Definity Insurance has failed to reinstate its chosen law firm after a tribunal upheld its removal over confidential information from a related claim.
The Ontario Licence Appeal Tribunal declined to reconsider an earlier order that removed the firm Definity had chosen to defend an accident benefits dispute. The reconsideration decision was released July 20, 2026, leaving in place a March 12, 2026 order that stripped the firm from the file over an unwaivable conflict of interest.
The underlying dispute arose from an auto accident. The claimant was a passenger in a vehicle owned and driven by her domestic partner.
The same firm had represented Definity during an examination under oath of that partner in a property damage claim he advanced from the same accident, and had been retained to defend a civil claim he brought. The claimant argued the firm therefore held confidential information from a co-claimant whose dispute with the insurer was intertwined with her own.
There was symmetry to the fight. Earlier in the proceeding, Definity had itself moved to remove the claimant's representative - her partner, who was acting as her counsel of record - citing the same kind of unwaivable conflict of interest. The Tribunal granted that request on December 15, 2025.
On reconsideration, Definity argued the Tribunal made errors of law and breached procedural fairness. It said the confidential information had come from the partner, not the claimant, and that it was not acting for the claimant on any matter besides her accident benefits claim.
The adjudicator was not persuaded. The confidential information, she noted, had been obtained from the partner, whose relationship with his property damage insurer was a fiduciary one. Because the insurer had already undertaken to call him as a witness, keeping the firm in place would give it the chance to use that information at the hearing.
A partly completed form proved telling. Definity had executed a privacy disclosure request seeking the partner's full property damage file so it could be shared with the claimant's accident benefits adjuster. But part of the form was left blank and unsigned. To the adjudicator, that showed the insurer itself understood a firewall should exist between the two files - and that keeping its counsel in place would remove it.
The governing question, the decision reiterated, was whether a fair-minded and reasonably informed member of the public would conclude that "the removal of counsel is necessary for the proper administration of justice."
Disagreement with an outcome, the adjudicator held, does not on its own establish a legal error or a breach of procedural fairness under the Tribunal's reconsideration rules. Definity, she found, had not identified any misstatement of legal principle, only a wish for a different conclusion on the same facts.
She also noted that the insurer's fairness argument rested solely on the result of the order, and that Definity had earlier used the same kind of motion to remove the claimant's representative.
The request for reconsideration was dismissed on both grounds. A separate motion by the claimant, to strike parts of the insurer's reply submissions, was also dismissed.
