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Tag: section 148 Insurance Vehicle Regulation

The Dry Judgement Blues – Knowledge of lack of Registered Owner Consent

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Knowingly riding in a vehicle involved in a collision where the at fault driver does not have the owner’s consent can lead to legal headaches when it comes to being compensated for injuries.  Reasons for judgement were released this week by the BC Supreme Court, Kamloops Registry, dealing with such a potential scenario.
In this week’s case (Schoenhalz v. Reeves) the Plaintiff was badly injured while riding as a passenger in a vehicle involved in a 2007 collision.  The Plaintiff suffered spinal fractures, various burns to her body, dental injuries and a pelvic fracture.  Damages of $282,992 were assessed.
The driver of the vehicle was found to be at fault.  The Court found, however, that the driver of the vehicle was not operating it with either the express or implied consent of the owner.  Accordingly the lawsuit against the vehicle owner was dismissed.    The driver was 15 years of age at the time and did not have a license.  The Court concluded that “at the time of the accident (the Plaintiff) knew that (the driver) was age 15 and did not have a driver’s license.”.
Why does this matter?  While this judgement did not get into collections issues such a finding could be problematic.
Typically a 15 year old uninsured motorist would have no means to satisfy a quarter million dollar judgement.  This leaves the issue of insurance.  In ‘no consent‘ situations ICBC treats the collision as uninsured leaving an injured plaintiff with only the ability to collect damages under either section 20 of the Insurance (Vehicle) Act or under their own Underinsured Motorist Protection plan (UMP).
While the above insurace plans often are valuable in satisfying an uninsured judgement, there are exceptions as to who can access these.  One such exclusion deals with knowingly being in a vehicle without driver consent.  A Plaintiff cannot access section 20 uninsured motorist funds if they “at the time of the accident as a result of which the bodily injury, death or loss of or damage to property was suffered, was an operator of, or a passenger in or on, a vehicle that the person knew or ought to have known was being operated without the consent of the owner, and, in the case of a leased motor vehicle, the lessee.”
A similar exclusion exists if a Plaintiff seeks to access their own UMP coverage.  Section 148(4)(c) of the Insurance (Vehicle) Regulation lets ICBC off the hook in circumstances where the Plaintiff ” is an operator of, or a passenger in or on, a vehicle that the insured knew or ought to have known was being operated without the consent of the owner.”
When seeking to collect the judgement from ICBC such a judicial finding may cause ICBC to deny payment on the basis that a person “ought to know” that an owner likely is not providing consent to an unlicensed individual operating the vehicle.  This area of law has received scarce judicial commentary but these coverage exclusions should serve as a stark reminder to individuals considering taking a ride with an unlicensed driver.
 

ICBC Underinsured Motorist Claims: The "No Consent" Restriction

Written by admin on . Posted in ICBC UMP Cases, Uncategorized. 166 Comments on ICBC Underinsured Motorist Claims: The "No Consent" Restriction

In my continued efforts to publicly summarize ICBC UMP Arbitration Decisions, reasons for judgement recently have been provided to me dealing with the restriction on ICBC UMP Coverage in circumstances where a vehicle occupant is injured through the negligence of a motorist who did not have the vehicle owner’s consent to operate.
In the unreported 2003 UMP Decision (D v. ICBC) the Claimant was injured in a 1998 collision.  He was the occupant of a vehicle driven by MV.   MV did not have the registered owner’s consent to operate the vehicle.  MV was given permission to drive by J who was the registered owner’s son.  J initially obtained the vehicle with the owner’s consent.  J did not have the owner’s permission to allow others to operate her vehicle.
The claims arising from the crash exceeded the damages available under section 20 of the Insurance (Vehicle) Act.  The Claimant applied to have his excess damages paid under his own Underinsured Motorist Protection coverage with ICBC.   ICBC argued that UMP coverage was forfeited because the Claimant was a passenger in a vehicle that he “knew or ought to have known was being operated without the consent of the owner” contrary to section 148.1(3)(b) of the Insurance (Vehicle) Regulation.
Arbitrator Yule agreed that given the facts of the case the Claimant should have known that consent was absent.  In finding the Claimant was not entitled to coverage Arbitrator Yule provided the following reasons:
28….Whether (the owner) consented, however, is a different question from the one raised in this case, namely whether a passenger such as Mr. D knew or ought to have known that (the owner) would not consent to the use of her vehicle in these circumstances.  There may well be circumstances in which an original borrower, who is aware of restrictions on the use of the borrowed vehicle put in place by the owner, allows another to drive without ever communicating those restrictions.  If there were nothing else about the surrounding circumstances to cause a driver or passenger to question the owner’s consent to the driver’s operation of the car, the driver and passenger would be entitled to full insurance protection.  A similar concept of reasonable belief by a driver i the consent of a vehicle owner applies in the extension of third party liability coverage under a driver’s certificate (Regulation s. 49(1)(c)) and under an owner’s certificate (Regulation, s. 65(1)(f))….The question is whether there is sufficient evidence from the totality of the circumstances such that, if he had considered the matter, a reasonable person in Mr. D’s circumstances ought to have known that (the owner) would not consent to the use of her vehicle int he circumstances prevailing the evening…
32…Where the vehicle is not stolen, and the original borrower remains in possession of and an occupant in the vehicle, and where constraints regarding use are known to the original borrower and not disclosed to others in the vehicle, the burden of establishing facts that a passenger ought to have known the owner would not consent should be onerous, even before taking into account that s. 148.1(3)(b) is an exclusion from coverage.
33.  In my view the Respondent has met the burden in this case…
The Reasons go on to highlight the specific facts indicating why a lack of consent should have been known in the circumstances.
This decision is not publicly available but, as always, I’m happy to provide a copy to anyone who contacts me and requests one.  Also, if anyone has an UMP decision from prior to 2007 and you’d like to have it added to this database please don’t hesitate to contact me.

FCA and Tort Claim Limits Under ICBC's Underinsured Motorist Protection

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An ICBC UMP decision has recently been provided to me dealing with the amount of coverage available under UMP when a claimant has the right to advance a tort claim and a Family Compensation Act claim arising from the same collision.
This decision was released well before the 2007 amendment requiring UMP Arbitration decisions to be published publicly on ICBC’s website.  I summarize the decison to add it to this public and searchable UMP Claims Database.
In the 1996 case, (CCK v. ICBC) the Claimant was severely injured in a collision.  She suffered a spinal cord injury rendering her a paraplegic.  Her mother was killed in the same collision.  The at-fault motorist was underinsured for all of the civil claims flowing from the crash.  The Claimant was entitled to damages not only for her own injuries but also as a beneficiary under the Family Compensation Act for the death of her mother.
The arbitrator had to decide whether the Claimant could access $1 million in UMP Coverage in her tort claim along with an additional $1 million in coverage for her FCA claim or whether both claims were covered by a single limit.  Arbitrator Schmitt provided the following reasons:
If CCK had been injured but had not lost her Mother, she would, of course, under section 148.1(2) be entitled to compensation under UMP coverage.  In this case she was insured and she lost her Mother so she is an insured under not one but two of the definitions.  What ICBC is arguing is that she is entitled to UMP coverage for her injuries and loss of her Mother but only under her own million dollars coverage…
In the case of CCK, she happens to be insured under two different definitions and she will be entitled to the benefits of her UMP coverage for both her claims up to the $1,000,000 limit…
The Mother’s estate is likewise entitled to the benefit of UMP coverage up to $1,000,000 but the Mother’s estate claims do not include the claims of survivors under the Family Compensation Act which belong specifically to those survivors…
The estate’s coverage is available to cover claims by the estate itself which may be advanced under the Estate Administration Act.  Insofar as CCK or her grandmother may be entitled to receive some or all of the proceeds of the estate as a beneficiary they may directly benefit from such coverage.  Otherwise CCK is entitled to the benefit of her own UMP coverage of $1 million with respect to her claim for personal injuries and her claim for damages under the Family Compensation Act.
This case should be contrasted with a subsequent Court of Appeal decision in 2007 (Lougheed v. Co-operators General Insurance Company)  which upheld the following trial judgement reasons finding that the ‘insured‘ in an FCA claim brought following a collision is the personal representative of the estate of the deceased and that all beneficiaries of such an FCA claim are subject to the representative’s single policy limit:

[85]  The issue, then, is how one ought to read the definition of “insured” in s. 148.1(1)(c), bearing in mind the scope of coverage granted by s. 148.1(2).  But for his death, Mr. Lougheed would have received UMP coverage by operation of s. 148.1(1)(a).  As a result of his death, the “insured” is “a person who…is entitled to maintain an action” because of Mr. Lougheed’s death.  The “action” refers to the family compensation claim that may be commenced under the FCA by the personal representative on behalf of all of the beneficiaries, or by the beneficiaries if it is not commenced by the personal representative.  In either case, however, the action must be treated as though it had been brought by the personal representative.  It is a single cause of action brought on behalf of all of Mr. Lougheed’s beneficiaries.

[86]  It follows, in my view, that the “insured” in s. 148.1(1)(c) must be the personal representative, who is the individual entitled, either directly or indirectly, to maintain a family compensation action as a result of the death of the primary insured, Mr. Lougheed.  That interpretation is consistent with the grant of coverage provision, which limits the recovery of benefits to those otherwise accruing to the deceased insured.

[87]  In the result, the UMP coverage limit is not $1 million for each beneficiary of a family compensation action, but $1 million for the beneficiaries of the action as a whole.  The plaintiffs, all beneficiaries, are entitled collectively to the $1 million of UMP coverage that would otherwise have been available to the deceased, Mr. Lougheed.

ICBC UMP Claims and Trial Disbursements

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An Arbitration determination was recently released addressing the jurisdiction of an UMP Arbitrator to award disbursements for expenses for items initially used in a tort trial then subsequently used in an UMP Arbitration.  In short Arbitrator Camp held that there is jurisdiction for recovery of such costs provided they were reasonably incurred.
In the recent case (Undisclosed v. ICBC) the claimants were awarded damages in a Washington State trial.  The Defendant was underinsured.  When the Claimants applied to ICBC for payment they needed to re-try the value of their cases pursuant to BC law.   Although their damages were assessed at a far lesser value than they were in the Washington State trial, they nonetheless were successful in proving their damage claims.  The Claimants relied on much of the same evidence in the ICBC UMP hearing as they did in the initial trial.
Following arbitration the Claimants applied for an order that ICBC pay for their disbursements incurred in proving their damages claim.  ICBC opposed arguing that the arbitrator “has no jurisdiction to award costs that would include legal fees ad disbursements in the Washington State action“.  While arbitrator Camp agreed “with this bald assertion” he went on to find that he could award disbursements even for items initially used in the Washington State trial.  In so concluding Arbitrator Camp provided the following reasons:
19.  Dealing first with the issue of the nature of costs that I can properly award, I find that as a result of section 148.2(2) and section 148.2(3) of the Regulation, I am constrained to only awarding party and party costs and I am not permitted to award actual reasonable legal fees as specified in section 11(2)(a) of the Commercial Arbitration Act.  The parties agreed that the jurisprudence stemming from the Rules pertaining to costs (now Rule 14) ought to be applied mutatis mutandus to the UMP arbitration process…
31. …An UMP arbitrator has a broad discretion to award party and party costs including reasonable disbursements that are utilized in the subject UMP arbitration process.   This is the approach I adopt for the reasons that follow.  The reasonable disbursements that I find are recoverable in these UMP proceedings find their genesis in the MVA which eventually gave rise to these arbitration proceedings.  Yes many of these reasonable disbursements were used in the Washington State trial but they were also necessary and used in these UMP arbitration proceedings.  There is no risk that there is any chance for double recovery of these disbursements by these claimants and I reiterate they are subject to the test of reasonableness.
32.  Finally, Mr. Mersey made the argument that any award of party and party costs and reasonable disbursements are governed by Washington State law which, as noted above, severely restrains recoverable costs and disbursements relative to the law of British Columbia.  I disagree.  In my view there is no connection between entitlement of UMP claimants to party and party costs and reasonable disbursements pursuant to the British Columbia provisions of the Regulation and the Commercial Arbitration Act and the Rules of Procedure for Domestic Commercial Arbitration, and the provisions of Washington State law which severely restrains recoverable costs and disbursements.  I am bound to adhere to the former.

Only Two Ways to Get to UMP

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An important arbitration decision was released last year demonstrating that there are only two ways to get standing at an UMP arbitration proceeding; either with the consent of ICBC or by having an unsatisfied judgement against the tort feasor.  The case also addresses the effects of a tort release in subsequent UMP proceedings and lastly the consent requirement under s. 148.2(4)(b) of the Insurance (Vehicle) Regulation finding that ICBC needs to demonstrate real prejudice to rely on this section.
In last year’s case (GG v. ICBC) the Claimant was injured in a Washington State motor vehicle collision.  The at fault motorist had very low third party liability coverage and likely was underinsured for the circumstances.  The Claimant had Underinsured Motorist Protection (UMP) with ICBC.
The Claimant sued in Washington State and the at fault motorist admitted liability.   Since the Washington State court award would not be binding on ICBC regarding the value of the claim the Claimant sought ICBC’s permission to settle for policy limits and proceed to UMP arbitration to determine the value over and above this amount that would be payable.  ICBC would not consent to this.  The Claimant settled his claim and started an UMP proceeding.  ICBC challenged this arguing the Claimant did not have standing to do so.  Arbitrator Yule agreed finding there are only two ways to get standing in an UMP Claim. In dismissing the claim Arbitrator Yule provided the following reasons:
37.  The essence of the dispute between the parties regarding the entitlement issue is whether there is a “third way” for a Claimant to establish the right to proceed to arbitration.  ICBC says there are only two ways to establish that right, namely (1) an unsatisfied judgement against the tortfeasor or (2) the consent of ICBC.  The Claimant says there is a third way, namely, by admissions of the tortfeasor, both as to fault for the accident (legal liability and legal entitlement) and as to an inability to satisfy any damages that may be awarded…The Claimant asserts that in this case compelling him to obtain judgement in the Washington State action is unfair, particularly having in mind the uselessness of an assessment of damages under Washington State law.  I agree.  However, in light of the legal authorities, I am constrained to conclude that the Claimant is not entitled to UMP compensation because he has not established the necessary prerequisites.
This finding was fatal in and of itself to the Claim, however, Arbitrator Yule also addressed the effects of a full and final release as against the tort-feasor.  When the Claimant settled with the at fault driver the typical release was signed.  Arbitrator Yule found that signing this release absent ICBC’s consent compromised the Claimant’s rights to an UMP Claim and provided the following reasons:
61.  Accordingly, I am constrained to find that in the absence of the agreement of ICBC that the claimant may do so and still proceed to an arbitration of his UMP Claim, the entry of a Consent Dismissal Order in the Washington action and the provision of a Full and Final Release of SK mean that the claimant is no longer legally entitled to recover damages from SK and there is no “excess” damages that could be the subject of an UMP Claim.  Hence, the claimant is not entitled to advance an UMP claim now.

Maternity Leave EI Benefits Not Deductible in ICBC UMP Claims

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Since ICBC’s Underinsured Motorist Protection coverage is a “fund of last resort” there are many deductions ICBC is entitled to take advantage of before paying funds out to Claimants.  These deductions, however, do have limits and this was demonstrated in an UMP Arbitration Determination released last year.
In last year’s claim (Undisclosed v. ICBC) the three claimants were awarded damages after receiving injuries from an underinsured motorist in Washington State.   One of the Claimant’s damages included $95,000 for past income loss.  ICBC argued that $65,000 should be deducted from this assessment for EI benefits that the Claimant was or would be entitled to as a result of section 148.1(f.1) of the Insurance (Vehicle) Regulation.
Arbitrator Camp rejected ICBC’s argument and reduced the amount by a much more modest $3,034 figure which was the sum the Claimant actually received from EI.   In refusing to make the greater reduction advanced by ICBC Arbitrator Camp noted that EI Maternity Benefits are not deductible in UMP Claims finding as follows:
57.  Other than pure speculation as to future EI benefits, some of which may indeed be predicated on maternity which is completely unrelated to the underlying facts and circumstances giving rise to the UMP award and therefore to any issue of deductibility, ICBC has led no evidence pertaining to the deductibility of EI benefits.  I therefore find that ICBC has not met the onus of proving any amount to be deducted with respect to future EI benefits.

Out of Province Quantum Awards Not Binding in ICBC UMP Proceedings

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In my continued efforts to create a searchable UMP Claims database, I summarize a 2009 UMP Decision addressing whether ICBC could re-litigate quantum of damages after the issue was already decided in an out of Province trial.  In short the Arbitrator held that trial verdicts addressing liability are binding for UMP coverage purposes but awards addressing quantum are not binding as these need to apply the law of British Columbia.
In the recent case (Undisclosed v. ICBC) the Claimants were badly injured in a 1996 collision in Washington State.  The at fault driver had only $200,000 of insurance coverage.  The injured parties were each insured with $1 million of Underinsured Motorist Protection with ICBC.  They sued the ICBC insured driver in Washington State and were awarded global damages of $9.1 million with 5 of the 6 Claimants’ individual awards exceeding $1 Million.
The Claimants and ICBC could not agree on the amount of UMP Benefits payable and submitted the issue to arbitration.  The arbitrator was asked to decide if the quantum award from Washington State was binding (less applicable deductions) or if the issue could be re-litigated.  In finding that the Washington State jury award addressing damages was not binding Arbitrator Camp provided the following reasons:
21.  On the facts of this case ICBC concedes the claimants have satisfied all of the prerequisite requirements laid down for UMP coverage.  Hence, it is conceded that the Washington jury verdict established liability on the underinsured motorist, resolved issues of contributory negligence and established that the damages attributable to the fault of the underinsured motorist exceeded the insurance limits and assets available to compensate the claimants.  Put another way, it is conceded that the Washington jury verdict determined that the claimants are “insureds” and (the at fault motorist) is an “underinsured motorist” for the purposes of the UMP scheme.
22.  In the majority of cases, in my experience, the parties (ICBC and the claimants) agree that the prerequisites for UMP coverage have been satisfied and the parties arrive at a settlement pertaining to UMP compensation.  Where the parties cannot agree, ICBC can follow one of two courses of action.  ICBC can either require that the claimant(s) proceed to a tort trial to determine the prerequisites necessary for UMP arbitration, or they can agree that those prerequisites have been met and proceed to an UMP arbitration by consent.
23.  In this case, the evidence satisfies me that ICBC required a tort trial to determine the prerequisites necessary for UMP arbitration.  The claimants chose Washington State as the most favourable jurisdiction to proceed with the tort trial, for good and valid reasons which are not germane to the arbitration issue before me…
28.  Section 148.2(6)(a) relating to the legal entitlement to UMP coverage is relatively straightforward.  It says that where an accident for which UMP compensation is being sought occurs in another jurisdiction, the law of the place where the injury or death was suffered shall be applied to determine whether the claimants are legally entitled to recover UMP compensation and if a difference arises as to that legal entitlement, that difference shall be arbitrated under the Commercial Arbitration Act of British Columbia.  It is section 148.2(6)(b) relating to the measure of any damages and the assessment of the amount of UMP compensation payable that is at the nub of this arbitration…
33.  Turning to my interpretation of s. 148.2(6), I find that the section is properly interpreted to mean that issues of legal entitlement shall be determined by Washington law in this case and that the issues pertinent to quantum of damages shall be determined by the law of British Columbia.  I am fortified in coming to this interpretation because of the linkage between s. 148.2(6) and s. 148.1(5).  Section 148.1(5) constitutes a limiting provision and the limitation only works or works much better if the interpretation of s. 148.2(6)(b) is interpreted such that the issues pertaining to the quantum of damages shall be determined by the law of British Columbia.