Childs v. Desormeaux: Does Anyone Have Insurance?

As every personal injury lawyer working on contingency knows, the key to finding a good case is identifying a solvent party that can be affixed with liability. Lawyers will not take on a case even where the defendant’s negligence clearly caused injuries to the client if that defendant does not have insurance coverage or funds to be able to satisfy any judgment attained. Even a case that is a slam dunk would be futile if the points never counted. Unfortunately, this creates a situation where access to justice is based on extra-legal considerations, on the chance that the party at fault is covered by insurance.

In the context of motor vehicle accidents, legislative schemes attempt to remedy this problem by ensuring that every driver has insurance coverage. Insurance companies now act as surrogates for defendants, paying all legal fees, making all strategic decisions, and paying out any settlements reached or judgments rendered. This current system is far removed from any traditional notion of corrective justice where negligent parties are held responsible for compensating those they have injured. The practical reality is a situation where insurance companies fight expensive and lengthy battles against each other in court over who should bear the bulk of responsibility for compensating injured victims.

Still, there are some cases that fall through the cracks. In Childs v. Desormeaux 2006 SCC 18 the actual person at fault, Desmond Desormeaux, was nowhere to be seen in the proceedings. He was uninsured when he drove while impaired and caused the accident that resulted in the plaintiff’s injuries. Further, he had no personal assets which could be used to satisfy the judgment against him.

Instead, the plaintiff had to resort to suing the hosts of the party where Desormeaux had consumed alcohol prior to getting into his car. Unlike the impaired driver, the hosts had homeowner insurance which could cover their liability in the accident. However, the SCC unanimously held that social hosts had no duty of care to public users of highways. Simply providing a place where alcohol could be consumed was insufficient in creating a risk that would give rise to a duty to take positive action to stop an intoxicated guest from driving home. In this, the SCC drew a distinction between social hosts and commercial hosts, who are in a better position to observe and control the consumption of alcohol and more responsible for the creation of any risks caused by such consumption.

While this decision upholds the result of prior judgments at trial and at the Court of Appeal, it does so on a different basis. The trial judge had actually found a prima facie duty of care for social hosts at the first stage of the Anns test but denied a duty on the basis of policy considerations, preferring to leave such reform to legislature. Conversely, the Court of Appeal did not find a prima facie duty but suggested in obiter that it would have decided differently from the trial judge at the policy stage of the Anns test. Further, the Court of Appeal limited its judgment to the facts of this particular case:

This judgment should not be interpreted to mean that social hosts are immune from liability to innocent third party users of the road caused by an impaired guest’s driving. On the contrary, I do not foreclose social host liability to innocent third parties particularly when it is shown that a social host knew that an intoxicated guest was going to drive a car and did nothing to protect the innocent third party users of the road.

According to the Court of Appeal, it appears that knowledge of the guest’s intoxication may trigger a positive duty on the host to stop the guest from driving. The SCC’s decision in Childs puts forward a more categorical denial of the imposition of social host liability:

I conclude that hosting a party at which alcohol is served does not, without more, establish the degree of proximity required to give rise to a duty of care on the hosts to third-party highway users who may be injured by an intoxicated guest … No duty to monitor guests’ drinking or to prevent them from driving can be imposed having regard to the relevant cases and legal principles. A social host at a party where alcohol is served is not under a duty of care to members of the public who may be injured by a guest’s actions, unless the host’s conduct implicates him or her in the creation or exacerbation of the risk.

Still, one can certainly imagine situations where the social host takes a more active role in encouraging a guest to become intoxicated and then allowing the guest to get behind the driver’s wheel. Such a case may give rise to liability in the future. Absent such circumstances, however, social hosts can rest easy in the knowledge that simply holding a party will not make them responsible for the actions of their guests.

While the legal reasoning behind the result is convincing, it’s hard not to feel sympathy for the plaintiff, Zoe Childs, who became a paraplegic as a result of the accident. It mattered little to her whether compensation for her injuries came from one insurance company or another. The SCC’s refusal to extend a duty of care to social hosts left her with a judgment against Desormeaux that was worthless. While there are provincial schemes in place that act as safety nets for instances when persons are injured by uninsured drivers, they do not provide adequate coverage for injuries as serious as those suffered by Childs.

Once again, the facts of this case point to the incongruity between the common law of torts and the practical reality of our current system, where insurance companies act as surrogates to the real parties involved. While the courts may not be the best place to create a solution, a better system is needed to address the plight of parties injured by uninsured defendants. Otherwise, courts will continue to face difficult cases that attempt to extend a duty of care to those who may not be responsible but happen to have insurance coverage.