April 8, 2018 by Sean Tindale, Lawyer, Partner, Hughes Amys LLP
Civil liability exposure for drone operators (and their insurers) is a developing area of law in Canada. If anything is clear, it’s that determining liability for negligent use of a drone doesn’t follow a simple mechanical formula.
When faced with civil liability claims, insurance and legal professionals will need to consider, among other things, the drone operator’s conduct, compliance with local and national laws, regulations and standards, as well as specific policy wordings and the unique facts and circumstances of each case.
Below is an overview of some of the issues affecting civil liability exposure of drone operators and their insurers.
COMPLIANCE WITH FEDERAL LAWS
Drone operators and their insurers must be familiar with a variety of statutory compliance issues at the national level.
Canadian laws regarding drone use are about to change in 2018. Proposed federal aviation regulations for drones weighing up to 25 kilograms include pilot training and testing requirements, mandatory insurance, and minimum age restrictions. Among other things, operational rules will require pilots to fly at least 5.5 kilometers from airports, 1.85 kilometers from heliports, 150 meters from open-air assemblies of people, and up to 75 meters from people or vehicles.
In urban areas, specific flight rules apply; approval from air traffic control may be required. As well, drones operated in urban areas must meet design standards, and drones heavier than one kilogram must be properly marked or registered. Indeed, statutory operational standards are set to provide a benchmark for the safe use of this emerging technology in Canada.
In addition to new aviation regulations, drone operators must comply with existing laws, including the Criminal Code. Sections of the Criminal Code that may apply to drones or “unmanned air vehicles” (subject to judicial interpretation of the term “aircraft” used in the statute) may include:
Violation of some of these provisions may result in penalties of up to 10 years in prison.
NEGLIGENCE AND STATUTORY COMPLIANCE
Drone operators and their insurers must also be alert to how statutory compliance issues may affect civil (tort) liability exposure.
It is useful to recall that a person’s conduct is negligent and subject to civil liability if it creates an objectively unreasonable risk of harm. In Ryan v. Victoria (City), the Supreme Court of Canada confirmed that to avoid liability in negligence, a person must exercise the standard of care that would be expected of an ordinary, reasonable and prudent person in the same circumstances.
Within this context, Canadian courts have held that breach of a statute is not necessarily proof of negligence. The reverse is also true: compliance with a statute does not necessarily prevent a finding of negligence. In Canada, statutory compliance may be an important factor in the overall assessment of negligence, but it is not determinative.
What does this mean for drone operators and insurers in Canada? Breach of statute is effectively subsumed in the general law of negligence, and the underlying obligation of reasonableness is critical. Civil liability will depend upon a variety of factors, including a drone operator’s conduct, statutory and regulatory standards, and other factual circumstances of the case.
With the foregoing in mind, evidence of breach of aviation regulations – for example, operating within “no drone zones;” operating within prescribed proximity to airports, people or vehicles; operating above prescribed altitudes or speeds; operating at night; or operating beyond line of sight – should be an important consideration when assessing the standard of care in a negligence claim.
Likewise, evidence of breach of a criminal statute, such as operating an aircraft while impaired, criminal negligence, or knowingly operating an unsafe aircraft, should continue to be highly relevant when assessing reasonable (or unreasonable) conduct.
PROVINCIAL INSURANCE LAWS
When considering the impact of statutory compliance on civil liability, drone operators and their insurers should also be familiar with insurance legislation in their province, including whether statutory compliance may give rise to questions about coverage.
For instance, in Ontario, Section 118 of the Insurance Act provides that a claim for indemnity under a contract of insurance may still be enforceable even if there is a contravention of a criminal or other law. The relevant portion of s. 118 states:
“Unless the contract otherwise provides, a contravention of any criminal or other law in force in Ontario or elsewhere does not, by that fact alone, render unenforceable a claim for indemnity under a contract of insurance except where the contravention is committed by the insured, or by another person with the consent of the insured, with intent to bring about loss or damage…..”
Section 118 has been invoked by insured persons in the automobile insurance context in Ontario.
For example, the Ontario Court of Appeal decided in Kereluik v Jevco that s. 118 does not permit an insurer to deny coverage or reduce coverage to minimum statutory limits based solely on an impaired driving conviction. Instead, the Court agreed that s. 118 was designed to provide insurance protection for negligent wrongdoers who do not intend to cause harm.
That said, the Kereluik case was decided in the context of a standard Ontario insurance policy (OAP1). The OAP1 did not contain a specific exclusion clause for losses that were the result of criminal acts.
In the case of non-standard drone insurance policies or endorsements, coverage questions arising from statutory compliance issues should be assessed by appropriate insurance and/or legal professionals on a case-by-case basis.
In the end, familiarity with statutory compliance issues and the impact on civil liability will help insurance professionals assess risk and exposure in the context of an important emerging technology.
1- See the 1983 Supreme Court of Canada ruling in The Queen (Canada) v. Saskatchewan Wheat Pool.
Sean Tindale, Lawyer, Partner, Hughes Amys LLP