ICBC Hit With Special Costs Award For “Reprehensible” Lawsuit Tactics

Reasons for judgement were published this week by the BC Supreme Court, Vancouver Registry, finding ICBC is liable to pay special costs for ‘reprehensible’ conduct in litigation.

In the recent case (Zhang v. 328633 BC Ltd) the Plaintiff was injured while riding as a passenger in a bus.  A truck driver made an unsafe lane change in front of the bus.  This caused the bus driver to brake forcefully throwing the plaintiff from her seat leading to multiple injuries.  The truck driver did not remain at the scene of the incident and was unknown.  The Plaintiff sued both the bus driver and ICBC as a statutory defendant in place of the unidentified truck driver, a legal remedy available under s. 24 of the Insurance (Vehicle) Act.  ICBC had video evidence from the bus as to what actually occurred but failed to produce this for years.  They also denied that a s. 24 claim existed until deep into the trial.

The bus driver was not paying adequate attention at the time and the court found both the bus driver and truck driver shared liability.

As a result of ICBC’s late production of crucial evidence and unreasonable denial as to the merits of the s. 24 claim the presiding judge found ICBC should pay special costs.  In reaching this conclusion Mr. Justice Branch provided the following reasons:

[85]         I find that the delayed disclosure of the Video supports an award of special costs. The footage was clear and overwhelming evidence as to what actually occurred, and was so integral to the case on liability that the production delay rises to the level of “reprehensible conduct”. The defendants offered no explanation for their late disclosure.

[86]         Furthermore, the Video was also relevant to the second issue, namely the defendants failure to admit that the requirements for a hit-and-run under s. 24 of the Insurance (Motor Vehicle) Act had been met.  The admission was not made until the close of evidence. This refusal was in spite of the Video depicting the unidentified truck not stopping at the scene, and despite the fact that the bus company defendant conducted its own failed investigation on the day of the accident. The delay in making this admission meant that unnecessary time and expense went into consideration of the s.24 issue, which should have been resolved much sooner.

[87]         Conduct which “make[s] the resolution of an issue far more difficult than it should have been” may attract a special costs award: Chapman at para. 10, citing Mayer v. Osborne Contracting Ltd., 2011 BCSC 914 at para. 11.

[88]         In Garcia v. Crestbrook Forest Industries Ltd. (1994), 9 B.C.L.R. (3d) 242 (C.A.), the Court of Appeal stated:

25.       If the proceedings are taken, not in the reasonable expectation of a satisfactory outcome, but in order to impose the burden of the proceedings themselves on the opposing party in circumstances where one party is financially much stronger than the other, then the absence of merit, coupled with the improper motive, is in my opinion a combination which may well amount to reprehensible conduct sufficient to require an award of special costs.

[89]         I find that the combination of the delayed disclosure of the Video, and the failure to admit the applicability of s. 24 in a timely fashion, support a limited special costs award. To avoid double counting, the general costs assessed at Scale B should not include any consideration of the plaintiff’s costs in relation to these two issues.