In February of 2021, the British Columbia Government enacted new regulations limiting the amount of “disbursements” (expenses incurred to make a claim and prove it in court) that an injured person is permitted to claim from a negligent driver, either as part of a settlement with ICBC or following a successful trial.
In addition to the pre-existing limit on the number of expert reports a party may use at trial, the new regulations limit to $3,000 the amount a party may claim for reimbursement of the cost of each report. Furthermore, there is now an ultimate limit to the total disbursements a party may claim from a negligent motorist – that limit has been set at a fraction (6%) of the total award or settlement.
Previously, the law limited the disbursements one could claim to reasonable and fair expenses, which gave the court the flexibility to consider the circumstances of the case before determining what was appropriate. To be considered “reasonable”, the expense must have been justified, given the nature of the claim. To be considered “fair”, the expense must have been justified, given the nature of the service provided. Although disbursements undoubtedly do still need to be both reasonable and fair, now no matter how justified an expense may be, our government has set a new limit to what expenses a person can demand that a negligent motorist (or ICBC) repay.
In most cases, this new limit will inevitably mean that injured parties will either refrain from incurring expenses that may be important for their claim or will have to pay these expenses out of money that was meant to compensate them for their losses.
To be clear, this limit does not apply to any other type of claim, only to claims made as a result of a motor vehicle accidents that happen (or have happened) in BC.
These two changes, which are retroactive, are expected to make ICBC much more profitable. Unlike other litigants, ICBC will be insulated from some of the cost of litigation, permitting it, if it wishes, to conduct more trials at less cost.
Conversely, people who were injured in vehicle accidents will now face greater costs and greater risk at trial. These consequences can be especially acute for low income earners who are more likely to make a claim for less money and who may also be less capable of affording the expense personally. To the extent those additional costs make the dispute unaffordable, some litigants may choose to accept a settlement offer that is significantly less than their claim is worth so as to avoid trial. To understand why, it is helpful to understand a few things about the costs associated with proving an injury claim at trial.
In every single case that is filed, and for good reason, ICBC routinely instructs the lawyer for the negligent motorist to deny that the claimant was injured and to require the claimant to prove at least three things:
- The nature of their injury;
- That the injury happened as a result of the accident;
- That the injury has already, or will in the future, lead to some kind of loss that would not otherwise have happened.
In almost every single case, expert opinion evidence is used to prove these three things. In the most simple of cases, just the opinion of the claimant’s family doctor may be sufficient. However, many cases include opinion reports from one or more doctors who specialize in the particular type of injury caused by the accident.
In addition, the law doesn’t allow doctors to just write a short note summarizing their opinion or to just come testify in court, which might be unfair to the negligent motorist. Instead, the law requires a doctor’s opinion to be in writing and to have a certain format so that the basis for the opinion is clearly expressed. To be given any weight by a judge, the opinion must almost always be based on a physical examination of the injured person. In addition, people are always expected to provide the judge with the best evidence available. For example, if you saw one doctor 100 times, and another doctor only once, but then only gave the judge a report from the physician you saw just the one time; that could be a problem. As another example, if you saw an expert for assessment and treatment, but didn’t provide the judge with an opinion report from that expert, that could be a problem, too. When those things happen, it is common for defence lawyers to ask the judge to make an adverse inference: in other words to ask the judge to infer that, had you obtained a report from that expert, it would not have supported the claim.
As a result of these court rules and expectations, experts who write reports normally meet with the injured person and conduct an interview and a physical examination, read through medical records from both before and after the accident, consider their opinion, and then have to write it all out in a report for the judge. That means the reports often cost a few thousand dollars, and when it comes to the really specialized surgeons, may cost much more. None of those rules are changing, and so the associated costs aren’t changing, either.
Until recently, a simple case might have just one report, while an average case would probably have two or three reports, and a more complex case might have 10 or more reports. Last year, the BC government changed the law so that now a simple case may now have only one report, and no case may have more than three reports unless there is consent by all parties or unless a judge permits an extra report. However, the new regulations say that regardless of how many reports might be permitted, and regardless how much they actually cost, unless your case falls into one of the exceptions outlined in the regulations, the negligent motorist never has to compensate anyone for more than $3,000 per report, and no matter how many reports are permitted, never has to compensate anyone for more than 6% of the value of the claim for all disbursements. In other words, to keep the math easy, in a claim where the total award is $100,000, ICBC will only have to pay $6,000 for all disbursements.
However, since the average claim is settled by ICBC for much less than $100,000, the disbursements ICBC is responsible for under these new regulations may not even be sufficient to pay for the cost of one medical report. Now, consider a case where the injured person doesn’t speak English, or not very well, and is also required to hire a translator to understand what their doctors say, what their lawyer recommends, and what is happening at trial. That translation can cost thousands of dollars, too. We haven’t yet contemplated the other sorts of routine disbursements that must be incurred when proving an injury claim, but it is exceedingly rare for disbursements to be less than $3,000 in a litigated claim. So, statistically speaking, more than 4 out of 5 claimants are likely to suffer some financial loss because of these new regulations.
Interestingly, the new regulations do not appear to set a limit on disbursements if the claim fails and is dismissed at trial. Thus, if the plaintiff wins at trial, the government mandates a 6% limit on disbursements the claimant may recover, but if the defence wins, ICBC faces no similar limit and can demand that the claimant pay the full disbursements incurred by ICBC in defending the claim. One would hope that either ICBC will be judicious in instructing defence counsel to make such claims and perhaps reserve them for the most egregious of circumstances, or the court will exercise its jurisdiction to award and determine costs in accordance with what seems to be the spirit of these regulations. However, as it stands, the regulations do not appear to restrict what can be claimed by ICBC.
It has been said that the whole point of the general rule requiring the party who loses at trial to pay the disbursements of the successful party is to encourage out-of-court settlement. The rule serves to encourage litigants to make a reasonable assessment of the most likely outcome of a trial and then use that assessment to make a fair offer to settle in advance of trial. Litigants who failed to do that, and who lost at trial, always had to risk making this additional payment. That is now no longer the case, at least for negligent motorists in BC.
The fact is, these new regulations will make it more difficult for many people to access justice, and will result in particular hardship for low income earners and people who are not fluent in English. In effect, by enacting these regulations our government has tilted the playing field, making it more difficult for all people injured in motor vehicle accidents to prove their injury at trial, and more expensive for them to take a legitimate case to trial.
 The limit on the number of reports was made retroactive to February 6, 2020, unless prior to that date a trial had already been booked to start before October 1, 2020. Similarly, the new disbursement limits have been made retroactive to all cases unless a notice of trial was served on ICBC before August 12, 2020. If so, some exceptions may apply.
 In each of the five fiscal years ending in 2016 through 2020, the number of claims from pre-April 1, 2019 accidents that resulted in payments to claimants of $50,000 or less was consistently over 80%.