The decision by the Ontario Court of Appeal in Baig v. The Guarantee Company of North America was released on December 5, 2007. The decision overturns a lower court decision that denied Guarantee the right to an examination under oath of its insured pursuant to the Statutory Conditions of the OAP1. This lower court decision was troubling because it seemed to stand for the proposition that the insurer lost its contractual right to an examination under oath simply because the insured had commenced an action. The decision went so far as denying the insurer’s right to the examination when the relationship became “adversarial”.

The decision of the Court of Appeal makes it clear that an insurer retains its right to an examination under oath of its insured notwithstanding the commencement of a civil action against the insurer. This is true for property claims and claims for statutory accident benefits.

The Court of Appeal also favourably cited the decision in Aviva Insurance Company v. Balvers, a decision argued before Madame Justice Stewart which upheld the insurer’s right to an examination under oath pursuant to s. 33(1.1) of the Statutory Accident Benefits Schedule. This lower court decision is itself under appeal by the insured and will be heard by the Ontario Court of Appeal in March 2008.

The decision in Baig can be found here.

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