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Posted on June 1, 2004 | Posted in Lawyers' Issues

Your writer normally avoids family law issues. The concept of a ten-foot pole comes to mind. However, the case of Bessie v. Arsenau [2004] O.J. No. 776 (S.C.J.) deals with lawyers’ negligence issues and seems to be interesting, so we are taking the plunge.

Insurance Policy

Husband and wife are in the midst of a divorce. The husband had disclosed three insurance policies in his Statement of Financial Information. The wife’s lawyer had examined the husband and had determined that the second policy had been surrendered earlier and that, accordingly, the financial statement was incorrect. He also knew that the third policy had been surrendered after the husband had sworn the statement.

The parties ultimately settled the action in 1998. The minutes of settlement provided that the husband would pay to the wife spousal support of $1,500 per month. The support obligation, which specifically bound the husband’s estate, had no time limit. In addition, the husband was to designate the wife as beneficiary of policy no. 1 for $30,000 and had to continue to do so for as long as he was required to pay support.

The husband died in 2001 and, naturally, the wife found that insurance policy no. 1 had lapsed in 1981. The wife was not pleased and commenced an action against her lawyer for $30,000. She alleged that her lawyer ought to have checked that the insurance policy existed at the time of the settlement. The lawyer maintained that he was entitled to rely on the husband’s statement and a representation from the husband’s lawyer at the time of the settlement that policy no. 1 still existed.

Fool for Lawyer

The lawyer acted for himself. We all know the adage about a lawyer who acts for himself.

The wife obtained an expert opinion that her lawyer breached the standard of care of a reasonably competent lawyer. The wife’s expert opined that the wife’s lawyer ought to have checked with the insurer to confirm that the insurance policy existed and that his failure to do so was a breach of the duty of care he owed to the wife.

The lawyer also obtained an expert’s report. This expert did not address the issue of the standard of care. He simply disagreed with the wife’s expert and stated that there is no free-standing authority under the Divorce Act to require a party to maintain a life insurance policy in favour of another, but that such an order could be made only to secure a support order.

The judge reviewed the essence of that opinion and then decimated it. The parties were free to negotiate any obligations they pleased and were not limited to what could be awarded at trial. Accordingly, the judge held that the lawyer’s expert had offered no opinion at all and held that the only evidence in front of her was the opinion of the wife’s expert.

The judge found that the lawyer breached a duty of care and was negligent. He knew that the financial statement was wrong regarding policy no. 2 and that the husband had subsequently surrendered policy no. 3. This should have alerted the lawyer that he could not rely upon the financial statement without verifying that the policy no. 1 was in good standing.

The judge awarded the wife the policy benefits of $30,000 less approximately $6,000 that the wife received from a 4th policy that the husband had maintained.

Double Recovery

The lawyer had also argued that the wife should not receive the policy amount because the minutes of settlement called for the policy only as security for the duty to pay the support. Since the estate was still able to pay the support, at least for the near future, the wife had not yet incurred any damages.

The judge first attempted to review the notes of the parties to determine the subjective view of the parties regarding the issue. She determined that she was unable to make that determination from the information that was available to her. She then interpreted the clauses on an objective basis and decided that the policy was in addition to the maintenance obligation.


We admit that we find all of this quite confusing. The judge made no mention of the alleged representation from the husband’s lawyer that the policy existed. The lawyer had not third partied the other lawyer, alleging negligent misrepresentation. Had LawPro been involved this would not have been surprising; it is not in the interests of LawPro to have two counsel fighting it out over the liability of two lawyers when, regardless of the one at fault, LawPro has to pay the amount. However, in this case, LawPro was not involved.

Further, we heard nothing about whether the benefits under an insurance policy could have been secured so that it could not lapse. What would have happened if the policy existed in 1998 and the husband simply stopped paying the premiums? Did the wife really have any damages?

Finally, it should not have been too difficult to adduce evidence regarding the subjective view of the parties regarding the policy as security or additional benefit. Why was there no evidence from the husband’s lawyer?


This case was decided on a motion for summary judgment under Rule 76. We feel that the lawyer simply did not present a good case and, consequently, lost. It would seem that he should have:

a)   put forward evidence from his own expert that talked about the duty of care. Neither he nor his expert seem to have understood the concept of solicitor’s negligence and the test for it;

b)   third partied the husband’s lawyer who had allegedly given him the false information;

c)   submitted some evidence regarding the impossibility of fully protecting the wife against the husband’s breach of his duties to maintain an insurance policy;

d)   adduced evidence from the husband’s lawyer regarding the alleged representation and the subjective interpretation of the minutes of settlement; and

e)   drafted minutes of settlement that were apparent as to whether the policy was security only or an added benefit.

The lawyer acted for himself. Pity!


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