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Tag: section 106 insurance vehicle regulation

Employer Paid Sick Leave Benefits Non-Deductible in ICBC Uninsured Motorist Claim

(Update December 3, 2013 – the below decision was upheld in reasons for judgement released today by the BC Court of Appeal)
Last year the BC Supreme Court found that employer paid wage replacement benefits are non-deductible in ICBC hit and run claims.  Reasons for judgement were released this week by the BC Supreme Court, Vancouver Registry, considering this issue in the context of an uninsured ICBC Claim.
In this week’s case (Jordan v. Lowe) the Plaintiff was injured by an uninsured motorist.  He successfully sued for damages.  When seeking to collect damages from ICBC pursuant to section 20 of the Insurance (Vehicle) Act ICBC argued they could deduct from the judgement the amount of sick leave benefits the Plaintiff collected from his employer.  Mr. Justice Willcock dismissed this argument finding these benefits did not have an element of insurance to them thereby not making them deductible   The Court provided the following reasons:
[20]         ICBC suggests the amendment to the Regulation, the addition of the words “compensation similar to benefits” to the definition of an insured claim, signalled the legislature’s intention to expand the definition.  I agree that must necessarily be so.  ICBC further suggests the expansion brought into the definition of an insured claim benefits that are not paid pursuant to insurance and the definition no longer necessarily imports an element of insurance.  With respect to the able submissions of counsel, I cannot agree.
[21]         When it enacted the most recent amendments to the Regulation, the legislature must be taken to have been aware of the judgment of the Court of Appeal in Lopez.  The conclusion in Lopez that the definition necessarily imports an element of insurance was founded upon the presence of the subheading to Regulation 106(1), “Exclusion of other insured loss”, and to the fact that the Regulation itself describes what are considered to be “insured claims”.  While the legislature has expanded the definition of what constitutes compensation or a benefit, it has not removed or varied the subheading of the Regulation in question and has not excluded from ICBC’s liability anything other than “insured claims”.
[22]         There was some discussion in Lopez with respect to what constitutes a “benefit” under the applicable section.  The amendment to the Regulation addresses that discussion and, in my view, may be applicable in some circumstances where there is some doubt with respect to what compensation in the nature of insurance is deductible.  It does not, however, remove or vary the requirement described in Lopez that the compensation must have an element of insurance to it.
[23]         For reasons set out in Loeppky, which I adopt and follow, I find payment of sick leave benefits to police officers employed by the City of Vancouver Police Department pursuant to their collective agreement do not have about them an element of insurance.  They are clearly benefits or compensation similar to benefits, but that alone does not suffice to cause them to fall within s. 103 of the Regulation.  ICBC is not entitled to deduct them from its liability to satisfy the plaintiff in relation to his claim against the designated defendant, Mr. Lowe.

Employer Paid Wage Replacement Benefits Non-Deductible in Hit and Run Claims

Section 106 of the Insurance (Vehicle) Regulation permits ICBC to reduce compensation by any amount paid by another “insured claim” in claims for injuries caused by unidentified motorists or uninsured motorists under section 24 and section 20 of the Insurance (Vehicle) Act .  Reasons for judgement were released last week by the BC Supreme Court, Vancouver Registry, addressing whether wage loss benefits paid by an employer are an ‘insured claim‘.  In short the Court held that they are not.
In last week’s case (Loeppky v. ICBC) the Plaintiff, a police officer, was injured in a hit and run collision.  ICBC accepted the crash was caused through the fault of an unidentified motorist.  The Plaintiff sought compensation for his damages including past wage loss.  During his time away from work his employer paid him wage replacement benefits.  ICBC argued these payments were an ‘insured claim‘ and therefore had to be deducted from his ICBC claim.  Madam Justice Grey disagreed and refused to make the deduction.  The Court provided the following reasons:

[83] In my view, Mr. Loeppky’s wage replacement benefits do not constitute an “insured claim” under s. 106 of the Regulation, and therefore may not be deducted from Mr. Loeppky’s award.

[84] In Arklie v. Haskell (1986), 33 D.L.R. (4th) 458, 25 C.C.L.I. 277 (B.C.C.A.), McLachlin J.A., writing for the court at para. 26, held that a sum of money advanced by an employer to an employee that had to be repaid in the event of any recovery did not qualify as a benefit under the predecessor of s. 106.

[85] More generally, in Lopez v. Insurance Corporation of British Columbia (1993), 26 B.C.A.C. 142, 78 B.C.L.R. (2d) 157, Hollinrake J.A., writing for the court at para. 21, held that an “insured claim” for the purposes of the Regulations must still import at least some element of insurance. He went on conclude that payments made by reason of a contract of employment, without some evidence that they originate from an insurer, do not possess such an element of insurance.

[86] The sum of $6,804.77 was paid to Mr. Loeppky under the collective agreement between the Vancouver Police Union and the Vancouver Police Board. Under the terms of that agreement Mr. Loeppky must repay that amount if he recovers it in this action. There is no evidence that the payments originated from an insurer. Thus, it is not an insured claim under s. 106 and the defendant is not entitled to deduct it from any award.

ICBC Uninsured Motorist Claims and the Deductibility of WCB Benefits

If a person is injured by the actions of an uninsured motorist in BC they can seek compensation directly from ICBC under section 20 of the Insurance (Vehicle) Act.
There are certain limitations to section 20 claims and one of these was that ICBC could deduct Workers Compensation Benefits.  This changed by the new section 106 of the Insurance (Vehicle) Regulation which came into force on June 1, 2007.  The new regulation changed the definition of an ‘insured claim‘ that ICBC could deduct as follows:

106 (1)  In this section, “insured claim” means any benefit, compensation similar to benefits, right to indemnity or claim to indemnity accruing to a person entitled to benefits, compensation or indemnity or to the personal representative or guardian of the person, and includes a benefit, compensation, right or claim

(a) under the Workers Compensation Act or a similar law or plan of another jurisdiction, unless

(i)  the insured elects not to claim compensation under section 10 (2) of the Workers Compensation Act and the insured is not entitled to compensation under section 10 (5) of that Act, or

(ii)  the Workers Compensation Board pursues its right of subrogation under section 10 (6) of the Workers Compensation Act

Reasons for judgement were released this week by the BC Supreme Court, Vancouver Registry, addressing whether ICBC could deduct WCB benefits paid when a crash occurred prior to June 1, 2007 but the uninsured claim against ICBC was still on-going after the new Regulation came into force.  In short the Court held that the date of the crash itself does not decide the issue, rather the date that the section 20 claim against ICBC is crystallized does.
In this week’s case (Hicks v. Bieberbach Estate) the Plaintiff was injured in a 2005 collision.  The opposing motorist was operating a stolen vehicle and was killed in the collision.  Motorists in stolen vehicles are deemed to be uninsured motorists by ICBC.  The Plaintiff initially obtained some compensation from WCB.  The Plaintiff then re-elected his route of compensation and brought a tort claim (apparently with WCB’s approval) against the uninsured motorist’s estate.
ICBC took the position that all the funds paid by WCB were non-recoverable as the crash happened prior to June 1, 2007.  Madam Justice Adair disagreed and found that since the CL-42 (the statutory declaration claimiants need to sign to seek section 20 benefits from ICBC) was not signed until after June 1, 2007 the new regulation applied and ICBC could not deduct the WCB payments from their section 20 obligations.  In reaching this decision the Court provided the following reasons:

[44]         A claimant who is injured by an insured driver and who wishes to make an application to ICBC for damages must do so in the prescribed form:  s. 20(2).  The form prescribed is a statutory declaration, where an applicant must verify facts as if under oath or on affirmation.  I do not see anything in s. 20 to suggest that ICBC “may pay” without having fundamental facts relevant to the claimant’s claim verified by solemn declaration,  as prescribed by the legislation.  On the contrary, the clear implication of s. 20(9) is that it is necessary for a claimant to submit a declaration in Form CL-42 before ICBC “may” pay.  The significance of the word “may pay” (rather than “must pay”) is that, even when a claimant has complied with s. 20 and the regulations, ICBC is notobligated to pay:  see Buxton v. Tang, at para. 7.

[45]         In my view, ICBC’s correspondence dated February 7, 2007, indicates that ICBC requires plaintiff’s counsel to comply with the service and default requirements of s. 20 (see in particular ss. 20(5)(b), (6) and (7)), and, more generally, indicates that ICBC expected Roy Hicks to comply with the section and the regulations before any amount would be paid to him.  This is entirely consistent with s. 20(9).  One of the requirements was that Mr. Hicks complete and submit a CL-42.  Unlike s. 24 of the Act, which requires a claimant to give ICBC notice of a claim within 6 months after the accident but does not specify any form in which the notice must be given, s. 20 specifies the form of notice of a claim, but does not fix a deadline…

[52]         In my opinion, in this case and reading s. 20 as a whole, ICBC was not in a position where it at least “may” pay, until Roy Hicks submitted his CL-42 statutory declaration.  That was the final step Mr. Hicks needed to complete (since service of the writ and defence of the claim by ICBC had been addressed in the fall of 2007) as claimant.  Since the CL-42 statutory declaration was submitted in February 2008, s. 106 of the New Regulation applies…

[54]         In summary, the question posed on the special case is:

Does the Insurance Corporation of British Columbia have the legal authority to deduct Workers’ Compensation Board benefits paid to the Plaintiff from any amount to be paid to the Plaintiff for damages, as a result of settlement or judgment in this matter, taking into account Section 20 of the Insurance (Vehicle) Act, R.S.B.C. 1996, c. 231 and regulation 106 of the Insurance (Vehicle) Act Regulations, or the predecessor to these sections which were repealed on June 1, 2007?

My answer is no.  Section 106 of the New Regulation applies in respect of the plaintiff’s claim.