Is legal representation by an insurer not counted against a party in every case?

Subsequent decisions applying the law as set out in Smith have held that legal representation by an insurer will not count against a party in every case: Mazur v. Lucas, 2011 BCSC 1685 (Mazur) at para. 53; Ward v. Klaus, 2012 BCSC 99 at para. 43. In the words of Humphries J. in Mazur, at para. 53, “[w]hile insurance coverage is not automatically a factor to be considered against the insured party, the facts of the particular case will govern whether it should be considered, and if so, what weight should be given to it.”

In Hunter v. Anderson, 2010 BCSC 1591 at para. 22, Cullen J. (as he then was) held that insurance coverage may be considered where it “creates an unfair advantage leading to unnecessary costs through testing the plaintiff's case”, citing Smith and Radke for support. While consideration of insurance coverage would certainly be justified where an insured party exploits a financial disparity to test the other party’s case unnecessarily, I do not think that such circumstances must always be present. As Humphries J. stated in Mazur, at paras. 50-53, Smith stands for the general principle that insurance coverage is a valid consideration for the factor of relative financial circumstances, and it does not limit the application of that principle to its specific facts. The issue of whether insurance coverage merits consideration will turn on the circumstances of each individual case.