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Court Comments on “Disproportionate Burden” Of ICBC 6% Disbursement Regulation

Earlier this year a regulation came into force artificially limiting the recoverable disbursements in many motor vehicle actions to 6% of the damages.  The government made little effort in disguising that this rule was brought in to save a single litigant money, namely ICBC.

In one of the first judicial comments on the regulation the Court noted that this rule places a disproportionate burden on plaintiff’s in proving their claims.

In today’s case (Zhang v. Scrott) the Plaintiff was injured in a 2018 collision (predating the retroactive regulation) and sued for damages.  In advancing his claim the Plaintiff noted his disbursements may exceed the 6% cap.  The Defendant applied for a defence medical exam.  The Plaintiff argued this should be denied because if granted the plaintiff may need responsive evidence which would then result in further disbursements beyond the recoverable cap.

The Court, while granting the application, noted with a more fulsome record a litigant may succeed in arguing that the cap “upsets the balance of fairness and equality. In an appropriate case,  it might be argued that the limit on recoverable disbursements weighs against an additional IME by the defence.”

In granting the application but noting the regulation’s disproportionate burden Master Elwood provided the following reasons:

[37]         As stated, I have some sympathy for the plaintiff’s argument based on fairness and equality.

[38]         Since it is based on an award of damages or a settlement amount, it appears that the limit in the Disbursement Regulation on recoverable disbursements only applies to plaintiffs. Since they have the legal onus of proving liability and damages, it is reasonable to assume plaintiffs will inevitably incur disbursements assembling evidence to litigate their claims. Some of these disbursements will be incurred before plaintiffs’ counsel can advise their client in a meaningful way on the value of the claim.

[39]         Moreover, the cost of reasonable disbursements in any given case is not necessarily a function of the value of the claim. For example, a plaintiff who suffers a broken foot, soft tissue injuries and headaches may reasonably need to incur as much in disbursements for expert reports as a plaintiff who suffers a traumatic brain injury. A plaintiff without employment may reasonably need to incur as much in disbursements as one who lost a lucrative career as a venture capitalist.

[40]         Many of the disbursements required to prepare a plaintiff’s case for trial will be incurred before the plaintiff fully knows the defendant’s case. Following receipt of the defendants’ expert reports, a plaintiff might reasonably incur additional expenses to obtain responding reports or to prepare for cross-examination.

[41]         It stands to reason, therefore, that the burden of the limit on recoverable disbursements may fall disproportionately on certain plaintiffs.

[42]         The difficulty in this case is that the record on this application does not provide an adequate evidentiary foundation for an argument based on fairness and equality. There is no evidence of the value of the plaintiff’s claim. There is no evidence of the disbursements he has incurred to date or anticipates incurring to take the case to trial.

[43]         The only evidence is an affidavit by a legal assistant. The legal assistant deposes that she is informed by plaintiff’s counsel that he is of the opinion that the total disbursements in this action, excluding reports commissioned in reply to defence expert reports, will exceed 6% of damages. The legal assistant also deposes that she is informed by plaintiff’s counsel that the last 21 cases he finalized resulted in disbursements above 6% of damages.

[44]         It is simply not possible on this evidence to engage in any meaningful weighing of the effect of the Disbursement Regulation on reasonable equality between the parties.

[45]         Also, I do not accept the plaintiff’s argument that an IME by Dr. Morgan would be redundant or that it would create a duel between experts, contrary to the intent of the Disbursement Regulation.

[46]         Rule 7-6 is a rule of discovery. The plaintiff has had the benefit of examinations by Dr. Young, Dr. Ancill and possibly others. The defendant has not had any examination conducted by a psychologist or a psychiatrist. There is no redundancy for the purposes of discovery in allowing Dr. Morgan to examine the plaintiff. Whether an expert report prepared by Dr. Morgan is redundant with a report by Dr. Ancill is an issue for the trial judge to decide.

[47]         Assuming Dr. Morgan and Dr. Ancill come to different opinions (which is only an assumption), a disagreement between two experts retained by two parties adverse in interest is not a “state of dueling experts”. There is no indication the Legislature intended with the Disbursement Regulation to eliminate normal adversarial litigation in motor vehicle actions or to require joint experts. Rather, the Ligature intended to moderate the cost and complexity of such litigation. Standing alone, a possible report by Dr. Morgan that possibly disagrees with a possible report by Dr. Ancill will not add unduly to the cost or complexity of this case. It certainly does not require that the IME be refused.     

[48]         The effect of the plaintiff’s argument would be that, wherever a plaintiff states that they intend to obtain an expert report on an issue on which the plaintiff has the burden of proof, that statement of intention would foreclose on any IME by the defence in the same or similar area of expertise. The trial judge in these circumstances would be left only with a report by the plaintiff’s expert, if any.   

[49]         I am invited by the plaintiff to conclude that no defence IME can be justified in light of the legislated limit on his recoverable disbursements. The plaintiff’s argument would eliminate the court’s discretion under Rule 7-6 in all but the simplest motor vehicle cases. Such a radical departure from the governing law would, in my view, require an amendment to the Rules.

6% disbursement regulation, disbursements, Master Elwood, Zhang v. Srott