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Fridays with Rogers Partners

At our weekly firm meeting, Michael Kryworuk discussed the recent decision of the Court of Appeal in Desjardins General Insurance Group v. Campbell, 2022 ONCA 128

History of the Litigation:

This appeal arose out of a number of applications and motions involving three separate insurance claims for damage to homes caused by a tornado that struck Ottawa in September of 2018. One of the damaged homes belonged to the Respondent, Ruth Campbell. The Appellant, Desjardins, was the insurer of Mrs. Campbell’s home.

Following a disagreement between the parties over the value of the loss, the Respondent triggered the appraisal mechanism under s. 128 of the Insurance Act. She appointed her lawyer, Mr. Obagi, as her appraiser. Desjardins appointed an employee, who was the adjuster assigned to the Respondent’s file, as their appraiser. The two appraisers agreed on the choice of an umpire.

After counsel for the Respondent advised the umpire that he might be bringing a bad faith claim on the Respondent’s behalf against the Appellant for how they had adjusted his client’s file, the umpire expressed a concern that Mr. Obagi was both the respondent’s lawyer and her appraiser. The umpire also questioned the independence of Desjardin’s appraiser.

The umpire advised the parties of his opinion that an appraisal “must be seen to function as an independent panel under the Insurance Act where there is no or perceived conflict of interest.”[1]The umpire was unwilling to proceed further without directions from the Superior Court.

While, Desjardins satisfied the umpire’s concern by appointing an appraiser who was not an employee of the insurer, the Respondent maintained her choice of appraiser as Mr. Obagi.Desjardins then brought an application for judicial direction and asked for the court to remove Mr. Obagi as the respondent’s appraiser.

The application judge dismissed the application finding that while the umpire is required to be impartial, that is not true of the appraisers selected by the parties. Desjardins appealed.

Legal Overview:

The Court of Appeal began their decision by outlining the key sections of the Insurance Act that were relevant to the issue of the duties of an appraiser.

Contracts providing for appraisals

128 (1) This section applies to a contract containing a condition, statutory or otherwise, providing for an appraisal to determine specified matters in the event of a disagreement between the insured and the insurer. 

Appraisers, appointment

(2) The insured and the insurer shall each appoint an appraiser, and the two appraisers so appointed shall appoint an umpire. 

Appraisers, duties

(3) The appraisers shall determine the matters in disagreement and, if they fail to agree, they shall submit their differences to the umpire, and the finding in writing of any two determines the matters.[2]

Positions of the Parties:

The Appellant insurer, Desjardins, argued that the application judge erred in finding that an appraiser is an advocate and not a decision maker, because this offends the principle of impartiality and breaches procedural fairness.

They argued that the application judge erred in relying on the witnesses’ understanding of the role rather than the wording of s. 128(3) of the Insurance Act. They also argued that the application judge erred by misinterpreting and misapplying a legislative amendment from 1966 to the Act that removed the word “disinterested” under s. 148, which also discussed appraisals.

Meanwhile, the Respondent, Mrs. Campbell, argued that the Insurance Act expressly permits the parties to appoint an appraiser of their choice, and that such a choice need not be neutral, non-partisan or independent of the parties. She also argued that the suggestion that the appraiser be neutral runs contrary to the legislative scheme of the Insurance Act, and the common practice in the industry where insurers regularly appoint their own adjusters as appraisers and the parties appoint their lawyers.


The Court of Appeal found that Desjardins’ argument was flawed for a number of reasons.

First, it was well established in the jurisprudence that the purpose of the appraisal scheme under s. 128 of the Insurance Act is to provide an “easy, expeditious and cost-effective means” for settlement of claims. The narrow function of the appraisal process is to provide the parties to the dispute with a valuation of loss, and not the determination of legal rights.[3]

Second, as was noted in the recent 2021 ONSC Decision of Northbridge General Insurance Corp. v. Ashcroft Homes-Capital Hall Inc., 2021 ONSC 1684,the appraisal process is designed to be collaborative and not adjudicative.[4]

Third, the Court of Appeal noted that in 1966, the Ontario legislature removed the qualification of “competent and disinterested” from the term “appraiser” in s. 148 of the Insurance Act. In the Court’s view, the Appellants were effectively asking the court to read this qualification back in.

In rejecting this argument, the Court noted that the application judge had correctly stated that sections 128(2) and (3) have never stipulated that appraisers must be competent or disinterested, and that through the exercise of modern statutory interpretation it would be wrong to read such a requirement in now.[5]

The Court of Appeal also found that while the appraisers need not be disinterested parties, they are also not properly called advocates. An appraiser must attempt in good faith to reach a compromise with their fellow appraiser. That does not preclude the appointment of one party’s lawyer as their appraiser.[6]

In short, the flaw in the appellants’ argument that appraisers must be independent is that it conflated the roles of the umpire and the appraisers. The integrity of the process depends on the impartiality of the umpire, not the appraisers.[7]

On appeal, Desjardins also argued that the real issue in this case was Mr. Obagi’s dual role as appraiser and counsel in the Mrs. Campbell’s bad faith action against Desjardins. They submitted that this created a conflict of interest and Mr. Obagi, in his role as appraiser, had the ability to influence and impact the decision in such a way that it could impact upon the bad faith claim.[8]

The Court found that the bad faith claim and the appraisal were different issues. The bad faith claim involved the conduct of the insurer prior to the reconstruction house after the tornado. However by that point, the house had been reconstructed and the sole issue for appraisal was their replacement cost.

The panel found that if the appraisal and the bad faith claim were to become intertwined in the future, this conflict of interest could be remedied by Mr. Obagi’s removal as counsel of record under s. 5.2 of the Rules of Professional Conduct.[9]


In this panel decision, the Court of Appeal dismissed the appeal and upheld application’s judge decision that the respondent’s lawyer could remain as her appointed appraiser.


This decision stands for the proposition that while the appraisal process under s. 128 of the Insurance Act requires umpires to be independent and impartial, this requirement does not apply to the appraisers chosen by the parties.

As such, the respondent was entitled to select her lawyer as her appraiser in the appraisal process. And while Desjardins had changed their appraiser from their adjuster to a non-employee, there was no obligation under s. 128 of the Insurance Act for them to do so.

[1] Desjardins General Insurance Group v. Campbell, 2022 ONCA 128 at para 3.

[2] Insurance Act, R.S.O. 1990, c. I.8, s 128.

[3] Desjardins¸ supra note 1, at para 27.

[4] Ibid, at para 29.

[5] Ibid, at para 30-31.

[6] Ibid, at para 36.

[7] Ibid at para 43.

[8] Ibid at para 40.

[9] Ibid at paras 41-42.