Employer Paid Sick Leave Benefits Non-Deductible in ICBC Uninsured Motorist Claim

(Update December 3, 2013 – the below decision was upheld in reasons for judgement released today by the BC Court of Appeal)
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Last year the BC Supreme Court found that employer paid wage replacement benefits are non-deductible in ICBC hit and run claims.  Reasons for judgement were released this week by the BC Supreme Court, Vancouver Registry, considering this issue in the context of an uninsured ICBC Claim.
In this week’s case (Jordan v. Lowe) the Plaintiff was injured by an uninsured motorist.  He successfully sued for damages.  When seeking to collect damages from ICBC pursuant to section 20 of the Insurance (Vehicle) Act ICBC argued they could deduct from the judgement the amount of sick leave benefits the Plaintiff collected from his employer.  Mr. Justice Willcock dismissed this argument finding these benefits did not have an element of insurance to them thereby not making them deductible   The Court provided the following reasons:
[20]         ICBC suggests the amendment to the Regulation, the addition of the words “compensation similar to benefits” to the definition of an insured claim, signalled the legislature’s intention to expand the definition.  I agree that must necessarily be so.  ICBC further suggests the expansion brought into the definition of an insured claim benefits that are not paid pursuant to insurance and the definition no longer necessarily imports an element of insurance.  With respect to the able submissions of counsel, I cannot agree.
[21]         When it enacted the most recent amendments to the Regulation, the legislature must be taken to have been aware of the judgment of the Court of Appeal in Lopez.  The conclusion in Lopez that the definition necessarily imports an element of insurance was founded upon the presence of the subheading to Regulation 106(1), “Exclusion of other insured loss”, and to the fact that the Regulation itself describes what are considered to be “insured claims”.  While the legislature has expanded the definition of what constitutes compensation or a benefit, it has not removed or varied the subheading of the Regulation in question and has not excluded from ICBC’s liability anything other than “insured claims”.
[22]         There was some discussion in Lopez with respect to what constitutes a “benefit” under the applicable section.  The amendment to the Regulation addresses that discussion and, in my view, may be applicable in some circumstances where there is some doubt with respect to what compensation in the nature of insurance is deductible.  It does not, however, remove or vary the requirement described in Lopez that the compensation must have an element of insurance to it.
[23]         For reasons set out in Loeppky, which I adopt and follow, I find payment of sick leave benefits to police officers employed by the City of Vancouver Police Department pursuant to their collective agreement do not have about them an element of insurance.  They are clearly benefits or compensation similar to benefits, but that alone does not suffice to cause them to fall within s. 103 of the Regulation.  ICBC is not entitled to deduct them from its liability to satisfy the plaintiff in relation to his claim against the designated defendant, Mr. Lowe.