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ICBC Privacy Breach Class Action Allowed To Include Claim for Punitive Damages

Reasons for judgement were published today by the BC Court of Appeal expanding the scope of a class action lawsuit against ICBC to allow claims for punitive damages to be included in the claim.

In the recent case (Ari v. ICBC) ICBC was sued after an employee of theirs passed personal records ICBC kept to “an acquaintance involved in the drug trade” after which a series of attacks were carried out against some of the individuals who had their private information compromised.  The court noted the following background

[2]             A former employee of ICBC, Ms. Candy Elaine Rheaume, for no business purpose, accessed personal information of 78 ICBC customers (“Primary Plaintiffs”) who had been at or near the Justice Institute of British Columbia in New Westminster. The personal information included names, addresses, driver’s license numbers, vehicle descriptions and identification numbers, license plate numbers, and claims histories. Ms. Rheaume then provided the information to an acquaintance involved in the drug trade. She received $25.00 per name provided. She was charged with, and pleaded guilty to, fraudulently obtaining a computer service pursuant to s. 342.1 of the Criminal Code and received a suspended sentence with nine months probation.

[3]             The illegally obtained information was used to target 13 of the Primary Plaintiffs (“Attack Victims”) with vandalism, arson and shootings between April 2011 and January 2012 (“Attacks”). Two people have been found criminally responsible for their involvement in the Attacks. The attackers thought they were targeting police officers solely because the vehicles were parked at or near the Justice Institute.

The Plaintiff succeeded in certifying a class action lawsuit against ICBC on the basis that they should be vicariously liable for the employee’s wrongdoing.  The chambers judge hearing the certification application declined and include all class members the plaintiff sought to have included and also removed the claim for punitive damages.  In finding that punitive damages claims should form part of the proceeding the BC Court of Appeal provided the following reasons:

[29]         Punitive damages may be awarded when misconduct “represents a marked departure from ordinary standards of decent behaviour”: Whiten v. Pilot Insurance Co., 2002 SCC 18 at para. 36. Punitive damages may be certified as a common issue in appropriate cases. Rumley v. British Columbia, 2001 SCC 69 at para. 34.

[30]         Rather than consider the past history of breaches of privacy by ICBC employees—the evidence supported that at least 7 employees have been terminated by ICBC between 2008 and 2011 for privacy breaches—the chambers judge considered the steps taken since the breach in this case was discovered. While laudable on ICBC’s part, subsequent conduct is not the sole basis upon which punitive damages are determined. The chambers judge should have accepted as true the allegation that ICBC has a history of employees breaching private information. Instead, she judged the case on the merits on the evidence before her. That was an incorrect approach.

[31]         In my view, the chambers judge erred when she refused to certify punitive damages. There was a basis in fact for the claim based on the information relating to the history of privacy breaches by employees.

[32]         Before us, ICBC asked that if we overturn the failure to certify the issues, we return the case to the chambers judge for the analysis on preferability. This was the approach this Court took in Kirk v. Executive Flight Centre Fuel Services Ltd., 2019 BCCA 111 at para. 151.

[33]         With respect to the punitive damages issue, the chambers judge continued the analysis and concluded that had she not decided that there was no basis in fact for a claim for punitive damages, it would be an appropriate case for certification.

[34]         The chambers judge carefully analyzed the preferability of the issues she did certify. In respect of the Other Residents, her analysis is equally applicable. The common issues that were certified apply equally to the Other Residents. Some of the Other Residents will fall into the subclass.

[35]         A judge has a great deal of discretion to change things to fit the circumstances as a class proceeding progresses. At this point, there having been no discovery, it is my view that the additional classes and common issues are preferable for a class proceeding. I would not refer that issue back to the chambers judge for further consideration as a result of allowing this appeal.

[36]         I would allow the appeal, include the Other Residents as members of the class, and certify the punitive damages issue as a common issue. I would leave the tasks of identifying the broader class and framing the common issue for the chambers judge.

Ari v. ICBC, Class Proceedings Act, punitive damages