Helicopter Company Cannot Limit Liability in Work Related Accident

Written on April 29, 2016.

A recent decision of the Yukon Territory Supreme Court rejected an application by a helicopter company to limit its liability to its insurance policy limits in a work-related accident case.

The motion arose out of an action brought by two passengers on a helicopter that crashed  on July 10, 2012, near Carcross, Yukon. Both passengers were injured in the accident. The passengers were collecting grizzly bear hair samples as part of their work on a grizzly bear survey project for the Yukon Government.

The Yukon Workers Compensation Act (the “Act“) contains the standard bar for claims arising from workplace accidents. Most Canadian jurisdictions operate no-fault workers compensation schemes wherein employers pay insurance premiums, and in return receive immunity from suit by employees injured in the course of their employment. Generally, this immunity extends to their own employees and any other employees who are part of the workers compensation system.

However the Yukon Territory also contains an exception to employer immunity “when the work-related injury arose from the use or operation of a vehicle”. “Vehicle” is defined in the Act as “any mode of transportation the operation of which is protected by liability insurance”. The helicopter in this case satisfied the definition of a “vehicle” since the operator had in place liability insurance on the date of the accident.

As a result the bar on claims did not apply. However the helicopter operator sought a ruling from the Court that its liability was limited to the amount of liability insurance available under its insurance policy.

The Court reviewed the normal rules of statutory interpretation and the legislative history of the Act. The Court concluded that the effect of the  Act was to expand the protection to all employers under the Act, while at the same time permitting actions where there was public liability insurance in place.  There was no intention on the part of the Legislature to limit recovery to the specific amount of coverage under a policy of insurance.

Accordingly the helicopter company was potentially liable for the full amount of the plaintiffs’ compensatory damages, regardless of the limits of its liability insurance policy.

(Postma v Horizon Helicopters Ltd., 2016 YKSC 15 (CanLII)) http://www.canlii.org/en/yk/yksc/doc/2016/2016yksc15/2016yksc15.html