Insurers can examine insureds under oath, even after litigation commenced

Insurers are entitled to conduct an examination under oath of an insured, pursuant to the Insurance Act, regardless of whether or not the relationship between the insurer and insured is adversarial or a lawsuit has commenced, Ontario’s Court of Appeal has ruled.
The decision reversed the decision of a motions judge, who found that the examination of oath insurers are entitled to conduct under Statutory Condition 6(4) of the Insurance Act is redundant, since the insurer has a right to examine the insured for discovery in a lawsuit.
“I do not agree with the motion judge’s conclusion that Statutory Condition 6(4) ceases to apply once the relationship between the insurer and the insured becomes adversarial or when litigation is commenced,” Ontario Court of Appeal Justice Russell Juriansz wrote for the court. “There are no words in the provision that indicate an insurer’s right to examine an insured is limited to the situation in which their relationship is not adversarial.”
In Baig v. The Guarantee Company of North America (GCNA), GNCA insured Rehman Baig’s 1999 BMW M3 convertible for Cdn$71,300 after Baig submitted an appraisal signed by Leanne Giilick of Discount Appraisals.
The car crashed in 2004. Subsequently, GNCA learned Giilick was the common-law partner of Baig, and that together they operated Discount Appraisals.
When the insurer tried to examine Baig under oath about the car’s initial appraisal value, Baig’s lawyers shut the questions down.
A motions judge agreed Baig didn’t have to answer the insurer’s questions because the relationship had turned adversarial, but the Appeal Court reversed this decision.