Tag: section 148.2 insurance (Vehicle) Regulation

ICBC UMP Arbitrations and Liability Findings


Useful reasons were recently released by Arbitrator Yule discussing the scope of an arbitrator’s power to address issues of liability in the course of an UMP Claim.
In the recent case (GG v. ICBC) the Claimant was injured by an underinsured Washington State motorist.  He sued for damages and ultimately settled for policy limits with the at fault motorists insurer.  The Claimant applied to ICBC to have excess damages paid under his underinsured motorist protection (UMP) policy.  The Claim was ultimately dismissed finding the Claimant did not have standing to trigger the UMP process.
The decision went on to discuss the ability of an arbitrator to Rule on liability issues when they have not been previously disposed of by a trial on the merits.  Arbitrator Yule provided the following reasons:
71.  As I have noted previously, the scheme of UMP compensation in British Columbia, in the absence of agreement between ICBC and a claimant, is premised upon an underlying tort judgement.  Sections 148.2(1) and (6) cannot mean that either party can arbitrarily and unilaterally have any issue relating to legal entitlement to recover damages determined in an arbitration because in those instances where there is a judgement int he underlying tort action, legal entitlement to recover damages will have been judicially decided.  Section 148.2(6) must at least be intended to give an arbitrator authority to determine issues of legal entitlement including contributory negligence where there is an agreement by the parties that the issue should be determined in the arbitration.  Absent the presence of collusion or fraud in obtaining judgement in a foreign jurisdiction, I think that the scheme of UMP compensation presumes that for accidents in foreign jurisdictions, issues of legal liability including contributory negligence are conclusively determined in a judgement of the foreign court.  I do not think that Section 148.2(6) entitles either a claimant or ICBC to “relitigate” an issue of liability or contributory negligence where there has been a judicial determination om the merits of the issue in a tort action in the jurisdiction where the accident occurred….I do not think a claimant who has succeeded in obtaining a judgement after trial in a foreign jurisdiction where such potential defences were not alleged, is exposed to have such defences raised for the first time in a subsequent UMP arbitration.  If the claimant here is entitled to pursue his UMP claim, notwithstanding the entered Consent Dismissal Order in the Washington action, it seems to me that the actual Order cannot be regarded as determinative of anything and is virtually irrelevant.  In that circumstance, I think Section 148.2(6) permits ICBC to raise the issue of contributory negligence, although whether the issue could be heard on its merits would be subject to full argument on the issue of whether, under Washington Law which is determinative as to issues of liability, formal admissions of fault in the pleadings constitute a conclusive determination of liability.

ICBC UMP Claims and Trial Disbursements

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

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.

Out of Province Quantum Awards Not Binding in ICBC UMP Proceedings


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.

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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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