ICBC faces $400-million hit after court overturns limits on medical experts in cases
Credit to Author: Rob Shaw| Date: Thu, 24 Oct 2019 21:35:46 +0000
VICTORIA — B.C.’s Supreme Court has overturned new rules intended to limit the use of experts in automobile insurance lawsuits, delivering a blow to the NDP government’s attempts to stop financial losses at the Insurance Corp. of B.C. and potentially endangering the provincial budget surplus.
The immediate effect is a $400 million financial hit for ICBC in a 2019-20 fiscal year in which the bottom line was expected to improve to a $50-million loss following a $2.5 billion loss during the previous two years.
Thursday’s judgment by Chief Justice Christopher Hinkson ruled that the government’s limit of three expert reports was unconstitutional because it violated the exclusive powers of a court’s control over its processes.
“I find that the impugned rule infringes on the court’s core jurisdiction to control its process, because it restricts a core function of the court to decide a case fairly upon the evidence adduced by the parties,” wrote Hinkson.
“The effect of the impugned rule is to require the court to play an investigatory function in place of its traditional non-adversarial role.”
Attorney General David Eby admitted the decision was a large setback for his efforts to reform the money-losing Crown auto insurer.
“It is difficult when we bring a big reform measure like this forward to lose in this way, and I won’t pretend it’s not, but that doesn’t mean we’re going to give up,” he told reporters Thursday.
“We have a number of potential responses depending on the decision and we’re looking at it carefully to figure out how we’re going to go forward.”
Appealing the decision, or introducing new legislation, are some of the options government is considering, said Eby.
“I think that everybody agrees that the costs of going to court to try and resolve the matter are too high,” said Eby.
“So it may be we need to look at other approaches to address this issue. We had certainly hoped we could find efficiencies in the court rules. More expedited processes. The United Kingdom has an entire set of court rules, limited exclusively to automobile collisions because they recognize that they had an issue. Our justice system is based on theirs. We’ll have to look at all our options. This is obviously a challenging decision for us and our reform efforts here.”
Opposition Liberal leader Andrew Wilkinson accused Eby of mismanaging the ICBC reforms, which have resulted in rate increases for some inexperienced drivers due to a rate redesign.
“NDP Attorney General David Eby blatantly disrespected the law and had to be put in place by the BC Supreme Court today,” said Wilkinson. “This is an embarrassment and British Columbians deserve an apology.”
The challenge was brought by Gregory Crowder, who was involved in a May 30, 2017 rear-end collision involving a tractor trailer that left him with traumatic brain injuries, among other medical problems. His legal action alleged the limit on expert medical reports would not have made it possible to outline the scope of his injuries and lifetime of necessary future care. B.C.’s Trial Lawyers Association — which represents personal injury lawyers opposed to government’s ICBC reforms — joined the case.
They argued it was an unprecedented interference with the court’s control of its process that encroached on the exclusive powers of the court and would create an undue hardship for plaintiffs.
The court largely agreed, though it stopped short of saying it created an undue hardship.
Hinkson wrote that the limit of three expert reports in auto insurance cases was “practically unworkable” and that government’s offer to allow joint experts and court-appointed experts were not satisfactory replacements.
“We think Mr. Justice Hinkson came down with a very considered and balanced ruling,” said Ron Nairne, a Vancouver lawyer who is the president of the Trial Lawyers Association.
“In our view it was certainly an overreach (by government). It was an overreach in the sense it was unfair. The more seriously injured a person is, the more they were harmed by this new rule.”
The decision overturns cabinet orders that Attorney General David Eby made in February, in which he declared that ICBC and plaintiff lawyers in automobile injury court cases would only be allowed to use only one expert each and one report each for fast-track claims valued less than $100,000, and up to three experts and three reports each for all other claims.
The change was supposed to save “in excess of $400 million” while encouraging faster settlements through courts and fewer costs by all sides.
Expert reports include those on medical conditions and wage loss. But they also account for millions of dollars in expenses annually to the provincial auto insurance system.
The government cap did leave some discretion for judges to permit additional court-appointed or joint experts.
The $400 million impact of the court ruling will also pressure the NDP government’s provincial budget. The projected surplus is $179 million for the fiscal year ending March 31, 2020, meaning the $400 million could either send the province into deficit or require Finance Minister Carole James to dip into contingency funds.
James already had to use $300 million in contingency funding earlier this year to keep the budget from dipping into deficit after weak economic results led to a dip in provincial revenue.
“It’s a big problem,” Finance Minister Carole James told reporters Thursday after the court ruling was released. “And I said that at first quarter (financial results) how that we could be talking about a half a billion dollars.
“And we already have problems as you know with ICBC, but, again, until we do the analysis until we take a look at what options are available for us and we take a look at the court decision itself it’s too early to say the impact.”
James said she has prudence built into the budget that could address some of ICBC’s financial impact. “It’s much too early to say.”
The court petition challenged the three-expert limit on three grounds.
In the first, the challengers argued a convention exists that court rule changes should only be allowed if approved by a rules committee that includes judges and lawyers. But Hinkson said he could find no such convention, and even if it existed it would have no legal force.
In the second point, the challengers argued that government used a cabinet order to make the expert report cap, and that cabinet orders can only change “practice and procedure” for courts, not “the means by which particular facts may be proved.”
Eby’s ministry tried to argue that there are also cabinet orders that set rules on expert reports, such as 84-day deadlines. But Hinkson said the report cap is a change in law and cabinet lacks the authority. Hinkson acknowledged the legislature could enact the same expert report cap by amending the Evidence Act, and so he went on to address the constitutionality of the overall issue.
The third argument centred on whether the government’s limits on expert reports infringed on the core jurisdiction of a superior court to hear and determine the cases before it, which is protected under the Constitution.
Eby’s ministry argued that core jurisdiction is narrow and the legislature has the power to restrict the ability of litigants to submit evidence.
Hinkson disagreed.
“The impugned rule does more than limit the court’s discretion; it eliminates it, and that is the petitioners’ complaint,” he wrote.
The rule would mean the court has to “play an investigatory function by appointing expert witnesses, in contrast to its usual impartial, adjudicative role” by deciding if and when to appoint its own expert witnesses to add to the information beyond the cap on expert reports, Hinkson wrote.
“If the expectation is that the court would identify the needed evidence once counsel have led the evidence that they have chosen to place before the court, then it is practically unworkable. It would lead to adjournment of trials, scheduling difficulties affecting other cases and litigants, and could be unfair to a party that would have to deal with evidence thought necessary by the court with little or no notice.”
The rule would mean that it is no longer up to litigants to meet their burden of proof in using the necessary evidence, but that it would then fall on the courts to ensure there is sufficient expert evidence, or appoint its own experts, before it proceeds in a case.
“The impugned rule places the court in a role that it should not be placed in. Transferring the responsibility of ensuring that there is relevant evidence upon which to decide the issues in a personal injury case from the parties to the court does, in my view, intrude upon what has, to date, been the core function of the court: to decide a case fairly upon the evidence adduced by the parties.”
The rule changes were part of larger reforms introduced earlier this year to save ICBC from billions in financial losses and near-insolvency. The other reforms included a cap of $5,500 on pain and suffering claims for minor injuries, which was supposed to save $1 billion annually, as well as requirements for certain cases to go through a civil resolution tribunal before court.
The limits on medical experts had proven controversial. Eby had to publicly clarify that neither a court rules committee nor the judiciary had approved or endorsed the limits, and that it was a decision made solely by government.