Event after law firm dinner not covered by insurer: BCCA

A British Columbia appeal court ruled a Vancouver law firm’s insurer doesn’t have to pick up the settlement tab of a lawyer who knocked a colleague over at a nightclub.

In April 2001, Vancouver law firm of Alexander Holburn Beaudin & Lang treated its associates and articling students to a dinner at a restaurant. After dinner, some members of the group went to a nightclub where “events took a very unfortunate turn,” as British Columbia Court of Appeal Justice Mary Newbury put it.

One of the associates, Jeremy Poole, was dancing with articling student Michelle Danicek when he fell backwards onto her. Danicek suffered brain injuries and was awarded a $5.9-million settlement.

In a Mary Carter agreement, Poole paid Danicek just over $1 million. But he kept challenging Lombard General Insurance Co. of Canada, which refused coverage of Danicek’s injuries despite Poole’s insistence the accident was connected to the two lawyers’ employment.

The Supreme Court of British Columbia ruled in Jan. 2011 that events such as the one at Bar None nightclub fall outside the scope of Lombard’s coverage.

While dismissing Poole’s appeal, the three-judge appeal panel ruled, in Poole v. Lombard General Insurance Co. of Canada, the dinner may have been a work-related function but taking the party to a nightclub had more social value than business.

“In my view the line was crossed when some of those attending the dinner decided to go to the nightclub. This visit seems to me to be almost indistinguishable from the more common situation of a few associates going out for a drink together after work and one of them being injured in a bar,” wrote Newbury.

“The social aspects of the occasion by far outweighed the very tenuous ‘connection’ between going to Bar None and the employment of Mr. Poole and Ms. Danicek by AHBL.”

A clause in Lombard’s insurance policy states it grants coverage to employees if they suffered injuries “only with respect to their employment.”

“I agree that the phrase ‘with respect to their employment’ has a wider meaning than ‘in the course of . . . employment’ or ‘within the scope of . . . employment’ used in clause 2.a,” wrote Newbury. “I do not agree, however, that any connection, however tenuous, between the employment of Mr. Poole or Ms. Danicek and the incident at Bar None can be said to engage coverage under clause 2.b.”

After the Supreme Court’s 2011 ruling, Poole told Canadian Lawyer in a written statement the decision has larger ramifications for law firms and lawyers.

“Lawyers become involved in a number of different activities, some work-related and others purely social, either internally, with other members of the bar or with clients,” he said.

“Understanding the breadth and limits of a firm’s general liability coverage for the wide variety of activities that may relate to or follow employment activities is key.”

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