Allegations of fraud need only be proven on a balance of probabilities in the civil insurance context

Slawter v. Insurance Corp. of British Columbia, [2011] B.C.J. No. 2595, September 2, 2011, British Columbia Provincial Court, D.A. St. Pierre Prov. Ct.J.

A dispute over the standard of proof to be applied in civil cases where an allegation of fraud is made. The Court found that the only standard of proof to be applied is the balance of probabilities.

The claimant maintained that the Insurance Corporation of British Columbia (“ICBC”) wrongfully denied his claim for compensation when he asserted that his vehicle had been stolen. ICBC felt the denial was warranted as their investigation revealed some inconsistencies in his reporting of certain details regarding the theft which led them to the conclusion that he had some responsibility for it. They asserted that the theft did not occur and that the claimant made wilfully false statements which invalidated his claim pursuant to s. 75 of the Insurance (Vehicle) Act.

There was a dispute between the parties about the applicable standard of proof where a claimant seeks to prove a loss and a right to indemnity and where an insurer raises affirmative defences like fraud or wilful false statements.

Following the Supreme Court of Canada decision in F.H. v. McDougall, 2008 SCC 53, the Court confirmed that there is only one standard of proof in civil cases - proof on balance of probabilities. Trial judges are responsible for scrutinizing evidence carefully regardless of whether there is a serious allegation of fraud, sexual assault or something else.

After considering all of the evidence The Court found that the claimant had led enough evidence to establish that on a balance of probabilities he had a valid policy of automobile insurance and that he suffered a loss. The Court noted that there were suspicious circumstances, but there was no clear and cogent evidence of fraud which met the standard of a balance of probabilities. The Court was also unable to conclude on the balance of probabilities that the claimant made wilfully false statements. The claimant was therefore entitled to be indemnified for his loss. Reasonable costs and disbursements were also awarded.

This case was digested by Kim Yee and edited by David W. Pilley of Harper Grey LLP.

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