Can Being Found Guilty For a Traffic Ticket Result in Loss of Insurance Coverage?

Being Found Guilty For Certain Traffic Violations Can Void Insurance Coverage or Make the Fight For Insurance Coverage Troublesome.

Understanding When a Traffic Ticket Conviction May Void Insurance Coverage Including Defence Against Liability Claims

Insurance Claim Document It is commonly understood, and perhaps mistakenly so, that exclusions and conditions within an automobile insurance policy that would trigger a denial of coverage arising from a violation of licensing conditions and restrictions are absolute; meaning if you did it, and are therefore legally guilty, then your insurance is always voided; however, such is often an inaccurate assessment as indeed some slack may apply to certain circumstances similar to that which occurred within the case of Tut v. RBC General Insurance Company2011 ONCA 644.  The Tut case involved the denial of insurance coverage for an accident involving a novice driver with a G2 class license who was caught operating the insured vehicle, unknowingly, with a blood alcohol level above 0.0 percent.  The concern arose when the novice driver attended a party the prior evening and consumed alcohol.  On the morning following the party, the novice driver, who was without any signs or sense of impairment, was involved in the accident.

Upon investigation into the accident, the son was found to have a blood alcohol content of .01 percent which, from an absolute technical perspective was a violation of the law applicable at that time, and therefore a violation of the insurance policy.  Due to the violation, RBC denied coverage including the duty to defend against litigation brought by victims of the accident.  Tut brought suit against RBC for wrongful denial of coverage and was successful in the lower courts; however, RBC appealed to the Court of Appeal for a determination that the violation was an absolute offence under the Highway Traffic ActR.S.O. 1990, c. H.8 and therefore the insurance coverage exclusion for driving while disqualified was properly trigged.

From this unfortunate situation, the legal question arose as to whether such a driving offence under the Highway Traffic Act was an absolute liability offence, meaning without the availability of any rebuttal explanation, or whether the driving offence was a strict liability offence where the law allows the availability of a due diligence defence by showing an attempt to avoid violating the law; but unintentionally violating the law nonetheless.

In reviewing whether the Highway Traffic Act violation was absolute and without any excuse, the Court of Appeal stated:

[21]  RBC relies on two recent cases which held that s. 6(1) is an absolute liability offence.  Neither case assists RBC.

[22]  The first case, Maharaj, refers to this court's decision in Kanda, but does not correctly apply it.  The court in Maharaj takes into consideration the public safety goal of the legislation without engaging in any real weighing of society's revulsion against punishing the morally innocent.  The latter is why the law recognizes a presumption against absolute liability.  Instead, Maharaj places emphasis on the fact that driving is a privilege, [page487] and on ease and efficiency of enforcement.  In my opinion, it is wrongly decided.

[23]  The second case RBC relies on, R.  v. Nyaata, [2005] O.J.  No.  4754, 2005 ONCJ 454 (CanLII), states that the offence of having a blood alcohol content greater than zero is an absolute liability offence.  However, the court also held that the evidence of a strong odour of alcohol on the accused's breath and the fact he held a G2 licence constituted a prima facie case that was rebuttable but, as the defence had called no evidence, a conviction would be registered.  Holding that the violation of s. 6(1) can be rebutted is inconsistent with the offence being one of absolute liability.  This case, too, is of no assistance to RBC.

[24]  Applying the factors in Kanda to this case, I make the following observations:

(1) In Kanda, this court was concerned with the same overall legislative scheme as here, namely, the HTA, and it held that the overall regulatory pattern of the HTA is neutral.  (2) The penalty for a violation of s. 6(1) is a suspension of the offending driver's licence.  This penalty is more severe than the penalty of a modest fine for the seat belt infraction in Kanda.  This factor tilts more in favour of the offence in this case being one of strict liability as compared to Kanda.  (3) Some of the sections in the HTA create an absolute liability offence by specifically excluding a due diligence defence.  The language of s. 6(1) does not specifically preclude a due diligence defence.  Section 6(1) also uses the mandatory word "must" but, as noted at para.  38 of Kanda, the case law does not support the conclusion that mandatory language necessarily results in absolute liability.  (4) The important public purpose in Kanda was, as here, road safety and protection of users of the road.  The court in Kanda held that classification of the offence as one of strict liability was an appropriate balance between encouraging drivers to be vigilant about safety and not punishing those who exercise due diligence.  I would reach the same conclusion in this case.

[25]  Thus, the application of the four Kanda factors leads me to conclude that the presumption against the offence being one of absolute liability has not been rebutted.  The offence is one of strict liability.

It is notable that the Tut case related to an accident that occurred in June 2007 and that the zero (0.0) percent blood alcohol condition contained within the Highway Traffic Act has since changed and thus the precise facts and issue within the Tut case may now be inapplicable; however, the Tut case still shows that where an offence is subject to strict liability, rather than absolutely liability, what appears at first glance as an insurance violation that would result in a denial of coverage may still involve some latitude.

Summary Comment

A coverage denial by an insurance company may be financially disastrous; and accordingly, whether the insurance policy conditions that support the reason to deny coverage should be absolutely applied without availability of any possible excuse or should be strictly applied with availability of a reasonable due diligence excuse, is of utmost importance.  While the Highway Traffic Act conditions that applied when the Tut case occurred may now be changed, the principle that a strict liability offence under the Highway Traffic Act does afford possibility of a defence does provide for leniency in what would otherwise be a situation of absolute liability with serious insurance coverage consequences.

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