ICBC tac­tics sure to back­fire: lawyers

Vancouver Sun - - FRONT PAGE - IAN MULGREW imul­[email protected]­ twit­­mul­grew

B.C. trial lawyers claim ICBC is with­draw­ing set­tle­ment of­fers and low­balling vic­tims with a tough-nosed ap­proach that will back­fire, but the Crown agency says it’s only try­ing to con­tain stag­ger­ing le­gal costs.

Matthew Fa­hey, of the West­point Law Group, said he was go­ing crazy Fri­day morn­ing after an about-face by the In­sur­ance Corp. of B.C.

“In the mid­dle of a ne­go­ti­a­tion —I CBC was at 40 K, I was at 50 K — ad­juster then says all of­fers gone, can now only of­fer 20K,” Fa­hey said.

“Ad­justers have ex­plained that it is part of a new strat­egy. ICBC is with­draw­ing all of­fers, mak­ing lower of­fers and not ne­go­ti­at­ing there­after. Now we have to lit­i­gate the mat­ter, which will cost ratepay­ers a lot of money.”

Guy Col­lette, of Col­lette Par­sons Har­ris, said an ICBC ad­juster sim­i­larly told him this week that an of­fer was no longer avail­able after Mon­day in a case in­volv­ing a 63-year-old woman pedes­trian hit by a truck.

And any fu­ture of­fer would be for less money, he added.

“I was ad­vised there is now a meat chart where the pa­tients would be char­ac­ter­ized on a oneto-five scale, no con­sid­er­a­tion of the in­di­vid­ual, just rate the in­jury: one be­ing the most mi­nor and five be­ing the most se­vere,” Col­lette said. “And there will be a cap on non-pe­cu­niary dam­ages for each of those num­bers over which they will not be able to ex­ceed. Pe­riod.”

Other lit­i­ga­tors and the Trial Lawyers As­so­ci­a­tion of B.C., which has about 1,500 mem­bers, ex­pressed sim­i­lar con­cerns, say­ing the move would cost ICBC a small for­tune be­cause many more cases would un­nec­es­sar­ily go to trial.

More than bad busi­ness, they in­sisted such an ap­proach reached the level of a mis­car­riage of jus­tice and bad-faith ne­go­ti­a­tions.

ICBC, though, de­nied any machi­avel­lian in­tent and blamed sky-high in­creases last year in le­gal ex­penses for trig­ger­ing tougher scru­tiny of set­tle­ment of­fers.

In the last five years, there has been a 43 per cent in­crease in the cost of in­jury claims, reaching some $3.67 bil­lion last year, ICBC said in a state­ment.

“In par­tic­u­lar, these costs are be­ing driven by lit­i­gated in­jury claims — since March 2017, the dollar value of set­tle­ments de­manded by plain­tiff lawyers for lit­i­gated files has in­creased by 30 per cent, while the av­er­age cost of closed lit­i­gated in­jury claims has risen by 20 per cent from $101,920 in 2017 to $121,826 in our cur­rent fis­cal year.”

Rea­son­able rate hikes won’t cover those kinds of in­creases, an ICBC spokesper­son said: “We have con­stantly been look­ing for ways to ad­dress rising in­jury claims costs and the pres­sure they put on in­sur­ance rates and it’s clear we need to con­tinue to find fair and rea­son­able ways to get the cost of the av­er­age in­jury claim down to more of a historical, in­fla­tion­ary trend rather than the sharp in­creases we’ve seen over the past year — in­creases of 20 per cent or more in some cases.”

Nev­er­the­less, there was no di­rec­tive to cap claims, no so­called meat chart, and no magic $15,000 fig­ure.

ICBC set­tles 15,000 claims a year, tak­ing fewer than 200 to trial, and closed more files than ever last year with an av­er­age pay­out of $16,500.

Un­der changes that take ef­fect April 1, how­ever, there will be a cap of $5,500 on pay­outs for pain and suf­fer­ing for mi­nor in­juries.

“In our view, ICBC is act­ing in­ap­pro­pri­ately on leg­is­la­tion and reg­u­la­tions that do not be­come law in this prov­ince un­til April 1,” said Ron Nairne, pres­i­dent of the Trial Lawyers As­so­ci­a­tion.

“They have done so with­out any pub­lic com­mu­ni­ca­tion or ad­vance warn­ing of this shift. Thou­sands of in­di­vid­u­als across this prov­ince who have been in­jured in a car ac­ci­dent are hurt­ing now. They need fi­nan­cial re­lief now, and ICBC is tak­ing that op­tion off the ta­ble.

“When will the as­sault on the rights and per­sonal fi­nances of in­jured Bri­tish Columbians end?”

In al­most 90 per cent of cur­rent cases, how­ever, the com­pany said it hasn’t even heard from plain­tiffs about their ac­tual con­di­tion, the amount they’re seeking or why they de­serve it.

Still, in the dark, ICBC has made of­fers to set­tle on nearly 60 per cent of those files.

“We cur­rently only have plain­tiff de­mands on less than 10 per cent of our open in­jury claims, mak­ing it very dif­fi­cult for us to make ap­pro­pri­ate set­tle­ment of­fers,” the spokesper­son said.

“When de­mands are be­ing made by a plain­tiff, those de­mands have in­creased by 30 per cent since 2017.”

At­tor­ney Gen­eral David Eby in­tro­duced mea­sures hop­ing to re­sus­ci­tate the ail­ing cor­po­ra­tion, say­ing al­most half of the av­er­age set­tle­ment wasn’t go­ing to the in­jured per­son but to­ward le­gal ex­penses and fees.

Yet Eby’s num­bers have been dis­puted, his touted $1-bil­lion an­nual sav­ings called into doubt, and the min­is­ter dubbed “Trump-like.”

“I know that Mr. Eby has been say­ing that le­gal costs, de­fence costs and lit­i­ga­tion costs are a big issue with re­spect to ICBC’s fi­nan­cial prob­lems,” Col­lette said. “I don’t ac­cept that. If that premise were true, what they are do­ing now does not go to rem­edy that.”

John Green, of North Van­cou­ver’s Han­son & Co., noted there were other prob­lems — the in­sur­ance giant’s re­cent of­fers were ridicu­lous and he had two cases in which the courts awarded dou­ble and triple its of­fer.

“Now the judge is mulling award­ing dou­ble costs against ICBC,” he added. “Their of­fers have been strato­spher­i­cally out to lunch re­cently. I don’t know what’s go­ing on with them, but I do know that in the cases I’ve had with them re­cently they’ve sunk an enor­mous amount of money for a poor re­sult.”

Green was equally crit­i­cal of the new ap­proach.

“If they start to cut off of­fers, I know I’ll pretty much be in trial for the next three years,” he said. “Which is good for as­so­ciate lawyers who are look­ing to work for me, I guess, but I don’t know how ef­fec­tive it is for sav­ing money. If they do take that hard­line ap­proach, firms like mine will have to be in court on more cases. In­stead of the one out of 10, it will be more like nine out of 10.”

B.C. was the last prov­ince where driv­ers sued each other un­der a purely lit­i­ga­tion-based in­sur­ance scheme and the in­com­ing mi­nor-in­jury cap is slightly higher than Al­berta’s $5,020 and On­tario’s $3,500 ceil­ing, but lower than those in New Bruns­wick, Nova Sco­tia, P.E.I. and New­found­land.

Que­bec and Man­i­toba have no­fault in­sur­ance, which re­stricts law­suits, and Saskatchewan has a dual sys­tem, with a $5,000 cap on lit­i­ga­tion.


At­tor­ney Gen­eral David Eby has made a num­ber of changes to ICBC, tout­ing $1 bil­lion in an­nual sav­ings, a claim that lawyers say makes Eby seem “Trump-like.”


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