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ICBC’S Attempt to Put Cap on Disbursements Found “Unconstitutional” by BC’s Supreme Court

August 30, 2022

Successful personal injury plaintiffs are entitled to recover damages as well as disbursements incurred to advance their case. A new law that attempted to put a cap on disbursements in ICBC claims was recently struck down by the BC court in Le v. British Columbia (Attorney General), 2022 BCSC 1146, representing a major win for car accident victims.

Let’s break this decision down:

What Are Disbursements?

Disbursements include expenses such as court filing fees and process server fees, but also include more significant expenses such as fees for independent medical examinations, MRIs, and expert reports (e.g. medical opinions,  functional capacity evaluations, accountants, accident reconstruction engineer reports). Necessary disbursements vary depending on the severity of injuries and the complexity of issues at stake. That being said, expert opinion evidence often plays a crucial role in a case where a plaintiff seeks damages for personal injury. In these types of cases, the plaintiff has the onus of proving liability for the accident and the existence, causation, and present and future impacts of their injuries. Plaintiffs are frequently required to obtain evidence of medical and other experts to prove their claim, which can be costly.

Understanding The Disputed Cap on Disbursements in ICBC Claims

The disputed regulation applied only to actions for personal injuries arising from BC motor vehicle accidents. It created a “disbursement limit” or “cap” equal to 6% of the total damages awarded by the court or paid in settlement before trial. The law clearly operated to the benefit of ICBC. BC courts were critical of this, noting that the “thinly veiled purpose of this legislation is to improve the finances of ICBC by reducing the quantity of expert evidence in motor vehicle accident liability claims and to thus both reduce litigation costs and produce lower damage awards whether by way of settlement or at trial.”

Capping Disbursements Hurts Car Accident Victims

The disbursement cap put a very significant limitation on injured victims seeking damages caused by the negligence of another driver. The cost of assembling expert evidence necessary to prove all injuries and their impact often significantly exceeds 6% of total damages. If a plaintiff incurred disbursements that exceed the 6% maximum, the disbursements would have to be paid out of the plaintiff’s damage award, reducing the amount found to be necessary to replace lost income or provide necessary future care. In other words, the regulation denied accident victims part of the recovery they would otherwise be entitled to.

Disbursement Cap Impairs Access to Justice

The disbursement cap would prevent or discourage some plaintiffs from accessing the court for a decision of their case on its merits. That is a very serious access to justice issue. Some plaintiffs would be unable to marshal the evidence necessary to prove all aspects of their case without sacrificing other expenses or a portion of their compensatory damages. Plaintiffs would be forced to decide that they simply can’t afford to proceed with a portion of their claim or to present the evidence the court requires to consider an award under a particular head of damages. Others would have the evidence in the form of the necessary expert reports, but would be unable to proceed to trial because of the additional costs and risks associated with having those experts testify.

Why Was The Cap On Disbursements Overturned?

In the Le case, Mr. Justice N. Smith struck down the regulation capping disbursements, finding it unconstitutional and of no force or effect on other legal grounds. In doing so, Judge Smith pointed out some troubling things about the cap:

  • There is no necessary or direct relationship between the amount of a damages award and the amount of disbursements that had to be incurred to obtain it. An obviously severe or catastrophic injury and the resulting large damages may be easier to prove than a relatively less serious but more subtle injury.
  • Even identical injuries requiring the same disbursements for expert evidence can produce widely varying awards or settlements. For example, two plaintiffs with identical injuries may each receive an award that includes an amount for past and/or future loss of earning capacity. A plaintiff with higher pre-accident income will receive a higher total award. So, for example, a plaintiff who was a highly paid professional may receive a total award large enough to recover all or most of their disbursements on the 6% formula, while a plaintiff with the same injuries who worked at minimum wage may only recover a small portion.
  • The total amount of an award or settlement may differ between similarly-injured plaintiffs based solely on age. A plaintiff who is nearing retirement age will receive a smaller award for loss of future earning capacity, and therefore a smaller total award, than a younger plaintiff with similar pre-accident income.
  • The final amount of a settlement or judgment is not easily predictable at the time the costs for expert reports and/or testimony are incurred. Plaintiffs and their counsel therefore will not know what amount can be spent without risk of exceeding the 6% limit. This would require plaintiffs to make decisions about what part of their case they will be forced to pursue or abandon.

How Does The Court’s Decision Impact Your ICBC Claim?

You are entitled to recover disbursements incurred to pursue your claim if you were injured in an accident caused by the negligence of a vehicle driver. If you would like to know more about how the disbursement cap may have impacted your ICBC claim, or to discuss starting a ICBC lawsuit, we welcome you to call us today at 604-243-5825 or fill out our online form to request your free legal consultation with one of our team of experienced personal injury lawyers.

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