Canadian Lawyer

www.canadianlawyermag.com 27 "While there might be exceptions based on the specific wording of a particular contract, the traditional view of the meaning of 'physical damage' will likely prevail." Justine Forsythe, Whitelaw Twining CANADIAN COVID-19 BUSINESS INTERRUPTION CLASS ACTIONS adds that trial courts are often relatively sympathetic to the argument of policy- holders denied coverage. Justine Forsythe, with Whitelaw Twining in Vancouver, says that as the impact of the pandemic grows more apparent, even as we slowly "get back to normal." The litigation strategy used in insurance cases will also evolve, including attempts to broaden the definition of physical damage. However, she believes that "while there might be exceptions based on the specific wording of a particular contract, the traditional view of the meaning of 'physical damage' will likely prevail." Forsythe points to a 2015 B.C. appeal court decision, Acciona Infrastructure Canada Inc. v. Allianz Global Risks U.S. Insurance Company, which defines "physical loss" and "damage" as an alteration in the appearance, shape, colour, or other material dimensions of the property insured. This definition is what most people would consider physical damage, she says. But Forsythe also says some cases from the U.S. demonstrate that there may be arguments available for policyholders to make, depending on the policy's wording. Regulation of insurance is handled at the state level — and attempts to bring class actions or multidistrict suits have been unsuccessful. The result is that thousands of individual COVID-related coverage lawsuits have been launched, with one University of Pennsylvania Law School litigation tracker putting the number at around 2,000. In cases where the insurers have asked courts to dismiss the suits, the majority have been successful. However, some courts in the U.S. have found that policyholders' allegations of "physical loss of or damage to property" were sufficient to survive early motions, and those cases have proceeded to the discovery process. For instance, in SWB Yankees LLC v. CNA Fin. Corp., an August 2021 decision from the Pennsylvania State Court, the judge rejected the insurers' arguments that the plaintiff failed to allege "direct physical loss or damage" sufficient to trigger coverage for its COVID-19 business interruption losses, based on the plaintiff 's pleadings that its covered property was rendered "unsafe" and "unfit for its intended use" due the coronavirus. In Ross Stores, Inc. v. Zurich Am. Ins. Co. (July 2021), a California Superior Court judge denied a motion to dismiss the plaintiffs' claims for business interruption coverage. The insurers had argued that the presence of coronavirus is not "property damage" and cannot constitute "direct physical loss." However, the policy at issue did not contain the word "direct" in the insuring agreement but instead covered "all risks of physical Nordik Windows v. Aviva: Ontario Superior Court of Justice Edward Belobaba ruled on Sept. 10 that Nordik, along with Hangar9 Studios Inc., Cash and Carry Inc. and Real Food for Real Kids Inc., are suitable representative plaintiffs in a class-action lawsuit. Workman Optometry Professional Corp et al. v. Co-Operators, Continental Casualty Co. Desjardin et al.: Class action certified on Aug. 20 by Justice Belobaba, involving several plaintiffs (including a suit store, a smoothie shop and a dance studio) and 14 insurance companies as defendants. Matt McCallum, Matt McCallum Denturist Professional Corporation v. Aviva Insurance Co. of Canada: Class action certified on July 27 by Justice Belobaba involving a group of denturists. The Royal Canadian Legion, Victory Branch #317 v. Aviva Insurance Co. of Canada: Class action certified on July 27 by Justice Belobaba, involving legion groups across the country.

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