Representing insurance companies is getting more hazardous all the time. In Succar v. Wawanesa Mutual Insurance Company, the plaintiff had sued Wawanesa for statutory accident benefits arising out of an MVA that occurred on January 1, 1994. Wawanesa had stopped benefits in 2004, precipitating this action.
Counsel for the plaintiff moved for leave to amend the statement of claim, to add certain adjusters as defendants. She also asked that the court grant leave to add as a defendant the law firm of Bell Temple. That firm had acted as counsel for Wawanesa throughout the lawsuit. Against both sets of proposed defendants, the plaintiff wanted to allege bad faith, negligence and procurement of breach of contract.
Superior Court Justice Colin McKinnon heard the motion for leave to amend. He permitted the addition of the individual adjusters as defendants, ruling that it was not clear that the adjusters could not be held liable to the plaintiff: “Where the law in a particular area can be described as ‘muddy’, the court will not strike that part of the pleading, nor hold that the claim or defence must fail.”
However, His Honour refused leave to add Bell Temple. In our view, it would have been quite startling had his decision been otherwise.
The allegations that the plaintiff sought to make against the law firm were that it had acted as adjusters, “thereby fulfilling an ‘adjustment mandate’ and acted in concert with their client Wawanesa and its employees”. Specific instances of this were the firm’s having arranged independent medical examinations, retained investigators to conduct surveillance and set up a residual earning capacity assessment of the plaintiff. Counsel for the plaintiff argued that Bell Temple had not just given legal advice, it had made “recommendations”.
Justice McKinnon was not persuaded. He refused to add Bell Temple as a defendant. He said: “It is argued that it is not at the instance of the plaintiff whereby a retainer can be defined between a solicitor and his or her own client. I agree.”
It would surely be an alarming development if a party to a lawsuit could determine the limits of appropriate conduct for the opposing party’s lawyer and sue the lawyer for having exceeded those limits. His Honour put it this way:
In exercising my discretion, the overarching consideration must be that of public policy. In my opinion, adding Bell Temple as a party based upon the allegations in the proposed Statement of Claim would undermine time honoured principles of solicitor-client privilege and solicitor-client relations. Bell Temple owes no duty of care to the Plaintiff. Rather, Bell Temple’s duty is to protect its client within the ethical mandates of the Law Society of Upper Canada: see Manufacturing Co. v. ZTW Properties Inc., (1997), 38 O.R. (3d) 319 (C.A.); Simpson v. Gafar,  O.J. No. 3352 (S.C.J.) and Brignolio v. Desmarais, Keenan,  O.J. No. 3499 (Gen. Div.). It follows that there can be no viable claim against a lawyer for interference with contractual relations because a lawyer offers legal advice to a client as to their rights in respect of the contract. To hold otherwise would effectively mean that lawyers would not be at liberty to freely advise their clients with respect to their rights and obligations without fear of being sued by a third party to whom they owe no duty: see 1198728 Ontario Inc. v. Tally Capital Ltd.,  O.J. No. 23 (Gen. Div.).
Counsel for the plaintiff then sought an order removing Bell Temple as solicitors of record, on the basis that lawyers from that firm would be witnesses at trial. Again, Justice McKinnon demurred, saying that that battle “was for another day”.
In our opinion, Justice McKinnon’s decision (particularly the passage quoted above) is a reassuring affirmation of where counsel’s duty lies (and where it does not).