Pope & Talbot Ltd. (Re)

Pope & Talbot Ltd. (Re)

An insurer defending on a reservation of rights may not be added as a party or permitted to intervene in underlying non‑automobile litigation in British Columbia, nor may it defend the insured in that underlying action through its own coverage counsel where that would risk non‑coverage‑neutral defence, disclosure of...

Source-derived case information.

Citation
2011 BCSC 548
Parties
Plaintiffs / Class Plaintiffs: Harmac employees (Class Plaintiffs); Applicant / Insurer: XL Specialty Insurance Company; Respondent / Alleged De Facto Director / Insolvent Insured: Pope & Talbot, Inc.; Monitor / Receiver: PricewaterhouseCoopers Inc.; Defendants / Insured Persons: Individual directors and officers (including Lionel Dodd); Insurer Funding Defence on Reservation of Rights: Federal Insurance Company; Excess Insurer: National Union Fire Insurance Company; Excess Insurer: ACE American Insurance Company (Ace Insurance); Interested Creditor / Party: Ableco Finance LLC
Court
Supreme Court of British Columbia
Jurisdiction
Canada
Judgment Date
28 April 2011
Procedural Posture
Bankruptcy/insolvency With Ancillary Civil Litigation (coverage/intervention Application) / Chambers Application / Process Hearing on Intervention and Choice of Counsel (application Dismissed)
Outcome
Application dismissed: XL's application to be added as a party or intervener and to defend P&T Inc. by its coverage counsel is dismissed.
Legal Topics
Intervention, Reservation of Rights, Duty to Defend Vs Duty to Fund, Coverage Disputes, Conflict of Interest and Privilege, De Facto Director Liability (cbca S.119), Judgment Creditor Remedies (insurance Act S.24)
Source Language
english
Insurance Law Bankruptcy and Insolvency Civil Procedure Directors and Officers Liability Class Actions Intervention Reservation of Rights Duty to Defend Vs Duty to Fund +4 more

Source-derived case record

Summary, issues, holding and outcome

More case intelligence is available

Unlock the full research layer for this judgment.

Full judgment text Legal principles 5 Authorities cited 23 Party arguments 2 Amounts and remedies 6
Sign in to unlock

Parties

Harmac employees (Class Plaintiffs)

Plaintiffs / Class Plaintiffs

XL Specialty Insurance Company

Applicant / Insurer

Pope & Talbot, Inc.

Respondent / Alleged De Facto Director / Insolvent Insured

PricewaterhouseCoopers Inc.

Monitor / Receiver

Individual directors and officers (including Lionel Dodd)

Defendants / Insured Persons

Federal Insurance Company

Insurer Funding Defence on Reservation of Rights

National Union Fire Insurance Company

Excess Insurer

ACE American Insurance Company (Ace Insurance)

Excess Insurer

Ableco Finance LLC

Interested Creditor / Party

Procedural Posture

Bankruptcy/insolvency With Ancillary Civil Litigation (coverage/intervention Application) / Chambers Application / Process Hearing on Intervention and Choice of Counsel (application Dismissed)

Legal Issues

  1. 1 Whether insurer (XL) may be added as a party or permitted to intervene in the underlying liability action
  2. 2 Whether insurer may defend the insured (P&T Inc.) in the underlying action through its coverage counsel while reserving rights
  3. 3 Whether insurer may defend the insured if not added as party or intervener

Ratio Decidendi

An insurer defending on a reservation of rights may not be added as a party or permitted to intervene in underlying non‑automobile litigation in British Columbia, nor may it defend the insured in that underlying action through its own coverage counsel where that would risk non‑coverage‑neutral defence, disclosure of privileged information and the insurer sculpting evidence to vitiate coverage; XL's application to be added as a party/intervener and to have its coverage counsel defend P&T Inc. is dismissed.

Court Disposition

Application dismissed: XL's application to be added as a party or intervener and to defend P&T Inc. by its coverage counsel is dismissed.

Orders

  • XL's application to be added as a party or intervener to the Harmac action and to defend P&T Inc. by its coverage counsel is dismissed