Reasons for judgement were released today by the Supreme Court of Canada rejecting an insurer’s attempt to restrict the amounts payable under a policy of excess insurance.
In today’s case (Sabean v. Portage La Prarie Mutual Insurance Co.) the Plaintiff was injured in a Nova Scotia motor vehicle accident and was awarded $465,400 by a jury. The at fault motorist had insufficient insurance to pay and the Plaintiff was only able to collect $382,000. The Plaintiff had under-insured motorist protection with the Defendant insurance company and applied to recover the shortfall. The Defendant sought to deduct any Canada Pension Plan disability benefits from their obligation.
The Supreme Court of Canada disagreed with the Defendant and found that CPP benefits could not be deducted from the insurer’s obligation to pay. In reaching this decision the Court provided the following reasons:
 The Endorsement stipulates that future benefits from a “policy of insurance providing disability benefits” are deducted from the shortfall in determining the amount payable by the insurer (cl. 4(b)(vii)). The issue in this appeal is whether the Canada Pension Plan (CPP ) is a “policy of insurance” for that purpose.
 The trial judge in this case found that CPP benefits were not benefits from a “policy of insurance” under the Endorsement and thus would not be deducted from the amount payable by the insurer. The Nova Scotia Court of Appeal disagreed, concluding that the CPP was a “policy of insurance” under the Endorsement.
 I agree with the trial judge. The ordinary meaning of the words at issue is clear, reading this Endorsement as a whole. An insurer cannot rely on its specialized knowledge of the jurisprudence to advance an interpretation that goes beyond the clear words of the policy. An average person applying for this additional insurance coverage would understand a “policy of insurance” to mean an optional, private insurance contract and not a mandatory statutory scheme such as the CPP . Thus, future CPP disability benefits do not reduce the amount payable by the insurer under the Endorsement.
 In sum, with respect to amounts that the eligible claimant is “entitled to recover”, cl. 4 (b) specifies nine sources that give rise to deductions from the amount payable by the insurer, none of which include the CPP. The ordinary meaning of a “policy of insurance” in cl. 4(b)(vii) of the Endorsement is clear. It refers to a private insurance policy purchased by the insured. Portage has asked this Court to read into those clear words the jurisprudence related to the collateral benefits rule in tort so that a “policy of insurance” would also include the CPP regime. As noted above, I cannot agree. Thus, the ordinary meaning of the words “policy of insurance” in cl. 4(b)(vii) does not include the CPP regime.
 The clear language of the provision, reading the contract as a whole, is unambiguous. There are no “two reasonable but differing interpretations of the policy”: B. Billingsley, General Principles of Canadian Insurance Law (2nd ed. 2014), at p. 147; Chilton v. Co-operators General Insurance Co. (1997), 32 O.R. (3d) 161, (C.A., at p. 169). The mere articulation of a differing interpretation does not always establish the reasonableness of that interpretation and does not necessarily create ambiguity.
In British Columbia, it is well understood that CPP benefits are deductible from ICBC’s obligation to provide UMP payments. This decision likely does not change this reality as payments “to which the insured is entitled under the Canada Pension Plan” are expressly defined as a “deductible amount” in the legislation defining payable UMP benefits.
Reasons for judgement were released by the BC Supreme Court, Kelowna Registry, creating a practical solution to a real world problem, getting a judgement paid in the face of ongoing claims which may exceed a Defendant’s coverage.
In this week’s case (Clark v. Bullock) the Plaintiff along with other individuals were injured in a serious collision. The Plaintiff’c claim proceeded to trial and damages of $550,000 were assessed. The Defendant’s had $5,000,000 of liability coverage however, there were ongoing claims involving injured infants and there was “a real and legitimate concern that there may not be sufficient coverage” to pay all the claims.
The Plaintiff had Underinsured Motorist Protection however a practical difficulty arose in that those funds could not be forced to be paid until it can be proven the Defendant’s were underinsured. In this case that could have taken many years as the infants claims were not yet ready to be quantified. This left the 67 year old plaintiff facing a real possibility that he could not receive payment on his judgement for a number of years. The Court, with the consent of the parties, fashioned a sensible solution and ordered that the money be paid via the UMP policy even though it technically was not accessible at this time. Mr. Justice Betton provided the following sensible reasons:
 In this particular case, ICBC determined that it would waive the entitlement that it has by virtue of the legislation to require that Mr. Clark exhaust all of his remedies, including awaiting the payment of his pro rata entitlement to the $5,000,000 coverage under the Bullock policy; that is, ICBC would waive its entitlement to insist on all of those steps being taken before accessing the underinsured motorist protection coverage.
 The condition it attaches is that it requires a declaration from court that would protect it against the potential for having to pay out more than the amount of the Bullock policy.
 With that concession or that position being adopted by ICBC, these parties come before me with a request for a declaration. That declaration essentially allows ICBC to access the underinsured motorist protection coverage available to Mr. Clark to pay the amount that Justice Barrow has determined Mr. Clark is entitled to with adjustments as agreed to by the parties….
 In my view, the interpretation of the statutes and the application of the law should not be blind to practical solutions when parties, fully cognizant of their rights and entitlement, present such a proposal. The court should make efforts to facilitate that, so long as it is not running afoul of legislation or established legal precedent, and does not prejudice parties who would have an interest in the pool of funds that they would have available to them.
 I am satisfied in these circumstances that, indeed, this arrangement is in the interests of both Mr. Clark and the Insurance Corporation of British Columbia, the applicants before me, and it does not prejudice or adversely affect the rights of the other entities, all of whom have been served with notice of this application and have chosen not to participate.
 The only other entity which is not a party that may, in a general sense, have an interest in this type of situation would be the Public Guardian and Trustee who, through its statutory obligation, has an interest in protecting infants in this type of context.
 I should say as well that all of those other parties are represented by counsel. No interested party in this matter is self-represented or unrepresented.
 I have chosen and determined not to require that there be any notice to the Public Guardian and Trustee, or that it be served with this application, because I am satisfied that the declaration which I will be making does not adversely affect the infants who are plaintiffs in separate proceedings arising out of this collision. They will still have full access to their proportionate shares of the insurance policy limits of the Bullocks.
 Accordingly, I will make the declaration.
While ICBC can deduct Canada Pension Plan disability benefits from an UMP Claim, can the same be done for additional “Children’s Benefits” paid by the CPP? Arbitrator Yule addressed this question in an UMP Arbitration Decision that was recently provided to me. In short Arbitrator Yule held that Children’s Benefits are non-deductible.
In the unpublished decision (H v. ICBC) the Plaintiff was awarded damages following a jury trial. The Plaintiff applied for payment under his own UMP Coverage as the at-fault motorist was underinsured. While the parties largely agreed on the deductibility of past CPP benefits from ICBC’s payment obligations, they could not agree on whether the additional CPP funds the Plaintiff received as “Children’s Benefits” were deductible. In finding that they were not Arbitrator Yule provided the following reasons:
37. In one sense it may well be thought that it must be a “benefit” to the Claimant to receive money (which must be paid to him in these circumstances) under a statutory scheme (the CPP) which imposes no constraint on his use of the monies. On the other hand, it seems to me the underlying rationale for the payment of the disabled cobtributor’s child’s benefit is the expectation that the money will be used by the recipient in a general way in the partial discharge of the recipient’s legal duty to support and maintain the children who are entitled to the benefits. In this sense, I think the benefit or right is that of the child and not of the parent or custodial person. It is significant that the benefits payable under Division A of Part II of the CPP, one is described as “a disability pension” (what the Claimant receives on account of his own disability) and another – the benefit at issue – is described as “a disabled contributor’s child’s benefit” [emphasis added]. It is difficult to transform what the statutory CPP scheme describes as “a child’s benefit” into the parent’s/custodial person’s benefit for the purpose of s. 148.1(1)(i). At least here where the monies are payable under another statutory scheme, I think “benefit: or “right” in s. (f.2) should be guided by the description of the benefitin the statory scheme, and where the statutory scheme itself defines the benefit as the child’s beneift, it shoudl be considered to be the child’s benefit. This interpretation also maintains consistency with the construction of ss. (f.2) where I have concluded that the entitlement to the child’s benefit is that of the child.
38. Accordingly I conclude that the children’s benefits paid to the Claimant are not deductible from his UMP Compensation.
Like many UMP Cases, This decision is not publicly available but, as always, I’m happy to provide a copy to anyone who contacts me and requests one.
Reasons for judgement were released last week in an ICBC UMP claim dealing with multiple defence medical exams in the context of a serious injury claim.
In last week’s case (G v. ICBC) the Claimant suffered a “severe traumatic brain injury” in a 2008 collision. The at fault motorist was underinsured and the Claimant applied for payment of damages under his own UMP coverage with ICBC.
In the course of arbitration the Plaintiff agreed to be assessed by five different physicians of ICBC’s choosing. These included two neuropsychologists, a neurologist, a psychiatrist and a physiatrist. ICBC then requested a further assessment, specifically a Multi-Disciplinary Fetal Alcohol Syndrome Disorder Assessment over the course of two days. The Claimant refused resulting in an ICBC application to compel attendance.
The parties agreed to apply the BC Supreme Court Rules in the course of the arbitration (click here to read an article discussing the lack of jurisdiction for an UMP Arbitrator to compel an independent medical exam when the BC Supreme Court Rules are not used). In dismissing the application Arbitrator Yule canvassed some of the well known authorities considering BC Supreme Court Rule 7-6(1) and (2). Arbitrator Yule provided the following summary of the applicable legal principles:
1. An order for a subsequent medical exam is discretionary but the discretion must be excercised judicially;
2. Independent medical exams are granted to ensure “a reasonable equality between the parties in the preparation of a case for trial”; reasonable equality does not mean that a defendant should be able to match expert for expert or report for report;
3. A second exam will not be allowed for the purpose of attempting to bolster an earlier opinion of another expert; there must be some question or matter that could not have been dealt with at the earlier examination; and
4. There is a higher standard required where the Defendant seeks subsequent medical exams.
Arbitrator Yule went on to rule that the playing field was reasonably equal after five ICBC directed medical exams such that a further exam was not warranted. He specifically pointed out that ICBC’s experts already opined on the issue of pre-existing fetal alcohol disorder without reservation and a further report would simply seek to bolster these opinions.
As of today’s date this judgement is not yet publicly available. As always, I’m happy to provide a copy to anyone who contacts me and requests one.
In my ongoing efforts to summarize historic UMP Arbitration decisions, I have recently been provided a 2005 arbitration award dealing with several issues including the deduction of CPP benefits in circumstances where a Plaintiff was found contributorily negligent.
In the 2005 case (H v. ICBC) the Claimant was injured in a 1996 collision. His claim proceeded to trial and his damages were assessed at just over $316,000 by the Jury. The Plaintiff was also found 10% contributorily negligent for failing to wear a seat belt.
The Defendant was underinsured and the Plaintiff applied under his own UMP Coverage for payment of damages. The Plaintiff had received CPP disability benefits of just over $65,000. ICBC sought to deduct the whole of this amount from the Plaintiff’s UMP claim. The Plaintiff opposed arguing that only 90% of the past payments should be deductible in keeping with the Jury’s finding.
Arbitrator Yule disagreed with the Plaintiff finding CPP benefit deduction can’t be reduced due to a contributory negligence finding. In coming to this conclusion Arbitrator Yule provided the following reasons:
8…Section 148.1(5) provides that an award of UMP compensation shall not exceed the amount of damages awarded, “minus the sum of the applicable deductible amounts”. As noted previously, one of the deductible amounts is an amount to which the insured is entitled under the Canada Pension Plan. On its plain wording, the full amount of the disability benefits to which the Claimant is entitled under the Canada Pension Plan are to be deducted from his UMP Claim. There is nothing in the wording of the UMP Regulations to suggest that deductible amounts are to be reduced in accordance with the percentage recovery of the Claimant. As the Respondent correctly argues, Part 7 payments, which a re also a deductible amount, are deducted in full regardless of the percentage recovery of a Claimant.
Like many UMP Cases, This decision is not publicly available but, as always, I’m happy to provide a copy to anyone who contacts me and requests one.
In my ongoing efforts to summarize UMP Arbitration decisions, a stack of historic UMP cases have recently been provided to me by colleagues in the Plaintiff bar which I will post as time permits. To this end, below is a summary of a useful 1999 decision addressing the deductibility of future Long Term Disability Benefits in an UMP Claim.
In the 1999 decision (M. v. ICBC) the Claimant was severely injured in a 1993 collision. The Claimant and ICBC came to a mediated settlement valuing the claim at $1.2 million. The Defendant was under-insured and an arbitration was held to determine what amounts were deductible from the Claimant’s UMP coverage.
The Claimant had a private policy of insurance with Canada Life. They had paid over $70,000 in LTD benefits. It was agreed that these were deductible. ICBC argued that these payments would continue and the present value of future payments had to be deducted from the settlement amount.
Arbitrator Yule disagreed due to a ‘payment suspension‘ clause in the LTD contract. In not deducting future LTD payments from Canada Life Arbitrator Yule provided the following reasons:
79. …The critical provision regarding what is payable in the subrogation provision is the term that says “if a lump sum payment is made under judgment or settlement for loss of future income or for future period or lump sum benefits which would otherwise be payable under this policy, no further benefits will be paid under this policy until such time as the monthly or periodic benefits which would otherwise be payable under this policy equal the amount received in the lump sum”…
81. …One looks to the ICBC Regulations and, in this case, the definition of deductible amount. One item to be deducted is an amount “payable to the insured under any benefit”. One then looks to the Canada Life Policy to see whether the future disability benefits will be payable in the sense that they are going to be paid. In this case, the result of the payment of the UMP Claim is that the future Canada Life benefits will not be paid because of the integration provisions of the Policy. In my view, then, the future Canada Life benefits are not payable and do not constitute a deductible amount.
Like many UMP Cases, This decision is not publicly available but, as always, I’m happy to provide a copy to anyone who contacts me and requests one.
In my continued efforts to publicly summarize ICBC UMP Arbitration Decisions, reasons for judgement recently have been provided to me dealing with the restriction on ICBC UMP Coverage in circumstances where a vehicle occupant is injured through the negligence of a motorist who did not have the vehicle owner’s consent to operate.
In the unreported 2003 UMP Decision (D v. ICBC) the Claimant was injured in a 1998 collision. He was the occupant of a vehicle driven by MV. MV did not have the registered owner’s consent to operate the vehicle. MV was given permission to drive by J who was the registered owner’s son. J initially obtained the vehicle with the owner’s consent. J did not have the owner’s permission to allow others to operate her vehicle.
The claims arising from the crash exceeded the damages available under section 20 of the Insurance (Vehicle) Act. The Claimant applied to have his excess damages paid under his own Underinsured Motorist Protection coverage with ICBC. ICBC argued that UMP coverage was forfeited because the Claimant was a passenger in a vehicle that he “knew or ought to have known was being operated without the consent of the owner” contrary to section 148.1(3)(b) of the Insurance (Vehicle) Regulation.
Arbitrator Yule agreed that given the facts of the case the Claimant should have known that consent was absent. In finding the Claimant was not entitled to coverage Arbitrator Yule provided the following reasons:
28….Whether (the owner) consented, however, is a different question from the one raised in this case, namely whether a passenger such as Mr. D knew or ought to have known that (the owner) would not consent to the use of her vehicle in these circumstances. There may well be circumstances in which an original borrower, who is aware of restrictions on the use of the borrowed vehicle put in place by the owner, allows another to drive without ever communicating those restrictions. If there were nothing else about the surrounding circumstances to cause a driver or passenger to question the owner’s consent to the driver’s operation of the car, the driver and passenger would be entitled to full insurance protection. A similar concept of reasonable belief by a driver i the consent of a vehicle owner applies in the extension of third party liability coverage under a driver’s certificate (Regulation s. 49(1)(c)) and under an owner’s certificate (Regulation, s. 65(1)(f))….The question is whether there is sufficient evidence from the totality of the circumstances such that, if he had considered the matter, a reasonable person in Mr. D’s circumstances ought to have known that (the owner) would not consent to the use of her vehicle int he circumstances prevailing the evening…
32…Where the vehicle is not stolen, and the original borrower remains in possession of and an occupant in the vehicle, and where constraints regarding use are known to the original borrower and not disclosed to others in the vehicle, the burden of establishing facts that a passenger ought to have known the owner would not consent should be onerous, even before taking into account that s. 148.1(3)(b) is an exclusion from coverage.
33. In my view the Respondent has met the burden in this case…
The Reasons go on to highlight the specific facts indicating why a lack of consent should have been known in the circumstances.
This decision is not publicly available but, as always, I’m happy to provide a copy to anyone who contacts me and requests one. Also, if anyone has an UMP decision from prior to 2007 and you’d like to have it added to this database please don’t hesitate to contact me.
An ICBC UMP decision has recently been provided to me dealing with the amount of coverage available under UMP when a claimant has the right to advance a tort claim and a Family Compensation Act claim arising from the same collision.
This decision was released well before the 2007 amendment requiring UMP Arbitration decisions to be published publicly on ICBC’s website. I summarize the decison to add it to this public and searchable UMP Claims Database.
In the 1996 case, (CCK v. ICBC) the Claimant was severely injured in a collision. She suffered a spinal cord injury rendering her a paraplegic. Her mother was killed in the same collision. The at-fault motorist was underinsured for all of the civil claims flowing from the crash. The Claimant was entitled to damages not only for her own injuries but also as a beneficiary under the Family Compensation Act for the death of her mother.
The arbitrator had to decide whether the Claimant could access $1 million in UMP Coverage in her tort claim along with an additional $1 million in coverage for her FCA claim or whether both claims were covered by a single limit. Arbitrator Schmitt provided the following reasons:
If CCK had been injured but had not lost her Mother, she would, of course, under section 148.1(2) be entitled to compensation under UMP coverage. In this case she was insured and she lost her Mother so she is an insured under not one but two of the definitions. What ICBC is arguing is that she is entitled to UMP coverage for her injuries and loss of her Mother but only under her own million dollars coverage…
In the case of CCK, she happens to be insured under two different definitions and she will be entitled to the benefits of her UMP coverage for both her claims up to the $1,000,000 limit…
The Mother’s estate is likewise entitled to the benefit of UMP coverage up to $1,000,000 but the Mother’s estate claims do not include the claims of survivors under the Family Compensation Act which belong specifically to those survivors…
The estate’s coverage is available to cover claims by the estate itself which may be advanced under the Estate Administration Act. Insofar as CCK or her grandmother may be entitled to receive some or all of the proceeds of the estate as a beneficiary they may directly benefit from such coverage. Otherwise CCK is entitled to the benefit of her own UMP coverage of $1 million with respect to her claim for personal injuries and her claim for damages under the Family Compensation Act.
This case should be contrasted with a subsequent Court of Appeal decision in 2007 (Lougheed v. Co-operators General Insurance Company) which upheld the following trial judgement reasons finding that the ‘insured‘ in an FCA claim brought following a collision is the personal representative of the estate of the deceased and that all beneficiaries of such an FCA claim are subject to the representative’s single policy limit:
 The issue, then, is how one ought to read the definition of “insured” in s. 148.1(1)(c), bearing in mind the scope of coverage granted by s. 148.1(2). But for his death, Mr. Lougheed would have received UMP coverage by operation of s. 148.1(1)(a). As a result of his death, the “insured” is “a person who…is entitled to maintain an action” because of Mr. Lougheed’s death. The “action” refers to the family compensation claim that may be commenced under the FCA by the personal representative on behalf of all of the beneficiaries, or by the beneficiaries if it is not commenced by the personal representative. In either case, however, the action must be treated as though it had been brought by the personal representative. It is a single cause of action brought on behalf of all of Mr. Lougheed’s beneficiaries.
 It follows, in my view, that the “insured” in s. 148.1(1)(c) must be the personal representative, who is the individual entitled, either directly or indirectly, to maintain a family compensation action as a result of the death of the primary insured, Mr. Lougheed. That interpretation is consistent with the grant of coverage provision, which limits the recovery of benefits to those otherwise accruing to the deceased insured.
 In the result, the UMP coverage limit is not $1 million for each beneficiary of a family compensation action, but $1 million for the beneficiaries of the action as a whole. The plaintiffs, all beneficiaries, are entitled collectively to the $1 million of UMP coverage that would otherwise have been available to the deceased, Mr. Lougheed.
In my on-going efforts to create a searchable UMP Claims Database, reasons for judgement were recently released addressing the deductibility of previous payments for Costs, Disbursements and ICBC paid MSP treatments in an UMP proceeding. In short the MSP payments were found to be deductible under UMP while the costs and disbursements payments were not.
In the recent case (X v. ICBC) the Claimant was a personal injury lawyer. He was involved in a 2004 collision. He initially sued for damages. The lawsuit was disposed of for payment of the underinsured defendant’s policy limits of $200,000 plus costs and disbursements with the parties agreeing have the value of the claim being privately arbitrated.
The Claimant alleged that he suffered a mild traumatic brain injury and sought damages “well over $1 million“. This claim was largely rejected with the arbitrator assessing damages at just over $276,000. The parties agreed that the $200,000 previous payment was deductible but could not agree whether the additional $22,575 ICBC paid for costs and disbursements were deductible from the UMP assessment. Arbitrator Boskovich held that it was not and provided the following reasons:
538. The codified applicable deductible amounts are very clear and not one of them contemplates a deduction for the costs and disbursements associated with a payment made:
- pursuant to Section 20 or Section 24;
- paid or payable under a Part VII;
- paid by the underinsured motorist as damages;
- paid or payable under a certificate, policy or plan of insurance providing third party legal liability indemnity to the underinsured motorist;
- paid or payable under vehicle insurance, wherever issued and in effect, providing undersinsured motorist protection for the same occurrence for which the underinsured motorist for protection is provided under this section;
- paid or payable to the insured under any benefit or right or claim to indemnity; and
- paid or able to be paid by any other person who is legally liable for the insured’s damages.
539. On their own, the costs and disbursements paid do not fall under a payment of any “benefit or right or claim to indemnity”.
540. I do not find the $23,575.17 paid by the Respondent for the costs and disbursements associated with the underlying tort claim to be an applicable deductible amount pursuant to the UMP Regulation.
ICBC went on to argue that the MSP payments they made under the Claimant’s Part 7 Benefit plan were deductible from the damage assessment. Arbitrator Boskovich agreed and provided the following reasons:
544. The payments made by ICBC to the Medical Services Plan of British Columbia for the various medical visits listed are payments made pursuant to Part VII as medical benefits and are a codified applicable deductible amount pursuant to Section 148.1(1)(c). There will be a deduction of $551.36 for these payments.
Useful reasons were recently released by Arbitrator Yule discussing the scope of an arbitrator’s power to address issues of liability in the course of an UMP Claim.
In the recent case (GG v. ICBC) the Claimant was injured by an underinsured Washington State motorist. He sued for damages and ultimately settled for policy limits with the at fault motorists insurer. The Claimant applied to ICBC to have excess damages paid under his underinsured motorist protection (UMP) policy. The Claim was ultimately dismissed finding the Claimant did not have standing to trigger the UMP process.
The decision went on to discuss the ability of an arbitrator to Rule on liability issues when they have not been previously disposed of by a trial on the merits. Arbitrator Yule provided the following reasons:
71. As I have noted previously, the scheme of UMP compensation in British Columbia, in the absence of agreement between ICBC and a claimant, is premised upon an underlying tort judgement. Sections 148.2(1) and (6) cannot mean that either party can arbitrarily and unilaterally have any issue relating to legal entitlement to recover damages determined in an arbitration because in those instances where there is a judgement int he underlying tort action, legal entitlement to recover damages will have been judicially decided. Section 148.2(6) must at least be intended to give an arbitrator authority to determine issues of legal entitlement including contributory negligence where there is an agreement by the parties that the issue should be determined in the arbitration. Absent the presence of collusion or fraud in obtaining judgement in a foreign jurisdiction, I think that the scheme of UMP compensation presumes that for accidents in foreign jurisdictions, issues of legal liability including contributory negligence are conclusively determined in a judgement of the foreign court. I do not think that Section 148.2(6) entitles either a claimant or ICBC to “relitigate” an issue of liability or contributory negligence where there has been a judicial determination om the merits of the issue in a tort action in the jurisdiction where the accident occurred….I do not think a claimant who has succeeded in obtaining a judgement after trial in a foreign jurisdiction where such potential defences were not alleged, is exposed to have such defences raised for the first time in a subsequent UMP arbitration. If the claimant here is entitled to pursue his UMP claim, notwithstanding the entered Consent Dismissal Order in the Washington action, it seems to me that the actual Order cannot be regarded as determinative of anything and is virtually irrelevant. In that circumstance, I think Section 148.2(6) permits ICBC to raise the issue of contributory negligence, although whether the issue could be heard on its merits would be subject to full argument on the issue of whether, under Washington Law which is determinative as to issues of liability, formal admissions of fault in the pleadings constitute a conclusive determination of liability.