Supreme Court of British Columbia issues precedent-setting rulings on D&O insurance policies in relation to Pope & Talbot insolvency
Client
PricewaterhouseCoopers Inc.
Date
November 12, 2009
Pope & Talbot Ltd. (Re) 2009 BCSC 1014, 2009 BCSC 1552 , 2009 BCSC 1823
On July 27 and November 12, 2009, Mr. Justice Paul Walker of the Supreme Court of British Columbia issued a pair of precedent-setting rulings that the Court had jurisdiction to determine the coverage of the Directors and Officers (D&O) policies issued by three US insurers to Pope and Talbot Inc. (currently in insolvency proceedings), and that BC law governs the policies in relation to wage claims by BC employees against Canadian and US directors.
The US insurers had asserted that the coverage litigation must occur in Oregon, and that Oregon law applied. The Court found that the policy terms contemplated different legal regimes governing different types of claims, with Canadian law to apply to wage claims arising under Canadian corporate law.
Courts occasionally divide the governing law of commercial contracts, but have seldom, if ever, done so with insurance policies. This decision will be important for all forms of liability insurance policies covering mult-jurisdictional risks issued by Canadian insurers or to Canadian insureds.
Richard Berrow and Kibben Jackson of Fasken Martineau were counsel for PricewaterhouseCoopers Inc., the Receiver of Pope & Talbot Ltd.
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