Binding ICBC Claims Settlements: Lawyers and Client Consent


(Update:  The case discussed in the below post went to trial on February 15, 2011 with reasons for judgement released on February 18, 2011 with Mr. Justice Truscott finding that no binding settlements were entered into).
As previously discussed, lawyers act as agents for their clients and can enter into a binding settlement even if their client did not instruct the lawyer to do so.   (This, of course, would be improper and I address this at the bottom of this post).  Reasons for judgement were released this week by the BC Supreme Court, New Westminster Registry, further demonstrating this reality.
In this week’s case (Johnson v. Wells) the Plaintiff was involved in 2 motor vehicle collisions.  She hired a lawyer to deal with one of these claims.  In the lawyers dealings with ICBC he settled the claim that he was retained for apparently with his clients instructions.  However, a disagreement arose as to whether the settlement covered the second claim.   ICBC alleged that the lawyer entered into a settlement agreement for both claims.  The lawyer disagreed.  The BC Supreme Court was asked to decide whether there was a binding settlement.
The Plaintiff gave evidence that she “had not even retained (the lawyer for the second claim)…I had no intention of settling that claim and I did not instruct (my lawyer) to settle that claim“.  Ultimately the Court deemed that there was not enough information to decide whether there was a settlement for the second claim and that ICBC’s adjuster needed to be cross examined.  The reasons for judgment, however, do not focus on whether the client consented, rather, on the communications between the lawyer and ICBC and what was agreed to regardless of the client’s instructions.  In ordering that ICBC’s adjuster be cross-examined Mr. Justice Truscott provided the following reasons:

[40]         I have concluded that the plaintiff’s application to cross-examine Adjuster Johnston on her affidavit should be allowed.

[41]         The cross-examination will be restricted to why Adjuster Johnston attributed $5,000 to the 2006 accident and $2,500 to the 2008 accident, what was said between her and Mr. Albertson about the 2008 accident and its settlement, why she thought Mr. Albertson was retained by the plaintiff or the 2008 accident, what discussion there was between the two of them on the terms of the release, and what discussion there was between the two of them on settlement of any Part 7 benefits claim.

[42]         I see no usefulness in questioning Adjuster Johnston about Mr. Albertson’s authority to settle the 2006 accident because he clearly had that authority from the plaintiff given the plaintiff’s affidavit evidence.

Implicit in this judgment is that a binding settlement could have been entered into, regardless of the client instructions, depending on the discussion between the lawyer and ICBC.
If a lawyer enters into a binding settlement without a client’s consent the client’s remedy is against their lawyer as opposed to the Defendant in the ICBC Claim.  In the best interests of everyone involved it is vital that lawyers do not accept an ICBC settlement offer unless they have clear instructions from their clients to do so.  As previously discussed, a best practice when giving settlement instructions to a lawyer is to do so in writing to help avoid potential complications.

Agency, bc injury law, Binding Settlements, Johnson v. Wells, Mr. Justice Truscott, Settlement Law

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ERIK
MAGRAKEN

Personal Injury Lawyer

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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