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ICBC Settlement of Personal Injury Claims Subject to Proportionality Test


In this costs of ICBC settlement case (Dhillon v. Bowering, 2013 BCSC 1178) the claimant was injured in two motor vehicle accidents in British Columbia. ICBC, on behalf of the defendants, made  initial offer to settle the two car accidents for $22,500 all-inclusive. That offer was later increased to $35,000 plus provable past wage loss, special damages, and costs and disbursements. At some point in time the claimant made a formal offer of $320,000.
After these offers were made ICBC tried to adjourn the trial but was denied by the court. ICBC then  increased their formal offer to $145,000, plus costs and disbursements. Two days later and just one day before trial that offer was increased to $175,000, plus costs and disbursements. The injury claimant accepted the ICBC offer of settlement. However no agreement could be reached on the claimants disbursements.
Before settling the case the claimant had incurred significant expenses to prepare for trial but ICBC put in dispute over $34,000.00 of these expenses. These case expenses included costs for medical reports, MRIs and discovery transcripts.
The injury claimant’s lawyer had advised the ICBC adjuster that he would be retaining an expert to provide the necessary medical evidence in order to respond to a settlement offer from ICBC. The adjuster did not object to this and asked for a copy of the report. In the application for payment of this report ICBC refused to pay the full amount which included a charge from CIRA.  CIRA is a provider of independent medical evaluations and services for a variety of industries across Canada, including medical-legal reports for use in litigation.
Master Sainty applied the relatively new test of proportionality in awarding the claimant the cost of the medical report which was commissioned before settlement with ICBC.  As the court stated at paragraph 23:

I must also consider “proportionality” in making my decision. But proportionality is, in my view, a two-way street. The amount of money at issue in an action (large or small) may have a bearing on both the necessity and propriety of a disbursement and whether it is reasonable in the circumstances. Here, the defendants’ initial offer to settle this matter (made August 11, 2009) was the sum of $22,500 all-inclusive. That initial offer was later increased to $35,000. Following service of all of the plaintiff’s experts’ reports, the formal offer increased to $145,000 and, as noted earlier, the actions settled the Friday before trial for $175,000 plus costs and disbursements. No doubt the experts’ reports played a part in the settlement offer and influenced the outcome. It was not until the medical reports and the Functional Capacity Evaluation were provided to the defendants that the amount of the offer increased to an amount the plaintiff was prepared to accept. In my view (and I agree with Ms. Dewar’s submissions on this point), proportionality (which I must consider in assessing costs per Rule 14-1(2)(b)) refers to the significance of the claim; either small or large.

Posted by Personal Injury Lawyer Mr. Renn A. Holness, B.A. LL.B.

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