ICBC Claim for "Disastrous Losses on the Stock Market" Fails at Trial

Update February 23 2018An appeal of the below case was dismissed this week by the BC Court of Appeal
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Reasons for judgement were released today by the BC Supreme Court, Vancouver Registry, considering whether a Plaintiff’s substantial losses in the stock market could be compensated as part of a personal injury lawsuit.  On the facts of the case the Court rejected this claim.
In today’s case (Barta v. DaSilva) the Plaintiff was involved in a 2007 collision caused by the Defendant.  The Plaintiff alleged that the collision caused a mild traumatic brain injury and this “destroyed his capacity to earn an income, trading securities on his own account, and has caused him to lose the capital he accumulated and invested in the stock market“.
Around the time of the crash the plaintiff’s total portfolio was valued around $1.8 million.  By the end of the 2009 the value plummeted to less than $400,000.  In rejecting the claim that a brain injury had anything to do with this diminished asset, Mr. Justice Affleck provided the following reasons:

[56]         By July 31, 2008, a year after the accident, the plaintiff’s portfolio had increased to $2,790,301.95.  He had made successful trades in that year increasing his portfolio by almost $921,000.  There is no possible inference to be drawn that cognitive impairment had damaged his trading ability during this time period.  Then disaster struck.  In September 2008 the market “crashed” and the plaintiff testified that he was “hit hard”.

[57]         The plaintiff had purchased Lehman Brothers Holdings prior to the crash and had made a considerable capital gain in a few days.  This appeared to have encouraged the plaintiff to hold Lehman Brothers even as his own financial crisis deepened, as did that of the market generally.  This the plaintiff argues indicates his impaired judgment following the accident.  However, I have no basis to conclude his decision to retain the Lehman Brothers stock was irrational at the time it was made.  He had made a substantial quick profit in a few days and I believe he concluded he could eventually continue to make money by holding on.  He did not foresee Lehman Brothers would be forced into bankruptcy.  Many investors suffered a similar fate…

…The plaintiff engaged in risky stock market trading over several years.  He developed a level of expertise that permitted him to earn a reasonable income.  However his unwise decisions made in 2008, coupled with the stock market collapse, and the judgment in favour of Mr. Palkovics created financial conditions from which he could not recover.  In my opinion the effects of the accident did not compromise his ability to trade on the stock market.   

[61]         It is impossible not to have sympathy with Mr. Barta’s disastrous losses on the stock market but the evidence does not satisfy me that he has proven that the defendant’s negligence caused them. 

Barta v. DaSilva, bc injury law, diminished earning capacity, Mr. Justice Affleck

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

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