In the just released Supreme Court of Canada (“SCC”) decision in Co-Operators Life Insurance Co. v. Gibbens, Mr. Justice Binnie used this obscure metaphor to describe the difficulty of interpreting the term “accident” within an insurance policy.
The metaphor is appropriate. The Serbonian Bog is a reference to the lake of Serbonis in Egypt. Legend has it that because sand blew onto it, the lake had a deceptive appearance of being solid. The word “accident” likewise gives a false impression of having a simple and solid meaning. On further examination, it is revealed to be a quagmire. To explain the term, Mr. Justice Binnie relied heavily on the insurance interpretation doctrine of reasonable expectations, using this to:
- analyze insurance policy terms according to the type of policy containing them;
- compel consideration of both accidental means and accidental results;
- establish accidents as a subset of unexpected events;
- distinguish accidental disease from disease arising in the ordinary course of events.
Mr. Gibbens is a British Columbia resident who had a group accident and critical illness insurance policy with Co-Operators (the “Policy”). The Policy paid a $200,000 benefit for paraplegia “sustained as a direct result of a Critical Disease or resulting directly and independently of all other causes from bodily injuries occasioned solely through external, violent and accidental means, without negligence” on the part of the insured. Over the course of two months, Mr. Gibbens had unprotected sex with three women and contracted genital herpes which, in turn, caused a rare complication known as transverse myelitis. This condition paralyzed him from the abdomen down. Neither herpes nor transverse myelitis was among the Critical Diseases enumerated in the Policy. Mr. Gibbens instead claimed against the Policy on the basis that his condition resulted from “accidental means”. Co-Operators disagreed and Mr. Gibbens sued. He won at trial and Co-Operator’s appealed. He won again at the B.C. Court of Appeal and Co-Operators appealed to the SCC. Co-Operators prevailed at the highest court.
Mr. Justice Binnie wrote the SCC judgment, noting at the outset that a century and a half of insurance litigation has failed to produce a clear definition of the word “accident”. Although, generally speaking, “bodily infirmity caused by disease in the ordinary course of events” is not considered to be an accident in insurance case law, the reasoning behind this has been unclear.
In his quest for clarity, Mr. Justice Binnie started with Canadian Indemnity Co. v. Walkem Machinery & Equipment Ltd. (1976 SCC) where “accident” was defined as “any unlooked for mishap or occurrence”. While this definition was useful, additional guidance was required because, as Mr. Justice Binnie observed, “The acquisition of a disease can frequently be considered ‘and unlooked for mishap’, broadly speaking. The challenge in this appeal is to relate different types of insurance and coverage in a way that makes sense in the commercial atmosphere in which the insurance was contracted.”
In recognition of the commercial atmosphere, there had to be some limitations on the generous meaning typically applied to the word “accident”. He wrote, “Care should be taken not to convert, for example, an accident policy into a general health, disability, or life insurance policy. Accident insurance is relatively cheap compared to the more comprehensive forms of insurance.” To avoid converting accident policies into comprehensive insurance, he ruled that judges should look at the entire chain of events from cause to effect instead of examining one end of the chain or the other. Despite the Policy’s specific requirement that the paraplegia result from “accidental means”, Mr. Justice Binnie refused to restrict himself to the question of whether the cause – unprotected sex – was an intentional act. It seems therefore that express policy language on accidental means or results will not remove from consideration any link in the chain of events.
Focusing only on results was also problematic since, as noted, acquiring a disease is generally unexpected. To make accident insurance workable, the unexpected cannot be the equivalent of an accident. Accidents must instead be a smaller subset of unexpected events. The key is to look to the reasonable expectations of the parties, governed both by the wording of the policy and the parties’ common sense perception of the world around them.
In this case, the written text of the Policy would indicate to any customer that they were not buying comprehensive health or life insurance. Therefore, the insurer and the insured would understand there were restrictions on the types of bodily illness (results) or types of causes (means) covered or both.
Regarding the parties’ common sense expectations, Mr. Justice Binnie concluded that the average person did not consider a disease arising in the natural and ordinary course of events to be an accident. For example, if an insured’s job involved working outdoors in hot weather and this caused him to suffer a heatstroke, the stroke would not be considered an accident. On the other hand, if the insured’s exposure to the weather was due something outside the natural and ordinary course of events, a shipwreck for instance, a resulting heatstroke would be an accident. Mr. Justice Binnie seemed to recognize that this approach would have led to a different result in Kolbuc v. ACE INA Insurance, a 2007 decision of the Ontario Court of Appeal. In that case, the insured was bitten by a mosquito carrying the West Nile virus and was rendered a paraplegic. The Court of Appeal ruled this was an accident. Mr. Binnie said he would make no comments on the merits of that case but he effectively overruled it, stating, “In my view, with respect, such a conclusion would stretch the boundaries of an accident policy beyond the snapping point and convert it into a comprehensive insurance policy for infectious diseases contrary to the expressed intent of the parties and their reasonable expectations.”
The cause of Mr. Gibbens’ disease and paraplegia was consensual and unprotected sex, a natural and ordinary event. Therefore, Mr. Justice Binnie ruled the resulting condition was not accidental within the meaning of the Policy.
The Gibbens case provides badly needed clarification on coverage for disease accident insurance policies and establishes that accidental means and results will not be considered in isolation from each other. It will be interesting to see if Mr. Justice Binnie’s “natural course of events” qualifier will be used outside of diseases cases to distinguish the accidental from the merely unexpected.