Tag: part 7 benefits deductions

More on the Steep Consequences of Part 7 Benefits Deductions in Tort Trials

As previously discussed, if you are insured with ICBC and fail to pursue your own Part 7 benefits a Defendant can reduce their liability by the amount of the benefits you should have pursued.  This can result in a very harsh damages deduction.  This was again illustrated in reasons for judgement released last week by the BC Supreme Court, Kelowna Registry.
In last week’s case (Thomas v. Thompson) the Plaintiff was injured in a 2005 collision.  The case went to trial in 2010 and the Plaintiff was awarded damages for various losses including the cost of future medical care.  One of the future care items was the cost of Lyrica.   The parties were invited to make further submissions regarding the future costs of this medication.
The Court accepted that the present day value of the Plaintiff’s future need for Lyrica totalled $147,939.   This entire award was then deducted because the Plaintiff could have pursued payment for this directly under his no-fault benefits.  In allowing this six figure damage reduction Mr. Justice Brooke provided the following reasons:







[4] The defendants say that rather than ordering the payment to the plaintiff of the present value of Lyrica as a cost of future care, the court must apply the provisions of s. 83(5) of the Insurance (Motor Vehicle) Act. This section in its entirety says this:

83

(a) within the definition of section 1.1, or

(b) that are similar to those within the definition of section 1.1, provided under vehicle insurance wherever issued and in effect,

but does not include a payment made pursuant to third party liability insurance coverage.

(2) A person who has a claim for damages and who receives or is entitled to receive benefits respecting the loss on which the claim is based, is deemed to have released the claim to the extent of the benefits.

(3) Nothing in this section precludes the insurer from demanding from the person referred to in subsection (2), as a condition precedent to payment, a release to the extent of the payment.

(4) In an action in respect of bodily injury or death caused by a vehicle or the use or operation of a vehicle, the amount of benefits paid, or to which the person referred to in subsection (2) is or would have been entitled, must not be referred to or disclosed to the court or jury until the court has assessed the award of damages.

(5) After assessing the award of damages under subsection (4), the amount of benefits referred to in that subsection must be disclosed to the court, and taken into account, or, if the amount of benefits has not been ascertained, the court must estimate it and take the estimate into account, and the person referred to in subsection (2) is entitled to enter judgment for the balance only.

[5] I am satisfied that the Part 7 benefits available to the plaintiff exceeded the present value of those benefits and judgment may not be entered for them.









For more information on the complexities of part 7 benefits and tort damage assessments you can click here to read my article “the two hats of ICBC“.

Part 7 Benefits Deductions and the "Two Hats" of ICBC


When a Plaintiff is awarded damages following a negligence claim from a BC motor vehicle collision, a Defendant can reduce the amount of damages they have to pay by the amount of no-fault benefits a Plaintiff can claim under their own policy of insurance from ICBC.  As recently discussed, this can result in a very harsh reduction.
The purpose for this deduction is so an accident victim doesn’t ‘double dip’.  That is, a person should not be paid twice for the same accident related expenses.  The reality, however, is that in most BC personal injury trials both the Plaintiff and Defendant are insured by ICBC.  This leads to a built-in conflict of interest.  At trial defence counsel appointed by ICBC will often argue that a Plaintiff’s claimed future medical care needs are not reasonable.  If the Plaintiff is awarded damages for future care the same counsel will then often argue that the award should be reduced as ICBC will pay for these damages under the Plaintiff’s own policy of insurance.
It is difficult to reconcile these two positions.  In 2009 the BC Court of Appeal found that trial judges can consider defence counsel’s trial submissions as a reflection of ICBC’s views with respect to the likelihood of payment of future insurance benefits.  Further reasons for judgement were recently brought to my attention demonstrating this practical approach by trial judges in face of ICBC’s arguments.
In today’s case (Van Den Hemel v. Kugathasan) the Plaintiff was injured in two seperate collisions.   At trial the Plaintiff was awarded damages including $8,000 for cost of future medical care.  The Defendants then argued that all of this should be deducted as ICBC would likely pay these expenses under the Plaintiff’s policy of insurance.
Mr. Justice Stewart disagreed with this submission and in doing so acknowledged the reality that ICBC’s views were likely expressed through counsel at trial and the Court would be “naive” to ignore these.  Mr. Justice Stewart reduced the award by only $100 and in doing so provided the following helpful reasons:
[9]  … whether the kinds of treatment at the cost accepted in my judgement would be paid in their entirety by ICBC is problematic, and the position taken in the tort case by the defendants, – effectively ICBC – with respect to the nature, extent, and source of the plaintiff’s problems.  ICBC is stuck with having to wear two hats – defend the tort action versus administer Part 7 – but I would be naive if I ignored the significance of the position taken in the trial simply because ICBC has no choice but to wear two hats.  The need to be realistic in assessing the ‘uncertainties’ lies at the heart of what the Court of Appeal had to say in Schmitt v. Thomas and in Boota v. Dhaliwal.
As of today’s date Mr. Justice Stewart’s recent judgement remains unpublished but I would be happy to share a copy with anyone who contacts me and requests one.

More on the "Harsh" Reality of Part 7 Benefits Deductions in ICBC Tort Claims


Two Judgements were recently released by the BC Supreme Court discussing the “harsh” reality of Part 7 Benefits Deductions in ICBC Injury Claims.
As previously discussedif you are entitled to receive Part 7 Benefits under your policy of insurance and don’t pursue these a Defendant who is responsible for injuring you in a BC Motor Vehicle Collision can reduce the amount of damages that they have to pay you by the amount of benefits you should have received from your own insurance coverage.  Often after trial ICBC will argue that some of the awarded damages should be reduced for this reason.  The first of the two recent judgments demonstrates that these deductions could operate in a punishing way for Plaintiffs.
In the first case released this week (Kirk v. Kloosterman) the Plaintiff suffered “catastrophic and tragic” injuries in a motor vehicle collision.  The Plaintiff, who had a learner’s licence to operate a motorcycle, failed to obtain a full licence at the end of his probation period and for this reason was considered uninsured by ICBC.  He was struck by a vehicle operated by the Defendant and suffered serious injuries.  He became paralyzed from near the waistline down.  His spinal cord became infected while in hospital and this “literally chewed up a further portion of the spinal cord so that he has lost a great deal of his thoracic capacity and now his arms and shoulders must bear his weight and provide all his strength“.
A jury found the Plaintiff 15% at fault for the collision and the Defendant 85% at fault.   Damages of nearly $4 million were awarded less 15% to reflect the Plaintiff’s liability.   Following verdict the Defendant (who was insured with ICBC) applied to have some of these damages reduced because the Plaintiff was allegedly in breach of his no-fault plan with ICBC.   Mr. Justice Crawford granted the motion and reduced the damages by approximately $200,000.  In doing so the Court noted that while this was “harsh and even punitive” a Plaintiff who disentitles himself to his own ICBC coverage can be faced with a statutory deduction in their tort claim.  Mr. Justice Crawford provided the following reasons:

[]           Ms. Kloosterman says the law is clear and settled: if the plaintiff acts so as to disentitle himself, then the Court must calculate and apply the deduction. She argues that Mr. Kirk would have been entitled to benefits under Part 7, had he possessed a valid driver’s licence.

[]           It is plain that the legislative intention is to prevent double recovery, that is, to prevent a plaintiff from recovering the same amount of monies both by way of the defendant through a tort action and by way of no-fault insurance coverage. Given the legislative intention, it seems harsh and even punitive to not only deny a plaintiff, who has been found substantially not at fault in a motor vehicle collision and awarded damages for losses sustained, no-fault benefits but also to deduct the amount of his or her potential entitlement to Part 7 from the tort award. However, the case law is binding on me, and can only be construed differently by the Court of Appeal:  see Baart v. Kumar, (1985), 66 B.C.L.R. 1 (C.A.); Si v. Enns, , 2001 BCSC 1120.

[]           Accordingly, I accept the defendant’s submissions on this issue and find that there must be a deduction.

In the second case released this week (Gignac v. Rozylo) the result was not nearly as harsh but the case still demonstrates the reality that applications for statutory deductions can be made following vehicle collision cases.
In Gignac the Plaintiff was injured in a 2004 motor vehicle collision.  Following trial Mr. Justice Wilson awarded damages including $15,000 for ‘special damages‘ and just over $115,000 for ‘costs of future care‘.  (UPDATE August 17, 2012 the BC Court of Appeal reduced the cost of future care award by about $40,000.  Their reasons can be found here) ICBC then argued that these awards should be reduced by $25,000 to account for the fact that the Plaintiff can obtain money from ICBC for these expenses under their own policy of insurance.
Mr. Justice Wilson largely rejected ICBC’s arguments and made a modest deduction of $2,000 of the awarded damages.  In doing so the Court provided the following useful comments about the “level of abstraction” of ICBC’s permissive benefits scheme:

[23]        As I understand Ms. Lewko, if a benefit is not “specifically listed”, then, an insured’s entitlement to the benefit is dependent upon “ICBC claims handling procedures”, or “ICBC claims handling policies”, or “ICBC policy”.

[24]        Legislative support for this approach is s. 88(2)(f), the “other” category, referred to above.

[25]        The statute does not direct me to determine entitlement to benefits pursuant to ICBC policy; the direction is to determine entitlement pursuant to the plan.

[26]        Section 88(2)(f) is subject to the opinion of the corporation’s medical advisor that an expenditure is likely to promote the rehabilitation of an insured.

[27]        The opinion of that medical advisor is a necessary condition before resort may be had to s. 88(2)(f) of the Regulation.  Absent the necessary condition, the corporation is not authorized to pay benefits.

[28]        Rehabilitation means restoration.  This plaintiff’s debilitating condition is chronic pain.  Current medical science has no cure for this condition.  I find it improbable that a medical advisor would opine that any of the goods and services contained in the assessment of future care costs, would promote the rehabilitation of this plaintiff.  Those goods are services were recommended by the occupational therapist as necessary to enable this plaintiff to maintain an optimum level of functioning, now and in the future, and to maximize independence and prevention of further disability.

[29]        Alternatively, if I am wrong in my interpretation of the legislation, and ICBC policy is a relevant factor, then the applicant has not persuaded me that it is more likely than not that this plaintiff is entitled to the benefits in controversy.  The scales are evenly balanced.  Policy may authorize the benefit or it may not.  According to Ms. Lewko:

11.       It is ICBC policy that the exercise of discretion for permissive benefits must be rationally connected to the relevant factors governing an objective assessment of the entitlement to the benefit.

That is a level of abstraction which does not allow for a determination of entitlement on a balance of probability.

[30]        In result, the cost of future care assessment is reduced by $2,000.

The Importance of Pursuing Part 7 Benefits in an ICBC Injury Claim

I’ve previously written about the important role Part 7 Benefits play in ICBC Injury Claims. In short if you are entitled to receive Part 7 Benefits under your policy of insurance and don’t pursue these the Defendant who is responsible for injuring you in a BC Motor Vehicle Collision can reduce the amount of damages that they have to pay you by the amount of benefits you should have received.
This argument can be made by a Defendant in a lawsuit even if the injured person applied for the benefits and ICBC refused to pay them.  Reasons for judgement were released this week by the BC Supreme Court showing this principle of BC Injury Law in action.
In this week’s case (Sauer v. Scales) the Plaintiff was injured in a 2004 BC Car Crash and successfully sued the at fault motorist and was awarded damages of over $300,000 (click here to read my post discussing the trial judgement)
After reasons were pronounced the Defendant’s lawyer brought a motion to reduce a portion of the award as it covered damages for benefits that the Plaintiff could have received from ICBC under his own policy of insurance.  Specifically the motion was brought relying on Section 83 of the Insurance (Vehicle) Act which holds in part that “A person who has a claim for damages…who…is entitled to receive benefits respecting the loss on which the claim is based is deemed to have released the claim to the extent of the benefits
The Plaintiff argued that this application was an abuse of process because he applied to have the benefits paid from ICBC directly but the adjuster cut him off claiming that “the accident did not cause the injuries“.
As with most ICBC Injury Claims I presume the same adjuster that told this to the Plaintiff was also responsible for the defence of the Plaintiff’s lawsuit against the at fault motorist (click here to read more about this conflict of interest).    The Plaintiff argued that ” the onus is on the defendant to establish that a deduction should be made under s. 83(5) of the Act. …the defendant chose to interpret Part 7 of the Regulation in a manner which initially severely restricted the plaintiff’s claim, and subsequently interpreted his entitlement to include virtually all of the damages for cost of future care awarded to him by the Court.  In addition, the plaintiff says that ICBC ignored requests for particulars in the plaintiff’s Part 7 action, and directed the plaintiff to include Part 7 items in his tort claim.  The plaintiff submits that this is a case where ICBC took an extreme position on the plaintiff’s entitlement to Part 7 benefits, and then resiled from that position for the purpose of seeking a deduction from the judgment equalling the plaintiff’s cost of future care award.
Ultimately Mr. Justice Cohen agreed with the Defendant and held that ICBC’s refusal to pay for requested Part 7 Benefits under the Plaintiff’s policy of insurance does not prevent the ICBC appointed Defence Lawyer in the tort claim to argue that the benefits should have been paid.  The Court went on to reduce the judgement by $25,000 for monies that could have been received from ICBC as No Fault Benefits.  Mr. Justice Cohen provides a comprehensive summary of this area of law at paragraphs 11-18 of the decision that are worth reviewing in full.
This case goes to show that Part 7 benefits need to be pursued vigorously otherwise one can limit the amount of damages and benefits available after a BC Car Crash.

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