- The Insurer’s allegation that the fire was a result of arson was obviously without merit
- The Insurer ignored the evidence of its own experts
- When the claim was denied, no explanation was offered to the Insured
- As a result of the denial, the Insured’s were “forced out into the snow”
- The Court found that the highest level of management was aware of these decisions, but took no steps to correct the deficiencies
- The actions of defence counsel throughout the course of the action was considered outrageous and bordering on misconduct
- The Court found that the Insureds had breached a “Peace of Mind Contract” when they knew it would have a detrimental effect on the Insured.
The Supreme Court outlined six criteria, which should be considered by the Jury in determining the quantum of a punitive damage award:
It must be proportionate to:
1. The blameworthiness of the defendant’s conduct;
2. The degree of vulnerability of the plaintiff;
3. The harm or potential harm directed specifically at the plaintiff;
4. The need for deterrence;
5. Even after taking into account the other penalties, both civil and criminal which have been or are likely to be inflicted on the defendant for the same misconduct;
6. The advantage wrongfully gained by a defendant from the misconduct.
This significant damage award for Bad Faith opens the door to "U.S. style litigation" and shifts the emphasis from the subject matter of the contract to the action of the Insurer.
See Lawyer Brian Atherton's detailed explanation of case: http://athertonbarristers.com/html/badfaith.html