BC Injury Law and ICBC Claims Blog

Producing False Witness To Collision Leads to $200,000 in Financial Consequences

In an illustration of BC’s motor vehicle¬†insurance¬†system having real teeth to punish¬†fraudulent¬†acts, reasons for¬†judgement¬†were released this week by the BC Supreme Court, Vancouver Registry, ordering substantial damages against a couple who produced a false witness to ICBC following a motor vehicle collision.

In this week’s case (ICBC v. Panag) the Defendant was¬†involved¬†in a 2006 collision. ¬†The parties had competing¬†versions¬†of how the collision occurred. ¬†The Defendant produced a witness in support of her claim. ¬†After investigation ICBC determined this individual in fact did not witness the collision and was known to the Defendant.

ICBC paid out over $188,000 in claims following the crash.  ICBC held the Defendant in breach of insurance and sued to recover this money on the basis that the Defendant attempted to commit insurance fraud.  Mr. Justice Grauer agreed and ordered repayment of these damages along with punitive damages.  In reaching this decision the Court provided the following reasons:

64]¬†¬†¬†¬†¬†¬†¬†¬†¬†In these circumstances I am satisfied that the Panags and Harinder Grewal were in fact involved in a conspiracy to put forward Mr.¬†Grewal to ICBC as a witness to the collision knowing that he had not in fact witnessed it, and with the intention that he provide ICBC with evidence that he did not have and which they knew to be untrue.¬† The facts, in my view, cannot fairly admit of any other inference.¬† Speculation is not required…

[67]         It follows that both Mr. and Mrs. Panag participated in a conspiracy to deceive ICBC about both how the accident happened and the status of Mr. Grewal as a witness to the accident.  They clearly intended ICBC to rely upon their representations, and ICBC as a result was left scrambling for a considerable period of time as it embarked upon an extensive investigation in an attempt to straighten out what would otherwise have been and should have been a straightforward matter.  This amounts to fraud.  See, for instance, ICBC v. Nisbet, 2009 BCSC 1570, at para. 85.

[68]¬†¬†¬†¬†¬†¬†¬†¬†¬†In the result, the Panags have forfeited their right to coverage under s.¬†19(1)(d) of the¬†IMVA¬†as well as s.¬†19(1)(e), and ICBC is entitled to recover against both of them.¬† Whether directly as a consequence of the Panags’ conspiracy to commit fraud or as a result of the application of the principles of unjust enrichment, this would include the moneys paid out to Mr.¬†Panag for his material damage claim and to Mrs.¬†Panag for her Part¬†VII claim.¬† The total amount awarded to ICBC in this regard is $188,722.86, which I am satisfied accurately represents what ICBC paid out, to which I add pre-judgment interest of $8,460.21.¬† I have deducted $305.06 from the interest claimed because of the absence of evidence concerning the date when expenses related to surveillance were incurred…

[70]¬†¬†¬†¬†¬†¬†¬†¬†¬†In providing ICBC with willfully false statements and in conspiring to commit fraud, the Panags undoubtedly engaged in conduct that was reprehensible.¬† In the particular circumstances of this case, however, I note that the consequences of their actions have exposed them to statutory liability far beyond the actual financial consequences of their actions.¬† Had they succeeded in their deception, they would have saved a mere $801 plus whatever might have been gained through a potential personal injury claim.¬† Now they must pay over $188,000 plus interest…

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3 Responses to “Producing False Witness To Collision Leads to $200,000 in Financial Consequences”

  1. Irene Carlson says:

    Good post as per.Erik Magraken..this is one of several reasons our rates are so high..false claims! Injured party’s are not always justly treated as a result of many false claims.Thanks.

  2. Erik,

    Nobody should accuse me of being pro-plaintiff; however, it’s my view that this decision is wrong. I realize that there are certainly aspects of ICBC practice of which I’m unaware. Nonetheless, the decision (to me) seems contrary to basic principles of insurance law (even as modified by the statutory provisions of motor vehicle liability insurance.)

    Yes, in the broad sense, the Panags lied. But the proper question isn’t whether they breached the policy coverages in the abstract. It’s whether they breached (in some meaningful sense) the particular coverages involved in the claim. I don’t see how their lie – which was that they were not at fault – can be considered a relevant breach of the liability coverages. It didn’t expose the ICBC to liability which it would not have but for the lie.

    So, if the Panags are to be punished for being bad people (lying) to the extent that they have to reimburse the ICBC for money it would have paid even if they had told the truth, the profession needs a better explanation than the case provides.

    Mr. Justice Grauer does not adequately explain why the IBC was entitled to repayment of the amount paid to settle the plaintiff’s claim, once one eliminates whatever extra costs were incurred by the ICBC to defend and settle. In my view, there isn’t an an adequate explanation as to how that result is a consequence of the relevant provisions of the Insurance Act. (Citing one’s own prior decision where one also didn’t provide a sufficient analysis isn’t good enough, in my view.)

    What’s the difference between a defendant ultimately admitting he or she lied about how the accident occurred and the judge or jury finding the defendant lied?

    Is it now the law that the ICBC is entitled to recoup liability payments made on behalf of a defendant under an auto policy every time the judge or jury finds the defendant was at fault and lied? There’s no principled reason for distinguishing that situation and what happened in Panag.

    Perhaps the ICBC’s counsel outlined a valid analysis in argument. If so, Justice Grauer didn’t (in my view) set it out.

    Perhaps the ICBC has an analysis that supports the result. I’d be interested in seeing it.

    If the analysis doesn’t turn on something unique to B.C. motor vehicle liability insurance, and it’s valid, it’ll be goose that lays the proverbial eggs for the Canadian liabilty insurance industry. Imagine being able to tell an insured that if you lie at all to us about anything, even if it’s irrelevant to your liability, we’ll deny coverage.

    On the other hand, if that’s the law, liability insurers in Canada will probably have to appoint separate coverage and defence counsel in every case, so that the coverage counsel can monitor for the slightest lie.

    Hmmm …. all that extra work could solve the articling student / new lawyer job crisis, no?

    Regards,

  3. OOPS – sorry,

    Erik: please fix the typo in your name in the salutation.

    Regards

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