Diocese of Bathurst loses $3.3M lawsuit against Aviva Insurance

The Diocese of Bathurst has lost its bid to recoup $3.3 million in compensation that was paid to victims of sexual abuse from its former insurer.

Its request for punitive damages from Aviva Insurance for wrongful denial of insurance coverage was also denied in the Court of Queen's Bench decision released late Friday afternoon.

"The Diocese was unsuccessful in establishing coverage for the compensatory damages it paid to the victims through the conciliation process and the expenses and costs related to it,"Justice StephenMcNallystates in his56-page decision.

"The Diocese's claims for damages with respect to that aspect of the action must fail and is therefore dismissed," he wrote.

"The portion of the Diocese's claims related to its expenses incurred in defending, resolving and/or paying judgments in relation to claims brought against it outside the conciliation process are yet to be determined."

• Diocese of Bathurst wants Aviva Insurance to pay $3.3M

In a confidential compensation process, the diocese paid out $5.5 million to 90 victims of abuse by its priests.

Lawyer Chris Blom, who represented the diocese,hadargued during a Dec. 9 court appearancethat Aviva Insurance was responsible to help the diocese pay for some of the compensation.

Lawyers for Aviva countered thatbishops within the diocese were aware of abuses dating back to the 1950s and did not report it.

"In my view, Avivaadopted a bona fide and legitimate position in coming to its decision to deny coverage, albeit one that may not have totally carried the day," wrote McNally.

He deferred the issue of costs until the case is complete.