Insurance Institute of British Columbia presentation on March 15, 2016

1. Sports & Events
It’s all fun and games until somebody gets hurt!
Presented by Samantha Ip, Jennifer Loeb
and David Buxton-Forman
Insurance Institute of British Columbia
March 15, 2016

2. It’s all Fun and Games until …
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3. Bluesfest – Ottawa, 2011

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5. Radiohead – Toronto, 2012

6. Alexisonfire – Vancouver Olympics 2010

7. Starfield – Abbottsford, 2008

8. Issues Arising
• Who is potentially liable?
• Do those potentially liable parties each have insurance
coverage?
• Is there overlapping coverage?
– Is the same risk insured?
– Is it the same interest insured?
– Is it the same insured?
• How is liability shared?
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9. Potential Acts
• Who may be liable?
– The venue
– The entertainment act
– Security
– Concession (especially if serving alcohol)
– Promotor
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10. Potential Acts
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11. Potential Acts
• Most of the potential parties will have insurance in
place
– General or commercial liability policies
• Often agreement between parties to obtain insurance
and name other parties as additional insureds
– Disputes commonly arise over question of whether
a party is an additional insured for a particular loss
• Limitation of coverage for additional insured
– Liability arising out of Named Insured’s operations
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12. Overlapping Coverage
• Different parties take out insurance over the same
interest and risk
– Venue owners and artists typically insured under
promotor’s liability policy
• Where an insured holds more than one policy covering
the same risk, the insured is entitled to select the
policy to respond, subject to conditions in the various
policies
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Solo or Group Act

13. Overlapping Coverage
• The conditions to be met:
– Same subject matter
– Same peril
– Same insured
– Policies are legally valid and in force at time of loss
– No exclusion for contribution
• Insured’s recovery still limited to amount of loss
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Solo or Group Act

14. Is the same risk insured?
Lumbermen’s Underwriting Alliance v Axa Pacific
Insurance, 2006 BCSC 957
• Forest fire caused by a logging company
– Logging company was covered by 2 insurance policies
– Spent $1.5 million on fire suppression
• Lumbermen’s claim for contribution from Axa failed because
their policies insured different risks
– Lumbermen’s policy covered fire-fighting costs
– Axa’s policy only covered third-party claims against the insured, and the
insured was not found legally liable for the fire

15. Is the same interest insured?
Clarke v. Fidelity‐Phoenix Fire Insurance Co. of New York
[1925] OJ No 144 (CA)
• House destroyed by fire
• Homeowner and Mortgage Lender separately insured their
interests in the house
• Court held there was no overlapping coverage:
– Homeowner’s insured interest was as an owner in possession
– Mortgage Lender’s insured interest was as a holder of
security to indemnify losses on the loan
• The mortgagor’s insurer covered the entire loss

16. • Primary vs. Excess Coverage
– Primary – triggered immediately on occurrence
– Excess – triggered when limits under primary policy
exhausted
– Look to policy wording to determine whether policy
is primary or excess.
• This insurance is excess over any other primary insurance
available to you covering liability for damages arising out
of the premises or operations for which you have been
added as an additional insured by attachment of an
endorsement
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Who’s the Headliner?

17. • Common law methods for apportionment between co-
primary insurers
– Maximum liability method
• Contribution based on proportion of individual
coverage limit to total coverage limit
• May be limited to concurrent property damage
insurance
– Independent liability method
• Equal contribution until lower limit is exhausted
• Used in cases of overlapping liability coverage
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Who’s the Headliner?

18. • “Other Insurance” Clauses
– Limit or exclude the insurer’s liability to indemnify
or contribute where other insurance policies cover
the same risk
– Typically 4 types:
• Pro Rata clauses
• Excess clauses
• Escape clauses
• Excess escape clauses
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Who’s the Headliner?

19. • Pro Rata Clauses
– Coverage is limited to a rateable portion
– Usually employ either common law method
– Example:
If the insured has other insurance against liability of loss
covered by this policy, the insurer shall not be liable for a
greater proportion of such liability or loss than the
applicable limit of liability bears to the total applicable limit
of liability of all collectible insurance against such liability or
loss
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Who’s the Headliner?

20. • Excess Clauses
– Policy becomes excess in the event of overlapping
coverage
– Example:
If there is other insurance against a loss covered under
this policy, the insurance provided under this policy
shall be excess insurance over any other valid
collectible insurance
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Who’s the Headliner?

21. Who’s the Headliner?
• Starfield Case
– Artist and Venue’s policy found to be excess to
promoters policy
– Both policies had excess clauses:
This insurance is excess over:
. . . . .
(2) Any other primary insurance available to you covering
liability for damages arising out of the premises or
operations or "products-completed operations hazard" for
which you have been added as an additional insured by
attachment of an endorsement

22. • Escape Clauses
– Eliminates coverage where loss is covered by any
other insurance
– Example:
If any person…other than the insured…is also covered
by other valid and collectable insurance, such other
person…shall not be indemnified under this policy
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Who’s the Headliner?

23. • Excess Escape Clauses
– Coverage is provided in excess to all other insurance
– Effectively acts as a top-up if the policy limits are in
exceeds the limits of other valid insurance
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Who’s the Headliner?

24. • “Other Insurance” clauses are not binding on other
insurers
• Conflict between “other insurance” clauses is common
• Two step approach to resolution
– First, attempt to reconcile the competing clauses
– Second, if there is a true impasse, clauses are
rendered inoperable and common law methods
apply
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Battle of the Bands

25. Encore
• Key Takeaways:
– When underwriting policies covering entertainment
events, insurers should recognize the potential risk
of:
• ancillary litigation between insurers with respect
to coverage
• its coverage extending to multiple additional
insureds
• coverage being apportioned in a method not
envisioned under the its policy
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26. The Dark Side of Sports
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31. Issues Arising
1. Overlapping Coverage – Who Pays?
2. Defences to Liability
3. Duty to Defend and Intentional Acts
3. Multi-Party Settlement Agreement Disclosure
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32. The Starting Lineup
• Who will pay?
– Players?
– Coaches?
– The League?
– Sponsors?
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33. The Starting Lineup - Players
• The individual who caused the incident that resulted in
an injury is the most obvious potentially at-fault party.
• This raised the defence of volenti non fit injuria
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34. • Legal defence that no wrong is done to a person who consents to being injured
• Is a complete defence to a claim and precludes recovery notwithstanding
negligence on the part of the defendant.
• Burden of proving all elements of the defence falls on the defendant
• The defence is approached with judicial caution:
The acceptance of risk may be express or may arise by necessary implication from
the conduct of the parties, but it will arise, in cases such as the present, only where
there can truly be said to be an understanding on the part of both parties that the
defendant assumed no responsibility to take due care for the safety of the plaintiff,
and that the plaintiff did not expect him to.
Common sense dictates that only rarely will a plaintiff genuinely consent to accept
the risk of the defendant's negligence.” (Dube v Labar, [1986] 1 S.C.R. 649 at 6 – 7
34
Volenti Non Fit Injuria

35. The two distinct aspects of the Volenti doctrine
• Voluntary assumption of risk as a defence
– Defence of consent available in negligence actions.
– As a defence, it operates after the breach of duty has been shown.
– Must show that the plaintiff voluntarily participated knowing the risk and agreed to
give up a cause of action.
– Voluntary acceptance of the risk may be express or implied.
• Inherent risks in sport:
– If an injury results from a normal or expected part of a sport, then no liability will
arise. Inherent risk influences the standard of care.
– These are more properly considered accidently caused injuries as opposed to
negligently caused injuries.
“The value of sports derives from their inherent conflict, speed, exertion and physical
contact. The occasional accident is the price paid by player or spectator for the benefits
of sports.
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Volenti Non Fit Injuria

36. Agar v Canning, [1965] M.J. No. 24 (MBQB)
• The plaintiff and defendant were on opposing teams in an ice
hockey game.
• The plaintiff attempted to delay the defendant by hooking
him with his stick. His stick delivered, what appears to have
been, a relatively minor blow to the back of the defendant.
• The defendant stopped, turned, took his stick with both his
hands and struck the plaintiff in the face rendering the
plaintiff unconscious.
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Volenti Non Fit Injuria

37. Agar v Canning continued…
“Hockey necessarily involves violent bodily contact and blows from the
puck and hockey sticks. A person who engages in this sport must be
assumed to accept the risk of accidental harm and to waive any claim
he would have apart from the game for trespass to his person in return
for enjoying a corresponding immunity with respect to other players.
…
But injuries inflicted in circumstances which show a definite resolve to
cause serious injury to another, even when there is provocation and in
the heat of the game, should not fall within the scope of the implied
consent.”
• The defendant was found liable, but the Court that the
plaintiff had provoked the defendant, and his damages
were reduced accordingly.
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Volenti Non Fit Injuria

38. The Starting Lineup - Coaches
• A coach may also be a potential at-fault
party depending on the circumstances
of the incident that caused the alleged
injury.
• If the coaches actions can be said to
have condoned the behaviour that
resulted in the alleged injury, he/she may be added to
any resulting lawsuit.
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39. The Coach
Olinksi v. Johnson, [1992] O. J. No. 2398
• At the end of a lacarosse game two referees were
assaulted by players of the Six Nations Arrows lacrosse
team as well as several spectators.
• The assaulting individuals, the manager, the band
council, the lacrosse association, and the coach were
all named as defendants in the resulting lawsuit.
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40. The Coach
• The court considered the following actions by the
coach:
– He saw a suspended player lingering by the exit at
the end of the game and did nothing;
– He did nothing when lacrosse balls and water
bottles being thrown at the referees from his team’s
bench during the game; and
– Commented to his team that he thought one of the
referees was not good.
• Witnesses stated that the Coach did not appear to have
control of his team on the night in question.
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41. The Coach
• The Coach was found to be an occupier under the
Occupiers Liability Act, because he was a “person who
[was] in physical possession of the premises” on the
day in question.
• The Court held that the Coach breached his duty as an
occupier to ensure that the premises were reasonably
safe through his failure to control his team.
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42. The Starting Lineup – League
• Depending on the nature of the incident, the league
that sanctioned the sporting event may be sued by the
injured party.
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43. Levita v Crew, [2015] O.J. No. 4559 (ONSC)
• Levita was injured in a recreational non-contact ice hockey game when Crew, a
player on the opposing team, collided with him shortly after Levita had taken a
shot on goal.
• Players in the league, True North, signed a waiver before every game.
• Crew was sued for intentionally and/or recklessly contacting Lewis.
• True North was sued for failing to protect other players from Crew – an allegedly
dangerous player.
• The court recognized that the standard of care may be modified by the inherent
risk in an activity.
“In hockey or basketball, for example, players have to assume some risk of injury from bodily contact,
even contact intentionally inflicted or in breach of the rules of the game. A body check -- even one that
calls for a penalty -- or contact fighting for a rebound in which the opposing player is called for a foul is
part of the ordinary risk of each game. Conduct in these contact sports becomes unacceptable only when
it is malicious, out of the ordinary or beyond the bounds of fair play.” (citing Laskin J.(dissenting on other
grounds) in Kempf v Nguyen, 2015 ONCA 114 at 106)
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The League

44. Levita v Crew continued…
• So what risks is a hockey player held to assume?
– That injuries may occur in the regular course of play;
– That injuries may occur through acts that begin when the game is on
but cause injury outside the course of play; and
– That injuries may occur from acts that are in contravention of a rule
but are not intended to cause injury;
• The degree of risk a player assumes can also be assessed in light of the
type of league and the style of play that normally takes place in the league
• What risks does a hockey player NEVER assume?
– That injuries may occur through “intentional or reckless battery by
another player in a non-contact league.” (at 92)
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The League

45. Levita v Crew continued…
• Levita was found to have assumed the risk of intentional contact in a non-
contact league because Levita knew intentional contact, even that which
resulted in an infraction of the rules, was a risk inherent in the particular
activity that he participated in
• The court found that Crew did not breach his standard of care by
intentionally contacting Levita and, therefore, he was not negligent
• Because there was no negligence, the volenti defence did not apply. But
the court remarked that if the defence could apply, it would have operated
in favour of True North and Crew. Levita’s act of signing a waiver and his
awareness of the physical and legal risks involved in playing in the True
North league were sufficient for him to have expressly and impliedly
consented to those risks.
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The League

46. • Corporate sponsors may also find themselves liable.
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And Now a Word from the Sponsor

47. • The plaintiff was rendered a paraplegic while participating in
an indoor soccer league game organized by the Ontario
Soccer Association (“OSA”).
• The plaintiff issued a claim against the defendant sponsors
for $4,500,000
• The plaintiff also pursued claims against the OSA, the facility
owner, other players and the referees
• The plaintiff alleged that the OSA sponsors breached their
duty to ensure the OSA had adequate insurance in place.
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Boudreau v Bank of Montreal, 2012 ONSC 3965
The Sponsor

48. Boudreau v Bank of Montreal, continued…
• “The issue…is whether a company which provides products or funds to a
soccer organization through a sponsorship role can have a legal duty to an
individual player to inquire into the nature and terms of any insurance
policy which the soccer organization may have purchased for the benefit of
the soccer players, and to ensure that the amount of such insurance is
adequate.”
• The sponsors were found to have no duty of care towards the injured
player. Sponsors were said to be in the same position as any other
individual who buys advertising space in a magazine or on television. As a
result, “there is no legal foundation for suggesting that a person
purchasing such a right to publicize a product, is legally responsible for the
consequences of the activity with which it associates its name.”
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The Sponsor

49. Chen (Guardien ad Litem) v Jose Navarez (the), 2003 BCSC
996
• A boating accident claimed several lives on the night of
the Symphony of Fire fireworks display in Vancouver
port. A pleasure craft had collided with a tug boat and
barge. The defendant owner of the tug boat and barge
added the sponsors of the fireworks as third parties.
• Did the sponsors owe a duty of care? If there was a duty,
did they breach the standard of care?
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The Sponsor Part II

50. Chen (Guardien ad Litem) v Jose Navarez (the), 2003 BCSC 996
• The sponsors were alleged to have failed to take precautions to minimize
the risk to vessels operating in English Bay on the night of the show.
– “…the Sponsors assumed a duty of care to the boaters attending the
fireworks display.”
• BUT, the sponsors, in deferring to the authorities they regarded as experts
on the issue of marine safety (Vancouver Port Authority, the Coast Guard,
the Vancouver Lifeguard, Vancouver Parks Board and Vancouver Marine
Policy), were not negligent.
• The takeaway  Sponsors may owe a duty of care to participants where
the sponsors participate in the organization of the event and are not mere
financial contributors for advertising purposes.
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The Sponsor Part II

51. Who has to Carry the Ball?
• Now that all of the possible at-fault parties have been
identified, what insurance issues arise?
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52. • An insurer has a duty to defend a claim against its insured where
the facts alleged in the pleadings, if proven true, would require the
insurer to indemnify the insured for the claim.
• The duty to defend is broader than the duty to indemnify. In
essence, an insurer may have a duty to defend while not having any
obligation to indemnify the insured.
• Three step process to determine whether there is a duty to defend:
1. Are the legal allegations properly pleaded?
2. Are the claims derivative of another claim?
3. Can a properly pleaded, non-derivative claim,
potentially trigger the duty to defend?
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The Duty to Defend

53. • Where a claim pleads both negligence and an
intentional tort, such as battery or assault is there a
duty to defend?
• The Supreme Court of Canada has said that “[i]f both
the negligence and intentional tort claims arise from
the same actions and cause the same harm, the
negligence claim is derivative, and it will be subsumed
into the intentional tort for the purposes of the
exclusion clause analysis.” (Non-Marine Underwriters,
Lloyd’s of London v Scalera, [2000] 1 S.C.R. 551 at 85)
53
The Duty to Defend

54. Thorne v. Royal & Sun Alliance Insurance Co. of Canada, 2003
NBCA 61
• During a recreational ice hockey game, the defendant, without warning,
punched the plaintiff in the face, breaking his cheekbone and causing
other injuries.
• The plaintiff’s Statement of Claim alleged his injuries resulted from both
the intentional acts and negligence of the defendant.
• The defendant was insured under the standard Insurance Bureau of
Canada Commercial General Liability policy.
• On these facts alone, there would typically be no duty to defend because
the allegations of negligence were entirely derivative from the alleged
intentional act of punching the plaintiff.
54
The Duty to Defend

55. Thorne continued…
• BUT, the defendant filed an affidavit in support of his application
for an order that the insurer had a duty to defend where he stated
that he threw the single punch in self-defence.
• The CGL policy applied to an accident or occurrence and contained
the following “self-defence” exclusion:
This insurance does not apply to:
(a) "bodily injury" or "property damage" expected or intended
from the standpoint of the Insured. This exclusion does not
apply to "bodily injury" resulting from the use of reasonable
force to protect persons or property.
55
The Duty to Defend

56. Thorne continued…
• The effect of the self-defence exception was clear: “the insurer must defend
any action against the insured seeking compensatory damages for bodily
injuries resulting from his or her use of reasonable force to protect persons or
property.”
• The expressions “accident” and “occurrence” in the Insuring Agreement must
be interpreted in light of the intention of the self-defence exception
• The court went on to comment that, despite there being a duty to defend, a
duty to indemnify could not arise due to the practical realities of the situation.
“That is so for two reasons. First, indemnity appears to be out of the
question; if Mr. Thorne acted in justifiable self-defence, Mr. Milligan's action
will likely be dismissed; if Mr. Thorne did not, [the intentional act exclusion]
would appear to be engaged.”
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The Duty to Defend

57. From the Sidelines
From an insurance perspective what are the key things to
consider:
• A variety of parties may be liable, and more
importantly, may be sued as a result of an incident at
such an event;
• The insurer will more than likely have a duty to defend
in the circumstances;
• The defence of volenti may prevent an injured
participant from collecting.
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58. Multi-party Settlement Agreements and the
Extent of Disclosure
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59. 59

60. Back to Bertuzzi…
• Bertuzzi pleaded guilty to criminal assault causing
bodily harm. He was sentenced to one year probation
and 80 hours of community service.
• Moore and his family sued Bertuzzi, and the former
parent company of the Canucks, Orca Bay
• Bertuzzi, Orca Bay and third parties reached a
settlement agreement on apportioning the liability for
Moore’s injuries
• In 2014, a confidential settlement was reached.
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61. Moore v Bertuzzi, 2012 ONSC 597
• The third party claim against coach Marc Crawford and all cross claims
between Bertuzzi and Orca Bay were discontinued as the three parties
entered into a proportional sharing agreement. That agreement
apportioned liability between the parties regardless of how liability would
be assessed at trial.
• The agreement was considered something like a Mary Carter Agreement
• The plaintiff was not informed of the terms of the agreement, nor even its
existence. When he became aware of its existence, he brought a motion to
compel its production.
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Settlement Terms

62. Issues
• The issues before the court were simply whether the proportional
sharing agreement should be produced and whether it should be
produced in its entirety.
• In order to determine these issues, the court considered whether
settlement privilege was a class privilege or a case-by-case privilege.
– If class privilege  onus for proving why a settlement
agreement should be produced would be on the party seeking
its production
– If case-by-case privilege  onus is on the party opposing
production to show why it should remain privileged
62
Settlement Terms

63. • The court did not answer the question of whether settlement privilege
was a class privilege or a case-by-case privilege.
• The agreement was ordered to be produced.
• The reason for production?  the agreement had changed the landscape
of the litigation:
– It ended adversity between the defendants and a third party;
– It changed their relationship from that set out in the pleadings;
– It would affect the running of the trial and pre-trial procedures; and
– It pre-determined how liability would be allocated.
• Therefore, if a settlement agreement changes the landscape of litigation,
it may have to be disclosed.
63
Settlement Terms

64. Does the Bertuzzi Decision Still Stand?
Sable Offshore Energy Inc. v. Ameron International Corp.,
2013 SCC 37
• Sable sued multiple defendants who had supplied it with paint intended
to prevent corrosion of its offshore structures and onshore facilities
• Sable entered into a Pierringer Agreement with some, but not all, of the
defendants
• The Pierringer agreement allowed one or more defendants to settle
with the plaintiff, leaving the remaining defendants responsible only for
the loss they actually caused
• The terms of the Pierringer Agreements were disclosed to the non-
settling defendants except for the actual settlement amounts
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65. • “The purpose of settlement privilege is to promote settlement.
The privilege wraps a protective veil around the efforts parties
make to settle their disputes by ensuring that communications
made in the course of these negotiations are inadmissible.”
• “Since the negotiated amount is a key component of the
"content of successful negotiations", reflecting the
admissions, offers, and compromises made in the course of
negotiations, it too is protected by the privilege.”
65
Sable Offshore Energy Inc. continued…

66. • Exceptions to privilege do exist.
• To come within those exceptions, the defendant must show
that a competing public interest outweighs the public interest
in encouraging settlement.
• Satisfactory counterveiling interests have been found to
include misrepresentation, fraud and undue influence.
• There is no prejudice to the non-settling defendants by
withholding the amounts of the settlement that is sufficient to
outweighing the public interest in promoting settlements.
66
Sable Offshore Energy Inc. continued…

67. THANK YOU
Presented By:
Samantha Ip
Jennifer Loeb
David Buxton-Forman