More on ICBC Claims, Soft Tissue Injuries and Assessment of Damages

Reasons for judgement were released today by the BC Supreme Court, New Westminster Registry, (Runghen v. Elkhalil) awarding a Plaintiff just over $147,000 in total damages as a result of injuries and damages sustained in a BC car crash.
The collision occurred in 2004 when the Plaintiff’s vehicle was rear-ended.  The issue of fault was admitted leaving only an assessment of damages at issue at trial.
In awarding $40,000 for pain and suffering (non-pecuniary damages) Madam Justice Fenlon made the following findings with respect to the Plaintiff’s injuries:
[16]            Based on the evidence of the experts, which is largely consistent, I find that Ms. Runghen suffered mild soft tissue injuries to her cervical and lumbar spine as a result of the accident; I further find that due to those injuries, she has headaches and chronic pain that has affected her ability to function both at home and at work.  I also find that Ms. Runghen’s pain and related incapacity are likely to markedly improve once an appropriate treatment plan is put in place.
Madam Justice Fenlon engaged in a thoughful discussion at paragraphs 17-34 of the judgement which is worth reviewing for anyone ingterested in seeing some of the factors courts take into consideration when valuing pain and suffering in ICBC soft tissue injury claims.
The balance of the judgement deals largely with claims for past wage loss and diminished earning capacity.   Awards were made under both of these heads of damages.  The court found that the Plaintiff’s ability to work was diminished as a result of chronic pain and that this would likely continue for at least some time after the trial.  In awarding $35,000 for diminished earning capacity the court engaged in the following analysis:

[50]            As noted earlier in these reasons, I accept that the chronic pain experienced by Ms. Runghen to date has been a limiting factor in her ability to take on longer hours at work.  I expect that limitation will continue to some extent over the next year, as she engages in a rehabilitation exercise program.  After that time, it is probable that she will be able to increase the amount of time she works to be more in keeping with what she would have been doing prior to the accident.  In coming to this conclusion, I recognize that Ms. Runghen had not established her career as a massage therapist and that we do not have a solid base line from which to work.

[51]            I am mindful that there is no certainty possible in terms of predicting what will occur in the future; there is a possibility, even with the correct treatment for her injuries, that Ms. Runghen may still experience some limitations.

[52]            Applying the considerations identified in Brown v. Golaiy (1985), 26 B.C.L.R. (3d) 353 (S.C.), I find that Ms. Runghen is likely to be somewhat less capable, overall, of earning income from all types of employment and that, in particular, she is likely to be less capable of earning incoming from her chosen field of massage therapy.  Ms. Runghen may have to consider retraining in another field or another area of specialization within massage therapy if she wishes to work full-time.

[53]            In my view, given the potential for marked improvement in Ms. Runghen’s condition that both Dr. Cameron and Dr. McGraw identified in their reports, and based on Ms. Runghen’s own experience with a similar but truncated rehabilitation program with Karp, it would not be appropriate to apply the precise mathematical calculation of future income loss used by Ms. Runghen.  Rather, this is an appropriate case to award a sum that takes into account the various contingencies and possibilities, without overcompensating Ms. Runghen by assuming the status quo and calculating a set wage shortfall over the next 36 year’s of her working life.  I set that sum at $25,000. 

[54]            I find that Ms. Runghen will need approximately six months to put in place and complete a four-month exercise rehabilitation program.  During that time, she will continue to work at her current level.  I therefore award damages of $10,000 to cover loss of income during this period.  

[55]            In summary, I award Ms. Runghen  a total of $35,000 for loss of future income and loss of earning capacity

 

Can Future Wage Loss be Awarded in an ICBC Claim When There is no Past Wage Loss?

The answer is yes and reasons for judgement were released yesterday (Schnare v. Roberts) by the BC Supreme Court illustrating this fact.  In yesterday’s case the BC Supreme Court awarded the Plaintiff just over $240,000 in total damages as a result of a 2005 BC Motor Vehicle Collision.   
The Plaintiff was a school teacher and was on her way to school when her vehicle was rear-ended.  The crash was significant enough that the Plaintiff’s vehicle was pushed into the vehicle in front of hers.
The Plaintiff suffered various injuries and these and their effect on the Plaintiff’s life are summarized at paragraphs 56-57 as follows:

[56]            Based on the evidence of Ms. Schnare, Dr. Fagan, Mr. McLean and Dr. van Rijn, I conclude that, in the accident on March 14, 2005, Ms. Schnare suffered soft tissue injuries to her neck, upper, mid and lower back, including in and around her sacroiliac region.  As a result of the injuries, Ms. Schnare was left with a mobile sacroiliac joint.  I conclude further that the defendants’ negligence caused Ms. Schnare’s injuries.  While, as of the trial, Ms. Schnare had occasional neck pain attributable to the accident, I find that the most serious result of the injuries Ms. Schnare suffered in the accident has been the mobility in her sacroiliac joint, the pelvic misalignment and rotation, and the associated back pain.  The pelvic rotation was observed and identified (by Mr. McLean) at Ms. Schnare’s first physiotherapy assessment on March 31, 2005 (approximately two weeks after the accident).  Dr. van Rijn’s examination disclosed that Ms. Schnare had a mobile right sacroiliac region and he identified Ms. Schnare’s sacroiliac region as the probable pain generator and source of Ms. Schnare’s back pain.

[57]            I find that, as a result of her injuries, Ms. Schnare continues to suffer some neck pain and significant back pain, and that this pain – particularly her back pain – limits and interferes with most normal and routine activities of her daily life.  Based on the evidence, particularly from Mr. McLean, Ms. Schnare’s condition has improved since the accident, as a result of physiotherapy and Ms. Schnare’s own efforts.  However, I accept the opinion of Dr. van Rijn and conclude that Ms. Schnare’s accident-related symptoms caused by her injuries have resulted in some permanent disability.

In justifying an award for non-pecuniary damages (pain and suffering) for $85,000 the Court highlighted the following facts:

Ms. Schnare’s injuries have had a very significant effect on the quality of Ms. Schnare’s life.  She has back pain regularly, and from time to time flare-ups of severe pain; she fatigues easily; she is unable to enjoy activities such as hiking or car trips with her family; she is unable to participate in her children’s activities (including homework and sports) in the manner and to the degree she would like; household chores are more difficult; she feels like a spectator on family activities, rather than involved and engaged; her intimate relationship with her husband has changed; and her strong desire to pursue a career as a kindergarten teacher has been frustrated.

[63]            Taking into account in particular Ms. Schnare’s evidence, the evidence of Mr. Schnare, Ms. Schultz and Ms. Brebuck concerning Ms. Schnare’s circumstances before and after the accident, and the opinions stated by Dr. van Rijn, I conclude that an award of $85,000 is appropriate in the circumstances.

From there the court went on to discuss the law of diminished earning capacity (future wage loss).  Despite only having a minimal past wage loss the Court awarded the Plaintiff $125,000 for diminished earning capacity.  In doing so the Court summarized and applied the law as follows:

 

[64]            The principles governing a claim for loss of earning capacity are set out in Rosvold v. Dunlop, 2001 BCCA 1, 84 B.C.L.R. (3d) 158.  There, the court confirmed that, “Where a plaintiff’s permanent injury limits him in his capacity to perform certain activities and consequently impairs his income earning capacity, he is entitled to compensation.  What is being compensated is not lost projected future earnings but the loss or impairment of earning capacity as a capital asset.”  The standard of proof to be applied when evaluating hypothetical, future events that may affect an award is simple probability, not the balance of probabilities.  Huddart J.A. continued:

10.     The trial judge’s task is to assess the loss on a judgmental basis, taking into consideration all the relevant factors arising from the evidence:  Mazzuca v. Alexakis, [1994] B.C.J. No. 2128 (S.C.) at para. 121, aff’d [1997] B.C.J. No. 2178 (C.A.). Guidance as to what factors may be relevant can be found in Parypa v. Wickware, supra, at para. 31;Kwei v. Boisclair (1991), 60 B.C.L.R. (2d) 393 (C.A.); and Brown v. Golaiy (1985), 26 B.C.L.R. (3d) 353 (S.C.) per Finch J. They include:

1.    whether the plaintiff has been rendered less capable overall from earning income from all types of employment;

2.    whether the plaintiff is less marketable or attractive as an employee to potential employers;

3.    whether the plaintiff has lost the ability to take advantage of all job opportunities which might otherwise have been open to him, had he not been injured; and

4.    whether the plaintiff is less valuable to himself as a person capable of earning income in a competitive labour market.

11.     The task of the court is to assess damages, not to calculate them according to some mathematical formula:  Mulholland (Guardian ad litem of) v. Riley Estate (1995), 12 B.C.L.R. (3d) 248 (C.A.). Once impairment of a plaintiff’s earning capacity as a capital asset has been established, that impairment must be valued.  . . . The overall fairness and reasonableness of the award must be considered taking into account all the evidence.

[65]            Ms. Schnare seeks damages in the sum of $345,600 for lost earning capacity.  This sum is based on a full-time salary of $64,000 per year; on the assumption that, because of her injuries, Ms. Schnare is permanently unable to work more than 4 days per week; and on the further assumption that, but for her injuries, she would begin teaching full time in about 2010 and continue until age 65, a period of 27 years (20% of $64,000 = $12,800 multiplied by 27 years = $345,600).

[66]            When Ms. Schnare worked a full-time week in the fall of 2008, she determined that she could not keep it up, and that she needed the one day a week to recuperate.  Other than that one week, Ms. Schnare last taught full time during the school year September 2000 to June 2001.  At that time, the Schnares’ daughter was about two, and Ms. Schnare was pregnant with their son.  As noted above, the Schnares has discussed Ms. Schnare returning to work full time when their daughter entered grade 7.  Of course, that Ms. Schnare would in fact have returned to work full time once her daughter entered grade 7, but for the accident, is not a certainty.

[67]            Dr. van Rijn addressed the topic of Ms. Schnare’s potential “occupational restrictions” in his June 5, 2008 report.  He noted Ms. Schnare’s plans to move to grade 1, rather than teaching kindergarten, and observed that “some of the job requirements (including sitting on the ground) may not be as necessary, which will hopefully allow her to manage more easily.”  He continued (italics added):

She has permanent restrictions with respect to jobs requiring increasing physical effort and would be competitively unemployable in such work when compared to an able-bodied woman with similar interests and skill sets.  This represents a permanent loss in her work capability and has caused her to suffer a work handicap as a result of her injuries.  She is potentially less desirable an employee to perspective employers as a result of her accident related symptoms.

[68]            However, Dr. van Rijn does not say anywhere in his report that Ms. Schnare would be unable, because of her injuries, to work full-time as a teacher.  I compare what Dr. van Rijn says with the evidence referred to in Fox v. Danis, at para. 97, where the court had the benefit of opinion evidence to the effect that the plaintiff had lost the capacity to work full-time.  While Ms. Schnare may have restrictions, and therefore be less employable or “competitively unemployable,” with respect to “jobs requiring increasing physical effort,” Dr. van Rijn does not identify teaching grade 1, or indeed teaching any particular school grade, as a job of this type.  In addition, there is no evidence that Ms. Schnare has ever considered any type of work other than teaching.

[69]            I consider that the approach taken by Ms. Schnare with respect to damages for loss of earning capacity is excessively mathematical.  In my view, it seeks to have Ms. Schnare compensated as if it were certain that she would never work full-time again, and her approach produces a result that, overall, is neither fair nor reasonable, taking into account all of the evidence.  On the other hand, based on the evidence, I do not accept the defendants’ submission that Ms. Schnare should receive no award for loss of capacity to earn income.

[70]            In my view, based in particular on Ms. Schnare’s evidence and on the opinions stated by Dr. van Rijn in his June 5, 2008 report, Ms. Schnare has suffered some impairment of her earning capacity as a result of her injuries.  She has been rendered less capable overall from earning income from all types of employment available to an individual qualified as a teacher, and she has lost the ability to take advantage of all job opportunities that might otherwise have been open to her had she not been injured.  Specifically, Ms. Schnare has lost the ability to take advantage of the opportunity to work full-time as a kindergarten teacher, taking into account the physical demands of that job.  On the other hand, I do not consider that the evidence supports the conclusion that, as a result of her injuries, Ms. Schnare has lost the ability generally to take advantage of opportunities to work full-time as a teacher, should she choose to do so in the future.  In that light, the difference between Ms. Schnare’s likely future income had the accident not occurred and her income now that the accident has occurred may well be small.

[71]            Accordingly, Ms. Schnare is entitled to damages, but the amount should be more modest than what her counsel has submitted.  I conclude that the damages for Ms. Schnare’s loss of earning capacity should be assessed at $125,000.

ICBC Injury Claims, Past Wage Loss and Income Tax

I normally don’t blog about tax law but in certain circumstances the interplay of tax law and personal injury law can have very significant consequences in ICBC Injury Claims.
If you are injured through the fault of another in a motor vehicle collision in BC and advance a tort claim for your past wage loss you need to be familiar with s. 98 of the Insurance (Vehicle) Act which limits past income loss awards to past ‘net’ income loss.
Serious injury claims usually take many years before making their way to trial, mostly because it is important for injuries to reach a point of maximum medical improvement before trying to value them.
As a result of this Plaintiffs with serious injuries such as brain or spinal cord injuries often have several years of past wage loss by the time their claim gets to trial.   How then, should s. 98 of the Insurance (Vehicle) Act operate for past wage loss in these circumstances?  Take the following example:
Imagine a Plaintiff who earned $50,000 per year had 4 years of income loss before his ICBC Injury Claim got to trial.  His gross income loss would be $200,000.  What would the net loss be?  Would it be the income tax on $200,000 at today’s rate or would the income be taxed at the lower rate (the taxes payable on a salary of $50,000 in each calaner year)?  
In a 2003 decision named Hudniuk, the BC Supreme Court stated that taxes must be assessed “as if the past income had all been earned at the effective date of the jury’s assessment namely, the first day of trial”  Since 2003 this approach has been generally accepted as being correct.  This approach, in my opinion, unfairly penalized Plaintiffs by taking an amount off their award for taxes far greater then what they actually would have paid in taxes had they earned the income year by year.  Fortunately, very important reasons were released today by the BC Court of Appeal (Lines v. Gordon) adding clarity to the application of section 98. 
In today’s case the BC Court of Appeal weighed in how s. 98 of the Insurance Vehicle Act should be applied.  In doing so the Court first reaffirmed the important principle in tort law that:
Damages should, so far as any monetary award can do so, restore the plaintiff to the position in which he would have stood but for the defendant’s wrongdoing. On this basis they should represent compensation for loss of earning capacity and not for loss of earnings. In a case of personal injuries, what the plaintiff has lost is the whole or part, as the case may be, of his natural capital equipment and to tax him on this is contrary to generally accepted principles of taxation.
The Court then went on to decide that the approach taken by the trial judge in Hudniuk was not inflexible and not appropriate in all circumstances and stated as follows:

[181]        Although the wording of ss. 95 and 98 contemplates the possibility of calculating net income loss for multiple periods between the date of the accident and the date of trial, it is my opinion that the Legislature did not intend to require in every case that gross past income loss be allocated to each of the calendar years between the date of the accident and the date of trial and to never allow net income loss to be calculated on the basis that the compensation for it was all received on the first day of trial.  If the Legislature had so intended, it would not have used the words “for any period” in the introductory portion of the s. 95 definition of “net income loss”.  Rather, if that had been the intention, the Legislature would have used words to the effect of “for each calendar year”.

[182]        In my opinion, the Legislature recognized that there may be difficulties in allocating gross income loss to particular periods between the date of the accident and the date of trial.  For example, as in Hudniuk, a jury may make a finding as to the gross income loss without being asked to allocate the loss to any calendar year or other period, and the judge may consider it inappropriate to speculate on the jury’s reasoning process.  The difficulty could be compounded if, again as in Hudniuk, the tax rules applicable to the income earned in a particular year are different from the tax rules applicable to the income allocated to that year.

[183]        Another example is a situation where the plaintiff was unemployed at the time of the accident and had no imminent prospects of employment.  The judge or jury could make an award for loss of past earning capacity, but it would be artificial to allocate it among different periods.

[184]        In my opinion, by the use of the phrase “for any period”, 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.  In the two examples I have given, it would be appropriate for the judge to use only one period for the calculation of net income loss (namely, the entire period from the date of the accident to the first day of trial).  In such a case, net income loss would be calculated as if the gross income award was received by the plaintiff on the first day of trial.

[185]        By way of contrast to the two examples I have given, in the situation where, at the time of injury, the plaintiff was working at a job and returned to that job after sufficiently recovering from the injuries, it would be appropriate, absent any complications, for the judge to allocate the gross income loss to the calendar years between the date of the accident and the date of trial as if the plaintiff had continued working.  This would accord with the principle that, insofar as is possible, the plaintiff should be put in the position he or she would have been in if not for the injuries caused by the defendant’s negligence.

[186]        There will be a wide variety of circumstances facing trial judges.  In each case, the trial judge will have to decide whether it is appropriate in the circumstances before him or her to calculate net income loss on the basis of one period, calendar-year periods or other multiple periods.  In making a decision in this regard, the trial judge should consider all of the circumstances and apply s. 98 in a manner that is most consistent with the principles of damage assessment to which I have referred.

[187]        The application of s. 98 in jury trials should be consistent with its application in trials by judge alone.  The judge will typically consult with counsel as to whether the jury will be requested to only make an award for the gross amount of the loss of past earning capacity or to also make a finding of fact with respect to the net income loss prior to trial.  Whether the jury will be requested to provide a lump sum amount of the past gross income loss, or will be requested to provide periodic gross amounts, for use in calculating the net income award, will depend on the circumstances of the case.

[188]        In the present case, the plaintiff did not earn any income between the date of the accident and the date of trial, with the result that there is no complication of using different tax rules for actual and allocated income.  Although the trial judge made a global assessment of the past income loss, he specifically accepted a scenario which allocated projected income among the calendar years between the accident and the trial, and he then applied contingencies to arrive at the award he made.  In the circumstances, it is reasonable to infer that he applied the contingencies to the projected annual incomes on a pro rata basis.

[189]         In addition, it is apparent from the supplementary reasons for judgment that the trial judge felt constrained to follow what he understood to be the inflexible approach of Hudniuk in circumstances where he felt that approach diverted from the damage assessment principle that a plaintiff should be made whole.  It is reasonable to conclude, in my opinion, that if the judge appreciated that he had a discretion to allocate the gross income loss to more than one period, he would have allocated it to each of the calendar years between the accident and the trial on a pro rata basis according to the incomes projected in the scenario he accepted.

This case is certainly good news for any Plantiffs injured in BC motor vehicle collisions.  The flexibility the Court of Appeal has given trial judges in the applicaiton of s. 98 of the Insurance (Vehicle) Act will result in more fair assessments in past income loss by not penalizing plaintiff’s with a tax rate that they never would in reality be exposed to.

Another interesting highlight of this judgement was the Courts comments on past wage loss awards being in reality awards for a diminished capital asset, specifically the court said:

 

[172]        I have already alluded to the principle that past income loss is properly characterized as loss of past earning capacity or loss of a capital asset.  Mr. Justice Pitfield made a similar point when he made reference in para. 40 of Hudniuk to the fact that the jury award was an assessment of damages and not a mechanical calculation. 

[173]        Despite the fact that past income loss is an assessment of damages for loss of a capital asset, there is normally a correlation between the time worked by a person and the amount of income earned by them.  In the majority of personal injury cases, the plaintiff, at the time of the injury, will have been working at a job and will return to the same job when he or she has recovered sufficiently from the injury.  Although it is technically an assessment of damages for loss of capital asset, there is no suggestion that the plaintiff would have worked at a different job if he or she had not been injured, and the assessment of damages does involve a calculation of the income the plaintiff would have earned at the job had he or she not been injured.

ICBC Claims, Future Wage Loss and the Ability to Work in Your Chosen Profession

Imagine sustaining permanent and partially disabling injuries in a BC Car Accident through the fault of another.  Despite your permanent injuries you are able to carry on in your own chosen profession.  Are you entitled to be compensated for future wage loss in your ICBC tort claim or does the fact that you can work in your own occupation restrict such an award?  Reasons for judgement were released by the BC Supreme Court today dealing with this issue.
In today’s case (Ayoubee v. Campbell) the now 34 year old Plaintiff was injured in a multiple vehicle collision which occurred in September, 2003.    The Plaintiff sustained serious injuries including a herniated disc (at the L5 / S1 Level) with associated pain down his leg and mechanical back pain in the collision.  At the time of the accident he had just begun a computer course at BCIT and intended to make a career from the opportunities that this education would provide.  Despite his serious injuries he was able to complete his studies then found and maintained employment in his chosen field.
In awarding $100,000 for non-pecuniary damages the court accepted that the Plaintiff will have some permanent pain and made came to the following conclusion with respect to his injuries:
[104]        I accept Mr. Ayoubee’s evidence that he has never been pain free since the accident, although he has managed to control the level of pain through exercise and stretching.  He has attempted to function as fully as he can, despite the limitations he now contends with.  In the past year, however, his leg has deteriorated and the quality of his life has diminished even further.  Surgery may help with the pain, but he will likely be left with residual numbness and discomfort, and the back pain will remain.  As a result of the accident, he has lost the quality of life of an active young man.
Madam Justice Humphries engaged in a lengthy discussion addressing the Plaintiff’s loss of future earning capacity.  The court found that given the Plaintiff’s permanent injuries certain occupations will be closed to the Plaintiff, however, the Plaintiff ‘is not foreclosed form the type of job he was training for at the time of the accident, obtained after the accident, and has held full-time employment ever since.’
In assessing the Plaintiff’s impaired earning capacity (future wage loss) at $80,000 Madam Justice Humphries made the following analysis:

[89]            In my view, this is a case in which it would be more appropriate to award a lump sum for loss of capacity.  There are a significant number of jobs that Mr. Ayoubee can no longer do, jobs of the type he once held and which could still provide him with opportunities for part time income enhancement that he now must forego.

[90]            As well, he is not as attractive an employee on the open labour market as he once was, given his chronic pain and inability to work without breaks.

[91]            He will also be unable to work while he recovers from surgery, which it is likely he will undergo once he has seen Dr. Dommisse.  Dr. Yu suggests the recovery time would be two or three months.  The defendants calculate the loss attributable to those months, reduced by the possibility that Mr. Ayoubee might decide not to have the surgery, and suggested that the applicable rate should be his salary level in 2005 when, in their position, he should have mitigated his damages.  The defendants arrived at a figure of approximately $7,700.  The plaintiff did not address that issue.

[92]            Surgery may improve Mr. Ayoubee’s leg pain, although the doctors differ on whether this is still realistic.  In any even he will be left with back pain.  I take into account that, of the two, the leg pain has always been the most severe, and is the cause of his greater restrictions at present.  On the other hand, given the back pain, there is no suggestion that he will be able to undertake moderate to heavy physical employment again.

[93]            An important factor that distinguishes Mr. Ayoubee’s case from those in which very high awards have been made for future loss is that he is not foreclosed from the type of job he was training for at the time of the accident, obtained after the accident, and has held full-time ever since.  He does not require retraining.  His employability does not depend on his ability to do heavy physical labour and he never intended that it should, although there is a substantial possibility that he might have supplemented his income occasionally with the type of job he held at Rona, if he were still able to do so.  

[94]            Considering that some future wage loss will be attributable to the surgery, and considering the diminution in the capital asset of his employability generally, I set his future loss, including his loss of capacity, at $80,000.

Loss of Commission Income and ICBC Injury Claims

Reasons for judgement were released today (Tong v. Sidhu)awarding a Plaintiff $30,000 for non-pecuniary damages (pain and suffering) as a result of injuries sustained in a 2007 BC Car Accident.  
Mr. Justice Cohen of the BC Supreme Court made the following findings with respect to the Plaintiff’s injuries:
[40]            In my opinion, the medical evidence and the plaintiff’s testimony supports the conclusion that the plaintiff suffered mild to moderate soft tissue injuries, and that he has made an overall improvement to a level where if he dedicates himself to learning and correctly performing the exercises recommended by Dr. King he will probably experience a full recovery within six to twelve months.
[52]            Upon a consideration of the severity and duration of the plaitniff’s accident related injuries and symptoms, and upon a review of the authorities on the range of the general damages submitted by the parties, I find that an award of $30,000 is a fair and appropriate sum to compensate the plaintiff for his general damage claim.
The Plaintiff, who was a commodities broker, also alleged a past and future loss of income although these claims were dismissed.   The Plaintiff sought approximately $50,000 for past income loss and $44,000 for future income loss.
In dismissing these damages Mr. Justice Cohen found that the Plaintiff ‘has not proven on the requisite standard that he has suffered past or future income loss‘.  Following this conclusion Mr. Justice Cohen engaged in a lengthy analysis of the Plaintiff’s claim for lost income and stated as follows:

[63]            First, the only documentary evidence the plaintiff has brought forward to support his claim are his income tax returns and payroll slips for 2007 and 2008.  Although he signed an authorization for release of employment information to the defendant, the onus remains on the plaintiff to bring to court any records which would help him to identify the details of his earnings history.  He has not produced any employment records to indicate or establish a month over month or year over year trend based on details of income from client or personal trading accounts.

[64]            Moreover, the plaintiff did not elicit evidence from Mr. Mok on his commission earnings to provide some comparative evidence regarding the level of earnings from commissions experienced by commodities brokers at Union Securities, or for that matter evidence of the earnings of brokers in other firms with a similar level of experience and client base as that of the plaintiff.

[65]            With respect to Mr. Mok, he and the plaintiff were performing the same work and both were earning income from commissions generated by client trades, as well as income from self trades.  Mr. Mok did say that he had two streams of earnings and that while his earnings from trades in his own account would not be shown on his T4, both streams of income were shown on his income tax returns.  He said that earnings from trading on his own account would be declared under the item of “business income” in his income tax returns.

[66]            I find that the plaintiff’s evidence on his precise earnings was at times both contradictory and confusing.

[67]            For example, the plaintiff was asked in chief about the line in his 1999 income tax return for “business income”, which shows an amount of $20,805.89 gross and a net loss of $8,323.15.  Although the plaintiff initially testified that the loss amount was due to amounts that he had to pay out of his pocket for losses sustained by his clients due to his trading errors, he later changed this testimony to say that the business income item related to a tax shelter investment that he had made, and that this was the amount reported to him by the company as a unit holder.  With respect to where he reported his income from self trades he said that he did not report this income in his income tax return as the earnings had gone into his RSP account, although he produced no records to substantiate his evidence on this point.

[68]            Finally, I think that there is evidence that completely undermines the plaintiff’s assertion that he is entitled to damages for loss of income, past or prospective.

[69]            In cross-examination, the plaintiff agreed with defence counsel that it was not common for him to make earnings in excess of $100,000.  He agreed that his earnings jumped substantially in 2004 because of the financing he worked on.  He also agreed with the figures from his income tax returns that since 2001, with the exception of 2004, he has earned in the range of $40-50,000 annually.  He agreed that 2004 was unusual, adding that it was unusual in the sense that his hard work paid off.  He also agreed with counsel that the last year he earned a figure in the same range was in 1996.  He agreed with counsel that his average income for the past 7 years has not been in the $80,000 range, but rather closer to $50,000.

[70]            The plaintiff agreed with counsel that based on his average earnings over the period leading up to the accident that his income in 2007 was similar to what he had earned in earlier years, with the exception of the year 2004.

[71]            The plaintiff testified that for the years 2001-2008 he would rank himself against his peers as being in the middle of the pack, and not on average a top performer.  He agreed that his assessment of his ranking has not changed since the accident, and also agreed that essentially, with the exception of 2004, his income has not significantly changed.

[72]            Counsel reminded the plaintiff of his evidence that his focus and concentration had been affected by the accident and he was asked whether it had affected his number of clients, to which he replied that he gained and lost clients for all kinds of reasons.  When counsel suggested to the plaintiff that he had not lost clients as a result of the accident, he replied that he may have lost or gained clients during the period following the accident.  He was not able to say whether in fact the accident related injuries had resulted in a loss of clients.

[73]            Mr. Steven Engh is manager of sales at Union Securities.  He met the plaintiff when they both worked at C.M. Oliver.  He was asked how he would rank the plaintiff as a commodities broker. He replied that the plaintiff would fall in the middle of the pack, and that as far as he knew this had been the case for the past five years.  He also said that all of the brokers in his firm have been affected by the current securities market conditions and that this would include the plaintiff’s area of trading.  He did agree with plaintiff’s counsel in cross-examination that the securities business is very demanding and that it takes a focused person to succeed.

[74]            In the result, I find that on the whole of the evidence the plaintiff has failed to prove his income loss claim. With the exception of the year 2004, the plaintiff’s history of earnings in the seven years leading up to the accident disclose a trend of income much closer to the $50,000 range than his claim of $80,000.  This is clearly borne out by his income for the year 2006, a year in which he was completely healthy, had his list of prospects, and presumably was focused and determined to increase his income to a level closer to his exceptional result in the year 2004.  Yet, his income for the year 2006, at least from commissions on trades, was not very far off his usual annual earnings in the $50,000 range.

[75]            In my opinion, the evidence falls far short of the claim that the plaintiff is making for income loss, past and prospective, and therefore this head of damage must be rejected.

This case is worth reviewing for anyone on commissioned or self employed basis who suffers a wage loss in an ICBC Injury Claim to see how courts scrutinize such claims and to get some insight into the factors and the type of evidence courts find useful in determining whether there has been a past loss of income.

ICBC Injury Claims and Future Wage Loss

One of the most difficult types of damages to value when a person sustains serious and permanent injuries through the fault of another in a BC Car Crash is that of ‘Future Wage Loss’.
Courts in British Columbia often view a person’s ability to earn a living as a ‘capital asset’ and if disabling injuries are sustained then that capital asset becomes diminished.  Accordingly BC Courts often assess damages for future wage loss as damages for a ‘diminished earning capacity’.
The basic principles that courts consider in awarding damages for ‘diminished earning capacity’ were set out almost 25 years ago in a BC Supreme Court case named Brown v. Golaiy,  These factors are as follows:

The means by which the value of the lost, or impaired, asset is to be assessed varies of course from case to case. Some of the considerations to take into account in making that assessment include whether:

1.      The plaintiff has been rendered less capable overall from earning income from all types of employment;

2.      The plaintiff is less marketable or attractive as an employee to potential employers;

3.      The plaintiff has lost the ability to take advantage of all job opportunities which might otherwise have been open to him, had he not been injured; and

4.      The plaintiff is less valuable to himself as a person capable of earning income in a competitive labour market.

In 2007, in a case named Steward v. Berezan, the BC Court of Appeal rejected a trial judges award for diminished earning capacity stating that “… The claimant bears the onus to prove at trial a substantial possibility of a future event leading to an income loss, and the court must then award compensation on an estimation of the chance that the event will occur…

Ever since Berezan many ICBC Injury Defence Lawyers have argued that the law has changed since Brown v. Golaiy and that there is a higher burden to reach before damages for future wage loss can be awarded.

Reasons for judgement were released today by the BC Supreme Court (Ashmore v. Banicevic) dealing with this argument and concluding that the factors set out in Brown v. Golaiy remain good law.  In a thorough analysis Madam Justice Smith gave the following reasons:

[140]          While a literal reading of that statement might indicate a change in the law, embodying an express direction to inquire first into whether there is a substantial possibility of future income loss before embarking on assessment of the loss (see Chang v. Feng, 2008 BCSC 49; 55 C.C.L.T. (3d) 203, and Naidu v. Mann, 2007 BCSC 1313, 53 C.C.L.T. (3d) 1), the Court of Appeal inDjukic v. Hahn, 2007 BCCA 203, 66 B.C.L.R. (4th) 314 (at para. 14) limited Steward v. Berezan to its facts, stating: 

…The error of the trial judge in Steward was in awarding damages for loss of earning capacity based on the plaintiff’s inability to work as a carpenter in circumstances where he had not worked as a journeyman carpenter for twenty years prior to the trial and, at age 55, did not contemplate any return to the trade.  The case turned on its facts and did not establish any new principle of law.  Conversely here, the assessment was based on a business actively pursued by both respondents when the accidents intervened and not on any long abandoned occupation without a prospect of their return to it.  I am satisfied that Steward has no application in the case at bar. 

[141]        In Sinnott v. Boggs, the plaintiff was a 16-year-old girl who had been 11 at the time of the accident.  The medical prognosis was that she would continue to suffer neck and shoulder aches, ongoing discomfort and intermittent headaches.  The trial judge assessed non-pecuniary damages of $35,000, past wage loss of $2,400 and lost earning capacity of $30,000 “for being less marketable as an employee because of the limitations on her ability to work competitively in all jobs previously open to her”.  The assessment of damages was upheld on appeal.  Mackenzie J.A. referred to the submission of the defendant on appeal that since there was no finding that any particular types of work were foreclosed to the plaintiff, no award for lost earning capacity could be made.  He referred to a number of authorities, including Steward v. Berezan, at para. 11, and stated:

All of those cases involved middle-aged plaintiffs in settled occupations.  Their continuing symptoms resulted in continuing pain and occupational discomfort but they did not reduce the plaintiffs’ ability to earn income in their chosen occupations.  There was no prospect that they would change employment to occupations where their earning capacity would be impaired.

[142]        MacKenzie J.A. then stated at para. 13 – 17:

In my view, the limitation on loss of earning capacity awards advanced by the appellant is not supported either in logic or by the authorities.

Three of the four factors outlined in Brown are broad enough to support an award in circumstances where a plaintiff is able to continue in an occupation but the ability to perform and the earning capacity resulting from that ability are impaired by the injury.

The line between non-pecuniary damages and damages for loss of earning capacity is between losses that sound in pain and suffering and loss of non-remunerative amenities on the one hand, and pecuniary losses in the form of a reduced ability to earn income on the other. There is no reason why an injury which permits a plaintiff to continue in a particular occupation but at a reduced level of performance and income should not be compensated for that pecuniary loss through damages for loss of earning capacity.

In the case at bar, Ms. Sinnott is a young person who has not yet established a career and has no settled pattern of employment. In such circumstances, quantifying a loss is more at large. Southin J.A. commented on this distinction in Stafford

[42]  That there can be a case in which a plaintiff is so established in a profession that there is no reasonable possibility of his pursuing, whether by choice or necessity, a different one is obvious. For instance, on the one hand, if a judge of this Court were to be permanently injured to the extent that he or she could no longer do physical, in contradistinction to mental, labour, he or she would have no claim for impairment of earning capacity because the trier of fact gazing into the crystal ball would not see any possibility that the judge would ever abandon the law for physical labour, assuming that immediately before the accident the judge was capable of physical labour. But, on the other hand, if a plaintiff is young and has no trade or profession, the trier of fact gazing into the crystal ball might well consider whether the impairment of physical ability will so limit his future employment opportunities that he will suffer a loss. See e.g. Earnshaw v. Despins (1990), 45 B.C.L.R. (2d) 380 (C.A.).

[43] There is, if I may use the word, a continuum from obviously no impairment of earning capacity from a permanent physical impairment, no matter how serious the impairment, to a very large potential loss which must be based on all the circumstances of the particular plaintiff.

I agree with those observations.  Ms. Sinnott is in a category of those who are young and without a settled line of work. The trial judge has found that Ms. Sinnott faces limitations on her ability to work competitively in jobs that were previously open to her. In my view, that finding is an adequate foundation for the trial judge’s award. I am satisfied that there was evidence to support the trial judge’s conclusions on the facts and there is no palpable and over-riding error of fact which would permit this Court to disturb her conclusion or award.

[143]        I conclude that the approach I should take to the assessment of lost earning capacity has not changed.  Accordingly, I must consider, with reference to the factors listed in Brown v. Golaiy, whether the evidence establishes the basis for an award in this case, and if so, at what level.

______________________________________________________________________________________

On another note, today’s case dealt with chronic soft tissue injuries and serious headaches.  In awarding $80,000 for the Plaintiff’s non-pecuniary losses, the court made the following findings of fact about the Plaintiff’s injuries and prognosis:

[113]        I have considered all of the evidence given by treating physicians and other health care practitioners, as well as the evidence of Dr. Jung and Dr. Schweigel, who saw the plaintiff for the purpose of providing medical-legal reports.  Dr. Schweigel deferred to the expertise of Dr. Blasberg with respect to the jaw injury; as well, he saw the plaintiff on only one occasion, while Dr. Bowlsby and Dr. Condon both saw him on a number of occasions.  Both Dr. Bowlsby and Dr. Condon are very experienced practitioners and struck me as fair-minded witnesses who were not advocating for their patient.  Dr. Jung’s two examinations of the plaintiff were thorough and well-documented.  I accept the evidence of Dr. Condon, Dr. Bowlsby and Dr. Jung, who all had extensive contact with the plaintiff, and do not accept the evidence of Dr. Schweigel where it is in conflict with their evidence.  I also accept the evidence of Dr. Blasberg.

[114]        Upon consideration of all the evidence, I find that Mr. Ashmore suffered a whiplash injury in the motor vehicle accident affecting his jaw, neck, shoulders and back.  I find that he suffers a continuous low-grade headache and serious headaches at least twice weekly, and that he continues to experience right-sided neck and upper back pain, pain with swallowing, and pain in the region of the jaw joint.  There is no evidence that he suffered from these symptoms prior to the motor vehicle accident.  I do not find on the evidence that stress causes his symptoms, although it may exacerbate them.  I find that but for the accident Mr. Ashmore would not experience the persistent headaches which I find are his worst ongoing symptom, and that but for the accident he would not suffer the other symptoms I have referred to.  I find that the plaintiff has met the burden of showing on the balance of probabilities that the defendant’s negligence caused his injuries.

[115]        The plaintiff’s symptoms arising from the injuries caused by the accident have caused him frequently to require rest in the middle of the day, necessitating work late into the night.  The extent of those symptoms is shown by the fact that they have caused him to give up most of the very active sports he formerly enjoyed, and have constrained his ability to assist with the care of his young children and to enjoy the kind of life he led before the accident.  As well, these symptoms have reduced the amount of time and energy he has available for work outside his regular employment.  Finally, the symptoms have led him to spend considerable time pursuing relief through various forms of treatment.

[116]        Taking into account the opinion evidence of all of the expert witnesses as to the likelihood of further recovery, I find that Mr. Ashmore is not likely to make a full recovery, although he may experience some improvement to the point where he will be able to manage his symptoms better. 

BC Personal Injury Claims and Sick Leave Benefits

Imagine that you are injured through the fault of another in British Columbia.  As a result of your injuries you become disabled and are unable to return to work for a period of time.  Fortunately you have a good job and have built up a ‘sick bank’ at work and you are able to draw from this during your period of disability.  When you bring your claim against the person responsible for injuring you are you able to claim your lost wages?  Reasons for judgement were released yesterday by the BC Supreme Court addressing this issue.
In this case the Plaintiff was injured in 2005 in a motor vehicle collision.  The Plaintiff was unable to work for a few weeks as a result of injury.  The Plaintiff had built up a sick bank and drew from this.  In her ICBC claim she claimed compensation in an amount equivalent to the hours depleted from her sick bank.  In awarding the Plaintiff this money the court engaged in a very thorough and well reasoned discussion of the law addressing this topic which I am pleased to reproduce below:

[56]            This court has long recognized the loss of sick bank credits as a compensable loss (see generally: McCready v. Munroe (1965), 55 D.L.R. (2d) 338, 54 W.W.R. 65 (B.C.S.C.)).  InLavigne v. Doucet (1976), 14 N.B.R (2d) 700 at para. 12 (C.A.), the New Brunswick Court of Appeal held that the depletion of a plaintiff’s accumulated sick leave arising from injuries suffered in an accident removed a benefit that he or she would otherwise have and, therefore, constitutes a genuine loss.  That conceptual approach was approved of by McLachlin J. (now the Chief Justice) in Ratych v. Bloomer, [1990] 1 S.C.R. 940 at 972, 69 D.L.R. (4th) 25:

I accept that if an employee can establish that he or she has suffered a loss in exchange for obtaining wages during the time he or she could not work, the employee should be compensated for that loss. Thus in Lavigne v. Doucet the New Brunswick Court of Appeal quite rightly allowed damages for loss of accumulated sick benefits.

[57]            Some years later the issue was revived before the Supreme Court of Canada in Cunningham v. Wheeler, [1994] 1 S.C.R. 359, 113 DLR (4th) 1, where Cory J. confirmed at 13 that an employee who uses sick leave in order to receive wages while off work and loses those sick day credits is entitled to receive compensation.

[58]            In Roberts v. Earthy, 1995 CanLII 1421 (B.C.S.C.) [Roberts], Clancy J. held at para. 8 that it was not necessary to adduce evidence showing that any consideration was paid by the plaintiff or negotiated on the plaintiff’s behalf through a collective agreement or other employment arrangement.  He did so on the basis that the accumulation of sick days is not related to what has come to be known as the insurance exception to the compensatory principle where such supporting evidence is generally required.

[59]            The case authorities do not appear to support a universal approach to the quantification of the loss flowing from the depletion of sick leave benefits.  For example, in Collins v. Ma, 1990 CanLII 1634 (B.C.S.C.), the court endorsed a contingency calculation being applied in order to take into consideration the likelihood of an employee drawing on the lost banked sick days in the future.  That approach was followed by the court in Olson v. Nixon, [1991] B.C.J. No. 155, 1991 CarswellBC 1346 (S.C.).

[60]            In Roberts, however, Clancy J. made no deduction for contingencies.  Likewise, more recently in Choromanski v. Malaspina University College, 2002 BCSC 771, the court rejected the defence argument that there should be a  reduction of the loss taken based on the plaintiff’s work history and the rate at which he had traditionally availed himself of his sick benefits. 

[61]            In my view, whether it is appropriate to make deductions for contingencies in quantifying the loss will depend upon the presence or absence of certain factors.  Those would include, for example, whether there is a maximum limit of accumulated sick leave, whether the plaintiff is able to cash out accumulated sick leave days on termination or retirement, whether the plaintiff has several years of employment remaining in which to potentially use the sick leave or has only a few months of employment left until retirement with a significant sick leave remaining, or whether the plaintiff has left the employment in which he earned the sick day credits altogether.  It cannot be predicted with any degree of certainty whether a person who is healthy today will be so tomorrow.  Illness or injury can afflict any one of us at any time.  Placing much if any reliance on the plaintiff’s past use of sick benefits strikes me as an unsound and potentially unfair approach because it fails to adequately protect a plaintiff against an unexpected serious or catastrophic illness in the future which could occur in any otherwise healthy plaintiff, or against a future injury, which, by its nature, is unpredictable.  In neither case would those future events necessarily be related to the plaintiff’s past use of sick benefits.

[62]            I accept that had Ms. Fenwick not used her sick leave credits, she would have been entitled to transfer them from her then employer, the Vancouver School Board, to her new employer, the Coquitlam School Board.  As well I am satisfied that, pursuant to her collective agreement, any monies awarded to Ms. Fenwick on account of lost sick days is repayable to her then employer in order to replenish her sick leave bank.  Beyond that, the evidence pertaining to the details of the portability of Ms. Fenwick’s sick day credits was not well developed.  I do not have cogent evidence as to whether there is a maximum number of sick days allowable, the formula for which she has earned them or whether she is able to cash them out on retirement or termination.

[63]            As best I can decipher from the evidence, the loss that Ms. Fenwick has sustained is a potential future loss in the sense that it would only be experienced if she has insufficient sick leave credits to adequately cover a future period of absence due to illness in respect of which she could have drawn upon the lost sick bank for income continuation.

[64]            Ms. Fenwick thoroughly exhausted her accumulated sick leave as a result of the accident.  She is a relatively young woman in the early stages of her career as a teacher.  I have found that she likely will experience flare-ups of her symptoms caused by this accident from time to time in the future which may require her to miss brief intervals of time from work.  She may also suffer from other illness or medical conditions in the future which will keep her from work. 

[65]            I am satisfied that fair and reasonable damages for this loss is compensation which reflects the actual hours Ms. Fenwick missed from work and used as sick time, multiplied by her approximate average hourly rate, without deduction.  To that, I would add her wage loss stemming from fifteen hours of unpaid absences attributable to her injuries.  The total damages amount to $5,469.18.

[66]            Ms. Fenwick’s counsel raised a concern about whether damages for Ms. Fenwick’s lost sick bank entitlement could be validly characterized as pre-trial earnings or income and thereby attract a deduction for income tax pursuant to sections 95 and 98 of the Insurance (Vehicle) Act, R.S.B.C. 1996, c. 231.  In my view, this kind of loss is not in the character of past wage loss.  Accordingly, there will be no deduction for income tax

ICBC Claims, CPP Disability and Deductibility of Wage Loss Awards

Reasons for judgement were released today dealing with the issue of whether a defendant ordered to pay a plaintiff money for future wage loss as a result of a BC motor vehicle accident can deduct from such an award disability benefits the Plaintiff will receive from the Canada Pension Plan (CPP).
The Plaintiff was injured in a 2005 motor vehicle collision.  Liability was not seriously contested and the Defendant was found 100% at fault at trial.  The Plaintiff suffered serious injuries including a

1. Fractured sternum; and

2. Head injury with probable significant cerebral concussion; and

3. Contused lower thoracic spine and upper lumbar spine; and

4. Multiple rib contusions.

The most contested injury was whether the Plaintiff suffered from on-going problems as a result of a brain injury allegedly sustained in the collision.  The court found for the Plaintiff noting that 
[71]            On balance I conclude that I accept the expert evidence to the effect that it is more likely than not that there are persisting, but very mild, sequelae from the mild traumatic brain injury affecting cognition.  The effects on Mr. Kean’s cognition are so subtle as to be virtually indistinguishable from the concurrent effects from the other operating causes, namely pain, pain medication, and depressed mood. 
The Court assessed damages as follows:

Non-pecuniary damages:

$180,000.00

Past wage loss:

$32,506.38

Future earning capacity loss:

$100,000.00

Future care costs:

$51,032.28

Special damages:

$10,672.95

 

 


ICBC argued that money the plaintiff has/will receive from CPP should be deducted from his awards for past wage loss and future wage loss awards.  The court dismissed this argument concluding that  “the law in this jurisdiction is settled to the effect that CPP disability benefits fall within the insurance exception to the rule against double recovery and should not be deducted from tort awards for past or future wage loss”
The key discussion took place at paragraphs 102 – 111 which I reproduce below:

[102]        Counsel for the defendant and the third party argued that CPP disability benefits received by Mr. Kean should be deducted from his award for past wage loss, and the present value of future CPP disability benefits should be deducted from his future income award.  The thrust of their argument is that this is necessary to prevent double recovery.  The defendant argues that CPP disability benefits are a form of mandatory social insurance that workers cannot negotiate out of, and the scheme is a form of income replacement.

[103]        The defendant’s argument is essentially the same argument that these same counsel made unsuccessfully in the case of Maillet v. Rosenau 2006 BCSC 10.  In Maillet, the plaintiff had received social assistance payments which were deducted from the past wage loss, but Powers J. did not accede to the defendant’s argument that future CPP disability benefits should be deducted from the award for losses of future earnings.  As here, the defendants relied on the case of M.B v. British Columbia, 2003 SCC 53, suggesting that the rationale applied in that case to conclude that social assistance payments were deductible from a future wage loss award, was equally applicable to CPP disability benefits and that the decision represented a change in the law.

[104]        In Maillet, Powers J. followed a line of authority which had held that the CPP disability pension scheme was essentially an insurance scheme and covered by the insurance exception to the rule against double recovery.  This line of authority includes Canadian Pacific v. Gill,[1973] S.C.R. 654, Hayre v. Walz (1992), 67 B.C.L.R. (2d) 296 (BCCA) and Cugliari v. White, (1998) 159 D.L.R. 4th 254 (Ont.C.A.).

[105]        Like Powers J, I do not see the reasoning in M.B. as effecting a change in the law as it applies to CPP disability payments.  The analysis undertaken in that case was outlined in ¶24 of the decision:

The first question is whether social assistance is a form of income replacement.  If it is not, no duplication arises.  If it is, the further question arises of whether social assistance can be excluded from the non-duplication rule under an existing or new exception.

[106]        The court determined that social assistance was a form of income replacement and then stated in ¶28:

It follows that the only way in which they can be non-deductible at common law is if they fit within the charitable benefits exception, or if this court carves out a new exception. Otherwise, retention of them would amount to double recovery.

[107]        After holding that social assistance payments did not fit the charitable benefits exception (because the rationale for that exception did not concern the purpose of charitable donations, but its effect on the owners and the difficulties of valuation), the court discussed whether it should carve out a new policy- based exception.  The court decided that it should not do so.  Clearly there was no viable argument that the insurance exception might be applicable to social assistance and that was not considered.

[108]        The defendant wishes to characterize the CPP disability payments as a form of social security because it is a legislative creature and contributions are mandatory. But, unlike social assistance, it is funded by contributions and only those who have contributed can benefit.  There is an overlap of recovery, but that is inherent in the insurance exception to the rule against double recovery.  The other side of the coin is that to deduct the CPP benefits from a tort award is to force the injured contributor to share the benefits of his contributions, (which represent deductions from his former earnings), with the tortfeasor.

[109]        The defendant’s book of authorities included, in fairness, the case of Sulz v. Minister of Public Safety and Solicitor General 2006 BCCA 582, which was decided shortly after theMaillet decision.  In Sulz, the British Columbia Court of Appeal quotes from Mr, Justice Iacobucci in Sarvanis v. Canada 2002 SCC 28 at ¶33:

….it has already been held by this court that CPP disability payments are not to be considered indemnity payments, and therefore that they are not to be deducted from tort damages compensating injuries that actually caused or contributed to the relevant disability.  See Canadian Pacific Ltd. v. Gill; Cugliari, supra.  This rule is passed on the contractual or contradictory nature of the CPP.  Only contributors are eligible, at the outset received benefits, provided that they then meet the requisite further conditions.

[110]        The issue in Sulz was the deduction of superannuation pension from a tort award.  The British Columbia Court of Appeal, in a decision written by Madam Justice Levine, (who was the trial judge in M.B. whose deduction of social assistance payments was upheld by the Supreme Court of Canada) said, at ¶65:

The superannuation pension received by the respondent is of the same character as CPP disability benefits and other pension payments, which have consistently held to be non-deductible from tort damages.

[111]        I conclude, as did the court in Maillet, that the law in this jurisdiction is settled to the effect that CPP disability benefits fall within the insurance exception to the rule against double recovery and should not be deducted from tort awards for past or future wage loss.

NOTE – the reasoning of this case may not apply to all ICBC claims.  For example in ICBC UMP Claims where ICBC is entitled to certain statutory deductions from the damages they need to pay to an insured.

ICBC Tort Claims and Net Wage Loss

If you have been injured in a BC motor vehicle accident and suffered a wage loss you may have had ICBC tell you that they can only pay you your ‘net wage loss’ in your tort claim.
I have often often seen ICBC calculate a person’s gross wage loss and deduct 25% to account for income taxes prior to paying the past wage loss.  Is this proper?  The answer is sometimes.  It depends on the amnount of your past wage loss award.
Great reasons for judgement were released today by Madam Justice Boyd of the BC Supreme Court.  In this case the court awarded $8,750.36 for past wage loss.  ICBC then tried to deduct income taxes on this amount prior to paying it.  Madame Justice Boyd summarized the applicable law very well and concluded that the leading BC Supreme Court dealing with this issue(Hudniuk v. Warkentin) applies, and using its principles
the Plaintiff’s net income loss should be calculated by deducting the necessary income tax from the agreed gross income loss of $8,750.36.  Further, as Hudniuk requires, for the purposes of tax calculations, this formula assumes that this amount is the only income earned by the Plaintiff in 2008.  Since the first day of trial was May 12, 2008, the tax rates in effect of the previous calendar year, as or December 31, 2007, are applicable
The court then noted that at the time personal income under $9,027 was exempt from taxation meaning the Plaintiff was entitled to the whole amount of past wage loss.
So, according to this judgement, if the past income loss you are entitled to in a BC ICBC tort claim is less than the personal income amount that is exempt from taxation you are entitled to the whole of your past wage loss.
I have heard through the grape-vine that the BC Court of Appeal will soon further clarify this area of the law, but until that time today’s case sets a great precedent for Plaintiff’s with less than $9,000 in past wage loss.
 

$25,000 Non-Pecuniary Damages for Neck, Shoulder and Back Soft Tissue Injuries

Following a 2 day trial using the Fast Track Rule  (Rule 66), reasons for judgement were released today compensating a Plaintiff as a result of a 2005 BC car accident.
The Plaintiff was injured as a passenger.  The offending motorist admitted fault and the trial focused on damages (lawful compensation) only.
The Plaintiff had a range of complaints following the accident including pain in her neck, right shoulder and low back, and a significant increase in the frequency of her pre-existing migraine headaches.
In assessing a fair award for pain and suffering the court made the following finding:

[24] I accept the plaintiff’s evidence that she was injured in the August 9, 2005 motor vehicle accident.  In this regard, I note that while the physicians who examined the plaintiff also accepted the plaintiff’s assertions, the fact that they did so does not assist the court in making that finding.  Their observations thereafter are of considerable assistance in assessing the possible course of the plaintiff’s recovery, however.  It does appear, taking account of what is before me, that the plaintiff recovered functionally very quickly although she may suffer some minor aches and pains that will occasionally interfere with her activities.

[25] The plaintiff has suffered some moderate interference with her life due to pain and suffering.  The cases advanced as comparables by the parties are of some assistance in locating this case on an appropriate scale.  I assess her damages for pain and suffering and loss of enjoyment of life at $25,000.

The Plaintiff also led evidence that she was able to take advantage of fewer overtime opportunities as a result of her injuries.  For this loss the court awarded $20,000.
The court found that the injuries should continue to improve but may linger for a while longer.  In addressing loss of earning capacity the court awarded $15,000 making the following findings:
She is capable of doing her work and of working considerable overtime.  On the basis of the medical evidence there is good reason to expect that she will fully recover in the next few years, with a modest chance of some limited impairment further into the future.  I think some allowance must be made for the possibility that the plaintiff may occasionally suffer losses into the future that are related to the injuries she has suffered.  I think the evidence suggests that these losses will be incurred, for the most part, in the next few years.  I fix the sum of $15,000 for loss of future earning capacity.

Contact

If you would like further information or require assistance, please get in touch.

ERIK
MAGRAKEN

Personal Injury Lawyer

When not writing the BC Injury Law Blog, Erik is the managing partner at MacIsaac & Company, based in Victoria, B.C. He is also involved with combative sports regulatory issues and authors the Combat Sports Law Blog.

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