A few weeks ago, Ontario’s Court of Appeal endorsed a liability insurer’s proposed use of a “split file” protocol to address inherent conflicts of interest in the conduct of an additional insured’s defence. Markham (City) v. AIG, 2020 ONCA 239, illustrates that early initiation of a “split file” protocol can allow an insurer to retain control of an insured’s defence (named or additional) when the underlying allegations create conflicts of interest between insurer and insured, or as between conflicting co-defendants insured under the same liability policy (i.e. with crossclaims against each other the underlying proceedings). Usefully for practitioners, the Court of Appeal outlined the “split file” protocol as an 11-point “to do” list that can be incorporated into coverage counsel’s conflict of interest management strategy.
April 22, 2020
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