Legal Column > Scope of exclusion: claims arising from the commission of a criminal act.

Scope of exclusion: claims arising from the commission of a criminal act.

affiché le 15 juin 2016
By Me Luc Jobin, Lawyer at Tremblay Bois Mignault Lemay S.E.N.C.R.L.
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Last February 2, the Quebec Court of Appeal issued a ruling in a case aimed at determining whether the exclusion clause in a life insurance policy provides an entitlement if an accident occurs "while the insured is participating in any criminal act or related offence."1. In this dispute, a motorcyclist being pursued by the police for speeding died after he lost control of his vehicle.

The Court of Quebec had initially ruled in favour of the deceased's estate, which attempted to recover benefits from Desjardins Financial Security Life Insurance Company. Desjardins, however, took the ruling to the Court of Appeal on the basis of the abovementioned exclusion.

The Court of Appeal went on to uphold the Court of Quebec's decision. The insurer was required to pay the benefits for the following reasons.

The insurance policy includes, in favour of the insured, a life insurance component in the event of death attributable to an accident. The exclusion, however, states that the benefit application will be denied if the accident occurs "while the insured is participating in any criminal act or related offence."

Driving at excessive speed and fleeing the police constitute two "hybrid" infractions, i.e. they may be punishable either by indictment (criminal act) or by summary conviction (or summary infraction), in accordance with the public prosecutor's decision. In its ruling, the Court of Appeal cited section 2402, paragraph 1 of the Civil Code of Quebec (CCQ), which reads as follows:
« 2402. In non-marine insurance, any general clause whereby the insurer is released from his obligations if the law is violated is deemed not written, unless the violation is an indictable offence.
Following a lengthy analysis of the jurisprudence in this area, the Court of Appeal declared that because the federal lawmaker has the exclusive power to legislate in criminal matters in Canada, it is self-evident that section 2402 of the CCQ necessarily refers to federal legislative provisions and that only conduct qualified as a "criminal act" under a specific federal legislative provision should be contemplated. Since the insured's conduct at the time of the accident was also punishable by a summary declaration of guilt ("hybrid" acts) and since the insurance policy made reference to a "criminal act", the exclusion put forward by the insurer was rejected.

Consequently, in the event of a claim filed following the commission of an act falling within the category of "hybrid" infractions, i.e. punishable by indictment or by summary procedure, the exclusion will be rejected in favour of the insured or his/her estate. It should be noted, therefore, that the abovementioned general exclusion clause is not applicable to "hybrid" infractions; it is only applicable to "pure" criminal acts. In that regard, the Court reiterated an oft-applied principle: as regards the interpretation of insurance policies, provisions setting out the scope of coverage are interpreted broadly, while those relating to exclusions or limitations are interpreted restrictively.

The Court, however, was careful to point out that if an insurance policy contained an exclusion clause specific to dangerous conduct (section 249 of the Criminal Code) or to fleeing from the authorities (section 249.1 of the Criminal Code), the insurer would be entitled to involve it against the policy beneficiaries.

1. Desjardins Financial Security, Life Insurance Co. vs. Émond, 2016 QCCA 161