Patchwork Contextualism in the Anglo-Canadian Law of Insurance Policy Interpretation: Implications for the Principles of the Law of Liability Insurance
39 Pages Posted: 2 Apr 2016
Date Written: November 18, 2015
The law of Canadian insurance policy interpretation can be seen as an apt natural experiment for some of the proposed principles in the American Law Institute’s draft Restatement on PRINCIPLES OF THE LAW OF LIABILITY INSURANCE. The Restatement attempts to provide some unification of the American law of insurance policy interpretation. In the past, this area of law has been divided by two distinct traditions – a textualist tradition where insurance policy meaning is derived solely from the text of an insurance policy and a contextualist tradition where insurance policy meaning is derived from both the text of the policy and, to varying degrees, broader contextual factors existing outside the policy. The Canadian law of insurance policy interpretation is a unique amalgam of American contextual and English textual insurance policy interpretation principles. It is, at its best, a patchwork, peripatetic contextual approach–it can vacillate from contextualism to extreme textualism in case results. At its purest form, it attempts to strike very close to the alleged middle ground that the proposed Restatement purports to itself strike. The Restatement attempts to straddle the bipolar textualist and contextualist camps of American insurance jurisprudence by providing a set of interpretive principles that draw on the best of both legal traditions. By understanding how the law of Canadian insurance policy interpretation operates – and fails – those charged with the task of drafting the Restatement may be able to draw some comparative assistance in achieving this delicate balance that Canadian law has, for decades, sought to achieve. At the very least, the Canadian experience may operate as a useful foil for how many of the issues tackled in the proposed Restatement may actually play out in American insurance law disputes.
Keywords: insurance; tort; litigation
Suggested Citation: Suggested Citation