NL Supreme Court rejects class action over travel expenses in an insurance policy

The insurer introduced changes to its policy that resulted in the denial of certain claims

NL Supreme Court rejects class action over travel expenses in an insurance policy

In a recent decision, the Supreme Court of Newfoundland and Labrador ruled against certifying a class action involving individuals affected by Aviva General Insurance Company's policy change.

The plaintiffs claimed damages for breach of contract, among other allegations, arguing that the insurer improperly handled travel expense reimbursements for insured individuals following motor vehicle accidents.

The dispute centred on Aviva's 2018 policy modification, which introduced a 25-kilometre deductible for reimbursement of travel expenses to medical appointments under Section B Accident Benefits. This policy affected claims where the round-trip travel did not exceed 25 kilometers, thereby denying reimbursement for such travel.

Adam Crotty and Shawn Coleman, who sought to be appointed as representative plaintiffs, experienced personal injuries from separate accidents and were recipients of Section B Accident Benefits. However, their claims for travel expense reimbursements were denied under the new deductible policy, prompting the class action application under the Class Actions Act, with the aim to include various affected parties across multiple Canadian provinces.

The Supreme Court reviewed the application based on criteria outlined in the Class Actions Act, which requires clear definitions of a class, the presence of common issues among class members, and that a class action must represent a preferable procedure for resolving the issues at hand.

The court acknowledged that while the insurance company altered its reimbursement policy, there was insufficient evidence to suggest that this change contravened existing insurance agreements or required regulatory approvals. The court emphasized that the term “reasonable expenses” within the policies did not specifically guarantee coverage for all travel expenses, which inherently allows the insurer some discretion in determining which expenses to cover.

The court also highlighted that the pleadings failed to demonstrate a cause of action or outline substantial common issues affecting potential class members, which are critical in certifying a class action. Furthermore, the application did not sufficiently argue that a class action would be the preferable procedure to address the claims compared to individual claims or regulatory intervention.

As a result of these findings, the court declined to certify the class action, stating that the plaintiffs did not meet the necessary legal thresholds for such a certification.

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