Solidary liability between an insurer and its insured, a constantly evolving notion

Octobre 2014 — “…an insurer and its insured may be held separately liable for the total amount of the obligation. This entails enormous consequences, especially regarding the limitation period (prescription) for such a recourse.”

In 2005, the Court of Appeal surprised everyone in the case of CGU v. Wawanesa1, by ruling that there is solidary liability between an insurer and its insured, in spite of a strong tendency in previous case law to the contrary.2 Since then, an insurer and its insured may be held separately liable for the total amount of the obligation. This entails enormous consequences, especially regarding the limitation period (prescription) for such a recourse.

This argument does not however stop there. In fact, since this controversial judgment was rendered, some authors have invoked numerous arguments countering the existence of such solidary liability. In September 2013, in spite of the fact that in Bourque v. Boudrier (2013 QCCA 1663) the Court of Appeal continued to apply the notion already established in the CGU case, Honourable Justice Bich, J.C.A., mentioned in an obiter dictum, the existence of a tendency in doctrine which was contrary to the solidary liability established between an insurer and its insured, which could lead to a reversal of this case law. However, these arguments, which are contrary to the existence of solidary liability, were not invoked by the parties either in their briefs or at the hearing, meaning that this issue was not heard by the Court of Appeal. In spite of the comments made by Justice Bich as stated in the Bourque ruling, it is still premature to believe that such a reversal of case law could apply in Quebec, as case law over the last years is unanimous to the effect that there actually is a solidary obligation between an insurer and its insured.3


Before 2005, everyone agreed that there was no solidary obligation between an insurer and its insured. In fact, according to Mr. Duprat, attorney “during the 1994 reform the legislator did not specify if there was a solidary obligation between an insurer and its insured regarding a recourse undertaken by a victim. It must accordingly be considered that such a solidary obligation does not exist.”4 The courts also agreed with this opinion. In Bouffard v. Genest5, the Court reached the conclusion that the interruption of the prescription of a recourse against a notary could not apply to his liability insurer, because of the lack of any solidary obligation existing between the two parties. There was however at that time only one judgment which affirmed the contrary, that is, Guardian v. Leblanc6, in which the Court reached the conclusion that an insurer and its insured had a solidary obligation as a result of its interpretation of the insurance policy and articles 2501 and 1523 C.C.Q. Because of the uncertainty that began to appear, in 2005, the Court of Appeal was called on to rule on this issue for the first time.


The Litigation

In 1997, a fire occurred in a residence insured by CGU. The fire spread to a neighbouring building, which was insured by AXA. The fire was accidentally caused by the owner of the building insured by CGU, or by a friend who was visiting him. They were both smoking cigarettes and the friend was insured by Wawanesa. The friend unfortunately died in the fire. As the insurer of the injured third party, AXA had decided to undertake subrogatory proceedings only against CGU, the liability insurer of the owner of the residence. Seeing that its insured was not the only person presumed liable for the fire, CGU wanted to force an intervention by the liability insurer of the deceased friend, Wawanesa. We underline the fact that AXA undertook its subrogatory recourse only against CGU three days before the limitation (prescription) of this recourse ran out.7 It was accordingly  impossible for CGU to force an intervention by Wawanesa within the three-year time limit following the damage.

In the the Superior Court decision, the trial level judge had reached the conclusion that according to article 1480 C.C.Q. both the insured of CGU and Wawanesa were solidarily liable for the damage caused to AXA’s insured, as they had both committed the same acts and it was impossible to determine who was precisely at fault. However, the solidarity under article 1480 C.C.Q. does not extend to insurers, as it only covers persons who committed a fault. The Court had accordingly reached the conclusion that it was possible to join the deceased person to the suit, but not his insurer. This was questionable from a moral viewpoint, but in compliance with the state of the law.

Relevant Legislation

Before going any farther, it is useful to look at the articles of the Civil Code of Québec8 which are mentioned in this judgment.

1523An obligation is solidary between the debtors where they are obligated to the creditor for the same thing in such a way that each of them may be compelled separately to perform the whole obligation and where performance by a single debtor releases the others towards the creditor.

2501An injured third person may bring an action directly against the insured or against the insurer, or against both.

The option chosen in that regard by the injured third person does not deprive him of his other recourses.

The Reasoning of Honourable Justice Baudouin, J.C.A

When called on to hear the appeal from this decision, the Court of Appeal and more specifically, Honourable Justice Baudouin, finally established the existence of solidarity between an insurer and its insured. Although Justice Baudouin underlined in his judgment that article 2501 C.C.Q. does not specifically provide for solidarity, he was of the opinion that the legislator created a solidary obligation without saying so, as all of the characteristics of solidarity are present, that is, a unity of object, a plurality of links and a mutual representation of interests. The fact of undertaking legal proceedings against the faulty party interrupts prescription against him, and according to article 2900 of the C.C.Q., this interruption also applies to all solidary creditors. Accordingly, in CGU, the Court of Appeal justices reached the conclusion that there was solidarity between an insurer and its insured, so that this interruption of prescription also had an effect against Wawanesa. In this way, both insurers and their two insured were all held solidarily liable and prescription was interrupted regarding them.


Reaction of the Legal Community

Much was written about this judgment, as many legal practitioners consider that the legislator never intended on providing for solidarity between an insurer and its insured. In fact, according to the saying that “the legislator does not speak needlessly” many legal practitioners consider that there is a solidary obligation only when the law clearly specifies it.

According to the authors Baudouin and Jobin, “considering that article 1523 C.C.Q. creates solidarity each time debtors are held liable together, is contrary to the principle according to which solidarity is not presumed.”9 They consider that if solidarity is required, only the legislator has the power to decide that and not the courts.

In addition, the authors Lluelles and Moore also confirmed that the legislator must provide for solidarity in clear and precise terms, failing which it cannot be presumed. “Any doubt on this point must eventually be resolved by a joint obligation. The fact that a victim has a direct optional recourse under article 2501 C.C.Q. against the liability insurer of the person who caused the prejudice should not normally allow reaching the conclusion that the obligations of an insured and its insured are solidary.”10

Solidarity Enthusiasts

On the other hand, some authors entirely agree with the principle stated in the CGU case. In fact, the author Pichette believes that it would have been “outrageous” if an insurer was deprived of its right to have a liable third party assume its liability strictly because of AXA’s decision to only sue one liable party.11 He considered that this change was positive, as it settled a large number of concrete and real problems, such as problems in connection with the solvency of an insured third party, whether bankrupt or not.

Constant Case Law

Since the judgment in CGU, no other judgment infringed the principle according to which insurers and insured are held solidaily liable of an obligation. For example, the Court of Appeal reiterated this principle in 2007 in the Saratoga12 case, in which the issue was a building insured by AXA and which had caught on fire because of a construction defect in the fireplace. AXA undertook subrogatory proceedings against the seller of the house and added its liability insurer Lombard, as a defendant. The three judges reached the conclusion that the CGU judgment was important and specified that it had “clearly ended the controversy”13 and that from now on, all previous case law no longer applied. The Court of Appeal accordingly reached the conclusion that there was interruption of the prescription, considering the solidarity between the insurer and the insured.

The Court of Appeal reaffirmed the existence of this solidarity in 2008 by its judgment in Joseph Élie14. In fact, in this judgment, the Court of Appeal did not conduct a detailed examination of the issue of solidarity and only applied the principle already established to a case involving an insurer which had indemnified its insured following the leakage of bunker oil in its building.  The insurer undertook a subrogatory recourse against the manufacturer of the oil tank and its liability insurer. In addition, in 2012, the Superior Court continued to apply solidarity between an insurer and its insured in Lombard15.

Since 2005, there has been no questioning of the principle established by the courts, as case law is unanimous to that effect. However, in 2013, the Court of Appeal suggested that it would be open to reconsider this issue once again.


The Litigation

After having purchased a building, the buyers realized that numerous access servitudes (easements) for the benefit of the neighbours affected the immovable, in spite of the fact that they had specifically asked the seller to ensure that the immovable was free of any encumbrances. They obtained a judgment to cancel the sale, but the trial level judge solidarily ordered only the selling company and its shareholder to reimburse the selling price. Unsatisfied that the court did not solidarily order the notary and the Professional Liability Insurance Fund of the Chambre des notaires  to reimburse the selling price, the purchasers appealed the decision. On appeal, the judges upheld the court order against the seller and the shareholder and in addition, they ordered the notary in solidum to pay, as they had all committed a fault contributing to the cancellation of the sale. Pursuant to recent case law, the notary’s insurer was solidarily ordered to pay with its insured, without the issue being argued on the merits before the Court of Appeal.

Toward the Abolition of Solidarity Between Insurer and Insured?

As mentioned above, although the issue of solidarity between an insurer and its insured was not raised in that case, in an obiter dictum, Honourable Justice Bich underlined that in spite of recent case law16, “the controversy remains and there is no lack of interesting counter arguments. That said, because in this case the parties did not have a chance to argue this issue, which is not raised in their briefs and was not raised at the hearing [she] preferred for now to follow the case law established by the Court.”17 (our emphasis). Accordingly, Justice Bich implies that she would be willing to hear argument on this issue, and this could lead to a reversal of the case law.


After having surprised the legal community by ruling that there is solidarity between an insurer and its insured, it’s possible that the Court of Appeal returns to its initial position, that is, the joint obligation. This is not however the case right now, as it will be necessary to wait for parties to submit the issue to the Court of Appeal, which will then conduct a serious examination. Without confirming that a change is in the offing, this comment nevertheless shows that there is a possibility of debating this point once again, which may more than please some insurers.

  1. CGU v. Wawanesa Mutual Insurance Company, 2005 QCCA 320;
  2. Fraser v. Jo-Al Chaussures Inc., (1984) S.C. 1023; Androutsos v. Manolokos, (1994) R.J.Q. 2608, REJB 1994-28750; Factory Mutual Insurance Co v. Guérin-Lajoie, (2004) R.R.A. 117, REJB 2004-79922; Caisse populaire Duberger v. Beaulé (1981) C.P. 232; etc.;
  3. Decisions cited in footnotes 16 to 20;
  4. François DUPRAT, “L’assurance responsabilité et le recours de la victim,” [Civil Liability Insurance and a Victim’s Recourses], Développements récents en droit des assurances (2003), Service de la formation permanente du Barreau du Québec, 2003, EYB2003DEV330, p. 5;
  5. (1998) R.R.A. 658;
  6. Guardian Insurance Company of Canada v. Leblanc, (1999) R.R.A. 670 (C.S.), REJB 1999-13953, para. 31;
  7. Supra, note 3, p.10;
  8. Civil Code of Québec, RSQ, C c-1991;
  9. Jean-Louis BAUDOUIN and Pierre-Gabriel JOBIN, Les obligations, 7th ed., by Pierre-Gabriel Jobin and Nathalie Vézina, Cowansville, Éditions Yvon Blais Inc., 2013, para. 617, p. 720;
  10. Didier LLUELLES and Benoît MOORE, Droit des obligations, [Law of Oblilgation] 2nd ed., Montreal, Les Éditions Thémis Inc., 2012, para. 2588, p. 1535;
  11. Supra, note 3, p. 11;
  12. Axa Insurance Inc. v. Immeuble Saratoga Inc., 2007 QCCA 1807;
  13. Ibid., par. 31;
  14. Federation, Insurance Company of Canada v. Joseph Élie Ltd., 2008 QCCA 582;
  15. Lombard General Insurance Company of Canada v. Factory Mutual Insurance Company, 2012 QCCS 4334;
  16. Saratoga, supra note 16; Ferme avicole Héva v. Coopérative fédérée de Québec (insured portion), 2008 QCCA 1053; Joseph Élie, supra note 18; Lombard, supra note 19, etc.;
  17. Bourque v. Poudrier, 2013 QCCA 1663.