CANADA Law and Practice Contributed by: Chris McKibbin, Avi Sharabi, Alex Valova and Douglas Treilhard, Stieber Berlach LLP
arbitration agreement satisfy the applicable statutory requirements and that any necessary translations, authentication requirements and service obligations have been met. Delays may also occur where paral- lel proceedings are pending in another jurisdiction or where an application has been brought to set aside the award at the arbitral seat. Overall, arbitral awards, including those rendered out- side Canada, are readily recognised and enforced. The legal framework is well established, judicial inter- vention remains limited and the available grounds for resisting enforcement are interpreted narrowly. This creates a high degree of predictability for parties who elect to resolve disputes by arbitration. 3.3 Practical Use of Arbitration in Insurance Matters Arbitration is best viewed as a specialised dispute- resolution mechanism that is widely accepted and frequently used in reinsurance and sophisticated com- mercial insurance markets, rather than a dominant method of resolving insurance disputes generally. No comprehensive public statistics quantify the use of arbitration across the insurance sector as a whole. However, arbitration clauses are frequently encoun- tered in reinsurance agreements and in sophisticated commercial insurance placements involving multina- tional risks, while consumer insurance disputes are more typically resolved through litigation, statutory tribunal processes or negotiated settlement. Unlike court proceedings, which are generally pub- lic, arbitral proceedings and awards are private and frequently subject to contractual or institutional con- fidentiality obligations. However, the extent of confi- dentiality ultimately depends on: • the arbitration agreement;
on questions of law may be available in some circum- stances, while appeals on questions of fact or mixed fact and law are often restricted or excluded alto- gether. In international commercial arbitration, judicial intervention is even more limited and challenges are typically confined to issues such as jurisdiction, pro- cedural fairness, excess of authority or other narrow grounds recognised by the applicable legislation and the New York Convention. 4. Coverage Disputes 4.1 Evolving Trends in Coverage Disputes The key emerging trends in Canadian insurance cov- erage disputes include climate and weather-related volatility; third-party litigation funding; and cyber risks, as follows. • Extreme weather events, including wildfires and flooding, have become more commonplace and have caused increasing losses. The Insurance Bureau of Canada reported that annual insured losses from natural disasters averaged CAD2.2 billion from 2014 to 2024 – triple the annual aver- age over the previous decade. As a result, insur- ers have revised their risk modelling and premium assessment, while also revising policy language where appropriate. • Canada is seeing an expansion of third-party litiga- tion funding, including as an investment vehicle for institutional and other large investors. This has increased the volume of claims, increasing litiga- tion and associated expense and raising the overall cost of coverage disputes. • As discussed in more detail in 4.3 Cyber and Tech- nology-Related Coverage Issues , as commerce becomes more digital, cyber attacks seeking to exfiltrate confidential information and/or money are increasing in number, severity and sophistication. These risks also include business interruption from direct network outages or widespread IT vendor or cloud provider outages. The next emerging trend will likely involve using AI in insurance coverage investigation, analysis and claim disposition. Insurers will aim to scale AI adoption in
• the governing arbitral rules; and • any applicable legal requirements.
The scope for appeal or judicial review is generally limited. Domestic arbitration statutes vary somewhat between provinces, but modern Canadian arbitration law strongly favours finality. Depending on the appli- cable legislation and the parties’ agreement, appeals
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