Defending Cross-border Insurance Defence

US Insured Sued In Canada | US Insurer Defending Insured in Canada

We are Ontario, Canada lawyers with experience advising United States insurers, self-insureds, risk managers, general counsel, attorneys, claims examiners, claims analysts, claims specialists, and third party enterprise claims management administrators, regarding claims brought in Ontario against US insureds.

Examples of US-based insureds sued in Canada may include:

  1. Manufacturers
  2. Distributors | Re-sellers | Franchisees
  3. Retailers with a US parent or affiliate
  4. Shippers | Transport companies | Freight Forwarders
  5. Commodities brokers
  6. Resort operators
  7. Sale of Goods – Buyers, Sellers, Shippers, Receivers, Consignors and Consignees
  8. Carriers, including NVOCCs
  9. Operators and Owners of Motor Vehicles

Bases of Canadian Court’s Jurisdiction

Canadian Courts may take jurisdiction over a US insured on the grounds of:

  1. Consent: a US-based insured can voluntarily consent to the jurisdiction of the Canadian Courts by agreement, such as a choice of forum clause in a contract.
  2. Attornment: Canadian Courts can assume jurisdiction over a US insured if the US-based insured is found to have consented to the jurisdiction of the Canadian Court by conduct, including by appearing in Ontario to challenge the merits of a claim
  3. Real and substantial connection to Ontario: Canadian Courts can assume jurisdiction if they determine that a US-based insured or a claim involving a US-based insured has a “real and substantial connection” to Canada.

The lawyers at Gilbertson Davis LLP have experience successfully challenging the jurisdiction of the Canadian Courts over US defendants.


A common mistake by US insureds or insureds’ US counsel is to deliver an appearance in the Canadian Court to avoid noting in default of a defence, without first considering the effect of appearing on the jurisdiction of the court. Canadian Courts can have tight timelines for delivery of a Statement of Defence (commonly called an Answer in the US). In Ontario, for example, an insured served with a Statement of Claim (commonly called a Complaint in the US) has 40 days to deliver a Statement of Defence or Notice of Intent to Defend.

US insurers should ensure that US insureds do not attorn to the jurisdiction of Ontario without proper advice.

Real and Substantial Connection Analyses

There are four presumptive connecting factors:

  1. the defendant is domiciled or resident in the province;
  2. the defendant carries on business in the province;
  3. the tort was committed in the province; and
  4. a contract connected with the dispute was made in the province.

This list is not exhaustive list; the Supreme Court of Canada has stated that the list of connecting factors is not closed. However, jurisdiction disputes will usually revolve around whether any of the four presumptive connecting factors apply.

Product liability

In product liability claims, Ontario Plaintiffs can attempt to bring US insureds to the Ontario Courts, even where the US insured does not have a physical presence in Ontario. Jurisdiction disputes in product liability cases often turn on whether a claim was “in respect of a tort committed in Ontario” or whether an insured was “carrying on business in Ontario”.

Claims against insured “in respect of a tort committed in Ontario”

Where a defendant carelessly manufactures a product in another jurisdiction that enters into the normal channels of trade and it is reasonably foreseeable that the product would be used in Ontario, the Ontario Court may assume jurisdiction.

For example, in Gariepy v. Shell Oil Co., 2000 CarswellOnt 3684 (SC) the defendants manufactured and supplied products used by manufacturers in plumbing and heating systems. The Plaintiffs’ claims were in respect of pipes made using the defendants’ products. The plaintiffs claimed that the defendant had Canadian Standards Association approval for the product it produced and knew that products using its products were being marketed in Canada. The Court found that it was reasonably foreseeable to the defendants that their negligence could result in damages to Ontario residents. The Court dismissed the defendants’ motion to stay the action for lack of jurisdiction.

Claims where insured allegedly “carrying on business in Ontario”

An Ontario Court may find that a defendant is carrying on business in Ontario where the defendant is performing some substantial aspect of its own business undertaking in the jurisdiction beyond providing goods and its services within that jurisdiction. (Yip v. HSBC Holdings plc, 2017 ONSC 5332)

For example, in Sgromo v. Polygroup International, 2017 ONSC 2525, the Court stated that although retailers in Ontario may have carried the defendant’s products, and although the defendant therefore did business with Ontario retailers, that did not mean that the defendant carried on business in Ontario.

The analysis of jurisdiction is technical and fact specific. The lawyers at Gilbertson Davis have experience in conducting jurisdiction analyses and in contesting claims on jurisdictional grounds.

Contact Us

The lawyers at Gilbertson Davis LLP have experience with insurance defence, including product liability defence. Our lawyers also have experience with bringing and defending against jurisdiction challenges.

Please contact us for an initial consultation.

Our Lawyers

John L. Davis

Managing Partner
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R. Lee Akazaki

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Joan C. Takahashi

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