Counsel for successful appellants in leading case interpreting and applying section 83 of the Insurance (Vehicle) Act and Part 7 of the Insurance (Vehicle) Regulation to effect post-judgment deductions to a tort award to take into account no-fault benefits available to a plaintiff.
The Court of Appeal has recently reaffirmed key principles governing deductions in a motor vehicle action to take into account no-fault benefits and, in so doing, provided guidance that should facilitate efficient resolution of such issues following a trial.
Courts have long recognized both the irrational nature of the common law’s lump sum, once-and-for-all approach to awarding damages for personal injury and the need for legislative change in the area: see, e.g., Andrews v. Grand & Toy Alberta Ltd.,  2 SCR 229 (CanLII), at 236; and Watkins v. Olafson,  2 SCR 750 (CanLII), at 760. The British Columbia Legislature responded to the call nearly 50 years ago by enacting a partial no-fault benefits scheme for persons injured in motor vehicle accidents, now found in Part 7 of the Insurance (Vehicle) Regulation, B.C. Reg. 447/83.
Under the scheme, an injured person has the option of suing a tortfeasor and claiming certain no-fault benefits from their own insurer (ICBC). The obvious risk of the person recovering twice for the same loss is meant to be addressed in the tort action through the application of s. 83 of the Insurance (Vehicle) Act. Through its deemed release and mandatory deductions for no-fault benefits, that provision integrates the tort and no-fault compensation schemes, avoiding double recovery, and shifts responsibility for compensating for certain heads of loss from the tortfeasor to the no fault insurer. The Court has previously characterized the words of s. 83 as unambiguous and the court’s mandate under it as clear: the court is required to estimate the value of future Part 7 benefits, regardless of the difficulties in doing so, take those benefits into account, and the plaintiff is entitled to judgment entered for the balance only: Schmitt v. Thomson (1996), 18 BCLR (3d) 153 (CA) (CanLII), at paras. 18, 21, 23.
Unfortunately, and despite guidance provided by the Court of Appeal starting in 1978 (see Fisher v. Wabischewich (1978), 5 BCLR 335 (CA) (CanLII), and numerous subsequent decisions citing it), the application of s. 83 has generated increased litigation in the Supreme Court of British Columbia over the last decade, thereby delaying resolution and increasing the costs of trial proceedings. Fortunately, the Court’s decision in Del Bianco contains clear reasons addressing the following five main points and issues frequently raised by parties or considered by the courts (or both) in the context of an application for deductions under s. 83.
First, plaintiffs opposing s. 83 deductions have sometimes blurred the lines between a tort defendant and its insurer. The distinct positions of each must, however, be recognized, and the Court underscored that ICBC is not a party to the tort action in which the s. 83 deductions are being sought; it is the tort defendant, not ICBC, who is seeking the deduction.
Second, s. 83 deductions have occasionally been opposed by plaintiffs and denied by courts because of ICBC’s pre-trial adjustment or denial of no-fault benefits. The Court reaffirmed that ICBC’s pre-trial adjustment of a no-fault claim is not a relevant consideration on the deduction application in the tort action – especially when, as is now frequently the case, the defendant obtains affidavit evidence from an ICBC representative committing to pay the plaintiff future benefits. In such cases, the Court has now directed trial courts to presume that ICBC (a Crown corporation) will honour the commitments it makes with respect to payment of no-fault benefits.
Third, the Court rejected evidence of a plaintiff’s worries about ICBC’s future financial viability as a basis for denying deductions. Similarly, it considered that it would be too speculative to suppose that future regulatory changes might adversely affect a plaintiff’s entitlement to no-fault benefits or that a future government would abolish ICBC without ensuring it kept commitments made to insured persons and the courts. On these issues, the Court’s comments echo recent lower court decisions concerning the appropriate evidence to be tendered by counsel and considered by the court: Aarts-Chinyanta v. Harmony Premium Motors Ltd., 2020 BCSC 953 (CanLII), at paras. 11-15; and Sidhu v. Alton, 2021 BCSC 265 (CanLII), at para. 70. An application for s. 83 deductions results in a final order and counsel must maintain standards of admissible evidence and make timely objections when those standards have not been observed.
Fourth, the Court also rejected as irrelevant the fact that it might not be possible to know the annually-adjusted rates for no-fault benefits in the future, or that an insured person might have to submit claims for no-fault benefits for an extended period (here, over 40-years). Such requirements are standard features of benefits plans and do not necessarily create a barrier to making deductions on a s. 83 application.
Finally, a frequently-litigated issue in the last couple of years is whether, through affidavit evidence tendered to support deductions sought by the tort defendant, ICBC can waive provisions of the Insurance (Vehicle) Regulation. For example, an insured person may be entitled to a certain number of pre-authorized treatments. The need for ongoing access to treatments beyond that number must, however, be certified by the insured person’s physician or ICBC’s medical adviser. On a deductions application, ICBC frequently accepts the court’s findings of fact about the need for treatments in excess of the pre-authorized number and waives the medical certification requirement. The Court reaffirmed that ICBC has the power under s. 85 of the Insurance (Vehicle) Act to waive such terms and conditions that operate in its favour. In its view, such waivers by ICBC are a reasonable thing to do and do not create a new form of coverage.
Ultimately the Court’s decision in Del Bianco provides authoritative guidance on issues that frequently frustrated the early or efficient resolution of s. 83 deduction issues and should reduce the need for such post-trial litigation.
The Court of Appeal for British Columbia has affirmed that the holder of a registered judgment against title under the Court Order Enforcement Act obtains that interest subject to the...