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Financial Services Group e-LERT: Update to Survey of Provincial Motor Vehicle Vicarious Liability - Alberta Cap Comes into Effect March 1st, 2011

Published: 01/17/2011

By David Budd, Jonathan Fleisher

Over the past several years, our firm has been regularly updating our clients as to the state of vicarious liability in Canada. As noted in our earlier newsletter, Alberta had passed a legislation to cap liability but that it had not yet come into force.

Effective March 1, 2011 legislative and regulatory amendments to the Alberta Traffic Safety Act and Insurance Act will cap vicarious liability of lenders, lessors, renters and conditional sellers of motor vehicles in that province to $1 million.

Section 187 (2.1) of the Alberta Traffic Safety Act provides that in an action for the recovery of loss or damage sustained by a person by reason of a motor vehicle on a highway the maximum amount that a lender, lessor, renter or seller will be liable for in respect of the same incident will be $1million less any amounts recovered for loss or damage under the third party liability provisions of motor vehicle liability policies issued to persons other than such lenders, lessors, renters or sellers. Accordingly, the new subsection 187 (2.1) is more protective then the originally contemplated bill as it ensures that the third party liability provisions of motor vehicle liability policies are used to satisfy any claims prior to looking to the lender, lessor, renter or seller of the motor vehicle. The wording of the Alberta legislation is also broader than the similar provisions in the Ontario Insurance Act (section 267.12) which specifically limits the cap to claims for loss or damage from bodily injury or death. The Alberta legislation places a cap on claims for “loss or damage sustained by a person.” In addition, vehicle rental companies are also protected by the $1 million cap. This chart contains an updated 10 province survey of vicarious liability to lessors and conditional sellers of motor vehicles in Canada.

The chart covers both vicarious liability for personal injury and property for both a lessor and a conditional seller. As is set out in the chart, the liability varies depending on the particular situation. The chart sets out the key statutes and section numbers that assist in the analysis. It should be emphasized that this area of law is in flux and case law may vary interpretations of the statute. As such, caution should be used in relying strictly on statutory authority. Further, as will be noted in the chart, there are certain areas where there is no clear guidance as to whether vicarious liability will flow.

Please click to download the chart.