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

Written by admin on . Posted in ICBC Back Injury (soft tissue) Cases, ICBC Soft Tissue Injury Cases, ICBC Wage Loss, Uncategorized.

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, Trials and Costs

Written by admin on . Posted in Civil Procedure, Uncategorized. 56 Comments on ICBC Injury Claims, Trials and Costs

I’ve written many times about the costs consequences of ICBC Claims and Supreme Court Trials where a formal offer of settlement is made under Rule 37B.  What about when no offer is made, what are the costs consequences then?  In these circumstances Rule 57(9) of the Supreme Court Rules governs which holds that “Subject to subrule (12), costs of and incidental to a proceeding shall follow the event unless the court otherwise orders”
What this basically means is to the victor goes the spoils.  If you bring an ICBC Injury Claim to trial in BC Supreme Court and are successful unless the court otherwise orders you will be entitled to your ‘costs’.  But what happens if you are only partially successful in your ICBC Injury Claim?  Can you still get your full costs or can these be split?  
Reasons for judgement were released today (Heppner v. Zia) dealing with this issue.  In today’s case the Plaintiff brought an injury claim following a 2004 motor vehicle collision in New Westminster, BC.  Prior to trial the Plaintiff was seeking to settle her ICBC Injury Claim for $349,900 and ICBC was offering $20,000.
After a 15 day trial the court found that the Plaintiff was 50% responsible for the collision.  In addition to being found partially at fault, the Court rejected the Plaintiff’s claim that she sustained a disc herniation as a result of the collision and that she was permanently disabled from her employment as a result of the collision.  In the end the Plaintiff was awarded damages of just over $45,000 for her soft tissue injuries.
In the normal course the Plaintiff would be entitled to her costs as she was awarded an amount greater than ICBC’s settlement offer and an amount greater than the Small Claims Court monetary jurisdiction.  ICBC, however, argued that they were largely successful in defending the claim in both proving the Plaintiff was partially at fault and in refuting her claim that her disc herniation was related to the collision  ICBC argued that the costs should be apportioned accordingly.  Mr. Justice Cohen of the BC Supreme Court agreed.
In concluding that the Plaintiff should be deprived of her costs for that portion of the trial which involved the claim of an accident related disc herniation Mr. Justice Cohen summarized and applied the law as follows:

[11]            In Sutherland v. The Attorney General of Canada, 2008 BCCA 27 at para. 31, Finch C.J.B.C., for the Court, said, as follows:

The test for the apportionment of costs under Rule 57(15) can be set out as follows:

(1)        the party seeking apportionment must establish that there are separate and discrete issues upon which the ultimately unsuccessful party succeeded at trial;

(2)        there must be a basis on which the trial judge can identify the time attributable to the trial of these separate issues;

(3)        it must be shown that apportionment would effect a just result….

[16]            Upon a review of the authorities submitted by both sides, particularly the recent decision of Romilly J. in Shearsmith v. Houdek, 2008 BCSC 1314, I am satisfied that the issue of the plaintiff’s disc herniation is a discrete issue upon which the plaintiff did not succeed.

[17]            In the case at bar, the Court noted at para. 290 of the Reasons, that the main thrust of the plaintiff’s claim for damages was that she sustained a low back soft tissue injury that eventually lead to disc herniation surgery that has rendered her permanently disabled, and that this outcome was due directly to the accident.

[18]            At paras. 291-292 of the Reasons, the Court said, as follows:

[291]    The defence position is that given the history and the onset of symptoms of low back pain; the plaintiff’s prior history of work related low back injuries and complaints; that the plaintiff’s first onset of low back pain after the accident was caused by the same movement of bending forward as caused the plaintiff’s work related onset of low back pain; and that the plaintiff was working as hard after the accident as she was before the accident, it is impossible to conclude that the accident caused the plaintiff’s chronic low back pain.

[292]    The essence of the defence based on causation is that the plaintiff did not complain about low back pain until about two months after the accident, and then only intermittently thereafter.  The defendants assert that a significant increase in the plaintiff’s low back symptoms and the onset of new symptoms can actually be dated from the plaintiff’s fall down the stairs in her home in early March 2005.  It was this event, claim the defendants, that caused the plaintiff to undergo disc herniation surgery and is the real reason why she did not return to her occupation as a nurse’s aid.

[19]            At para. 317 of the Reasons, the Court concluded as follows:

[317]    In the result, I find that the evidence does not establish a temporal link between the accident and the onset of the plaintiff’s low back symptoms ultimately leading to the diagnosis of disc herniation and disc herniation surgery.  In my opinion, the plaintiff has failed to prove on a balance of probabilities that the accident caused or contributed to the plaintiff’s disc herniation.  She has failed to prove that her disc herniation would not have occurred but for the negligence of the defendants.

[20]            Thus, in the circumstances of the case, I disagree with the plaintiff’s contention that the plaintiff’s disc herniation was not a discrete issue, but merely part of the overall burden on her to prove the extent of the injuries that she suffered as a result of the accident.

[21]            I also disagree with the plaintiff that it is not possible to attribute the time taken up in dealing with the issue of the plaintiff’s disc herniation, as opposed to the time taken up dealing with the plaintiff’s other injuries. 

[22]            I find that the plaintiff should be denied her costs associated with this discrete issue.

The Court then turned to the issue of liability and the fact that ICBC was successful in proving the Plaintiff 50% at fault for the collision.  Mr. Justice Cohen held that in these circumstances the Plaintiff’s trial costs should be reduced by 50% and summarized and applied the law as follows:

 

[25]            Finally, I turn to the matter of s. 3(1) of the Negligence Act, R.S.B.C. 1996, c. 333 (the “Act”).  The defendants submit that the costs awarded in favour of the plaintiff ought to be reduced by 50% to reflect the court’s finding on liability. 

[26]            Section 3(1) of the Act states:

Unless the court otherwise directs, the liability for costs of the parties to every action is in the same proportion as their respective liability to make good the damage or loss.

[27]            The plaintiff says that an application of s. 3(1) would work an injustice in this case.  Her position is that the issue of liability occupied relatively little time at the trial, perhaps no more than a day or two.

[28]            In Moses v. Kim, 2007 BCSC 1820, the plaintiff sought 100% of his taxable costs, notwithstanding that he was held 65% responsible for the accident.  At para. 13, Gray J., as part of her analysis of whether she should use her discretion to depart from the usual rule, set out the following criteria to be applied by the Court:

(a)        the seriousness of the plaintiff’s injuries;

(b)        the difficulties facing the plaintiff in establishing liability;

(c)        the fact that in settlement negotiations the amount offered was substantially below the ultimate amount;

(d)        whether the plaintiff was forced to go to trial to obtain recovery;

(e)        the costs of getting to trial;

(f)        the difficulty and length of the trial;

(g)        whether the costs recovery available to the plaintiff, if costs are apportioned according to liability, will bear any reasonable relationship to the party’s costs in obtaining the results achieved;

(h)        the positions taken by the parties at trial, in particular whether the positions taken were appropriate and reasonable in the circumstances;

(i)         whether the defendants made any settlement offers;

(j)         the ultimate result of the trial; and

(k)        whether the plaintiff achieved substantial success that would be effectively defeated if costs were awarded pursuant to s. 3(1) of the Negligence Act.

[29]            In the instant case, the Court found that the plaintiff sustained mild to moderate soft tissue injuries as a result of the accident, and held that the general damage award should be based on the fact that her condition had improved and recovered to the stage that by a year post-accident she felt well enough to return to work on a gradual basis.  Hence, the plaintiff’s general damage award was substantially less than the amount she sought.

[30]            As well, the award received by the plaintiff for general damages was substantially less than that offered by her prior to the trial ($349,000), and somewhat closer to the amount offered by the defendants ($20,000).  Moreover, the factors of whether the plaintiff was forced to go to trial to obtain recovery, the costs of getting to trial, and the difficulty and length of the trial are applicable to both sides. 

[31]            Finally, given the ultimate result of the trial, and the fact that, in my view, the plaintiff did not achieve substantial success that would be effectively defeated if costs were awarded pursuant to s. 3(1) of the Act, I find that there are no features of the action to warrant departure from the usual rule. 

[32]            Accordingly, the plaintiff’s costs shall be reduced by 50% to reflect the division of liability.

More on ICBC Injury Claims and the LVI Defence

Written by admin on . Posted in ICBC LVI (Low Velocity Impact) Cases, ICBC Soft Tissue Injury Cases, ICBC Whiplash Cases, Uncategorized.

I’ve blogged and written many times about ICBC’s Low Velocity Impact Program (LVI) and today Mr. Justice Williams shared his opinions about the so called LVI defence.
In today’s case (Munro v. Thompson) the Plaintiff suffered a whiplash injury in a 2006 motor vehicle collision.  The Court found that the impact was indeed quite minimal when considering the vehicle damage.  In awarding $9,000 for the Plaintiff’s injuries (which the court found largely resolved several months following the collision) Mr. Justice Williams summarized the law as it related to Low Impact Collisions as follows:

[50]            The issue of the legitimacy of injury claims arising from accidents in which property damage is very minor is one that comes before the court not infrequently.

[51]            The accident at bar was a low velocity collision where damage to the vehicles was so minimal as to be almost non-existent.  All of the evidence supports that conclusion.  In such instances, claims for compensation for injury are often resisted on the basis that there is reason to doubt their legitimacy.  Furthermore, in this case the principal evidence in support of the plaintiff’s claim is subjective, that is, it is his self-report.  There is not a great deal of objective evidence to support his description of the injuries he claims to have suffered.

[52]            In response to those concerns, I would observe that there is no principle of law which says that because the damage to the vehicles is slight or non-detectable, that it must follow that there is no injury.  Certainly, as a matter of common sense, where the collision is of slight force, it is probably more likely that resulting injuries will be less severe than where the forces were greater, such as to result in significant physical damage to the automobiles.  However, I would not hold that out as a reliable thesis, but rather a statement of very general expectation. Suffice to say, I do not accept that there can be no injury where there is no physical damage to the vehicles.

[53]            With respect to the lack of objective evidence of physical injury and ongoing symptoms, it is well accepted that the court must be cautious in assessing the evidence.  The determination must be made in a way that the outcome will be fair to both the plaintiff and the defendant.

[54]            The plaintiff, to succeed in his claim, must establish on a balance of probabilities that this incident caused injury to him, and that those injuries entitle him to an award of compensatory damages against the defendant.

[55]            I am satisfied in this case that Mr. Munro was injured as a consequence of the accident, notwithstanding its apparently minor nature.  Accordingly, it is necessary to determine the extent of the effect of those injuries on him and the quantum of the damages to which he is entitled.

If you are injured by the fault of another in a BC Car Crash and ICBC tells you that your crash fits their LVI criteria therefore you suffered no compensable injuries its worth reviewing cases like this.  ICBC’s LVI policy is not the law, it is simply a corporate policy that has no legal force.  If you were injured in a car crash through the fault of another in BC your rights to make a tort claim are not diminished any because of the amount of vehicle damage. 

ICBC Claims and the Onset of Pain in Pre-Existing Conditions

Written by admin on . Posted in ICBC Back Injury (soft tissue) Cases, ICBC Soft Tissue Injury Cases, ICBC Spine Injury Cases, ICBC Whiplash Cases, Uncategorized.

Reasons for judgement were released today by the BC Supreme Court (Haines v. Shewaga) awarding a Plaintiff $34,000 in non-pecuniary damages (pain and suffering) as a result of injuries sustained in a 2005 car crash in Nanaimo, BC.
One of the issues in this case which frequently comes up in ICBC Injury Claims is that of pre-existing conditions.
The Plaintiff was 22 at the time of the crash.  He never had mid back pain in the years prior to the collision.   His back was injured in the collision and he continued to have symptoms in his backat the time of trial (some 3 years later).   After receiving medical treatment it was discovered that the Plaintiff had pre-existing (although asymptomatic) condition known as degenerative disc disease.  
The court found that the Plaintiff suffered various soft-tissue injuries in the crash, namely that:
[62]            I accept that the plaintiff sustained a mild to moderate whiplash type injury to the soft tissues of his neck, upper back (on the right side) and mid back, as well as a minor injury to his sternum area (likely from the seatbelt).  I find that the plaintiff had substantially recovered from all of these injuries by the time of trial, except for the injury to his mid back.  I accept that he still experiences pain in that area, after heavy and prolonged physical exertion.  Some aspects of the work that he does as a deck installer will continue to cause him some pain, from time to time.  But based on the whole of the evidence (and particularly on the plaintiff’s work record), I am not satisfied there is a substantial possibility that this pain will disable him from working. 
With respect to the Plaintiff’s pre-existing and but now symptomatic degenerative disc disease Mr. Justice Halfyard found as follows:
[69]            In my view, there is no significant conflict between Dr. Filbey and Dr. Warren on the subject under discussion.  Nor would I discount Dr. Warren’s evidence on the ground that he now works almost exclusively for ICBC.  I accept the opinions of both of these medical experts.  As a consequence, I find that the plaintiff’s complaint of mid-back pain following the accident is strongly corroborated by the medical findings and opinions.  There is no evidence whatever to suggest that the plaintiff had experienced pain in his mid-back before the accident, and he firmly denies this.  I infer from the evidence given by the doctors that pain in the thoracic spine area from whiplash-type injury is far less common than pain in the cervical and lumbar spine.  In the result, I am satisfied on the balance of probabilities that the motor vehicle accident caused the plaintiff’s latent pre-existing degenerative condition to become painful.
So how then, does a court value injuries when a pre-existing condition contributes to the duration of traumatic injury?
Here, Mr. Justice Halfyard reduced the Plaintiff’s award for pain and suffering by 15% to account for the chance that the Plaintiff’s degenerative disc disease would have become symptomatic at some point in time in the future even if the accident did not occur, thus the damages of $40,000 were reduced to $34,000.
On a different note, this claim is worth reviewing to see how BC Courts can deal with the issue of credibility in ICBC Injury Claims.  The credibility of the Plaintiff often plays a crucial role in ICBC Soft Tissue Injury Cases.  Here the ICBC Defence Lawyer challenged the credibility of the Plaintiff.   The court indeed concluded that the Plaintiff was ‘not a credible witness’ and paragraphs 37-60 are worth reviewing for anyone interested in a discussion about factors courts consider when weighing the credibility of a Plaintiff in an ICBC Injury Claim.

ICBC Insurance Claims and the Duty to Disclose the Principal Operator

Written by admin on . Posted in Uncategorized. 97 Comments on ICBC Insurance Claims and the Duty to Disclose the Principal Operator

When you purchase a contract of insurance with ICBC one of the things that must be disclosed is who the principal operator of the vehicle will be.  Depending on the answer the rate of insurance may vary.
If a consumer misrepresents who the principal operator is this can result in a breach of insurance and if this occurs ICBC will not be responsible to honour the policy of insurance if a claim is made.
Reasons for judgement were released today by the BC Supreme Court (Lexis Holdings International Ltd. v. ICBC) demonstrating the potential consequences that can flow from a principal operator misrepresentation.
In today’s case the Plaintiff company leased a BMW.  When purchasing insurance from ICBC the company’;s representative declared that ‘there was no principal operator of the BMW’.
The vehicle was subsequently vandalized and under the policy of insurance ICBC would have been expected to pay $33,090.35 for the damages.  When the Plaintiff claimed payment from ICBC under the policy of insurance ICBC declined to pay claiming that the Plaintiff ‘knowingly misrepresented a material fact regarding the principal operator’.
Madam Justice Arnold-Bailey of the BC Supreme Court agreed with ICBC and found that the Plaintiff’s representative knowingly misrepresented who the principal operator of the vehicle was at the time the insurance was purchased.  As a result of this the Plaintiff’s claim was dismissed and ICBC were awarded their costs for trial.
In reaching this conclusion Madam Justice Arnold-Bailey summarized the law as follows:

[16]            The general rule in insurance claims, stated at ¶24 of Bevacqua v. I.C.B.C., 1999 BCCA 553, is that once an insured has shown that the loss alleged falls within the perils insured against under the terms of the policy coverage, the onus falls on the insurer to prove any affirmative defences, including fraud.  In Kruska v. Manufacturers Life Insurance Co., [1984] B.C.J. No. 2812 (S.C.), Finch J., as he then was, stated the test for fraud in civil cases at ¶41:

41        The accepted test of actual fraud in a civil case derives from Derry v. Peek (1889), 14 A.C. 337. There must be a false representation, made knowingly, without belief in its truth, or recklessly, without care whether it is true or false. Nothing less than this will suffice for the defendant to succeed in this case.

[Emphasis added]

It is clear from this test for fraud that knowingly making a misrepresentation (per s. 19(1)(b) of the Act) is a form of fraud.  It is therefore ICBC that bears the burden of proving that Mr. Teap knowingly made a false representation in the matter of the principal operator of the vehicle without belief in its truth, or reckless as to its truth, as all parties have agreed that Lexis Holdings has shown that its loss falls within the policy coverage.

[17]            The standard of proof in this case, as with all civil cases, is on a balance of probabilities (F.H. v. McDougall, 2008 SCC 53 at ¶49).  However, because an allegation of fraud, or a misrepresentation amounting to a form of fraud, against an insured is quasi-criminal in nature, and, if proven, could “affect the insured’s life well beyond the outcome” of his claim, the court must be mindful that a careful scrutiny of the evidence is necessary before finding that such an allegation has been proven (Bevacqua at ¶44; Leon v. ICBC, 2002 BCSC 794 at ¶29).  As always, clear and cogent evidence is required (Bevacqua at ¶48).

[18]            The usual first step in such cases, as set out in Rai v. Insurance Corp. of British Columbia, 2005 BCSC 92, and followed by Madam Justice Smith in Deol v. Insurance Corporation of British Columbia, 2007 BCSC 1307 at ¶28, is to determine who the principal operator of the vehicle was at the time of the incident giving rise to the claim, based on who drove the vehicle most during the term of the owner’s certificate.  To “operate” and what constitutes a “principal operator” are defined in Part 1 of the Revised Regulation (1984) Under the Insurance (Motor Vehicle) Act, B.C. Reg. 447/83, as follows:

“operate”, in the case of a vehicle, includes to have care, custody or control of the vehicle;

“principal operator” means the person who will operate the vehicle described in an application for a certificate for the majority of the time the vehicle is operated during the term of the certificate;

[19]            Plaintiff’s counsel submits in the present case it is not necessary for the Court to determine who the principal operator of the BMW was during most of the term of the owner’s certificate of insurance because there is no issue as to other possible principal operators.

[20]            Counsel for ICBC disagrees and submits that the first step of the analysis as to whether there has been a breach of the policy based on a misrepresentation as to the insured’s declaration of principal operator is as articulated in Rai:  the Court must determine who drove the vehicle most during the term of the owner’s certificate in order to determine who was the principal operator of the vehicle at the time of the accident (or loss).  That being the case, counsel for the defendant submits that evidence as to Mr. Teap’s regular use of the BMW and his accessorizing and customizing it to his own taste is relevant to who was, in fact, the principal operator at the time of loss.

[21]            In the present case I find in relation to the first principle drawn by D. Smith J. in Deol from the judgment of Preston J. in Rai that there is no meaningful distinction to be drawn between a party allegedly misrepresenting that there was no principal operator for a vehicle and misrepresenting the principal operator to be a person other than himself.  I find evidence as to who was, in fact, the principal operator of the BMW between March 2, 2005, when it was insured, to the date of loss on November 10, 2005, to be relevant to alleged misrepresentation by Mr. Teap on March 2, 2005 that there was no principal operator.

[22]            Therefore, in terms of the first step in the analysis as set out in Rai, the evidence (including Mr. Teap’s November 15, 2005, statement to the adjuster and the bills for various modifications to the BMW) clearly shows, and Mr. Teap eventually admitted in his testimony, that he was the person who regularly operated the BMW and had the care, custody, or control of it for the majority of the term of the insured period.

[23]            The next step is to note that the appropriate time period the Court must consider in determining whether a misrepresentation was made is “the date the claimant applied for the insurance” (Deol at ¶28; Rai at ¶14).  There is no obligation for the insured to go back to an insurance broker to have this aspect of the contract changed at some later date should the principal operator of the vehicle change (Bolen v. ICBC, 2006 BCSC 1749 at ¶44-45).  That it is clear in hindsight that Mr. Teap was the principal operator of the BMW is hence not determinative of the issue.  Rather, the defendant must show on a balance of probabilities that Mr. Teap knew on March 2, 2005, at the time he entered into the contract of insurance with ICBC, that he was in fact going to be the principal operator of the vehicle (Deol at ¶28; Rai at ¶14).  This is the point where the parties disagree.

[24]            If this Court finds that Mr. Teap knew that he was to be the principal operator of the BMW on March 2, 2005, then the final and related step will be to determine whether Mr. Teap made the misrepresentation knowingly, pursuant to s. 19(1)(b) of the Act, which at the relevant time stated:

Forfeiture of claims

19(1) If

b)         an applicant for an owner’s certificate knowingly misrepresents or fails to disclose in the application a fact required to be stated in it,

all claims by or in respect of the applicant or the insured are rendered invalid, and his or her right and the right of a person claiming through or on behalf of or as a dependent of the applicant or the insured to benefits and insurance money is forfeited.

[Emphasis added]

[25]            In Whitelaw v. Ransom and Wellington Fire Insurance Co., [1958] B.C.J. No. 135, 15 D.L.R. (2d) 504, the Court of Appeal dealt with s. 169 of the Insurance Act, R.S.B.C. 1948, c. 164, which used the similar wording:  “Where an applicant for a contract … knowingly misrepresents or fails to disclose in the application any fact required to be stated therein … a claim by the Insured shall be invalid and the right of the Insured to recover indemnity shall be forfeited” (¶25).  In separate majority reasons, Davey J.A. noted that both Sleigh v. Stevenson, [1943] 4 D.L.R. 433, O.W.N. 465, and General Accident Ass’ce Co. v. Button, [1954] 3 D.L.R. 352, 34 M.P.R. 25, articulated that “knowingly” is used in that section in the sense that the applicant is in “possession of information that what is in fact stated in the application is untrue or does not disclose the truth” (¶30-31).  This definition was also relied on by the majority of the Supreme Court of Canada in Turgeon v. Atlas Assurance Co. (1968), 13 D.L.R. (3d) 308 at 314.

[26]            To find that the plaintiff knowingly misrepresented the material fact in question, I must therefore be satisfied on a balance of probabilities, after careful scrutiny of the evidence, that on March 2, 2005, Mr. Teap was in possession of information such that what was stated in the insurance contract was untrue or did not disclose the truth:  namely that he knew he was to be the principal operator of the BMW, contrary to the statement in the contract that there was no principal operator of the vehicle.

[27]            In assessing whether this test has been met, the Court will be mindful that mere speculation of fraud will not be sufficient:  Swales v. I.C.B.C., 1999 BCCA 767.

[28]            A number of cases were provided by counsel to illustrate instances where even very strong speculation and circumstantial evidence were not sufficient to establish fraud.

[29]            In Swales, for example, the Court of Appeal allowed an appeal and entered judgment in favour of a plaintiff whose insurance claim had been dismissed at trial.  The plaintiff claimed that his vehicle was stolen from a public parking lot while he was in a movie theatre.  The defendant ICBC became suspicious after engaging in an investigation of the claim and declined to pay the plaintiff, alleging that he was involved in the theft of his own vehicle.  At trial, the judge instructed the jury that the plaintiff had the burden of proving that the vehicle was taken without his knowledge, consent, or approval.  This was an error in law since it effectively reversed the onus of proof.

[30]            Furthermore, the defence counsel in Swales conceded at trial that there was no direct evidence of the plaintiff’s involvement in the theft, and so ultimately, “[t]he case was left to the jury solely on the basis of the plaintiff’s credibility and the suspicious circumstances on which I.C.B.C. chose to deny the claim” (¶6).  The Court of Appeal stated that the jury’s finding of fraud amounted to “nothing more than speculation” and that overall, the case “came down to showing that the plaintiff may have had a motive for wanting to have his vehicle stolen” (¶7).  Therefore, Finch J.A., as he then was, for the Court, concluded that there was no foundation from which a properly instructed jury could have reasonably inferred fraud on the plaintiff’s part.

[31]            In Yeterian v. I.C.B.C., 2004 BCSC 404, the defendant ICBC resisted the plaintiff’s insurance claim for the theft of his motorcycle.  ICBC alleged that the plaintiff himself was involved in staging the theft and relied primarily on the fact that when the police found the motorcycle abandoned and damaged some distance from where the plaintiff had parked it, the ignition and locking mechanisms were not damaged.  ICBC was also suspicious because the plaintiff swore that he was “almost certain” that he had locked the steering lock, in which case the motorcycle would only have been able to move in a circle.  Despite these points, the court was not convinced that ICBC had proven fraud on a balance of probabilities:  “The evidence discloses little but speculation to support I.C.B.C.’s position that he falsely reported a theft” (¶27).

[32]            In Johl v. ICBC, 2005 BCPC 0121, the claimant’s vehicle was involved in a hit and run accident.  The claimant claimed that his vehicle was stolen and that he was not the driver involved in the incident.  The defendant ICBC investigated the claim and, suspecting fraud, refused to pay his claim.  At ¶56, V. Romilly P.C.J. set out the circumstances that ICBC viewed as suspicious:

     Viewing the evidence, it seems that the defence views the following circumstances as casting suspicions on the Claimant:

1. The vehicle was involved in a hit and run some distance away from where the Claimant said he parked his vehicle and according to Constable Reimer individuals have been known to report their vehicle as stolen when they are involved in a hit and run, and that that immediately arouses his suspicion.

2. The Locksmith’s report.

3. The Security Alarm Expert report.

4. The supposed lack of cooperation by the Claimant in dealing with Constable Reimer.

5. The Claimant’s alleged deceit in passing off his cousin, (who I found looks very much like him) as himself in dealing with Constable Reimer, which indicates deceit on his part, which was continued in his evidence at trial.

6. The fact that his car was parked some thirty feet away from where he slept and no one was awakened by an alarm going off.

The claimant argued that these points amounted to “mere speculation” and did not constitute clear and cogent evidence.  The Provincial Court Judge agreed:  “The above in my opinion without any direct evidence of the Claimant’s involvement in the theft, amounts to mere speculation on the defence’s part” (¶60).

[33]            In Bolen, finally, the plaintiffs’ truck was stolen and, as in the previous examples, ICBC refused to pay for the claim due to a suspicion of fraud.  Unlike the previous examples, ICBC did not suspect that Mr. and Mrs. Bolen had actually participated in the theft.  Rather, ICBC alleged that they made misrepresentations in relation to a number of matters, including the principal operator of the truck, their use of the truck, and its value.  Fisher J. found at ¶42 that ICBC had not met its burden of proof in establishing that Mr. Bolen had misrepresented the principal operator aspect of the insurance contract:

     […] Despite my concerns about the reliability of the plaintiffs’ evidence on this issue, there is no evidence that contradicts Mr. Bolen’s testimony that he was working for his union in 2000, and did not need the truck for shift work until October 2002. Considering this, along with the rest of the circumstantial evidence about Mr. Bolen’s connection with the truck, I am not satisfied that ICBC has proved to the requisite standard that the plaintiffs misrepresented the principal operator designation in any application for an owner’s certificate before November 2002.

[34]            It is clear from the foregoing cases that speculation, suspicion or potentially unreliable evidence from a plaintiff who sustains a loss, constitute an insufficient basis upon which an insurer may deny a claim based on fraud or a type of fraudulent misrepresentation.

 

BC Personal Injury Claims Round-Up

Written by admin on . Posted in ICBC Back Injury (soft tissue) Cases, ICBC Chronic Pain Cases, ICBC Dizziness Cases, ICBC Headache Cases, ICBC Psychological Injury Cases, ICBC Shoulder Injury Cases, ICBC Soft Tissue Injury Cases, ICBC Whiplash Cases, Uncategorized. 55 Comments on BC Personal Injury Claims Round-Up

On Friday the BC Supreme Court released reasons for judgement dealing with awards for pain and suffering in 3 separate motor vehicle accident cases.
In my continued efforts to create an easy to access data-base of ICBC related claims for pain and suffering here are the highlights of these cases:
In the first case (Driscoll v. Desharnais) the Plaintiff suffered soft tissue injuries to his neck, back and shoulder in a 2003 BC motor vehicle collision.  In justifying an award for non-pecuniary damages (pain and suffering) of $55,000 the court summarized the injuries and their effect on the Plaintiff’s life as follows:

[101]        The trial occurred about five years following the accident.  Mr. Driscoll continues to suffer pain, significant sleep disturbance, and restrictions on his activities.  He is stoic and is inclined to push through pain until it becomes intolerable.  He has a reduced capacity to work, and despite his preference for working alone, he cannot operate his business without hiring other workers.  He is no longer able to participate in some of the activities he enjoyed, such as motorcycle riding, full-contact ball hockey, golf, and rough-housing with his children.  

[102]        The evidence demonstrated on a balance of probabilities that these problems were caused by the accident.  Although Mr. Driscoll had received physiotherapy prior to the accident, the treatments were all at least 18 months prior to the accident, and were for short periods.  All the problems had resolved prior to the accident.  The injury he suffered on the toboggan appeared to be a brief flare-up of his back symptoms, rather than a new injury.

A highlight of this decision for me was the court’s discussion of credibility.  One of the tricks of the trade for ICBC defence lawyers in ICBC Soft Tissue Injury Claims is to challenge the credibility of the Plaintiff.   That appeared to be a tactic employed in this case and the Defendant asked the court to consider the following well-known principle often cited in ICBC Soft Tissue Injury Cases:

[6]                The case of Price v. Kostryba (1982), 70 B.C.L.R. 397 (S.C.), is often cited as a reminder of the approach the court must take to assessing injuries which depend on subjective reports of pain.  I quote portions of pages 397-399 of those reasons for judgment:

The assessment of damages in a moderate or moderately severe whiplash injury is always difficult because plaintiffs, as in this case, are usually genuine, decent people who honestly try to be as objective and as factual as they can. Unfortunately, every injured person has a different understanding of his own complaints and injuries, and it falls to judges to translate injuries to damages.

Perhaps no injury has been the subject of so much judicial consideration as the whiplash. Human experience tells us that these injuries normally resolve themselves within six months to a year or so. Yet every physician knows some patients whose complaint continues for years, and some apparently never recover. For this reason, it is necessary for a court to exercise caution and to examine all the evidence carefully so as to arrive at a fair and reasonable compensation. Previously decided cases are some help (but not much, because obviously every case is different). …

In Butler v. Blaylock, decided 7th October 1981, Vancouver No. B781505 (unreported), I referred to counsel’s argument that a defendant is often at the mercy of a plaintiff in actions for damages for personal injuries because complaints of pain cannot easily be disproved. I then said:

I am not stating any new principle when I say that the court should be exceedingly careful when there is little or no objective evidence of continuing injury and when complaints of pain persist for long periods extending beyond the normal or usual recovery.

An injured person is entitled to be fully and properly compensated for any injury or disability caused by a wrongdoer. But no one can expect his fellow citizen or citizens to compensate him in the absence of convincing evidence — which could be just his own evidence if the surrounding circumstances are consistent – that his complaints of pain are true reflections of a continuing injury.

Fortunately for the Plaintiff a positive finding was made as to his reliability and damages were assessed accordingly.

________________________________________________________________________________________________

The second case released on Friday (Eccleston v. Dresen) involved a 2002 collision which took place in Salmon Arm, BC.  The injuries included chronic soft tissue injuries of moderate severity and a chronic pain syndrome.  Both liability and quantum of damages (value of the ICBC Injury Claim) were at issue.   The Plaintiff was found 60% at fault for the collision.

In assessing the Plaintiff’s non-pecuniary damages at $108,000 Mr. Justice Barrow made the following findings:

[127]        I am satisfied that the plaintiff suffered a moderate soft tissue injury to her neck and upper back.  Further, I am satisfied that she developed and continues to suffer chronic pain as a result.  I am also satisfied that she is depressed and that the proximate cause of her depression is the pain she experiences.

[128]        I am not satisfied that her complaints of pain are motivated by any secondary gain; rather, I am satisfied that she has met the onus of establishing that, as Taylor J.A. in Maslen v. Rubenstein (1993), 83 B.C.L.R. (2d) 131, 33 B.C.A.C. 182, at para. 8 put it:

…her psychological problems have their cause in the defendant’s unlawful act, rather than in any desire on the plaintiff’s part for things such as care, sympathy, relaxation or compensation, and also that the plaintiff could not be expected to overcome them by his or her own inherent resources, or ‘will-power’.

[129]        Further, I am satisfied that the plaintiff’s condition is likely permanent; although it is more likely than not that it will moderate if she follows the advice of Dr. O’Breasail.  He is of the view that with intensive psychotherapy for at least a year, followed by two further years of less intensive therapy coupled with a review of her medications and particularly anti-depressant medication, there is some hope that she will either experience less pain or be better able to cope with the pain she does experience, or both.

________________________________________________________________________________________________

The final motor vehicle accident case addressing pain and suffering released on Friday (Murphy v. Jagerhofer) involved a Plaintiff who was injured in a 2004 rear end collision in Chilliwack, BC.   The injuries included a moderate to severe whiplash injury with associated chronic pain, disturbed sleep and headaches.  In justifying a non-pecuniary damages award of $100,000 Mr. Justice Warren made the following factual findings after a summary trial pursuant to Rule 18-A:

[112]        The issue of causation in this case is determined by applying the factors in Athey.  Here the defendants argue that there were pre-existing conditions that would have affected the plaintiff in any event.  I disagree.  I find on the evidence of both Dr. Porter and Dr. Bishop that the plaintiff was asymptomatic of the complaints he now has which have arisen from the injuries he suffered in this accident.  Using the rather macabre terms found in other cases, this plaintiff had a “thin skull” rather than a “crumbling skull” and on my reading of those medical opinions I prefer, I find there was no “measurable risk that the pre-existing condition would have detrimentally affected the plaintiff in the future. . . .” Athey, per Major, J. at para. 35. 

[113]        Accordingly, I find that the presenting complaints of the plaintiff were caused by the negligence of the defendant driver and I turn to address the issue of appropriate compensation.  In this, I am strongly influenced by the opinions of Drs. Porter and Longridge and the opinion of Mr. Koch.  The plaintiff suffered a moderate to severe whiplash type injury which had a significant physical and emotional effect upon him some of which have persisted to the day of trial and will continue into the future.  The back and neck pain caused him considerable pain and caused sleeplessness, headaches and general body pain for which he was prescribed pain medication.  Many of these symptoms continued well into 2005 despite his participation in a Work Hardening Programme in the fall of 2004.  I accept that he has tried every mode in an effort to alleviate his symptoms.  In his opinion, Dr. Bishop dismissed passive therapies, but I conclude it was understandable that the plaintiff would follow other professional advice and give these therapies every chance to help.  I say that with the exception of the later cortisone injections, which are painful and of very limited result, and also the later chiropractic attention.

[114]        Added to his back and neck pain, the plaintiff has experienced some hearing loss, tinnitus and episodes of dizziness.  These are frustrating and to some extent debilitating.  He also has jaw, or temporal mandibular joint arthralgia and myofascial pain.  He was given an oral appliance which he is to wear on a daily basis yet he continues to experience jaw stiffness and fatigue. 

[115]        It is understandable that these conditions have affected him emotionally.  The opinion of Mr. Koch corroborates the plaintiff’s evidence.  I accept the opinion of Mr. Koch that the plaintiff “downplays” the difficulties in his life and that the plaintiff has a phobia of motor vehicle travel, post-traumatic stress disorder and related repressive symptoms. 

I hope these case highlights continue to be a useful resource for my readers in helping learn about the value of non-pecuniary damages in ICBC Injury Claims.  As always, I welcome any feedback from all my visitors.

ICBC Injury Claims, Past Wage Loss and Income Tax

Written by admin on . Posted in ICBC Brain Injury Cases, ICBC Chronic Pain Cases, ICBC Wage Loss, Uncategorized. 112 Comments on 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.

More on Rule 37B and ICBC Injury Claims

Written by admin on . Posted in Civil Procedure, Uncategorized. 112 Comments on More on Rule 37B and ICBC Injury Claims

Reasons for judgement were released today by the BC Supreme Court providing more interpretation to Rule 37B in the context of ICBC Claims.  (for background on Rule 37B and ICBC Claims see my former blog posts).
In today’s case (Jacobs v. McLaughlin) the Plaintiff sued 3 separate Defendants as a result of 3 separate accidents.  All 3 Defendants made formal settlement offers before trial.   2 of the Defendants bested their formal settlement offers at trial.  At issue was what costs consequences should follow as a result of this.
The court summarized the case law to date interpreting Rule 37B with the following analysis:

[20]            The new rule broadens the discretion of the court, permitting it “to take offers to settle under the rule into account based on the factors set out later in the rule”:  Cowichan Bay Contractors Ltd. v. Insurance Corporation of British Columbia (29 July 2008) Victoria 05/1639, at para. 5 [Cowichan Bay]. 

[21]            Unlike its predecessor, Rule 37B does not mandate outcomes; if the plaintiff fails to beat an offer to settle, it does not mean that the plaintiff will automatically be deprived of costs, as this “interpretation would fetter what is clearly intended to be an unfettered discretion”:  Bailey v. Jang, 2008 BCSC 1372, [2008] B.C.J. No. 1952, at para. 19 [Bailey].

[22]            In addition to providing for the court’s discretion to consider offers to settle, the new rule is permissive in its effect:  British Columbia Society for the Prevention of Cruelty to Animals v. Baker, 2008 BCSC 947, [2008] B.C.J. No. 1635 [B.C.S.P.C.A.].  Subrule (5) empowers the court to deprive a party, in whole or in part, of costs to which it would otherwise be entitled, or award double costs of all or some steps taken in the proceedings.

[23]            The policy underlying the new Rule 37B remains the same as under the former Rule 37:  to encourage reasonable early settlement of disputes “by providing that there will be consequences in the amount of costs payable when a party fails to accept an offer that ought reasonably to have been accepted”:  Arnold v. Cartwright Estate, 2008 BCSC 1575, 86 B.C.L.R. (4th) 99, at para 16; Abma v. Paul, 2009 BCSC 60, [2009] B.C.J. No. 87, at para. 23.  The rule also exists to “deter certain kinds of conduct”:  Bailey, at para. 18. 

Rule 37B(6)(a):  Reasonableness of the Offers to Settle

[24]            The onus is on the defendants to establish that the offer was one that the plaintiff ought reasonably to have accepted:  B.C.S.P.C.A., at para. 36.

[25]            The plaintiff submits that this Court should not give any weight to the defendants’ offers to settle not solely because they were unreasonable, but because she was incapable of accepting any of the offers in isolation of the others.  The plaintiff relies on Carvalho v. Agnotti, 2008 BCSC 386, [2008] B.C.J. No. 559 [Carvalho], to support her argument.

[26]            In Carvalho, the defendants made separate offers related to two separate car accidents involving the plaintiff.  Mr. Justice N.H. Smith held that the substantial overlap in damage claims precluded acceptance of only one of the offers; instead, the plaintiff had to consider the two offers together.  In this case, each of the three accidents caused separate and discrete injuries to Ms. Jacobs.  Plaintiff’s counsel had overwhelming evidence prior to the onset of Ms. Jacobs’ MS that there were no “overlapping” injuries.  Carvalho is distinguishable on this basis. 

[27]            I am satisfied that the factual evidence before the plaintiff should have led her to conclude that the offers could have been accepted in isolation of each other.  This is not the imposition of hindsight reasoning, as argued by the plaintiff.  Rather, it is the fair assessment of the factual evidence before the plaintiff as it related to her claim. 

[28]            Ms. Jacobs submits that at the date of delivery, following so soon after the third motor vehicle accident and the definitive diagnosis of her MS, she did not have an opportunity to obtain medical and legal opinions respecting the role of the trauma in the exacerbation of her MS.

[29]            Under Rule 37B, a party must be afforded a reasonable period of time to “consider an offer and decide in the circumstances existing at the time of the offer whether it should be accepted or rejected”:  Coquitlam (City) v. Crawford, 2008 BCSC 1507, [2008] B.C.J. No. 2095, at para. 17 [Coquitlam].

[30]            All parties agree that the plaintiff required a reasonable opportunity to investigate this allegation before deciding to reject the offers to settle. 

[31]            The defendants state that there should have been a reasonable time period in which to investigate the MS causation issue after July 17, 2006, when the issue became “alive”.  The defendants submit that by December 31, 2006 the plaintiff should have been able to fully assess the legal principles and scientific research on the MS causation analysis as it related to her claim.  Thus, they submit, it would have been reasonable for Ms. Jacobs to accept their offers to settle by that time.

[32]            I note that the plaintiff amended her statement of claim to include the MS causation issue in October 2006.

[33]            The plaintiff submits that it was reasonable for her to advance the MS causation issue up until a few weeks before trial, as her particular claim was supported by medical science, her physicians, and the law in British Columbia. 

[34]            At a pre-trial settlement conference on September 27, 2007, Mr. Justice Halfyard commented that the defendants’ defenses on the MS causation issue were strong and it would be difficult for the plaintiff to prove this allegation on a balance of probabilities. 

[35]            The plaintiff argues that it was unreasonable to accept the offers to settle after the settlement conference because it would have had serious cost implications for the plaintiff, ultimately leaving her with no compensation and in a deficit position, notwithstanding the admitted negligence of the defendants.  Thus, the plaintiff submits, at no time was it reasonable for her to accept the offers to settle.

[36]            The trial commenced on October 14, 2007. 

[37]            The plaintiff appears to have initiated the investigation into her injuries and their relationship to her MS around November 16, 2006, which is the date of Ms. Jacobs’ first appointment with Dr. Devonshire.  However, any serious evaluation into this claim occurred much later; all reports relating to the plaintiff’s MS were dated July 2007 (Devonshire report) and August 2007 (Rathbone, Freeman, and Bateman reports), with the requests for these reports dated between two and four months prior to their receipt.  The majority of Ms. Jacobs’ appointments related to these reports took place in the late spring and early summer of 2007. 

[38]            I find it difficult to accept Ms. Jacobs’ argument that it was unreasonable at essentially all times to accept the offers because she expected to succeed on the MS causation issue, given that she ultimately abandoned the argument.  At some point, the medical and legal research done by counsel should have suggested that the factual and scientific evidence linking Ms. Jacobs’ injuries and her MS were not sufficient to bring to trial.  As Mr. Justice Hall noted at para. 16 of Catalyst Paper Corporation v. Companhia de Navegação Norsul, 2009 BCCA 16, [2009] B.C.J. No. 52:

[16]      It seems to me that the trend of recent authorities is to the effect that the costs rules should be utilized to have a winnowing function in the litigation process.  The costs rules require litigants to make careful assessments of the strength or lack thereof of their cases at commencement and throughout the course of litigation.  The rules should discourage the continuance of doubtful cases or defences.  This of course imposes burdens on counsel to carefully consider the strengths and weaknesses of particular fact situations.  Such considerations should, among other things, encourage reasonable settlements.

[39]            I accept the defendants’ submission that at some point before the settlement conference, neither the factual nor the scientific evidence supported the MS causation issue allegation.  Knowing this, plaintiff’s counsel took the gamble anyway.

[40]            Taking into consideration when the statement of claim was amended to include the MS causation issue, and the plaintiff’s receipt of her experts reports, I am satisfied that the plaintiff should have been able to evaluate her claim by August 15, 2007.  At this point, the MS causation issue should have been abandoned, and the McLaughlin and Meehan offers ought reasonably to have been accepted.

[41]            The plaintiff further submits that accepting the two offers which exceeded the judgment in this case would have saved neither time nor money, as the case against Ms. Moyer would have commenced in any event, and this court would have been required to hear all the evidence related to the three accidents. 

[42]            There are two difficulties with this submission.  First, the injuries sustained in the accidents were discrete, thus, a claim against Ms. Moyer would not have required any evidence pertaining to the accidents involving Ms. McLaughlin and Ms. Meehan.  Second, there are multiple purposes for assessing offers to settle in the award or deprivation of costs under Rule 37B, only one of which is indemnification.

Rule 37B(6)(b):  Relationship Between the Terms of 
Settlement Offered and the Final Judgment of the Court

[43]            Subrule 37B(6)(b) could be used to assess, among other things, whether an offer is strategic (MacKinlay v. MacKinlay Estate, 2008 BCSC 1570, 44 E.T.R. (3d) 48) or confers a significant benefit aside from costs:  B.C.S.P.C.A., at para. 34. 

[44]            The plaintiff submits that this Court should look at the difference between the global amount offered by the defendants and the global damages awarded by this Court and hold that the amount is insignificant.  However, the offers were not made globally. 

[45]            I find that the differences between the offers to settle and the awards of both defendants are significant.  The plaintiff recovered approximately 60% of the amount on offer by the defendant McLaughlin and precisely 60% of the amount on offer by the defendant Meehan. 

Rule 37B(6)(d):  Any Other Factor the Court Considers Appropriate

[46]            The defendants argue that the old Rule 37(24) and the plaintiff’s unreasonableness should be considered.

[47]            First, the defendants point out that they had no ability to structure offers with regard to the current rule, as they were made two years before it came into effect.  The issue of the application of Rule 37B in the context of settlement offers made prior to its enactment was considered by Mr. Justice Macaulay in Cowichan Bay, who stated the following at para. 12 of his oral judgment:

[12]      Finally, I take into account that at the time the offer was made in this case, the parties then reasonably expected that the rule in its then form would govern the consequences of the offer.  Accordingly, there is no question that the plaintiffs have had notice of the potential consequences throughout the proceedings.

[48]            I agree with the defendants that there was an expectation at the time the offers were made that success on the part of the defendants would inevitably give rise to an award of costs.  This factor will diminish in significance over time, but so long as there is litigation involving offers to settle under the former rule, the consequences under that regime are factors to consider.

[49]            The defendants also argue that the court should impose a penalty on Ms. Jacobs.  The plaintiff caused a great deal of unnecessary costs and resources, which were expended by both sides in this litigation.  In particular, the defendants prepared for a 30-day trial, and then had to modify this preparation after the plaintiff abandoned the MS causation issue on the first day of trial.  This, alone, added significant costs to the defendants. 

[50]            The purposes of Rule 37B, to promote settlement, prevent unnecessary claims, and deter poor conduct, will lose its efficacy if a reasonable party is denied relief after attempting to resolve the case by settlement.

 

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

Written by admin on . Posted in ICBC Back Injury (soft tissue) Cases, ICBC Spine Injury Cases, ICBC Wage Loss, Uncategorized.

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

Written by admin on . Posted in ICBC Back Injury (soft tissue) Cases, ICBC Soft Tissue Injury Cases, ICBC Wage Loss, ICBC Whiplash Cases, Uncategorized.

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.