Ontario declines to import U.S. Stonewall principle in a Canadian asbestos product liability case

The Ontario Superior Court of Justice has declined to import the U.S. court’s Stonewall decision into an asbestos claims case launched in Ontario, meaning insurers are not the hook for asbestos claims made against Goodyear Canada after 1986, when insurance coverage for asbestos was no longer commercially available.
The so-called Stonewall principle is named after the 1995 U.S. case, Stonewall Insurance Company v. Asbestos Claims Management Corporation.
A U.S. court in Stonewall held that when allocating an asbestos-based claim for insurance purposes over a number of years of injury, the insured should not be deemed to self-insure for those years when the insured could not voluntarily insure itself because of the existence of an asbestos exclusion.
In other words, the insurers, not the insureds, were responsible for injuries occurring during the period in which insurance was unavailable.
In Goodyear Canada Inc. v. American International Companies, Goodyear asked for a preliminary motion to ascertain whether the Stonewall principle applied in Ontario law.
The defendant insurers issued insurance policies for asbestos coverage to Goodyear Canada between 1969 and 1986. The parties agreed to restrict claims in the Canadian action to policies in force between 1969 and 1980.
The courts did not conduct a trial to determine Goodyear’s liability in this case. The allegations made against Goodyear, a product liability case, have not been proven.
The preliminary legal issue in this case was whether Goodyear could be held responsible for any asbestos injuries and/or occurrences found to have occurred after 1985, because insurance coverage for asbestos-related claims was not commercially available for purchase during that period that would respond to U.S. claims.
Goodyear held the Stonewall principle applied. That is, the company could not be held to self-insure for asbestos-related injuries that occurred during a period in which commercial insurance coverage for asbestos claims was unavailable.
The Ontario court declined to import the U.S. Stonewall principle into Ontario law.
“Finally, it must be said that there is no right to insurance,” Ontario Superior Court Justice David G. Stinson ruled in a lengthy and complex decision.
“When any manufacturer brings a product to market, it is responsible for the attendant risks. Insurers may choose or decline to provide coverage for that risk. While insurers may freely contract to indemnify the manufacturer, they are by no means required to do so.
“Further, where an insurer deems it no longer to be commercially viable to provide such indemnification, it has the freedom not to contract. Stonewall or no Stonewall, I see no compelling reason – and surely none grounded in fairness – why an insurer who has made a business decision not to provide coverage should be forced to do so because it was not available elsewhere.
“The facts of this case provide neither the reasons nor impetus to adopt Stonewall at this time.”
The full details of the case can be found at:
http://www.canlii.org/en/on/onsc/doc/2011/2011onsc5422/2011onsc5422.html