Is Invasion of Privacy a Tort? Is There Insurance for It?

In our continuing effort to catch up on cases decided this month,  we would like to draw your attention today to an important ruling by Mr. Justice David Stinson, in Somwar v. McDonald’s Restaurants of Canada Ltd. 

This was a motion by the defendant McDonald’s, to dismiss an action for “invasion of privacy”. The issue was whether it was plain and obvious, that under the law of Ontario, invasion of privacy is not a tort, for which damages are recoverable. After a careful review of the law, Justice Stinson concluded that not only was it not clear that invasion of privacy cannot be tortious, but “the time has come to recognize invasion of privacy as a tort in its own right”.

The plaintiff was a restaurant manager employed by McDonald’s. The basis of his action was that McDonald’s had done a credit check on him, without his permission. He claimed both compensatory and punitive damages. Justice Stinson’s decision was not an adjudication of the claim on its merits. Rather, McDonald’s had brought this preliminary motion, seeking dismissal of the action on the basis that the statement of claim failed to disclose a cause of action recognized in law. Thus, Justice Stinson was only deciding whether the claim could possibly succeed at trial. He held that it could. The action will now go forward to settlement or trial.

With the greatly increased attention being paid to privacy issues these days, it is probably not surprising that litigants would seek damages in tort for alleged infringement of their privacy rights. The increased incidence of such claims will likely lead to some interesting insurance issues too. The typical CGL policy does contain coverge for violation of privacy rights as part of its “personal injury” coverage. However, that coverage is usually stated to cover “oral or written publication of material that violates a person’s right of privacy”. At first blush, such coverage would not appear to extend to the sort of situation that occurred in the Somwar case.

In addition, there has been litigation in the United States about insurance coverage for invasion of privacy claims, over whether such claims are caught by an exclusion for acts “expected or intended” by the insured. In Lineberry v. State Farm Fire & Casualty Co. 885 F.Supp. 1095, 1995 WL 313921 (M.D.Tenn.,1995.) for example,  the court interpreted a personal umbrella policy that covered claims for “invasion of privacy” but excluded claims for damage either expected or intended by the insured or the result of the insured’s willful and malicious act. The court held that “the umbrella policy expressly covered injuries resulting from invasion of the right of privacy, an inherently intentional tort, but excluded injuries which were intended or expected….the coverage is illusory, and the policy is ambiguous and must be interpreted against the insurer and in favor of the insured.” So, despite the exclusion, the policy was interpreted so as to find coverage.

Finally, in today’s privacy law round-up, you can find decisions of the Privacy Commissioner online at We will be including some of these in future Updates.

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