The Diocese of Bathurst has lost the $3.3 million lawsuit it brought against
Aviva Insurance. The Diocese claimed that its former insurer should have covered the compensation the Diocese paid to victims of sexual abuse.
However, the Court of Queen’s Bench decision denied the Diocese’s request for punitive damages from Aviva for wrongful denial of insurance coverage.
“The Diocese was unsuccessful in establishing coverage for the compensatory damages it paid to the victims through the conciliation process and the expenses and costs related to it,” said Justice Stephen McNally in the decision. “The Diocese’s claims for damages with respect to that aspect of the action must fail and is therefore dismissed.”
“The portion of the Diocese’s claims related to its expenses incurred in defending, resolving and/or paying judgments in relation to claims brought against it outside the conciliation process are yet to be determined,” he further stated.
The Diocese paid out $5.5 million to 90 victims who were abused by priests under the pastoral district through a confidential compensation process.
Last December, the Diocese’s lawyer Chris Blom argued in a court appearance that Aviva should have abided by the policy it sold the district in helping pay for some of the compensation. Lawyers representing the insurer, however, countered that bishops within the Diocese were aware of the abuses as far back as the 1950s and failed to report on them.
“In my view, Aviva adopted a bona fide and legitimate position in coming to its decision to deny coverage, albeit one that may not have totally carried the day,” McNally said in his decision.
CBC News reports that McNally deferred the issue of costs until the case is complete.
Related Stories:
Insurance suit sheds light on Ottawa clergy abuse scandal
Another carrier sued over sex-abuse settlements
