Reasons for judgment were published this week by the BC Court of Appeal addressing the common law principles of subrogation and double recovery in a BC tort claim.
In the recent case (Provost v. Dueck) the Plaintiff RCMP officer was involved in a crash and sued for damages. At trial he was awarded various damages including $27,500 for past income loss for the months his injuries disabled him from work. During this time of disability, however, the RCMP continued to pay his full wages. Payments for other various benefits were made as well. These payments “were not made pursuant to a collective agreement or any other contractual arrangement. Rather, they were made pursuant to the longstanding “practice or policy” of the RCMP to continue to pay the full wage benefits of injured officers during their convalescence“.
The BC Court of Appeal held that in these circumstances the RCMP enjoyed no true rights of subrogation and that the awards should not have been made in tort as they would constitute double recovery. In ordering a deduction of these damages from the Plaintiff’s award the BC Court of Appeal provided the following reasons:
Reasons for judgement were released this week by the BC Supreme Court, New Westminster Registry, making an interesting award with respect to past wage loss covered by a sick leave plan.
In this week’s case (Bulpitt v. Muirhead) the Plaintiff, a firefighter, was injured in a 2007 collision. He did not suffer an actual wage loss as “he received all of the wages he would otherwise have received had the accident not occurred as sick leave benefits to which he was entitled as an employee of the City of New Westminster“. These benefits were subject to a subrogation agreement which was put into evidence. The court expressed concern about whether this was a sufficient basis to make an award for past loss of wages. Instead, the court did not award money for past wage loss but used its inherent jurisdiction to make a blanket order that the Defendant provide full indemnity to the plaintiff in respect of any amount of the judgement that the plaintiff is, or becomes, obligated to re-pay the City. In reaching this decision Mr. Justice Weatherill provided the following reasons: [102] The only evidence proffered by the plaintiff during the trial in respect of a claim for past wage loss came in the form of a letter dated June 6, 2008 from a payroll clerk with the City of New Westminster to ICBC. It states: “Please find enclosed the completed Certificate of Earnings form for [the plaintiff]. I am also attaching a copy of the subrogation agreement from the Collective Agreement for The City Firefighters’ Union, Local 256. The gross pay lost up to May 30, 2008 due to [the Accident] is $20,365.56. Please be aware that his sick claim is still ongoing so this figure is not a final amount. When a settlement has been reached, please forward to my attention the total amount of earnings lost due to this accident, plus any interest attributed to those earnings, payable to the City of New Westminster. This will allow us to credit Mr. Bulpitt’s sick plan and return any gratuity hours that he lost due to the accident. [Emphasis added] [103] The attached “subrogation agreement” states:
Sick Leave Recovery
a) An employee may use sick leave credits for time lost through accidental injuries PROVIDED THAT prior to making a claim or commencing an action for damages against a third party in respect of such injuries, he shall notify the Employer of such claim and enable the Employer the opportunity to be represented in all proceedings or settlement discussions relating to the claim. Any such claim shall include a claim for loss of wages including pre- and post- judgement interest, and to the extent that recovery is made, such amount will be reimbursed to the Employer. The Employer will reimburse the employee, fifty percent (50%) of the cost of the legal fees certified by the employee’s legal counsel as being attributed to providing the wage/benefit loss claim. [104] During argument at trial, I expressed to plaintiff’s counsel my concern that this evidence was insufficient to prove the employer’s right to make a subrogated claim for the wage benefits it had paid to the plaintiff while he was unable to work due to his Accident-related injuries… [108] Regardless, it is my view that the June 6, 2008 letter and the excerpted portion of the Collective Agreement is evidence that the plaintiff’s sick leave benefits were not as they would have been but for the Accident. Clearly, there was a benefit plan that had been negotiated by the City and the firefighters’ union the terms of which were contained in the Collective Agreement. Further, this letter is evidence of what it will take to restore the plaintiff’s sick leave plan to its pre-Accident status. [109] In all cases, the court retains residual power to grant appropriate relief through its inherent jurisdiction: Anderson v. Buydens, [1998] B.C.J. No. 2675 at para.16 (S.C.). In this case, a miscarriage of justice would result if the plaintiff was awarded nothing for past wage loss because he received benefits from his employer yet the employer was able to “claw back” those same benefits by way of a right of subrogation. I am satisfied that there ought to be a provisional award for past wage loss in this case. The plaintiff is entitled to full indemnity from the defendants in respect of any amount to which the plaintiff is or becomes obligated to re-pay to the City of New Westminster in respect of benefits he received as a result of the Accident.
When an ICBC insured Defendant is awarded costs following successfully defeating a BC Supreme Court lawsuit, do the costs get paid to the litigant or to the insurer? To date there are contradictory authorities addressing this (you can click here to read a case awarding costs to the party and here for a case awarding them to ICBC).
Adding to the uncertainty, reasons for judgement were released this week by the BC Supreme Court, Vernon Registry, indicating that the personal defendant gets the benefit of the costs payment.
In this week’s case (Nadeau v. Okanagan Urban Youth & Cultural Association) the Plaintiff was injured when struck by a vehicle. He sued a personal defendant arguing he was the driver and also ICBC arguing that they were liable in the event that the personal defendant was not the driver. The Claim against the personal driver was ultimately dismissed and the claim against ICBC succeeded.
The Defendant was awarded costs, however, Mr. Justice Powers found that a ICBC should be responsible for payment of the costs to the personal Defendants. In doing so the Court provided the following reasons: [135] . I order that the plaintiff recover 85 percent of his costs from the defendant, ICBC, at Scale B. I also order that the plaintiff recover the costs he is required to pay to Mr. Usseni and James Mugambi and James Kibigi from the defendant, ICBC. I am satisfied that this is one of those cases which fall within Rule 14-1(8) of the Civil Rules, where the plaintiff should recover the costs it pays to those defendants as a disbursement in its bill of costs against the defendant, ICBC. [136] The central issue in this proceeding on liability was which vehicle struck the plaintiff and who was operating that vehicle. If it was not the vehicle owned by Ms. Mutanda and driven by Mr. Usseni, then it would be a vehicle operated by an unidentified driver. The only question with regard to liability of the defendant, ICBC, for the unidentified driver, was whether the accident occurred on a highway so that s. 24 of the Act applied. Of course, the extent of the negligence of the operator and of Mr. Nadeau were also in issue, but those were in issue in any event. [137] In this case, not only was it reasonable for the plaintiff to bring its action against Mr. Usseni and Ms. Mutanda, James Kibigi and James Mugambi, as well as ICBC pursuant to s. 24 of the Act, it was the only course available to the plaintiff. There were real and legitimate issues of fact as well as issues of law that could not be resolved without a proper trial. The cause of action against each defendant was the same. The only issue was which defendant was liable depending on findings of fact. [138] In my opinion, it would be unfair to require the plaintiff to pay the costs of Mr. Usseni, Ms. Mutanda, James Kibigi and James Mugambi, without the ability to recover those costs from the unknown driver, or in this case, ICBC, pursuant to their liability under s. 24 of the Act.
Earlier this year the BC Supreme Court released reasons for judgement finding that when a Defendant succeeds in a lawsuit and is awarded costs the order is for their benefit not their insurer. In short the Court held that ICBC has no subrogated right to costs awards under section 84(1) of the Insurance (Vehicle) Act. Reasons for judgement were released this week by the BC Supreme Court, New Westminster Registry, taking an opposite view of this issue.
In this week’s case (Habib v. Jack) the Plaintiff was injured while riding on a bus. She sued the bus driver and bus company but had her claim dismissed at trial. The Defendant was awarded costs with Madam Justice Ross giving ICBC the benefit of this costs award. The Court provided the following brief reasons: In the result, the defendants will have their costs. Under s. 84(1) of the Insurance (Vehicle) Act, R.S.B.C. 1996, c. 231, the Insurance Corporation of British Columbia (“ICBC”) is subrogated to its insured and is entitled to recover the costs to which the insured would be entitled. Accordingly, ICBC is entitled to recover the costs awarded to the defendants.
Given the contradictory recent court findings on this issue I suspect the BC Court of Appeal will be asked to weigh in on the topic of insurers subrogated rights to costs following the successful defence of a lawsuit.