Favourable Policy Interpretation Gets Award

June 20th, 2013 by Meliha Waddell

Favourable Policy Interpretation Gets Canadian Armed Forces Corporal $125,000 for Loss of a Foot

This blog is written by our law summer student, Michelle Stephenson.

32-year-old Corporal Gardner initially hurt his knee in the course of his service in March, 2006. Two and a half years later, concerned that it would affect his career, he underwent surgery on the knee. During the procedure, a main artery and vein in his left leg were severed, leading to the loss of the leg from above the knee.
An Accidental Dismemberment Policy issued to members of the Armed Forces provided for a $125,000 indemnity for loss of a foot if that loss:

  • was attributable to military service;
  • occurred by accidental, external and violent means;
  • occurred within 90 days of the injury; and
  • resulted solely and directly from that injury, independent of all other causes.

Furthermore, the policy had an exclusion clause, so that no benefit would be payable for any loss caused wholly or partly by medical or surgical treatment.

At first glance, the situation seemed dire for the corporal. The loss of his foot occurred well over 90 days after his knee injury, was not obviously and directly caused by the injury, did not clearly occur in the course of military service, and appeared to result from a medical procedure.

Favourable Policy Interpretation Gets AwardHowever, the court reasoned that “the injury” in this case was the surgery itself, and that because he got the surgery out of concern for his career, even though it was voluntary, it constituted arising out of military service. Furthermore, because the severing of the artery was not shown to be part of the actual treatment he was meant to receive, but rather an accident during the treatment, it did not fall within the scope of the exclusion clause.

The interpretation of the facts and insurance policy might, at face value, appear to be somewhat of a stretch on the part of the court to ensure that a deserving veteran was compensated for his loss. However, the decision highlights settled law that, when interpreting an insurance policy:

  • any ambiguities will be resolved in favour of the claimant,
  • exclusion clauses are strictly interpreted against the insurer, and
  • the onus is on the insurer to prove the exclusion on the balance of probabilities.

In this case, the insurer had not shown that the exclusion clause was applicable, and there was enough ambiguity around the phrasing of the exclusion clause and what is “attributable to military service” to support the compensation of the corporal.

The full decision on the “Favourable Policy Interpretation Awards Canadian Armed Forces Corporal for Loss of a Foot” case is available at: Ontario Reports.

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