On the show this week: ICBC. The government-owned insurance company has run into financial difficulty as a result of both how the company has been operated, and political decisions to take money that it had been saved for the purpose of paying claims out of the company in order to balance the provincial budget.
Currently, drivers who are at fault for an accident are responsible for it. In some circumstances, such as where a driver is convicted of impaired driving, dangerous driving, or failing to remain at the scene of an accident, they would be in breach of their insurance coverage and they would be personally responsible for repaying ICBC for any loss.
There has been some suggestion that BC should move to a no-fault system, in which it would not matter who caused an accident. This would save money by avoiding litigation concerning who was responsible for an accident but might be inconsistent with community values that people who cause accidents should be responsible for them.
Recently announced changes would create an in-house ombudsperson, to review complaints. This is a ponderous idea as BC already has an ombudsperson and an auditor general. Duplicating these functions inside ICBC doesn’t seem likely to be beneficial.
Another initiative involves having ICBC offer some money to people who suffered a loss, without removing their ability to sue later. This proposal needs to be considered in the context of ICBC’s frequent attempts to settle claims for less than would be awarded if the cases were decided by a judge.
If people who are injured are offered, and accept, less than their claim is worth, either because they are desperate, or don’t have proper legal advice, this may make it uneconomic to sue ICBC later for the difference between this amount, and what they should have been paid.
Fundamentally, ICBC needs to be directed to change its approach to claims. If a claim is legitimate, ICBC should be promptly offering people what would be expected if they went to court. This would be both consistent with the duty of a publicly owned insurance company to treat people fairly and would save significant resources that are currently spent litigating claims.
Despite ICBC claims to the contrary, a review of cases that do proceed to trial demonstrates that ICBC is continuing to offer people less than the amounts be awarded in court.
Finally, the role of ICBC in administering things like drivers’ licences and paying for police traffic enforcement should be reconsidered. These are ordinarily government functions, that would not be paid for by private insurance companies. Having ICBC pay for these things is no different than taking money out of ICBC to pay for government programs.
Legally Speaking with Michael Mulligan is live on CFAX 1070 every Thursday at 10:30.
An automated transcript of the show:
Adam Stirling [00:02:43] It’s time for, legally speaking with Michael Mulligan from Mulligan Defence Lawyers, who joins us remotely for today’s segment. We are appreciative of his time, as always. Good morning, Michael. How are you?
Michael T. Mulligan [00:02:52] Good morning. Great to be here, remotely just down in Dallas, Texas, taking in yesterday, the Toronto Dallas hockey game, which was a good one from a Canadian and Victoria perspective. You’ve got a Canadian team and then you get a captain from Victoria and Dallas. So, I can’t complain about any of that.
Adam Stirling [00:03:12] Excellent. Sounds like all sorts of fun. We have had no small measure of debate and discussion on our open phone lines earlier this week, Michael. And I know you monitored a portion of that ICBC, our insurance coverage. And what sort of conduct may result in us not being covered financially if we cause injury? How does all this fit together?
Michael T. Mulligan [00:03:32] Sure. Boy, there’s a lot to unpack here. And the dumpster fire doesn’t seem to be going anywhere anytime soon. There’ve been a number of things that have been in the news lately that I think is important for people to understand, both about the breach issues that you mentioned and then some of the suggestions to try to generally improve the financial status of ICBC, that are at least connected to that. So, there’s been some discussion locally about the fallout from that tragic case involving the young girl who was hit by the speeding Mercedes SUV and the conviction for that. And there have been discussions about one of the implications of that being that the driver of the SUV who was convicted will no longer have any insurance coverage, at all, because of the criminal code driving prohibition. And I think it’s important to remind everyone about various ways in which you can, in fact, wind up with no insurance coverage and potentially be on the hook for the rest of your life paying for damage that you cause if you don’t follow all of the conditions set out in the Insurance Motor Vehicle Act and its regulations. One of those is about if you’re convicted of a criminal code driving offence, so that would include things like dangerous driving or refusing to provide a breath sample impaired driving. Any of those sort of things will all mean that if you’re convicted of them, you automatically and without any discretion on the part of the judge would no longer have insurance coverage, meaning that ICBC would come after you to recover any money they paid out to somebody where you damaged your vehicle or injure them. You can also be in breach of your policy if you do various other things. For example, if you’re involved in a race, in racing somebody away from a light or something, that is a breach, race or speed test. If you take any steps to not stop for the police, that is a breach of your insurance coverage. You can also wind up with a breach of you do something like engage in an illicit or prohibited trade or transportation that will get you into a breach circumstance. There are, in short, a host of circumstances in which even though you might be paying for your insurance, ultimately you would be on the hook to pay for any damage that you caused if you engage in any of those things. One of the interesting things to be considered is in the recent public discussions about insurance and cost have been suggestions about what’s been referred to as no-fault insurance, which would mean that they would simply be paid for medical or other expenses and no consideration would be given to who might have caused the accident. And that’s a very interesting thing. Certainly, it would save time and effort trying to sort out who is responsible for an accident. But one of the reasons why I think, in the past, those proposals have run into unpopularity publicly, that people don’t generally like the idea that if somebody was, for example, driving dangerously or while they were impaired or engaging in street racing or doing something that they would not in any way be personally responsible for any of that; any loss or damage they caused doing it. I think generally people like the idea that you know, hey, if you’re engaged in a police pursuit and you seriously injure somebody, they don’t like the idea that we’re not going to worry about who caused that and assist the person engaged in the police pursuit the same way you might assist the first innocent person who was injured as a result. So that’s an important thing that intertwines with some of these breach concepts. Another thing which I think is important for people to know, I listened very carefully to some of the suggestions made by the Attorney General the other day.
Adam Stirling [00:07:52] Yes,
Michael T. Mulligan [00:07:52] Talking about changes. And there those have to be listened to and considered very, very carefully. It sounds like in some respects the Attorney General may be taking advice from the bureaucracy at ICBC about things that might be done, and real caution has to be used there. In my judgment, watching how that system works from a legal perspective, one of the really core problems isn’t so much the lack of choice, although there’s some argument about that. But is this ICBC, when it’s dealing with claims made, tends to try to adjudicate them in the way that you might adjudicate a claim. If you are a for-profit private company and that is to say, when a claim is made, irrespective of whether it’s clear that it’s a legitimate claim. The approach, they think, appears to be, trying to in all respects minimize the amount of money that they are paying to the person. And if you look at that in a really short-term way we might say, well, perhaps that sort of adversarial approach might result in some cases with success. After all, somebody might, for example, not get legal advice about what their claim would be worth, and they might accept some offer that was significantly less than what they might be entitled to if their case went to court. So, you might say in the really short term, in some cases that would have a benefit, but financially certainly not a benefit for the person who was not properly compensated. But over the longer term, what that approach does is that protracts the time it takes to settle claims and it causes unnecessary litigation and rancor over them. But the talk about five years to settle a claim is an utterly unacceptable period of time. And in my judgment, one of the things that would very much assist both the costs faced by the corporation and try to address things which aren’t going to be adequately addressed by having an in-house ombudsperson for heaven’s sakes.
Adam Stirling [00:10:11] Ya what do you make of that? That was odd to me.
Michael T. Mulligan [00:10:14] So that sounds like an entire waste of money. Probably a response by the corporation to legitimate concerns about how they’re treating people and not a very good response. In my judgment, a better approach for a particularly a public insurance company when a claim would be made is to, first of all, determine whether the claim is a legitimate one. If a claim is illegitimate or fraudulent or exaggerated in some way, plainly those need to be resisted vigorously and nobody would take issue with that. But that is not how most people conduct themselves. So if a public insurance company, like ICBC, determines their claim is an appropriate, legitimate claim, what they should be doing and what they do not do at the moment, would be to figure out what that claim is likely to result in were it to go to court and offer that amount of money to the person. That is the amount the person would be entitled to if the matter was litigated five years down the road. Offer that amount of money. That is the amount of money the person is entitled to. That is the appropriate amount to offer. If that is done, there would be no motivation for somebody to hire a lawyer and go to court aimlessly. After all, our civil justice system is set up in such a way that if you make a formal offer and then somebody does continue to, without any purpose, sue, they’re going to have costs awarded against them. It will be an utter and total waste of time and make no sense. But that is not the approach that ICBC often takes. Often the approach we take is to make to offer much lower than what they know would be awarded. Hoping that either person would accept it, or they could eventually, after some period of time, the person would wear out and take it. And that’s not appropriate. And the suggestion made, curious what it sounds like, what they are doing and it is the image that came to mind for me was the sort of cobra with the idea that they will make offers to people which we could accept without preventing them from suing later.
Adam Stirling [00:12:32] Yeah. Does that prejudice? Future proceedings?
Michael T. Mulligan [00:12:35] Here’s what in fact would go on. Here’s the way that needs to be considered. And this was an interesting thing that your last guest, Mr. Johal, spoke about. Which was the things like the cost of hiring a competent lawyer to represent you. Often that’s done in ICBC cases on a contingency basis. A lawyer would say, look, if this thing succeeds, they would get some percentage of the claim, if it doesn’t succeed the lawyer wouldn’t be paid. And now here’s how that would play out. What it sounds like they’re suggesting and let’s imagine you had a claim which when you looked at it, and you can figure these things out is not rocket science. You could look at past claims, what courts have awarded, and you can figure it out, it’s not that complicated. So, let’s say you got a claim which you looked at and you concluded based on past decisions that that person lost wages, whatever it might be, that the claim would be worth say, sixty thousand dollars. So, the way this proposal would play out is if ICBC continues to operate in a way that it has operated, trying to make offers in the lowest possible, hoping they would be accepted. You can imagine what would occur is this, ICBC might go to the person and say, fine, we’re offering you forty-five thousand dollars. Here it is. You can take that. And if you conclude that’s not enough, you could sue us. Person takes the forty-five thousand dollars, fifteen less than what they are genuinely entitled to because that’s how the corporation operates, frequently. The person would then, if they got legal advice, be told “Oh yes, you were paid fifteen thousand dollars less than you should have been paid”. Look, here are the previous cases with the same injuries. Let’s look at how much you lost in wages or other expenses as a result of the accident. However, now your claim, your remaining claim would be worth fifteen thousand dollars. At that point, it may be utterly uneconomic to hire a lawyer on a contingency basis or otherwise, to litigate. Right…
Adam Stirling [00:14:37] Can you…try to help me understand this small amount. Just before we continue, I was under the impression that the Attorney General it was, Rick McCandless, has told me this a number of times, had lawyers examined ICBC settlement offer process like lawyers from the public services. One of the first steps that was taken, my understanding is that the offer process itself was not found to have any significant defects in, Am I mistaken?
Michael T. Mulligan [00:15:00] You were mistaken,
Adam Stirling [00:15:02] Okay.
Michael T. Mulligan [00:15:03] And here’s how you could conclude that your mistake to simply go and look at the cases which go to court and there are many of them. If you can read them every week, they’re posted on the Supreme Court website. You can read them, and you will see them frequently, either substantial awards made for people who have sued ICBC. And then you will see when you look down to the bottom of them, the person being awarded costs for the proceeding. What that tells you is that the offer made by ICBC was less than the amount that the court ordered the person be paid. And those are frequent. You don’t need a study by lawyers employed by ICBC or a study by adjusters over there. No doubt they would have a completely different spin on the matter. You can simply look at the actual results in court and the actual results in court when you get them and they are publicly available, all of them.
Adam Stirling [00:15:58] Okay,
Michael T. Mulligan [00:15:58] You can see that people are being awarded significantly more than the amount of money that ICBC was offering.
Adam Stirling [00:16:06] OK, I recall what I was thinking of. It was a news story published February 6, 2019. Question Does ICBC lowball settlement offers? Government review says no. Lawyers for the Ministry of the Attorney General was reported by CTV and others launched the review last summer. At that time, to help determine how much blame ICBC shoulders for climbing litigation costs. After reviewing 100 randomly selected cases that were closed in 2013 and 2017, the ministry’s legal counsel found little evidence to support the reputation ICBC has among some drivers for low balling. That’s what I was thinking of.
Michael T. Mulligan [00:16:38] Sure. What you need to do is exactly what I’ve suggested.
Adam Stirling [00:16:41] Okay.
Michael T. Mulligan [00:16:42] There published. All of them were published. They’re public. You can simply go and look at the cases which go to court and for whom there are public decisions about what the judge found the appropriate award was. They’re all available. And then just look at what was the result. Was, were costs also awarded against ICBC? And the answer to that is ordinarily, yes, they were. And here’s the other practical consideration, if that it was not so, it would make no sense whatsoever for lawyers acting for these people to proceed to court. It would be a futile and expensive procedure.
Adam Stirling [00:17:21] Let’s take a quick break. Legally speaking continues in just a moment here on CFAX 1070. Michael Mulligan joining us remotely today. All manner of things it can result in breaches to ICBC coverage. The idea of a no-fault insurance system, again, a possibility for the future of B.C. and more coming up after this.
Commercial [00:17:38] COMMERCIAL BREAK.
Adam Stirling [00:17:39] Michael Mulligan, we’re continuing with legally speaking here on C Facts Tan 70. Michael joining us remotely from Texas today. You were saying before the break regarding ICBC.
Michael T. Mulligan [00:17:49] Yes, I was saying and I should say this, if anyone has any doubt about the approach that ICBC takes in claims and whether they are attempting to settle claims for less than they’re worth, hoping that they wouldn’t proceed to trial or that a person wouldn’t hire a lawyer, rather than relying on a report from ICBC or anyone else that’s dealing with whether they think they are engaged in that conduct or not. I would suggest anyone who is interested can go to a website, called CanLII, C – A -N – L -I – I dot org can leave a free site that includes all court decisions. You can go to British Columbia Supreme Court and you could then search for terms like ICBC or accident claim. You can sort them by time and you can look at them and you will see a pattern of cases that proceed to court and where judges routinely order that money be paid well in excess of what was offered by ICBC to settle the claim. And what that tells you is that their mode of operation is to do exactly what I’ve indicated. It’s trying to, rather than as a public entity, ask yourself, what is the amount this person is entitled to? They are asking themselves, how little might I be able to settle this claim for? And that’s really an important to corporate cultural change. It’s the sort of change which, rather than things like appointing an ombudsperson to try to deal with disgruntled people who are treated in that way, I would urge the Attorney General to give clear direction to ICBC about how they ought to conduct their affairs. And the advice would be along these lines. You are a public insurance company when you receive a claim, if it is a legitimate offer and pay the person what that person would be entitled to if they would proceed to court. That is the amount you should offer, not less. And if you take that approach, you will not take five years to resolve cases. Furthermore, you will not spend millions of dollars litigating things, hoping that you might reduce the amount that could be awarded, offer people, promptly, the fair value of their claim. And it’s not rocket science to compute that. That, to my mind, would accomplish much more than these sort of ICBC based suggestions about ombudsperson or allowing them to make strategic payments early. That would then make it difficult potentially for a person to economically hire a lawyer to go to court and recover what they would, in fact, be entitled to. That’s really what’s going on with those proposals. As a final suggestion to assist the putting out the dumpster fire would be this. There has been much discussion about the fact that the previous government took money from ICBCs reserves to avoid raising other taxes. And that’s really not in dispute. But one thing that is continuing to go on, is that we choose to have ICBC perform functions that are well outside insurance functions, that private insurance companies would perform in other provinces. You don’t have a private insurance company doing things like doing driving tests, issuing driver’s licences, dealing with paying for police road checks. None of those things would go on those having those government functions performed by the public insurance company or really the equivalent of continuing to extract money from the insurance company to pay for that activity. And it is the equivalent of taking money out to try to balance the budget. So, we have more than an insurance company here. We have an insurance company that is also conducting tests and issuing licences and suspending people and doing all sorts of functions that need to be performed. And of course, if we didn’t have a wholly owned public insurance company performing those noninsurance functions, you would need to pay to have government employees do those things. And so tucking government functions into the insurance company is really no different from extracting money from the insurance company and then having government employees perform those tasks.
Adam Stirling [00:22:29] All right. Thank you for your analysis and your thoughts on this, Michael. We had planned to discuss some other cases, but this matter arose during our discussions earlier today. So, I’m happy you were able to provide your input and your analysis. We have three minutes left in today’s segment. How would we like to spend those three minutes?
Michael T. Mulligan [00:22:46] Well, I would say….I would just urge listeners when you are hearing proposals like the ones that were put forward the other day, and sort of defended by the head of ICBC, to ask yourself the question, why are they proposing this? From what perspective are they coming from? And many of their proposals seem to come from the perspective of how things might be made better from ICBC perspective. Right. If you’re coming at it from the perspective of, I’m an employee of ICBC and I wish to continue to have this operation continue, which, of course, is fundamentally important, if that’s what your career is, you are going to make suggestions designed to further the power of ICBC to make decisions that aren’t are not reviewable by an independent court. You’re going to make proposals to try to reduce the ability of people to get counsel to oppose those things. And those aren’t appropriate. The core function of a public entity like that ought to be treating people in a fair and equitable fashion and suggestions which, sort of further the institutional capture of an organization are not appropriate. And there are changes which the government can make that aren’t changes that require massive legislative changes or changes necessarily that would impact on how compensation is paid in a way that’s inconsistent with what most people would think is fair. And the core of that ought to be a direction to them, act in a way which is fair and act in a way that means that people do not require years of litigation to be paid what they should be paid. And if they do that, my expectation is that the dumpster fire is going to, pretty quickly, go away.
Adam Stirling [00:24:49] Michael Mulligan. Thank you for your time, as always. We look forward to speaking again next week.
Michael T. Mulligan [00:24:54] Thank you so much. I look forward to it as well.
Adam Stirling [00:24:55] All right. Take care. Have a good trip. Bye.
Automatically Transcribed on January 30, 2020 – MULLIGAN DEFENCE LAWYERS