Latest ICBC Attempt To Stack Court System in Their Favour Declared Unconstitutional

This week the BC Supreme Court struck down regulations limiting the amount of disbursements a party can claim when prosecuting an ICBC claim as being both unconstitutional and contrary to administrative law principles.

By way of background, the current BC Government has taken many steps limiting the rights of BC crash victims in order to grow ICBC’s bottom line.  This culminated in full blown ‘no fault’ insurance taking away the rights of crash victims to sue those that injure them except in the most limited of circumstances.  There are many active claims, however, that pre-date the no-fault era and the Government has been trying their best to limit the rights of those victims in their disputes with ICBC.

In 2019 the BC Supreme Court found a rule limiting how many expert witnesses a plaintiff could rely on to be unconstitutional.  After this loss the BC Government took another kick at the can passing a regulation under the Evidence Act saying plaintiff’s could only recover disbursements totalling 6% the value of their claim in an ICBC fight.  This made crash victims face the unwelcome choice of either not bringing sufficient evidence to court or knowing that if they do they may not have the right to recover the costs of doing so.  Mr. Justice Smith presided over the challenge to this regulation in Le v. British Columbia (Attorney General) and this past week provided reasons striking it down both on administrative law and constitutional principles.  In doing so Justice Smith provided the following comments on the regulation:

[12] A regulation can be set aside only if it is found to be unconstitutional or if it is
inconsistent with the objective or scope of the enabling statute. The court has no
jurisdiction to rule on the merits of the regulation, its likely efficacy, or the wisdom of
the policy that gave rise to it. That said, the impugned regulation cannot be properly
understood without reference to its practical impact, including some obvious
anomalies that it creates.

[15] The impugned regulation applies only to actions for personal injuries arising
from motor vehicle accidents (although amendments to the enabling statute would
permit its extension to other personal injury cases). I therefore cannot ignore the
reality that the impugned regulation operates to the immediate and primary benefit of
ICBC. That reality was previously recognized by this Court in Meckic v. Chan, 2022
BCSC 182, where Kent J. said at paras. 10 and 12:
[10] The thinly veiled purpose of this legislation is to improve the finances
of ICBC by reducing the quantity of expert evidence in motor vehicle
accident liability claims and to thus both reduce litigation costs and produce
lower damage awards whether by way of settlement or at trial.

[12] While all of this may serve the best financial interests of the
government and its Crown corporation auto insurance monopoly, it makes
more challenging the already difficult task of the Court in determining the
nature and extent of the plaintiff’s injuries and the appropriate medical
treatment that might be required in the future.

[34] The impugned regulation applies a fixed limit only on the recovery of
disbursements by plaintiffs and gives the court no discretion to permit exceptions in

the circumstances of individual cases. But where a defendant is entirely successful,
such as when the plaintiff fails to prove liability, the disbursements recoverable by
the defendant are, of necessity, left entirely to the court’s discretion. 

[70] The impugned regulation applies the same limit of 6% of total damages to all
cases, without regard to the legislature’s recognition of judicial discretion and the
increased costs likely to flow from it. The discretion is specifically provided to avoid
serious prejudice, but the impugned regulation creates a financial barrier or
disincentive, and therefore possible further prejudice, to litigants asking the court to
exercise that discretion.

[71] Because the impugned regulation fails to recognize the judicial discretion
contained in the governing statute, I find it to be inconsistent with the objective,
language and purpose of the statute and is therefore not authorized by s. 12.1 of the
EA.
[72] Although I find that lack of judicial discretion to be the major reason the
impugned regulation is inconsistent with the enabling statute, there is a further
inconsistency in relation to some cases. Section 12.1 of the EA creates a limit that
expressly applies to expert evidence on “vehicle injury damages.” In authorizing the
LGC to enact regulations, it provides the LGC may do so “[f]or the purposes of this
section [12.1 of the EA].” It says nothing about experts needed to prove a
defendant’s liability. But s. 5(1) of the impugned regulation also denies recovery of
the cost of a liability expert’s attendance at trial. I find that to be a limitation on
recovery not contemplated by the governing statute.

[90] The impact of the impugned regulation on individual plaintiffs will obviously
vary depending on the circumstances of each plaintiff and the issues in each case.
But I am satisfied, on the basis of the evidence and on those aspects of the civil
litigation system of which I am entitled to take judicial notice, that the impugned
regulation, in its present form, will prevent or discourage some plaintiffs from
accessing the court for a decision of their case on its merits. Some plaintiffs will be
unable to marshal all of the evidence necessary to prove all aspects of their case
without sacrificing other reasonable expenses or necessary portions of their
compensatory damages. Others may have the evidence in the form of the necessary

expert reports, but will be unable to proceed to trial because of the additional costs
and risks associated with having those experts testify.
[91] Like the hearing fees that were at issue in Trial Lawyers 2014, a limit on
disbursements comes within the province’s constitutional jurisdiction over the
administration of justice, but that jurisdiction must be exercised in a manner that is
consistent with other constitutional requirements:
[32] The historic task of the superior courts is to resolve disputes between
individuals and decide questions of private and public law. Measures that
prevent people from coming to the courts to have those issues resolved are
at odds with this basic judicial function. The resolution of these disputes and
resulting determination of issues of private and public law, viewed in the
institutional context of the Canadian justice system, are central to what the
superior courts do. Indeed, it is their very book of business. To prevent this
business being done strikes at the core of the jurisdiction of the superior
courts protected by s. 96 of the Constitution Act, 1867. As a result, hearing
fees that deny people access to the courts infringe the core jurisdiction of the
superior courts.
[92] In the absence of a provision that preserves judicial discretion to relieve
against the consequences of the impugned regulation in appropriate cases,
including cases where the court exercises its related discretion to allow a party to
exceed the presumptive limit of three experts, I find that the impugned regulation, as
with the rule that was at issue in Crowder, “compromises and dilutes the role of the
court, and encroaches upon on a core area of the court’s jurisdiction to control its
process.” (Crowder at para. 185).

[93] I declare that s. 5 of the disbursements and expert evidence regulation is
inconsistent with the enabling statute, s. 12.1 of the Evidence Act, and contrary to s.
96 of the Constitution Act, 1867. It is therefore of no force or effect.

bc injury law, ICBC 6% Regulation, Le v. BC (Attorney General), Mr. Justice Smith

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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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