OVERVIEW
On August 27, 2024, the Ontario Court of Appeal rendered its decision in Live Nation Ontario Concerts GP, Inc. v. Aviva Insurance Company of Canada, 2024 ONCA 634 (CanLII) (“Live Nation v. Aviva”). Live Nation v. Aviva arose out of a request for defence coverage by an additional insured. Live Nation put on a concert. A concert goer claimed she was injured in a security incident. Live Nation was named as an additional insured to the security company’s policy issued by Aviva. Live Nation and its own additional insured, the property owner, sought defence costs from Aviva by application.
Initially, the application judge held that Aviva owed the applicants 100% of their past and future defence costs in the action. Aviva appealed. One of the issues on appeal concerned how to deal with Live Nation’s $1,000,000 SIR. Aviva argued that there were mixed claims, and as such it was entitled to equitable contribution. Live Nation argued that the claims were not mixed, and all arose out of the security incident, but that in any event Aviva could not seek equitable contribution from them. Aviva argued that an insured with an SIR should be treated as an insurer for the purposes of equitable contribution.
The Court of Appeal decided that there were mixed claims, as there were claims for security negligence, as well as statutory negligence claims. Aviva was not responsible to indemnify the respondents for the latter. However, the Court held that Aviva could not seek equitable contribution from Live Nation despite the SIR. Aviva retained the right to seek reallocation of defence costs at the end of the underlying action.
This decision demonstrates that the concepts of risk allocation and equitable contribution are different. Assuming the risk of a certain amount of defence costs via an SIR does not turn an insured into an insurer. The concept of equitable contribution is a remedy between insurers and ought not to be applied between an insurer and an insured.
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