B.C. Civil Resolution Tribunal refuses to set aside minor injury settlement

The validity of a settlement agreement depends on whether it was fairly negotiated based on the available knowledge at the time, the B.C. Civil Resolution Tribunal has found.

“This case is a lesson in showing that it is prudent for injuries to first run their course before settling,” wrote Erik Magraken for BC Injury Law Blog, in a post analyzing the case. “Generally, it is difficult to set a settlement aside once one is reached with the law only permitting this in limited circumstances.”

In Naqvi v. ICBC, 2020 BCCRT 995, the applicant got into a motor vehicle accident in May 2019. A doctor diagnosed him with sprains of the neck, lower back and right shoulder, with an estimated six to eight weeks until full recovery. The applicant missed two days of work and went through rehabilitation therapy.

In September 2019, the applicant executed a settlement agreement with the respondents, which entitled him to $6,890, finally settled the injuries, losses and damages and released and discharged the respondents from all actions relating to the accident.

However, in January 2020, the applicant experienced a flare-up of his injuries and received a diagnosis of a disc bulge. When the Insurance Corporation of British Columbia refused to set aside the settlement agreement and release, the applicant asked the Civil Resolution Tribunal to make a minor injury determination.

The applicant contended that his injuries no longer fell under the definition of “minor injuries” as defined by s. 101 of the Insurance (Vehicle) Act, so they should not have been settled as such. If his injuries were found to not be minor, the settlement agreement should be set aside, the applicant argued.

The tribunal cited McIsaac v. McIsaac, 2010 BCSC 691, which stated that the applicant attempting to have a settlement agreement set aside should show that he was unfairly induced to accept, or show that the settlement is grossly unfair or grossly inadequate. The McIsaac case mentioned one possible test to assess the validity of the settlement, which is to address the question of “whether, when the settlement is looked at in the light of the adjuster’s knowledge at the time the settlement was entered to, the bargain was fair, just and reasonable.”

The Civil Resolution Tribunal rejected the applicant’s request for a minor injury determination. The tribunal found the settlement agreement to be valid, fair, just and reasonable and not grossly unfair or unconscionable.

The evidence showed that the applicant only took two days off from work until his symptoms worsened. At that point, around four months had passed since he’d signed the settlement agreement.

The applicant argued that the settlement was made under the mistaken belief that his injuries were minor. The tribunal said that the validity of a settlement agreement is assessed based on whether it was fairly negotiated in accordance with the knowledge available at the time. The subsequent discovery of a more serious injury will not invalidate the settlement agreement.