B.C. court refuses to reduce damages award without proof of entitlement to insurance benefits

The benefits previously paid or will be paid by the public insurer may be deducted from the award of damages to an insured plaintiff as long as the plaintiff’s entitlement to these benefits are proven, B.C. Supreme Court had ruled.

The court awarded Daryl Edward Cook damages worth $199,292.92 on account of three separate actions arising out of motor vehicle collisions. In Cook v. Kang, 2022 BCSC 408, the defendant in the most recent collision applied for deduction of the award under s.83 of the Insurance (Vehicle) Act.

The act reduces liability by amounts that the plaintiff has received or is entitled to receive as benefits under the Insurance (Vehicle) Regulation. The court said that the purpose of the law is to remove the burden of future care from tortfeasors and place it on the insurance provider. The law also seeks to prevent double recovery or double compensation on the part of the plaintiff in actions arising from motor vehicle collisions.

Following this scheme, the defendant asked the court for a deduction of $17,841.18 from the Cook’s award of special damages on account of benefits that had already been paid to him under the insurance regulation. The defendant likewise sought for an order reducing Cook’s award for costs of future care by $92,607 on account of future benefits that Cook will be entitled to receive under the insurance regulation.

The court said that prior jurisprudence had laid down a two-step test for determining whether deductions should be made under the act. First, the court should determine whether the plaintiff has received or is entitled to the benefits under part 7 of the insurance regulation. Second, once entitlement is established, the court should estimate the amount of the deduction.

Deductions for benefits previously paid

The court awarded the plaintiff $39,995 in special damages, which was inclusive of specific medications, physiotherapy costs, and gym membership. The Insurance Corporation of British Columbia (ICBC) had already reimbursed the plaintiff for these expenditures in the amount of $16,847.04. As a result, the court ruled that this amount should be deducted from the damages award.

Nonetheless, the court found that ICBC’s reimbursement to Cook was lacking by $967.14. An ICBC representative stated that he was authorized to pay this amount irrevocably, unequivocally, and unconditionally to the plaintiff. However, the court pointed out that even if the ICBC representative was authorized to pay the amounts, they have apparently not been paid. In the end, the court refused to deduct this amount from the damages award since it was not in fact paid to Cook and consequently, there was no real risk of double recovery.

Deductions on account of entitlement to future benefits

Future benefits were in the form of medication, physiotherapy, kinesiology, and gym membership fees. The court noted that in order to claim benefits, ICBC could require an insured to submit to a health examination by an ICBC-selected health care practitioner, or to accept any medical treatment or rehabilitation program that ICBC would require. If the insured refuses to do so, ICBC could refuse to provide benefits.

The court said these requirements could potentially restrict an insured person’s entitlement to the benefits under the insurance regulations. The court found that ICBC does not have a good working relationship with Cook, and that Cook is mistrustful of ICBC. These circumstances create a risk or uncertainty as to Cook’s future entitlement to the benefits under the insurance regulation, according to the court. Due to this uncertainty, the court concluded that the defendant had failed to discharge its burden of proving Cook’s entitlement to future benefits. In the end, only the deduction which pertains to the amount already paid by ICBC was allowed by the court, so the damages award was reduced to $182,445.88.