It is not unheard of for evidence to go missing in property damage claims. The outset of a claim can be very hectic, with a lot of parties involved, most of whom are not concerned about future recovery for the loss. However, if there is subrogation potential, preserving the evidence should be a paramount consideration for the insurer.

When we hear that key evidence is missing, it is a natural reaction to think that the doctrine of spoliation might apply. However, the doctrine of spoliation actually applies only in quite limited circumstances, requiring the following:

  1. 1. The missing evidence must be relevant;
  2. 2. The missing evidence must have been destroyed intentionally;
  3. 3. At the time of destruction, litigation must have been ongoing or contemplated; and
  4. 4. It must be reasonable to infer that the evidence was destroyed in order to affect the outcome of the litigation.[1]

Given the requirement that the destruction be intentional, the doctrine of spoliation will apply to very few cases – especially in subrogation where insurers understand the importance of preserving evidence. Nonetheless, the loss of evidence still presents a problem for the plaintiff, which is illustrated in a recent decision from the Ontario Superior Court of Justice, Dupuis v. W.O. Stinson & Son Limited.

In Dupuis, the insurer brought a subrogated claim for $500,000.00 stemming from a defective oil tank. The Statement of Claim was issued in November 2012 and discoveries had been completed but the plaintiff still had undertakings which remained outstanding. The plaintiff advised relatively late in the process that the subject oil tank had been misplaced. The decision arises from a motion brought by the defendants to dismiss the action for delay.

The defendants’ motion was brought pursuant to Rule 24.01(2) of the Rules of Civil Procedure, because the plaintiff had failed to set the matter down for trial by the fifth anniversary of the claim being issued. The Rule requires the court to dismiss the action in those circumstances, unless the plaintiff shows an acceptable reason for the delay and proves that there will not be any prejudice to the defendants that cannot be compensated for by costs.

The court was not satisfied that the plaintiff provided a just reason for the delay. The supporting reasons included that the subrogated insurer had difficulty getting cooperation from its insured, but apparently did not take steps until quite late in the day to attempt to locate him and gain his cooperation.

Most importantly, the court found that, without the oil tank, it would be “virtually impossible” to reach a conclusion as to what caused the tank’s failure. The defendants submitted an expert report which commented that the standard inspection procedures could not be performed without the tank. On the other hand, the plaintiff submitted an email (not a report) from its expert indicating that they could assess the cause of loss by photographs and TSAA records.  The court gave no weight to the email.

The court found that the defendants would suffer non-compensable prejudice if the action were allowed to proceed. Therefore the action was dismissed for delay.

While the doctrine of spoliation does not apply in these types of cases, the destruction or misplacing of evidence always creates a hurdle for the plaintiff who has the onus to prove causation on a “but for” standard. The lesson to be learned by this decision is twofold: (1) reach out early and remain in contact with your insured, whose cooperation is often critical in a subrogated claim; and (2) do not let the evidence out of sight, or you might be forfeiting your opportunity to recover in subrogation.

See Dupuis v. W.O. Stinson & Son Limited, 2019 ONSC 5762 (CanLII) 

[1] See the recent decision, CMT et al. v. Government of PEI et al., 2019 PESC 40 (CanLII), for a good overview of spoliation law in Canada.


  • Tim Gillibrand

    Better known around the water cooler as “Amazon Prime”, Tim has a knack for knowing just what his insurance clients need and delivering it overnight (at a premium). Whether he’s flexing his subrogation muscles, “nerding out” over a new coverage issue or investigating fraud, Tim enjoys thinking outside the box.