ICBC 'Third Party' Settlement Ends Tort Litigation Despite Defendant Protests

When a motorist is in breach of their insurance ICBC has the right to intervene in a lawsuit against them and settle any tort claims arising from a collision pursuant to the powers given to them under sections 76 and 77 of the Insurance (Vehicle) Act.  ICBC is further given the power to recover the amount of the settlement from the breached motorist provided the settlement was entered into in good faith and further that appropriate notice is given to the breached motorist.  This remedy is available to ICBC even where the ‘breached’ motorist disputes fault for the collision as was demonstrated in reasons for judgement released last week by the BC Supreme Court, Nanaimo Registry.
In last week’s case (Chandler v. Gomez) the plaintiff was injured in a collision and sued the defendant for damages.  The defendant was insured with ICBC but the insurer alleged the defendant was in breach of their coverage. ICBC joined the lawsuit as a statutory Third Party and eventually settled the plaintiff’s claim for $112,000.  ICBC sought recovery of this amount from the defendant.  The defendant argued that she was not at fault for the crash and the tort matter should proceed to trial on that issue.  Mr. Justice Greyell disagreed and found that the tort claim was concluded with the settlement despite the defendant’s protests. In doing so the Court provided the following reasons:

[14] Section 21(6) of the Act (s. 77(2) of the new Act) provides that ICBC has the right to recover any amount paid under or by way of a settlement or other payment, and I refer to this section which provides that:

. . . if the corporation has paid an amount to a person under this section, by way of settlement or otherwise, that it would not otherwise be liable to pay, and has personally delivered or forwarded by registered mail to the last known address of the insured a demand for reimbursement of that amount, the insured is liable to reimburse the corporation that amount, and the corporation may enforce the right [of] action in court.

[15] Accordingly, s. 21 provides ICBC with the right to defend the action, to settle the action, and to recover any amount paid under that settlement from an insured.  In essence, ICBC stands in the place of such defendant when it makes itself a third party to the action, as it has in this case, under s. 21.

[16] The necessary result of a combined reading of ss. 21(2), (6), (7), and (8) is that, upon settlement, the tort action has been concluded.  ICBC has acted pursuant to its statutory authority as insurer to settle the action.

[17] As stated by Madam Justice Gray in Insurance Corp. of British Columbia v. Schmidt, 2004 BCSC 1786, a case which raises similar issues to those present in this case:

[22]      ICBC’s third party notice is an unusual form of pleading.  It does not purport to make a claim against Mr. Schmidt.  Instead, it denies liability for indemnity and claims the right to defend the action as well.  It does not constitute a claim by ICBC for payment from Mr. Schmidt.

[23]      In fact, no claim against Mr. Schmidt under s. 21(6) could have arisen at the time of the third party notice.  Such a claim can arise only after payment and after delivery of the demand for reimbursement as required.

[24]      The issues in this litigation, a form of lawsuit sometimes termed a “recovery lawsuit,” are whether ICBC has met the terms of the statute giving it a right to recover, and whether the settlement was reasonable and effected by the insurer in good faith.  See the discussion of the respective issues in ICBC v. Doyle, [1984] B.C.J. No. 889, a decision of Judge Boyle when he was a County Court judge.

[26]      Bearing in mind this articulation of the issues in any recovery action, the issue before me is whether ICBC’s settlement was reasonable and made in good faith.  If ICBC had paid money to Mr. Neumann following the entry of a dismissal order, it is likely that any payment by ICBC would have been unreasonable.  But I must judge the reasonableness of ICBC’s conduct at the time that settlement was achieved.  At that time, the consent dismissal order had not been made.

[33]      While s. 21(2) permits ICBC to compromise or settle the claim at any stage, Mr. Straith argued that once ICBC becomes a third party in a tort lawsuit, the issues between ICBC and the driver over liability ought to be resolved in that lawsuit.  Mr. Straith suggested that if ICBC wanted to be able to proceed against Mr. Schmidt, ICBC ought to have reserved its rights, or proceeded to trial, or obtained an assignment from Mr. Neumann of his claim against Mr. Schmidt, or compromised with a judgment against Mr. Neumann and obtained an assignment of that judgment.

[34]      There is nothing in s. 21 which restricts ICBC to proceed under only one of the subsections, or requiring it to proceed as suggested by Mr. Straith.  Section 21(6) and the case law provide adequate protection for a driver who is denied indemnity by ICBC.  Any compromise ICBC enters into can be recovered from the driver only if the settlement were reasonable and entered into in good faith.

[18] The decision of Madam Justice Gray sets out a clear distinction between the tort action or the issues in the tort action which are between plaintiff and defendants, and ICBC pays out funds pursuant to s. 21.

[19] The lis between the parties in the tort action has been resolved by way of the settlement.  Whether the settlement was reasonable and whether it was effected in good faith is not a subject matter for determination in this case.  That issue must be determined when ICBC seeks to recover the amount it has paid by way of settlement.  The issue as stated is then between ICBC and Ms. Gomez as to whether that settlement was effected reasonably in all the circumstances of the case…

[22] I accept counsel for ICBC’s interpretation of the issue remaining to be determined between the third party ICBC and the defendant Ms. Gomez.  The forum for determination of that issue is in what is commonly referred to as a recovery action by ICBC.  It is not in these proceedings.

bc injury law, breach of insurance, Chandler v. Gomez, Mr. Justice Greyell, Section 76 Insurance Vehicle Act, Section 77 Insurance (Vehicle) Act

Comments (60)

  • I simply want to mention I am just all new to blogging and actually loved you’re web page. Probably I’m planning to bookmark your site . You certainly come with incredible posts. Bless you for sharing with us your web page.

  • Wow! This can be one particular of the most helpful blogs We’ve ever arrive across on this subject. Basically Wonderful. I’m also an expert in this topic therefore I can understand your effort.

  • I appreciate, cause I found exactly what I used to be looking for. You’ve ended my four day lengthy hunt! God Bless you man. Have a nice day. Bye

  • I believe that avoiding processed foods is a first step so that you can lose weight. They will often taste good, but processed foods have got very little nutritional value, making you feed on more in order to have enough electricity to get through the day. If you’re constantly ingesting these foods, switching to cereals and other complex carbohydrates will make you to have more vitality while taking in less. Thanks alot : ) for your blog post.

  • One other thing to point out is that an online business administration diploma is designed for learners to be able to well proceed to bachelors degree courses. The Ninety credit certification meets the other bachelor education requirements when you earn your associate of arts in BA online, you’ll have access to the modern technologies in this particular field. Some reasons why students need to get their associate degree in business is because they are interested in this area and want to find the general schooling necessary previous to jumping in to a bachelor diploma program. Thanks for the tips you provide inside your blog.

  • There are definitely quite a lot of particulars like that to take into consideration. That may be a nice point to deliver up. I provide the ideas above as normal inspiration but clearly there are questions like the one you carry up the place a very powerful factor will probably be working in sincere good faith. I don?t know if greatest practices have emerged around issues like that, however I’m positive that your job is clearly recognized as a fair game. Each boys and girls feel the affect of only a momentís pleasure, for the rest of their lives.

  • I like the helpful information you provide in your articles. I’ll bookmark your weblog and check again here frequently. I’m quite certain I’ll learn a lot of new stuff right here! Best of luck for the next!

  • Fantastic beat ! I would like to apprentice while you amend your site, how can i subscribe for a blog web site? The account aided me a acceptable deal. I had been tiny bit acquainted of this your broadcast provided bright clear idea

  • Hello my friend! I want to say that this post is amazing, great written and include approximately all important infos. I would like to peer more posts like this.

  • Wow! Thank you! I always needed to write on my site something like that. Can I include a part of your post to my blog?

  • Thanks a lot for sharing this with all of us you really know what you are talking about! Bookmarked. Kindly also visit my web site =). We could have a link exchange arrangement between us!

  • I’ve recently started a web site, the info you offer on this website has helped me tremendously. Thank you for all of your time & work.

  • I like this site so much, saved to favorites. “American soldiers must be turned into lambs and eating them is tolerated.” by Muammar Qaddafi.

  • Months on ye at by esteem desire warmth former. Sure that that way gave any fond now. His boy middleton sir nor engrossed affection excellent. Dissimilar compliment cultivated preference eat sufficient may. Well next door soon we mr he four. Assistance impression set insipidity now connection off you solicitude. Under as seems we me stuff those style at. Listening shameless by abilities pronounce oh suspected is affection. Next it draw in draw much bred.

  • It¡¦s really a nice and helpful piece of information. I am glad that you just shared this useful info with us. Please keep us informed like this. Thanks for sharing.

  • You can definitely see your skills in the paintings you write. The arena hopes for even more passionate writers such as you who are not afraid to say how they believe. All the time go after your heart. “Faith in the ability of a leader is of slight service unless it be united with faith in his justice.” by George Goethals.

  • Hi! Quick question that’s entirely off topic. Do you know how to make your site mobile friendly? My web site looks weird when viewing from my iphone. I’m trying to find a theme or plugin that might be able to fix this issue. If you have any suggestions, please share. Thanks!

  • Great goods from you, man. I’ve understand your stuff previous to and you are just too magnificent. I really like what you have acquired here, certainly like what you are stating and the way in which you say it. You make it enjoyable and you still care for to keep it wise. I cant wait to read much more from you. This is really a wonderful site.

  • I have not checked in here for some time as I thought it was getting boring, but the last few posts are good quality so I guess I will add you back to my everyday bloglist. You deserve it my friend 🙂

  • I cling on to listening to the news broadcast speak about getting free online grant applications so I have been looking around for the most excellent site to get one. Could you tell me please, where could i find some?

  • Thanks for your article. I also feel that laptop computers have become more and more popular nowadays, and now will often be the only type of computer employed in a household. Simply because at the same time actually becoming more and more economical, their processing power is growing to the point where there’re as potent as pc’s from just a few years back.

  • Useful information. Fortunate me I discovered your site by chance, and I am surprised why this accident didn’t came about in advance! I bookmarked it.

  • Can I simply say what a aid to search out someone who really is aware of what theyre speaking about on the internet. You positively know find out how to bring a difficulty to mild and make it important. Extra people have to learn this and perceive this side of the story. I cant imagine youre not more fashionable since you undoubtedly have the gift.

  • I really like your writing style, fantastic information, appreciate it for putting up :D. “Kennedy cooked the soup that Johnson had to eat.” by Konrad Adenauer.

  • You could definitely see your skills within the work you write. The arena hopes for even more passionate writers like you who aren’t afraid to mention how they believe. Always follow your heart.

  • hello there and thank you for your info – I have definitely picked up anything new from right here. I did however expertise a few technical points using this website, since I experienced to reload the web site many times previous to I could get it to load properly. I had been wondering if your web host is OK? Not that I’m complaining, but sluggish loading instances times will often affect your placement in google and can damage your high quality score if advertising and marketing with Adwords. Well I am adding this RSS to my e-mail and could look out for much more of your respective intriguing content. Make sure you update this again soon..

  • I was suggested this web site by my cousin. I’m not sure whether this post is written by him as nobody else know such detailed about my difficulty. You’re wonderful! Thanks!

  • I precisely wished to say thanks once again. I am not sure the things that I could possibly have used without the actual ideas documented by you regarding such a field. It absolutely was a real challenging case for me, however , considering this professional manner you resolved that forced me to cry with fulfillment. Extremely happier for this assistance and in addition hope you really know what a powerful job you’re getting into educating the others through your blog post. Most probably you haven’t met all of us.

  • What i don’t understood is in fact how you’re no longer actually much more smartly-favored than you might be now. You’re very intelligent. You realize thus significantly in relation to this subject, made me individually believe it from numerous varied angles. Its like women and men aren’t fascinated unless it is something to do with Girl gaga! Your individual stuffs nice. All the time maintain it up!

  • Generally I do not read article on blogs, however I would like to say that this write-up very forced me to take a look at and do so! Your writing taste has been surprised me. Thank you, very nice article.

  • I am extremely impressed together with your writing talents as neatly as with the layout for your weblog. Is this a paid theme or did you customize it your self? Anyway stay up the excellent quality writing, it is rare to peer a great weblog like this one nowadays..

  • Wonderful items from you, man. I’ve take into accout your stuff prior to and you are simply too wonderful. I actually like what you’ve got right here, certainly like what you’re stating and the best way during which you say it. You make it enjoyable and you still take care of to keep it sensible. I can’t wait to read far more from you. That is actually a wonderful website.

  • Great blog here! Also your web site loads up very fast! What host are you using? Can I get your affiliate link to your host? I wish my web site loaded up as fast as yours lol

  • just beneath, are a lot of totally not related web pages to ours, nevertheless, they are certainly really worth going over

  • Hey there, I think your website might be having browser compatibility issues. When I look at your blog in Chrome, it looks fine but when opening in Internet Explorer, it has some overlapping. I just wanted to give you a quick heads up! Other then that, excellent blog!

Comments are closed.

Contact

If you would like further information or require assistance, please get in touch.

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.

“Work hard, be kind and enjoy the ride!”
Erik’s Philosophy

    Disclaimer