Chapter 2 - Legal Concepts Flashcards

1
Q

What are the four legal concepts that regulate the settlement of auto accident claims?

A

1) negligence
2) onus of proof
3) subrogation
4) absolute liability

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2
Q

Define negligence.

A
  • is the omission to do something which a reasonable person guided by those considerations which ordinarily regulate the conduct of human affairs, would do, or doing something which a prudent and reasonable person would not do.
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3
Q

Define liable.

A
  • means legally responsible
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4
Q

What does legislation state about who is liable if you lend your car to a friend?

A

1) the owner of the auto
2) the driver of auto
3) lessee of auto

  • if you lend a car to your friend and he gets into an accident for which he is at fault, the owner/lessee are just are legally responsible for the accident as the driver is
  • but the driver must be operating the auto with the consent or implied consent of owner/lessee
  • SECTION 192
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5
Q

Define onus of proof.

A
  • means the burden or responsibility of proof, and is also known as “onus probandi”
  • is related to the concept of negligence
  • when one person sues another, the law puts the onus of proof upon the person suing (the plantiff)
  • therefore, the one who alleges the other motorist is negligent is required to prove that negligence
  • one exception is an accident involving a pedestrian or cyclist, the motorist presumed to be liable must prove that he/she was not negligent
  • SECTION 193
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6
Q

How is fault determined?

A
  • by fault charts or a similar fault assessment process

- fault charts are based on precedent set by decisions for accidents that have previously happened

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7
Q

Explain subrogation.

A
  • an insurer who pays to repair an insured’s car that was damaged by a 3rd party, has the right to recover from the at-fault 3rd party
  • right of subrogation can be limited or removed by legislation (in Ontario)
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8
Q

Define subrogation.

A
  • is the transfer of legal rights (to an insurer) of someone whose debts/expenses have been paid to pursue recovery from an at-fault party
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9
Q

Explain absolute liability.

A
  • legal concept that can influence settlement of auto insurance claims
  • the insurer is responsible to pay 3rd party claims even though the insured has breached a policy condition
  • 3rd parties are given a direct right of action against the insurer to have the insurance money under the policy paid directly to them
  • some jurisdictions require a judgment to be obtained in the favour of the 3rd party before money will be awarded
  • insurer has legal right to recover from its own insured any amount paid by reason of absolute liability
  • insured may find it difficult to obtain future insurance until they have repaid any amounts their insurers paid due to absolute liability provision
  • insurers are only obligated to pay up to the minimum limits of insurance in the jurisdiction involved, even if policy has higher limits
  • best defense for insurers against absolute liability claims is to do a thorough research before they bind coverage
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10
Q

What does SECTION 258 (1) - application of insurance money, 3rd party claims, etc and SECTION 258 (4) - insurer absolutely liable contain?

A

The right of a person who is entitled to have insurance money applied upon the person’s judgment or claim is not prejudiced by:

1) an assignment, waiver, surrender, cancellation or discharge of contract made by the insured after the happening of the event giving rise to a claim under contract
2) any act or default of the insured before/after that event in contravention of this part or the terms of the contract
3) any contravention of the criminal code or a statute of any province/territory in Canada or of any state/district of Columbia of the USA by the owner or driver of the auto

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11
Q

Explain negligence.

A
  • is the fialure to do what a reasonable and prudent person would do
  • its doing what a resonable and prudent person would not do
  • legislation states that a negligent person in an auto accident is liable (legally responsible) for damage/injury caused
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