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Tag: without prejudice communications

Court Finds ICBC's "Claim Payment Proposal" Extends Limitation Period

When you can’t agree with ICBC as to the value of your claim they sometimes provide a “Claim Payment Proposal” which, unlike a conventional settlement, does not resolve a claim but leaves the door open to litigation.  Reasons for judgement were released this week by the BC Supreme Court, Vernon Registry, considering the effect of such a proposal on a limitation period.
In this week’s case (Coombs v. LeBlond Estate) the Plaintiff was injured in a 2008 collision.  The Plaintiff and ICBC could not agree on the value of the claim and ICBC provided a Claim Payment Proposal.  The Plaintiff eventually sued for damages but did so after the expiry of his limitation period. ICBC applied  to dismiss the lawsuit on this basis.  The Plaintiff argued that the Claim Payment Proposal, despite being marked ‘without prejudice‘ was an admissible confirmation of the cause of action extending the limitation period.  Mr. Justice Betton agreed and dismissed ICBC’s application.  In doing so the Court provided the following reasons:
[23]         The act of marking a document with the clause “without prejudice” alone is insufficient to determine whether a document is privileged. Rather, the two conditions stated in Belanger must be present for a “without prejudice” letter to be privileged. There must be:
(a)      a dispute or negotiation between two or more parties, and;
(b)      terms of settlement offered.
[24]         There is no issue with condition (a) in the present case. The privilege issue turns on whether terms of settlement were offered by ICBC in their letter.
[25]         In my view, neither the letter of December 8, 2008 nor the attached claim payment proposal contain such terms. The defendants stress that there are terms attached, but they are not, in my view, terms of settlement.
[26]         In Rogic the first letter attaching the full and final release clearly communicated that the terms of settlement would be payment of $5,000 in exchange for a full and final release. If that release was signed, the action was concluded; accordingly, the letter was not admissible.
[27]         The second letter, as was noted in paragraph 32, did not contain any such terms and was admissible; however, it did not constitute a confirmation of a cause of action.
[28]         The defendants also cite Strassegger v. Harrison Hot Springs Resort Hotel Ltd., [1999] B.C.J. No. 1878 (S.C.) in support of their position. I find this case is not helpful to the defendants’ cause. Strasseggerwas decided on the ground that the correspondence could not be relied upon as confirmation of the action, not whether the document was privileged: see paragraph 11.
[29]         Here the effect of the letter, the cheque, and the claim payment proposal is to confirm the cause of action. It also informs the plaintiff as to ICBC’s view that the money represents a reasonable offer of settlement. It does not, however, impose any terms for the settlement of the action. It provides only that there be an acknowledgement of the receipt of the monies and that they would be deducted from any future recovery.
[30]         In my view, even if the plaintiff had executed the claim payment proposal, the terms contained in it are not the sort of terms contemplated by the Court of Appeal in Belanger or this court in Rogic as being terms of settlement of the dispute or negotiation.
[31]         Accordingly, the application of the defendants is dismissed.

Some Threats OK, Others Not So Much in Settlement Negotiations

In BC the law provides wide protection over confidential settlement discussions to permit parties in a lawsuit to have full and frank resolution attempts.  Typically settlement discussions made on a ‘without prejudice’ basis are protected by the law of settlement privilege and are not admissible in a subsequent trial.
There are exceptions to this general rule, however, and one such exception relates to communications with”threats of an egregious nature“.  Reasons for judgement were released yesterday by the BC Supreme Court, Vancouver Registry, demonstrating this.
In yesterday’s case (Monument Mining Limited v. Balendran Chong & Bodi) the parties were involved in a defamation lawsuit.  In the course of the lawsuit various settlement offers were exchanged.  The Plaintiff sought to introduce these into evidence.  The Defendants opposed arguing these were protected by settlement privilege.  Mr. Justice Goepel concluded the letters contained egregious threats and therefore privilege was lost.  In admitting the letters into evidence the Court provided the following reasons:

[25] In Evergreen Building Ltd. v. IBI Leaseholds Ltd., 2006 BCSC 1190 at para. 16, 58 B.C.L.R. (4th) 294, Kelleher J. said at para. 16:

[16]      Privilege is lost not by making a threat, but by threatening to do something of an egregious nature. For example, a threat to commence an action or to bring a motion does not destroy the privilege attaching to a settlement communication. On the other hand, a threat to commit perjury is not privileged.

[26] I find that the July 12 Letter does contain threats of an egregious nature. The July 12 Letter warns that if the settlement proposal is not accepted, the Clients may  bring claims against Monument, Avocet and their respective directors alleging fraud and other misdeeds and may inform the AIM, the TSX and Haywood Securities Inc. of the alleged fraudulent conduct. Such actions could be devastating for a publically traded company.

[27] Monument and Avocet were not parties to the D8 Litigation.  The reservation of rights set out in the July 12 Letter served no legitimate settlement purpose. The intent of the reservation of rights was to put improper pressure on entities not involved in the D8 Litigation. The threat is of such character that the public interest in its disclosure outweighs the public interest in protecting settlement communications.  Settlement privilege does not extend to the July 12 Letter.

[28] In the result, the Settlement Letters are admissible and will be marked as exhibits 37, 38 and 39 respectively.