BC Supreme Court denies injunction against cap on disbursements in motor vehicle injury cases

The BC Supreme Court has denied an application by the Trial Lawyers Association of British Columbia (TLABC) to suspend the regulation imposing a cap on recoverable disbursements in motor vehicle personal injury actions.

The petitioners sought an interlocutory injunction against section 5 of the Disbursements and Expert Evidence Regulation (DEER), pending a constitutional challenge. The Attorney General of British Columbia and Isabel Leontine Snelgrove opposed the application. Snelgrove is the defendant in a separate action for injuries sustained in a motor vehicle accident.

The DEER regulation is part of a series of legislative reforms aimed at addressing the financial crisis in British Columbia’s automobile insurance regime, overseen by the Insurance Corporation of British Columbia (ICBC). A 2017 report by Ernst & Young attributed the problems at ICBC to the province’s tort-based litigation model, noting that litigation costs accounted for a significant portion of ICBC’s budget. To curb overspending, the report suggested limiting ICBC’s exposure to disbursements in personal injury actions, among other measures.

In response, the provincial government enacted several legislative reforms. One such reform included DEER, which caps recoverable disbursements in motor vehicle injury cases to 6 percent of the total damages awarded or settlement amount, with specific exceptions. The cap aims to reduce litigation costs and promote ICBC's financial stability.

The petitioners argued that the cap was unconstitutional and sought to have it declared of no force and effect. They contended that the cap unfairly prejudiced plaintiffs, forcing them to either incur additional disbursements at their own expense, forego necessary disbursements, or apply for exceptions that could compromise solicitor-client and litigation privilege.

However, the Supreme Court found these arguments speculative and unsupported by evidence. It noted that plaintiffs could still seek ICBC’s consent to exceed the cap or bring applications under s. 5(6) of DEER without necessarily disclosing privileged information. The court also emphasized that the regulation did not delay or impede access to healthcare services but merely affected financial compensation.

Furthermore, the court highlighted that the balance of convenience favoured the continued operation of duly enacted legislation. It stressed the public interest in maintaining legislative measures designed to address ICBC's financial challenges.

In conclusion, the BC Supreme Court ruled that the petitioners failed to demonstrate a serious question to be tried, the risk of irreparable harm, or that the balance of convenience favoured granting an injunction. Consequently, the application to suspend the operation of the disbursement cap was dismissed.