ICBC Law

When a BC motor vehicle accident tort claim goes to trial and a judge or jury awards pecuniary damages over $100,000 s. 99 of the Insurance (Vehicle) Act requires the award be paid periodically where it is “in the best interests of the plaintiff” to do so.  Reasons for judgement were released last week by the BC Supreme Court, Vancouver Registry, addressing this area of law.

In last week’s case (Bransford v. Yilmazcan) the Plaintiff was injured in a 2003 collision.  She developed Thoracic Outlet Syndrome and experienced disability related to this.  Her claim went to trial where she was awarded just over $1.2 million by a Jury.  This award was reduced somewhat by the BC Court of Appeal.

Ultimately the Plaintiff was awarded $436,000 for loss of future earning capacity.  ICBC applied under section 99 of the Insurance (Vehicle) Act to pay this portion of the judgement in monthly installments at $1,357 per month arguing that this would be in the ‘best interests‘ of the Plaintiff.  Madam Justice Griffin disagreed and dismissed the applicaiton.  In doing so the Court provided the following useful reasons:

[51]         The defendants argued that since they were only seeking a partial structured judgment, rather than a structured judgment that applied to the whole of the future damages award, the plaintiff will be left with sufficient flexibility to meet any fluctuating needs.  I am not convinced this is an entirely fair approach.  The future care award is allocated for the plaintiff’s future care needs.  Normally a person uses income to pay for extraordinary living expenses or to make choices such as repayment of debt.  If the loss of future earning capacity award is structured, the plaintiff will lose this flexibility. Such a loss of flexibility is not cured merely because only a partial structured judgment is sought.

[52]         In this case, a factor that weighs heavily is the fact that the proposed structured judgment will run for 38 years.  That means, if a structured judgment is ordered, that for 38 years of this plaintiff’s life, she will not have the ability to make her own choices about her investments or her needs, beyond what she can do with receipt of the monthly periodic sum.  None of the evidence proffered by the defendants suggested that a fixed rate of return of 2.5% would be a safe investment over 38 years.  If the financial landscape changes drastically in 25 years, the plaintiff will not have the flexibility to adapt if she is subject to the structured judgment.  However, if the financial landscape changes drastically in the next 25 years, and she has been fiscally conservative in managing a lump sum award of damages, she will have the flexibility to deal with the change in circumstances.

[53]         I come back to the principle enunciated in Lomax, namely that a damage award is the plaintiff’s own property.  Underlying this point, in my view, is the common sense observation that a central aspect of one’s dignity and humanity is the ability to control one’s own destiny by the freedom to make one’s own choices.  Where a plaintiff has been injured through the negligence of defendants, such that she has suffered a significant loss of earning capacity, as here, she has already lost some personal dignity in that her future choices have been limited due to her injuries.  In this case the plaintiff would lose additional dignity and autonomy if her ability to make her own decisions about her damages award was taken away.

[54]         Having observed the plaintiff’s evidence at trial and on this hearing before me, I was impressed with her capabilities.  I observed that she was a person who was a “go-getter” before her injuries, and she remains someone with an independent and strong personality.  I have considered all of the factors referred to above, and weighed the risks and benefits of a structured judgment against the risks and benefits of a lump sum award.  I conclude that an order that the loss of future earning capacity award be structured would not be in the best interests of this plaintiff.

[55]         I therefore dismiss the defendants’ application.

(Update: the Defendant’s Appeal of the below judgement was dismissed by the BC Court of Appeal on February 7, 2012)

Many of you may be aware of ICBC’s current “demystifying” campaign.   There are many misunderstood topics related to injury lawsuits and one of the most prominent is that of mild traumatic brain injury (MTBI).  Reasons for judgement were recently released by the BC Supreme Court, Chilliwack Registry, demystifying some of the arguments that are commonly raised in opposition to these claims.

In today’s case (Madill v. Sithivong) the Plaintiff was involved in a 2004 BC motor vehicle collision.  The Plaintiff’s vehicle was struck on the passenger side by the Defendant’s vehicle.  The issue of fault was admitted by the Defendant with the trial largely focussing on the value of the Plaintiff’s claim.

The collision was not significant, from a vehicle damage perspective, causing little over $1,700 in damage to the Plaintiff vehicle.   Despite this the Plaintiff suffered a traumatic brain injury in the crash.  ICBC argued that the injuries were not serious in part because the vehicle damage was modest, the Plaintiff had a ‘normal‘ Glasgow Coma Scale score of 15/15 noted on the ambulance crew report and that the hospital records relating to the treatment of the Plaintiff noted that he suffered from “No LOC (loss of consciousness)” and “zero amnesia“.

The Plaintiff called evidence from Dr. Hunt, a well respected neurosurgeon, who gave evidence that the above facts were not determinative of whether the Plaintiff suffered from serious consequences related to MTBI.  Madam Justice Morrison was persuaded by Dr. Hunts’ evidence and accepted that the Plaintiff suffered from long term consequences as a result of an acquired brain injury.  In rejecting the defence arguments Madam Justice Morrison provided the following ‘demystifying‘ reasons:

[112]     Dr. Hunt said he tries to concentrate on the individual.  He finds it helpful to see the notes of the family doctor, which deal with initial complaints, as do the notes of the ER doctor and responders.  But he notes that those doctors are very busy, and things get overlooked.  The same is true with an ambulance crew.  Dr. Hunt stated there may be no loss of consciousness, but there may be a loss of awareness.  An ambulance crew may give a 15 score for the Glasgow scale, indicating normal, but that could be misleading.  He also noted that someone may be described as being in good health pre-accident, but that would not mean he would not have issues.

[113]     Dr. Hunt disagreed that the best evidence of whether the plaintiff was an amnesiac, were notes at the hospital of “no LOC” and “zero amnesia”.  It was the evidence of Dr. Hunt that no matter how many times you see those terms, that a patient is alert and wide awake, that sometimes in looking at crew reports, the necessary information is not there.  A person does not need to strike his head for a concussion to have occurred.  It need only have been a shaking.

[114]     It is important to explain what a mild traumatic brain injury is, he stressed; Dr. Hunt referred to the many concussions in sports.  He said it is important to look at what happened following the accident, what symptoms have occurred and are continuing to occur.  Patients often deny a loss of consciousness or a loss of awareness, and it may be so fleeting that they may well be unaware.  But if the head has been shaken or jarred enough, this will equal a concussion, which is the same as a mild traumatic brain injury.  There may be no indication of bruises on the head, but it still could be a concussion.  Dr. Hunt noted that something prevented the plaintiff from exiting the vehicle, so the Jaws of Life was used.

[115]     Dr. Hunt noted that Dr. Tessler agreed that the plaintiff had a cerebral concussion in his initial report, but it was the opinion of Dr. Hunt that Dr. Tessler was not up to date on mild traumatic brain injuries.

[116]     In his evidence, Dr. Hunt listed some of the symptoms that are compatible with a concussion having occurred:  headaches, altered vision, balance difficulties, general fatigue, anxiety, memory disturbance, inability to manage stress.  “A concussion is a mild traumatic brain injury.  We no longer grade concussions.”

[117]     I found Dr. Hunt to be an excellent witness.  He was cautious, detailed, thoughtful, low key, thorough and utterly professional.  In cross-examination, he gave a minor clinic on mild traumatic brain injuries.  He was subjected to a rigorous, lengthy and skilful cross-examination, which only served to expand upon and magnify his report and opinions.

[118]     He commented on the history of Mr. Madill prior to the accident, pointing to a number of things that may have caused excessive jarring or shaking of the head, even if there had been no symptoms of concussion.  He believes that the first responders’ observations are not always accurate as to what actually happened.  He said he himself may not have identified problems of concussion at the scene of the accident.  Ninety percent of people with concussions have headaches.  They have difficulty describing the headaches, and they are not the same as migraine or tension headaches.

[119]     Dr. Hunt was further critical of Dr. Tessler in opining that Dr. Tessler had diluted his opinion, and that he had concerns with the report of Dr. Tessler.  He felt that Dr. Tessler was still “in the dark ages” with regard to mild traumatic brain injuries, that he has not had the advantages that Dr. Hunt has had in working with sports brain injuries.  “Concussion is cumulative.”

[120]     I found the report and the evidence of Dr. Hunt persuasive.  He came across as an advocate of a better understanding of concussions or mild traumatic brain injuries, not as an advocate on behalf of the plaintiff.

In addition to the above, two other topics were of interest in todays’ case.  Evidence was presented by ICBC though private investigtors they hired who conducted video surveillance of the Plaintiff.  The Court found that this evidence was of little value but prior to doing so Madam Justice Morrison made the following critical observations:

[74] Much of the videotaping occurred while both the plaintiff and the private investigator were moving on streets and highways, driving at the speed of other traffic.  The investigators testified they drove with one hand on the wheel and the other hand operating the video camera, up at the side of their head, to allow them to view through the camera what they were taping.  That continues to be their practice today, according to at least one of the investigators, which was interesting, considering from whom they receive their instructions, a corporation dedicated to road safety.

Lastly, this case is worth reviewing for the Court’s discussion of diminished earning capacity.  In short the Plaintiff was self employed with his spouse.  Despite his injuries he was able to continue working but his spouse took on greater responsibility following the collision.  The Court recognized that the Plaintiff suffered from a diminisehd earning capacity and awarded $650,000 for this loss.  Paragraphgs 193-210 of the judgement contain the Court’s discussion of this topic.

As previously discussed, the new BC Civil Rules have changed the test of document production in the pre-trial discovery process.  The test has been narrowed from documents “relating to every matter in question in the action“ to “all documents that are or have been in a parties possession or control that could be used by any party to prove or disprove a material fact” and “all other documents to which a party intends to refer at trial“.  In addition to this the Court must take the concept of ‘proportionality‘ into account when considering an order to produce third party records.

Reasons for judgement were released considering this narrower obligation in the context of an ICBC claim.

In today’s case (Tai v. Lam) the Plaintiff was involved in a 2006 motor vehicle collision.  The Plaintiff was injured and claimed damages.  The Defendant asked that the Plaintiff produce his bank statements from the date of the accident onward in order to “defend against (the Plaintiff’s) claim for loss of earning capacity”  The Plaintiff refused to provide these and a motion was brought seeking production.    Master Baker dismissed the motion and made the following useful comments about document disclosure obligations under the new rules and the concept of proportionality:

[5]             I am not going to make the order sought.  I agree entirely with Mr. Bolda’s view of this, which is that it is essentially one production too far, that the information and details sought goes beyond what is reasonable, even on a redacted basis.  To ask that all the bank statements be produced is a broad, broad sweep.

[6]             Sitting here listening, it struck me, it is as if a party who commences proceedings and says, “look, I have been injured and I have suffered financial losses” is inviting some kind of a Full Monty disclosure, that they are expected to produce all financial information they might ever have out there.  Even if it is suggested or offered today that that be done on a redacted basis, it is still, in my respectful view, a requirement for production that is excessive.

[7]             It certainly raises big issues about privacy and if one says, “well, redaction would fix that”, what does it take for counsel to sit down and patiently, carefully redact their client’s bank records for four and a half years?  If that is not a question of confidentiality and privacy, it is a question of proportionality, which is just as concerning to me today as the other issues.

[8]             The banking records.  I am also persuaded by Mr. Bolda’s argument, and a  common position taken today, that the judgment will be one of assessment, not calculation, that the trial judge will have multiple facets to consider and amongst them the gross income.  And while it is for the defence to present and structure its case as it wishes, it seems to me that if it successfully attacks any of these claims for expenses it can only increase Mr. Tai’s income, and I cannot see the value in that perspective.

[9]             I know that until recently the standard in this province was Peruvian Guano and locally Dufault v. Stevens, but that standard has changed.  There has to be a greater nexus and justification for the production of the documents in a case, and I am satisfied that that standard has not been met here today, so that the application is dismissed.

(UPDATE February 9, 2012:  The Damages in the below case for Diminished Earning Capacity and Cost of Future Care were reduced somewhat by the BC Court of Appeal on February 9, 2012)

A common misconception is that a person cannot claim for diminished earning capacity (future wage loss) in an ICBC Claim when there has been no past wage loss.  As I’ve previously discussed, this simply is not true.  Reasons for judgement were released last week by the BC Supreme Court, Vancouver Registry, demonstrating this.

In last week’s case (Morlan v. Barrett) the Plaintiff was injured in two separate motor vehicle collisions.  Fault was admitted by the Defendants in both actions.  The Court found that both crashes caused a single indivisible injury (chronic widespread pain eventually diagnosed as fibromyalgia).

The Plaintiff’s injuries and limitations caused her to change employment to a job that was less physically demanding.  Fortunately, her new job paid a better salary and the Plaintiff had no past wage loss from the time of her first crash to the time of trial.  Her injuries, however, were expected to cause ongoing limitations and the Plaintiff claimed damages for diminished future earning capacity.  Mr. Justice Stewart agreed the Plaintiff was entitled to these damages and assessed the loss at $425,000.  In reaching this assessment Mr. Justice Stewart gave the following useful reasons:

[7] The plaintiff found work at the Electrical Industry Training Institution (EITI) in 2008 and is employed there as a Program Coodinator.  The job is far less demanding and the commute is only 20 minutes.  The job is also far less rewarding in terms of job satisfaction.  Having to change jobs was a huge blow and this will be reflected in the non-pecuniary damages I award later.  By happenstance the plaintiff’s salary actually went up when she switched jobs.  For that reason there is no claim for loss of earning capacity to the date of trial.  But there is a claim for loss of opportunity to earn income – including benefits – in the future…

[17]        Pure happenstance resulted in her suffering no loss of income to the date of trial, i.e., she got a less demanding job which happened to pay more than her job at the B.C. Fed.  But a reduction in her capacity to earn income has been made out.  Her having to give up her job at the B.C. Fed demonstrates that the circle of secretarial or administrative positions for which she could, if necessary, compete has been narrowed.  (Exhibit 6, a “Functional Capacity Evaluation” and Exhibit 5, the report of an “Occupational Health Physician” simply confirm the obvious.)  To put it in familiar terms:  she is less marketable as an employee; she is less capable overall from earning income from all types of employment; she has lost the ability to take advantage of all job opportunities which might otherwise have come her way; and she is less valuable to herself as a person capable of earning income in a competitive labour market (Rosvold v. Dunlop, 2001 BCCA 1 at paragraph 10).  The live issue is whether there is a real and substantial possibility that the reduction in her capacity to earn income will in fact result in lost income – including benefits – in the future (Sobolik v. Waters, 2010 BCCA 523, paragraphs 39-43).

[18]        As noted earlier, having considered the whole of the evidence placed before me I rely on the evidence of the plaintiff’s family physician, Dr. Beck, as I peer into my crystal ball and consider the plaintiff’s future.

[19]        The fact that the balance of the medical evidence does not replicate what Dr. Beck said at Exhibit 4 page 6 – that the plaintiff has “plateaued even slightly worsened over the past year” – and indeed the evidence of the rheumatologist, Dr. Shuckett is quite different – is neither here nor there as having considered the whole of it I say as the trier of fact that Dr. Beck was an impressive, thoughtful witness of great experience who offered up her opinion against a background of having dealt with the plaintiff for 25 years and, more particularly, having had close supervision of the plaintiff’s medical condition since January 6, 2007 and the advent of the motor vehicle accidents.  In saying that I have not lost sight of the fact that Dr. Beck has in fact retired.

[20]        Having considered the whole of the evidence together, I say that three real and substantial possibilities have been made out:  that the plaintiff’s condition will improve; that the plaintiff’s condition will remain as it is; and that the plaintiff’s condition will worsen.  In “giv[ing] weight according to their relative likelihood” to these three hypothetical events I find that the possibility of her condition improving barely rises above mere speculation and that the possibility of her remaining the same and the possibility of her condition worsening are both great (Athey v. Leonati, [1996] 3 S.C.R. 458 at paragraph 27).

[21]        I find that there most certainly is a real and substantial possibility that the reduction in the plaintiff’s capacity to earn income will result in lost income – including benefits – in the future.  Beyond the fact that nothing in life is certain and that she may yet find herself on the job market there is the real and substantial possibility that even if she remains in her current job until the end of her working career, her working career will end earlier than it would otherwise have absent the effects on the plaintiff of the defendants’ negligence.  That is so because it is a real and substantial possibility that her fibromyalgia will remain as it is but common experience dictates that as one moves into one’s latter years the ability to work in spite of a condition that drains one’s energy diminishes.  Independently of that, it is a real and substantial possibility that the plaintiff’s fibromyalgia – and with it loss of energy – will worsen.  I make that finding having considered the whole of the evidence including that of the plaintiff as to her recent experience and of all of the doctors and concluded as the trier of fact that I rely most on the evidence of Dr. Beck.

[22]        I take into account factors beyond those that relate to the state of the health of the plaintiff and her ability to work.  The plaintiff has established a real and substantial possibility – not mere speculation – that had she not had to forfeit her job at the B.C. Fed she would have, within a few years of the date of the motor vehicle accidents, taken advantage of an opportunity to perhapsmove up in the hierarchy of the B.C. Fed to the point of becoming a Director and with that received an increase in salary and benefits.  That is the net effect of the evidence of the plaintiff and of Lynda Bueckert.  Moreover, as of January 6, 2007 the plaintiff had to assume that she would retire from the B.C. Fed when she turned 65.  After January 6, 2007 the law changed.  I find that the plaintiff’s love for her job at the B.C. Fed combines with my picture of what she was before January 6, 2007 and results in my accepting her evidence to the effect that it is a real and substantial possibility that absent the defendants’ negligence she would have continued to work at the B.C. Fed even after she had turned 65.  I have considered the positive and negative vagaries of life, i.e., the contingencies.  Having considered the whole of it I award the plaintiff $425,000.

There has been some uncertainty in the law over the past few years over the amount that is to be deducted by trial judges when awarding past income loss in tort claims arising from BC motor vehicle collisions.  This issue was clarified in reasons for judgement released today by the BC Court of Appeal.

In today’s case (Laxdal v. Robbins) the Plaintiff was injured in a motor vehicle collision and sued for damages.  She was awarded $3,306 for past loss of income.  Section 98 of the Insurance (Vehicle) Act requires past income loss awards to be reduced to “net income loss” after taking income tax into account.

The trial judgement did not reduce the wage loss award finding that “In my view, the authorities support the conclusion that where the gross award is at or below the amount exempt from taxation, there would be no tax payable so that the net past income loss would be the same as the gross past income loss….Accordingly there will be no deduction for income tax as the amount of past wage loss is below the personal exemption”

ICBC disagreed and appealed this finding.  ICBC argued that any past loss of income awards need to be combined with actual income earned during the year of the loss and tax consequences need to be determined using the global figure.  The BC Court of Appeal agreed and provided the following clarity in this contentious area of personal injury law:

[18]         I have concluded that the trial judge was incorrect in interpreting ss. 95 and 98 of the Insurance (Vehicle) Act as not requiring a reduction in her award for past loss of income to reflect the tax consequences when that loss is combined with earned income during the same period. The words of those sections must be read in their grammatical and ordinary sense.

[19]         Having found that the losses all occurred in 2006, the trial judge ought to have combined the respondent’s 2006 income with the past income loss award for the purpose of determining the income she would have earned for income tax purposes “as if she had continued working” (as per Tysoe J.A. at para. 185 of Lines). To achieve this result, the appellant proposed the use of what has been referred to as the “stacking approach”.

[20]         I am satisfied that, where an income loss can be attributed to a particular tax year or years, the language of ss. 95 and 98 of the Insurance (Vehicle) Act requires a resort to the stacking approach. Although Tysoe J.A. explained in the examples he referred to in Lines that “it was the intention of the Legislature to give a discretion to the judge to determine what period or periods are appropriate for the determination of net income loss in all of the circumstances”, once that determination is made, the legislation requires a deduction from the gross income loss to take into account the provisions of the Income Tax Act of British Columbia, the Income Tax Act of Canada and the Employment Insurance Act of Canada for the relevant year or years…

[22]         As Tysoe J.A. observed in Lines at para. 180:

… It does seem somewhat odd for the income loss allocated to a particular year to be reduced according to one set of tax rules (i.e., the tax rules for the preceding year), while the plaintiff’s actual earnings for that year are taxed according to a different set of tax rules (i.e., the tax rules for the year in which the income was earned).

[23]         The application of the stacking approach in accordance with the legislation will result in the combination of the award for past income loss with the other income earned for the same year, but the application of the enumerated legislation from the preceding year to only that portion of the total income for that year represented by the award. While the result is a cumbersome calculation, I see no need to resort to any exceptional construction of the legislation, as discussed by Lamer J., as he then was, in R. v. Paul, [1982] 1 S.C.R. 621 at 662, in order to achieve the legislative intent of ss. 95 and 98 of the Insurance (Vehicle) Act. Section 95(a) of the Insurance (Vehicle) Act refers in each of its subsections to taxes or premiums as the enumerated Acts “read on December 31 of the calendar year before the calendar year in respect of which the net income loss is to be determined”. In my view, this wording accommodates awards for either single or multiple years of income loss by permitting a judge to allocate the loss as discussed at para. 184 of Lines, and to then subject the award for that year or years to the effect of the specified legislation based on their provisions for the preceding year.

[24]         A feature of the present legislation that does not arise in this case is the inability of a person injured in a motor vehicle collision to take advantage of any tax planning, such as a contribution to a Registered Retirement Savings Plan. In Lines Tysoe J.A. concluded at paras. 190-194 that such a notional contribution could not be allowed when calculating net income loss under ss. 95 and 98. While the inability to take advantage of such tax planning will not place the injured person in the same position that he or she would have been in, but for the accident, the application of the stacking approach will come as close to so doing as possible, while at the same time giving effect to the intent of the Legislature.

[25]         In this case, the respondent’s total reported income for the year 2006 was $40,175.00. The respondent paid $6,024.05 for federal and provincial income tax that year, which represented an overpayment of $202.26.

[26]         I conclude that the appropriate means by which to arrive at the respondent’s net past income loss is:

a)       to determine her income from other sources during 2006 ($40,175.00);

b)       add that figure to her income loss after taking into account the sick benefits she received ($3,306.24);

c)       determine the tax that would be payable on $43,481.24, based upon the 2005 income tax rules and regulations by computing the amount in accordance with the provisions of theIncome Tax Act of British Columbia, the Income Tax Act of Canada and the Employment Insurance Act of Canada applicable to the calendar year ending December 31, 2005 and on $40,175.00 based upon the 2006 income tax rules and regulations by computing the amount in accordance with the provisions of the Income Tax Act of British Columbia, the Income Tax Act of Canada and the Employment Insurance Act of Canada;

d)       subtract the difference between the two tax figures determined in c, above;

e)       then deduct d from the income loss award, net of sick benefits that she received.

Generally when a Plaintiff advances damages for diminished earning capacity (future wage loss) in a personal injury lawsuit expert evidence is called to address the long term prognosis and consequences of a Plaintiff’s injuries.  Interesting reasons for judgement were released today by the BC Supreme Court, Vancouver Registry, making such an award despite the lack of medical opinion evidence addressing the issue.

In today’s case (Helgason v. Bosa) the Plaintiff was involved in a 2006 motor vehicle collision.  Her vehicle was t-boned by the Defendant.  Fault for the crash was admitted.  The trial focused on the value of the Plaintiff’s claim.

In support of her case the Plaintiff attempted to introduce two medico-legal reports written by her GP.  The first report, dated May 11, 2009 stated that “You have asked me to comment with regard to [the plaintiff’s] loss of earning capacity.  I do not feel that [the plaintiff] is less capable overall from earning income from all types of employment and I do not feel she is less marketable or attractive as an employee to potential employers as a result of the motor vehicle accident.”

As time passed the doctor changed her mind and wrote a second report indicating that the Plaintiff’s injuries would cause a diminished earning capacity.  The Defendant argued that the second report did not comply with the Rules of Court and that it should be excluded from evidence.  Mr. Justice Silverman agreed.  This left the Court with only the doctor’s first report providing an opinion of the Plaintiff’s future earning capacity.

The Defendant’s lawyer then argued, given the first report, the Court should not make an award for diminished earning capacity.  Mr. Justice Silverman disagreed and filled in the gaps addressing this issue with factual evidence presented at trial.  The Court went on to award the Plaintiff $45,000 for this loss and in doing so provided the following helpful reasons:

[48]         It does not follow from my ruling that I must conclude that the doctor’s opinion as of May 11, 2009, was still her opinion at trial.  Clearly, it was not.  However, the most significant consequence of my ruling is that there is no expert opinion in evidence with respect to future issues to support the plaintiff’s argument that I should be awarding damages for various of the plaintiff’s future concerns.

[49]         It does not necessarily follow from that, that the plaintiff is unable to mount an argument that there is still a sufficient basis for me to make the findings that she argues are appropriate.  The plaintiff argues that there is still sufficient evidence for me to draw the inferences which she argues I should draw, even without the opinion expressed in the inadmissible report.  It is noteworthy, in that regard, that when the defendants argued for the ruling with respect to admissibility, one prong of its argument was that the non-compliant report was not “necessary” because there was already other evidence with respect to the various future issues.

[50]         I am satisfied that indeed there is other evidence from which various inferences about the future might be drawn.  That other evidence consists of the following:

1.       Comments in the admissible report that do make projections into the future which are consistent with the position that the plaintiff takes:

“I do not think that [the plaintiff] has reached maximum medical improvement and she will continue to improve over the next 18 - 24 months.”

“Her present employment as a yard planner has a potential to exacerbate her symptoms.”

“I am not advising that [the plaintiff] change her current employment, but I will agree that her current employment does exacerbate her symptoms to a moderate degree.”

2.       The plaintiff’s own evidence at trial of her ongoing difficulties.

3.       The doctor’s oral evidence about various visits of the plaintiff since May 11, 2009, and the observations which she made (although her opinion arising from those visits was not admissible)….

[52] I am satisfied from the foregoing that the injuries, and other difficulties caused by the MVA, are ongoing and will continue to be ongoing, and will negatively affect the plaintiff’s capabilities and abilities in the future.

Reasons for judgement were released this week by the BC Supreme Court, Vernon Registry, discussing non-pecuniary damages for mechanical back pain and further discussing awards for ‘diminished earning capacity‘ for stay at home parents who intend to return to the workforce.

In this week’s case (Bergman v. Standen) the Plaintiff was involved in a 2006 motor vehicle collision.  Fault for the crash was admitted by the other motorist.  The Plaintiff was 27 years old at the time of the crash and did not have “an established record of employment because of the conscious choice she and her husband made to have and raise their children to school age with the benefit of a stay-at-home-mother”.

The Plaintiff sustained injuries in the crash which included soft tissue damage and mechanical back pain.  Some of these symptoms were expected to be permanent although there was room for improvement with further therapy.  Mr. Justice Barrow assessed the Plaintiff’s non-pecuniary damages (money for pain and suffering and loss of enjoyment of life) at $75,000.  In arriving at this figure the Court provided the following reasons:

[63] To summarize, Ms. Bergman was a 27-year-old mother of two young children, who suffered a Grade II whiplash injury to her neck and upper back, which resolved after several months and left her with no recurrent symptoms. She also suffered contusions, bruises to her face and chest, and a sore wrist, which resolved without ongoing difficulties shortly after the accident. Finally, and most significantly, she suffered a mechanical injury to her lower back that, I am satisfied, caused her significant pain and discomfort in the four and a half years since the accident. I am not persuaded that the discomfort is as significant as Ms. Bergman describes it, but it is nevertheless significant. I am satisfied that her lower back will remain symptomatic indefinitely. If, however, she follows the advice of Dr. Travlos and others, and commits to a program of physical conditioning and determines to work through the limitations that her low back may present, rather than dwelling on them, the degree to which that injury will affect her life in the future will moderate. In light of this, I am satisfied that an appropriate award for non-pecuniary damages is $77,500. This amount includes $2,500 for past loss of housekeeping capacity for reasons I will explain below.

This case is also worth reviewing for the Court’s discussion of diminished earning capacity (future wage loss) awards for Plaintiffs who are out of the workforce at the time of their injuries.   As previously discussed there is nothing preventing such plaintiffs from being awarded damages for future wage loss given the right circumstances.  In assessing the Plaintiff’s loss at $65,000 Mr. Justice Barrow provided the following useful reasons:

[80] Ms. Bergman does not have an established record of employment because of the conscious choice she and her husband made to have and raise their children to school age with the benefit of a stay-at-home mother. I accept that Ms. Bergman planned to and will return to work when her youngest child reached school age. I accept that the sort of work she is destined to do will likely involve an emphasis on physical as opposed to mental exertion. There is a mill in Lavington that Ms. Bergman thought about applying to. She impresses me as the sort of person who would find work of that nature rewarding and challenging. It is with a view to those real and substantial possibilities that the question of her indefinite, albeit moderating disability, needs to be assessed….

[84] I recognize that Dr. Coghlan, in his September 21, 2009 report, concluded that he would “not restrict her activity level in terms of jobs on the basis of today’s findings”. I am not sure that the opinions of the physiatrists are in conflict. Whether they are or not, I am satisfied that Ms. Bergman has established an impairment of her capital asset, being her ability to earn an income in the future. Valuing that loss is necessarily an imprecise exercise. Lacking any better measure, I consider that an award equivalent to between one and two years of Ms. Bergman’s likely future annual income to be reasonable. I fix her loss of future earning capacity at $65,000.

As previously discussed, when a person becomes disabled from work due to injuries and uses up banked sick time they can claim damages to be reimbursed for this loss in a tort claim.

If the tort claim arises from a BC motor vehicle accident the Insurance (Vehicle) Act requires awards for past wage loss to be reduced to take income tax consequences into account resulting in damages only for “net income loss”.  So, when damages are paid for use of banked sick time does the award need to be reduced to take income tax into account?   The answer is no and reasons for judgement were released last week by the BC Supreme Court, Vancouver Registry, addressing this issue.

In last week’s case (Chalmers v. Russell) the Plaintiff was a school teacher who was involved in two motor vehicle collisions.  The Plaintiff was not at fault for either of these crashes.  As a consequence of injuries sustained the Plaintiff had to use up several thousand dollars of banked sick time available to her through her employment.  Madam Justice Griffin awarded the Plaintiff damages for this loss and in doing so provided the following useful reasons explaining that these awards are not to be reduced to take income tax consequences into account:

[85]         I accept Ms. Chalmers’ evidence that following the first accident, she was so sore and painful that she felt it necessary to take time off work prior to the birth of her child in order to expedite her recovery.  I am mindful that she did not obtain any medical evidence in support of her decision to take time from work.  Regardless, given her advanced state of pregnancy, the trauma of the accident and the pain she was in after the first accident, I consider her decision not to return to work to be reasonable and due to her injuries.  The cost to reimburse the sick bank during this time period is $342.45 per day, totalling $3,766.95.

[86]         As noted in Bjarnason v. Parks, 2009 BCSC 48, depletion of a sick bank is a compensable loss: at para. 56.  However, it is not an income loss so there should be no deduction for income tax in accordance with ss. 95 and 98 of the Insurance (Vehicle) Act, R.S.B.C. 1996, c. 231: Bjarnason at para. 66.

In addition to the above, today’s case is worth reviewing for the Court’s discussion of non-pecuniary damages for mothers whose injuries affect their ability to look after their young children.  In today’s case the Plaintiff sustained various soft tissue injuries which, while not disabling, continued to affect the Plaintiff and interfered with her ability to look after her infant children.  Madam Justice Griffin assessed non-pecuniary damages at $50,000 and in doing so provided the following reasons:

[123] Importantly, Ms. Chalmers has lost the experience of being a relatively pain-free, physically active mother of her infant children during an important period in their young lives.  This is clearly a huge loss for Ms. Chalmers.

[124] I conclude that a reasonable award of non pecuniary damages, that is fair to all parties, is $50,000.

This is not the first time that pain interfering with parenting has been considered a relevant matter by the BC Supreme Court in addressing non-pecuniary damages and you can click here to read a previous post further discussing this topic.

Although stay-at-home parents are becoming less and less common many parents still take several years away from the workforce to raise their children in their infant and pre-school years.  Often times these parents intend to return to work after their children attend school on a full time basis.

When a parent in these circumstances becomes disabled from working due to the fault of another can they make a claim for loss of income in their tort action?  The answer is yes provided there is evidence establishing  a likelihood of returning to employment absent the accident related disability.   Reasons for judgement were released last week by the BC Supreme Court, New Westminster Registry, dealing with this area of law.

In last week’s case (Carr v. Simpson) the Plaintiff was seriously injured in a 2005 motor vehicle collision.  The Defendant admitted fault and further admitted that the crash injured the plaintiff but took issue with the value of her claims for various damages including for income loss.

The Plaintiff, a 39 year old mother of three at the time of the collision, was out of the workforce for several years prior to the crash.  She spent these years working as a home-maker and raising her children.  She undertook some modest employment as a house cleaner shortly prior to the crash.  Following the crash she became disabled and did not return to any work from the time of the crash to the time of trial.

The Court accepted the Plaintiff sustained serious, permanent and partly disabling injuries due to the crash.  The Plaintiff sought damages of $84,000 for lost income from the time of the crash to the time of trial.  She argued that she had planned on returning to the work force once her children became school-aged (which was around the time of the crash) but was precluded in doing so as a result of her injuries.  The Defendant disagreed arguing that the Plaintiff suffered only a modest loss of income because of her “inconsistent work history (and) lack of incentive to work because of income from other sources.”

Mr. Justice Bernard sided with the Plaintiff and awarded her most of what she sought for past income loss.  In doing so the Court provide the following useful reasons addressing the reality that parents that leave the workforce to raise young children can still succeed in an income loss claim:

[132]     I reject the notion that Ms. Carr’s unemployment history during her child-rearing years made her return to the workforce less realistic or less likely. Ms. Carr did not harbour fanciful ideas about her capabilities, her income-earning potential, or her opportunities for employment. When her youngest child reached school age, Ms. Carr was relatively young, energetic, able-bodied, willing to work hard, prepared to accept modest wages in exchange for her labours, and was fortunate to have a brother who could offer her steady, secure, and reasonably well-remunerated employment.

[133]     The evidence establishes that Ms. Carr, shortly before the collision, was motivated to earn some income (e.g., from housecleaning) until her youngest child was enrolled in school; thereafter, she planned to seek more fulsome employment. I do not accept the defence submission that Ms. Carr lacked the incentive and/or need to earn an income; to the contrary, since she has been unable to work because of her injuries she has, with some reluctance, turned to her mother for ongoing loans of relatively large sums of money, just to get by.

[134]     Ms. Carr became a single parent as of June 1, 2005. I find it highly likely that this new status would have impelled her to take the employment her brother offered, and to do so immediately. Her newly poor economic circumstances would have necessitated that Ms. Carr make child-care arrangements to bridge the time until her youngest child was in school in September 2005, and would have motivated her to work as many hours as she could manage as a single parent. Similarly, I am satisfied that she would have made any necessary arrangements for the care of her father.

[135]     I also find it is highly likely that Ms. Carr, as an employee of her brother, would have worked the hours and received the rates of pay assumed by Mr. Bush in his calculations. I find it is most unlikely that the seasonal aspect of the work would have reduced Ms. Carr’s overall income. Any shortage of work in the slow season would be offset by the demands of the busy season, and I am satisfied that Ms. Carr would have adjusted her life, accordingly.

[136]     While I am unable to agree with the plaintiff’s submission that in the determination of past wage loss there should be no reduction for negative contingencies, I am satisfied, for the relatively predictable period in question, the reduction must be minor.

[137]     Having regard for all the foregoing, I assess the plaintiff’s past wage loss at $75,000.

This case is also worth reviewing for the Court’s discussion of non-pecuniary damages.  The Plaintiff sustained numerious injuries including soft tissue injuries to her neck and upper back, Thoracic Outlet Syndrome, headaches and dizziness, a right hand and wrist injury which required surgery, a meniscus tear that required surgery, low back pain and depression related to chrobic pain.  In assessing non-pecuniary damages at $100,000 Mr. Justice Bernard provided the following reasons:

125]     Ms. Carr has, at age 44, many years ahead of her. As a result of the defendant’s negligence, Ms. Carr has been permanently partially disabled and left with constant and chronic pain. Since the collision, Ms. Carr has undergone two surgeries and endured considerable pain and discomfort. Ms. Carr has developed TOS and surgery is not recommended. She suffers from clinical depression related to the negative effect her injuries has had upon her, her family, and her way of life. Ms. Carr’s mental acuity and concentration has slipped. Ms. Carr’s marriage ended six months after she sustained her injuries. Her husband was unsympathetic and frustrated by her lack of desire for sex due to her discomfort. Ms. Carr has been rendered unemployable for most jobs in a competitive market. She is now unable to enjoy most leisure activities and active social pursuits with her children. She has a special fondness for horses and gardening, but meaningful participation in activities related to these interests is no longer feasible. Ms. Carr has lost much of the satisfaction from gainful employment, and the purpose and dimension it gives to life. In short, the negligence of the defendant has had a profoundly negative and lasting impact upon Ms. Carr.

[126]     I agree with the plaintiff’s position that the Djukic case is most similar of the proffered cases on its facts. I also agree with the defendant’s submission that Ms. Djukic’s pain was more severe than that of Ms. Carr; otherwise, I am persuaded that Djukic a useful reference point for the upper end of a general damages award in this case; and that Cimino is instructive in determining the lower end.

[127]     Having regard to all the foregoing, I assess Ms. Carr’s general damages at $100,000.

As I’ve previously written, if a person does not declare their earnings when paying their taxes they can still advance a wage loss claim in a personal injury lawsuit, however, doing so not only makes the claim more difficult to prove but also could expose the Plaintiff to repercussions from Revenue Canada.  Reasons for judgement were released last week demonstrating why this is so.

In last week’s case (Thomas v. Thompson) the Plaintiff was involved in a 2005 motor vehicle collision in Kelowna, BC.  He went to trial without a lawyer and advanced a claim for damages for over $1.3 million.   Fault for the crash was admitted by the Defendant.  At trial many of the Plaintiff’s claims were rejected by the trial judge however the Court did accept that the Plaintiff suffered from “continuing pain” as a result of the collision and this would need to be treated on an ongoing basis with medication.  As a result the Plaintiff was awarded damages for non-pecuniary loss and cost of future care.

The Plaintiff gave evidence that he earned an average income of more than $60,000 per year in the period shortly prior to the crash.  However, his tax returns did not reflect this.  Despite the unreported nature of the pre-injury income Mr. Justice Brooke accepted that the Plaintiff did earn a “substantial income” in the years prior to the crash.  The Court rejected the claim for loss of past and future income, however, finding that the Plaintiff’s injuries, while on-going, did not impair his earning capacity.

The end result is that, in advancing an unsuccessful claim for past loss of income, the Plaintiff testified in open court as to the amount of income he earned that he failed to report to Revenue Canada.   As reasons for judgement are publicly available there is nothing stopping government agencies such as Revenue Canada from pursuing Plaintiffs who give such evidence for payment of back taxes and penalties.  These can, of course, be substantial.  The difficulties with advancing wage loss claims when the history of earnings is unreported is demonstrated by the following passage from the trial judge:

[24]         I now turn to the damages claimed by the plaintiff, and the question of credibility.

[25]         First of all, the plaintiff said under oath that he earned an income in 2004 of $63,886 and in 2005 from January 3 to June 28 an income of $31,444 (or more than $60,000 on average a year), in home renovation work. Mr. Dave Novak gave evidence for the plaintiff that he hired him on a regular basis to do home improvements and renovations, based on an estimate in advance, for which he sometimes paid in cash and sometimes by cheque. He did not disagree with the amounts shown by Mr. Thomas on forms of sales orders, but acknowledged that he had no firm recollection. In his 2003 tax return summary, Mr. Thomas reported an income of $21,815 employment insurance benefits. No reference is made to income from employment. In 2004 Mr. Thomas reported an income of $6,840 from employment insurance, and other income of $500 for a total of $7,340. In 2005 Mr. Thomas reported no income, and in 2006 and following Mr. Thomas reported an income of Social Assistance payments varying from a little more than $2,000 a year to almost $11,000 a year. There is no reference to any employment income in any tax return placed in evidence. Mr. Thomas explains this by saying that he did not understand that tax was payable on earned income where the tax payer did not charge GST or PST. I find this to be preposterous. What Mr. Thomas is saying is that he is well informed enough to claim employment insurance benefits, but not well informed enough to report actual income. It is noted that in each year his tax return was prepared by H&R Block, a commercial tax preparer. I also note that Mr. Thomas made an assignment in bankruptcy on August 24, 2007 in which he disclosed liabilities of in excess of $41,000 made up of student loans and credit card debts. While I accept that Mr. Thomas has been challenged in his language skills in the past, and I must consider what role if any this might have played, I find his understanding and usage was fluent and effective and I can only conclude either that he knowingly failed to disclose his true income in his tax returns, or that he did not earn the kind of income that he claims to have made in the home renovation business.

[26]         I find that Mr. Thomas was working in 2003, 2004 and 2005 and earning a substantial income. But, not only was he failing to report that income but he seemingly was drawing employment insurance which is, of course, payable upon being fit but unable to find work.