Murder, Insurance Money and the Slayer Rule
In the 1944 film-noir classic Double Indemnity, Fred MacMurray plays Walter Neff, a successful salesman at Pacific All Risk Insurance. He has an affair with Phyllis Dietrichson, the wife of a client, played by Barbara Stanwyck, and the two concoct a classic caper: To kill her husband, make it look like an accident, and collect the insurance money.
The title takes its name from a clause in some life insurance policies that would double a benefit in the case of accidental death, like falling off a train, the fate that allegedly befell Mr. Dietrichson and energizes a very suspicious Edward G. Robinson to find out the truth.
While Billy Wilder’s classic film trips up the protagonists’ best-laid plans at several turns, the aim of the insurance company is to uncover a fraud (it would be up to the courts to determine the killer). At law, such a concept is caught by what’s known as the Slayer Rule.
Cleaver et al. v Mutual Reserve Fund Life Association established a general rule of public policy that forbids a criminal from profiting from his or her own wrongdoing. The facts were these: A husband had taken out an insurance policy for the benefit of his wife. The policy was to pay out in the event of his death to the wife, should she be alive, otherwise to his estate. The husband died leaving a Will, the wife was convicted and imprisoned for poisoning him, and Cleaver was appointed administrator of her assets. The insurance benefit was denied to the wife on public policy grounds, and was instead paid out to the estate. In Latin, it’s known as ex turpi causa (“from a dishonourable cause an action does not arise”) and it has been Canadian law since Cleaver was decided in 1892.
One of the most important developments over the last century has been the critical element of moral culpability under section 16 of the Criminal Code of Canada as it relates to the Slayer Rule and insurance entitlements. In the 2012 decision Dhingra v. Dhingra Estate, the Ontario Court of Appeal reversed a lower court’s decision that applied the Rule to a person found not criminally responsible (NCR), holding,
“It seems to me that if a person found not criminally responsible on account of mental disorder is not “morally responsible” for his or her act, there is no rationale for applying the rule of public policy. That rule is founded in the theory that people should not profit from their crimes or, more broadly, by their own wrongs. […] It was an error for the application judge to describe the appellant as having “committed second degree murder.”
So, while an NCR designation may permit the courts to clear a path for the release of the insurance benefit, the following scenarios are still treated as black letter law when a killer strikes, is in their right mind, and:
1) Where insurance proceeds are in question;
2) Where the slayer is a beneficiary under a will;
3) Where the slayer is an heir of his intestate victim;
4) Where the slayer and the deceased were joint tenants.
Thanks for reading!
Ian Hull and Daniel Enright