Is a plaintiff's claim for bad faith rejection of insurance benefits a tort/contract based tort or contract based claim?

New Brunswick, Canada


The following excerpt is from Shanks v. Shay, 2015 NBCA 2 (CanLII):

In Walsh v. Nicholls, Drapeau C.J.N.B. explains further the view of this Court: The practice of bifurcating actions against insurers where the plaintiff alleges a breach of the covenant of good faith and fair dealing is common in American jurisdictions. It strikes me as equally appropriate in a case, such as the present, that features tort- and contract-based claims for bad faith rejection of insurance benefits. In my judgment, it would be just to sever the issue of breach of the Policy from all other issues in the Statement of Claim and I would so order. As well, I would order that the issue of breach of the Policy be tried first and that, until that threshold issue is adjudicated, all other issues raised in the Statement of Claim be considered irrelevant for both written and oral discovery purposes. [paras. 88-89]

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