Standardized limitation periods on B.C. and Ontario horizons

B.C. and Alberta may soon be following the path of Ontario when it comes to standardizing limitation periods for actions against insurers, opting for two-year (or ultimate 10-year) period from proof of loss, according to Sandra Corbett of Parlee McLaws LLP.Speaking at CICMA/CIAA Ontario’s 40th Annual Joint Conference in Toronto, Corbett noted the Supreme Court in 2003 cited problems with having different limitations for various types of insurance policies (particularly the modern, comprehensive, multi-peril policies). The Supreme Court’s decisions in KP Pacific Holdings v. Guardian Insurance Co. of Canada and Churchland v. Gore Mutual Insurance Co. generated “a flurry of consultations and requests for reform,” according to a paper Corbett presented to the conference.The reforms most likely to be adopted in Alberta and perhaps B.C. include those recommended in an August 2003 report by the Alberta Law Reform Institute, Corbett suggested. “Generally speaking, when the Alberta Law Reform Institute makes recommendations in Alberta, our government adopts them,” said Corbett. “They are a very, very well-respected institute by our government.”The Alberta Law Reform Institute report notes that “inconsistent limitation periods have caused confusion for both insured and for lawyers, and have resulted in a considerable amount of litigation over missed limitation periods. In light of the multitude of actions arising from the present state of the law, it would be desirable to standardize and rationalize all limitation periods for actions against insurers on policies.”The law institute report goes on to say that all limitation periods for actions on insurance contracts currently in the Alberta Insurance Act should be removed. By default, then, actions on insurance contracts would be governed by the Limitations Act. The Limitations Act has the two-year and 10-year limits.”There is no principled reason for having a one-year limitation period for actions on insurance contracts, rather than the two-year (or ultimate 10 year period) provided for in the Limitations Act,” the law reform institute report says.