In this ICBC personal injury appeal, ICBC appealed the amount of reductions made for future ICBC benefits. ICBC argued successfully that the contingency reduction was fatally speculative. There was no evidence of a risk that the claimant would not receive the benefits to which she was entitled.(Watson v. Fatin,2023 BCCA 82)

Personal Injury Trial Decision

The lawsuit arose from a car accident near Sproat Lake on Vancouver Island. At the time, the plaintiff  was riding as a passenger in a minivan driven by her husband. He attempted to make a left turn off the highway when the left rear corner of the minivan was struck by a truck. The truck had accelerated into the opposite lane of the highway in a failed attempt to pass them. The force of the collision spun the claimant’s minivan 180 degrees and damaged it so severely that it could no longer be driven.

After the judge released his reasons assessing damages, ICBC applied to have the total amount of the future care award deducted from the judgment. They argued all items listed by the judge were fully covered by the no‑fault benefits that would be paid by ICBC under Part 7 of the Insurance (Vehicle) Regulation and so must be deducted.

ICBC Mandatory Deductions and Contingencies

By reasons for judgment indexed as 2021 BCSC 1210, the judge held that Botox, kinesiology, physiotherapy, and massage treatments came within s. 88(1) of the Regulation and reduced the award for those items, but only by 80%. He described the 20% not included in the reduction as “a 20% contingency reduction to the deductions from the cost of future care award”. The judge did not reduce the award for aids and equipment or gym and pool membership. His decision reduced the damages assessment by $37,400, bringing the award for cost of future care to $17,600.

Contingency Discount is Impermissible as Double Recovery

In allowing the appeal the Court of Appeal stated:

[27]   In his para. 53, the judge linked the 20% contingency discount to his conclusion that some but not all of the deductions advanced were allowed. Respectfully, I conclude that there is no connection here between the judge’s conclusions on deductibility and the application of a contingency discount for the care items that he found were mandatory under Part 7.

[28]  The relevant question in determining whether the deduction itself can be reduced is whether there is a risk that Ms. Fatin will not receive the benefits she is entitled to. On the evidence, there is no basis apart from speculation to say that Ms. Fatin would, or could, be short‑changed under Part 7 for the benefits. Here, the judge was satisfied that any conditions that could apply to the four items of care he found are mandatory benefits were waived by ICBC. He rejected a discount for uncertainty that ICBC would keep its promises and he found there was no evidence to support a contingency reduction for a discrepancy between a Part 7 benefit and the actual cost of the care items. He did not find other Part 7 benefits, such as counselling, might be paid so as to escalate the pay-out of Part 7 benefits past the presumptive ceiling of $150,000.

[29] What is missing here for the application of a discount is some connection to the evidence plausibly supporting the view that there is the required realistic risk that the insured will not be fully compensated for future care in the event the award is reduced by the present value of the identified Part 7 care items. I conclude that the 20% contingency deduction applied by the judge is untethered to the evidence, and so is fatally speculative.

  On those findings, the court had no basis in principle or fact for a discount from the required deduction for Part 7 benefits for Botox, kinesiology, physiotherapy, and massage treatments. The court off appeal concluded that such a deduction represents, “impermissible double recovery”.

The appeal was allowed in respect of the 20% contingency reduction applied to the deduction of the award for cost of future care.



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