Introduction to ICBC Automobile Insurance (12:I)

This information applies to British Columbia, Canada. Last reviewed for legal accuracy by the Law Students' Legal Advice Program on August 12, 2020.

A. General

The automobile insurance system in BC is comprised of “no-fault” benefit claims and indemnification for claims in tort law.

No-fault benefits are included as part of the basic (compulsory) insurance coverage offered by the Insurance Corporation of British Columbia (ICBC or “the Corporation”) exclusively. As the name implies, payment of the no-fault coverage is given regardless of whether any element of fault is attributed to the insured. Optional coverage above and beyond the basic coverage may be purchased from either ICBC or a private insurer under an optional insurance contract (“OIC”).

Claims for damages brought under tort law, however, do require the presence of a fault element on the part of the defendant to be successful. The victim of the accident (e.g. a personal injury claimant) may sue the other driver(s), the owner(s) of the insured car, the manufacturer(s), automobile shop(s), municipality, the insurer(s), or any other parties liable for the injury. Legislatively, there is no limitation on the maximum amount of damages that a court could award to a victim. However, case law and statute may effectively cap certain heads of damage, such as non-pecuniary damages. Where the necessary conditions are met, ICBC may indemnify the insured for all or part of the assessed liability. This means that where damages are awarded to a victim in an accident, ICBC will pay those damages instead of the party (i.e. the insured) who is at fault.

It is important to determine whether the action is one that can be commenced in BC and whether the law of BC applies. For cases involving a BC resident who has been involved in an out-of-province accident, private international law rules will govern the action. Generally, for the substantive issues, the laws of the jurisdiction where the accident took place will apply. For procedural matters, the rules of the trial court will apply. A summary of out-of-province insurer qualifications, service procedures, and jurisdictional considerations is listed in Section VI, below.

The Insurance (Vehicle) Act [IVA] and the Insurance (Vehicle) Regulation [IVR] form a code governing most aspects of auto insurance in BC. This chapter is not meant to be a comprehensive summary of the IVA or IVR but rather is a guide to help people locate the relevant sections of the IVA and IVR that they are likely to encounter. A few preliminary concepts, which will be of use in understanding this chapter, are discussed immediately below.

1. Indemnification

Drivers purchase car insurance to protect themselves in the event that they are found liable for damages. If the necessary preconditions are met, ICBC assumes liability for payment of benefits or damages to the claimant or victim of a car accident. Instead of the insured paying the damages claimed, the insurance company, “indemnifies” the insured.

2. Subrogation

Subrogation is a common feature of insurance contracts. When ICBC assumes liability for payment of benefits or damages of any kind on behalf of the insured, ICBC is ‘subrogated’ to the right of recovery that the insured had against any other person (IVA, s 84), i.e., ICBC has all remedies available to it that the insured person might have exercised by him or herself (IVA, s 83).

3. Premiums and Point Penalties

Premiums are regular payments made by the insured to ICBC. Premiums are based on where the insured lives, how the vehicle is used, the type of vehicle, and the insured driver’s claim record.

The point penalty system is authorized by sections 210 and 211 of the Motor Vehicle Act [MVA]. Section 28.01 of the Motor Vehicle Act Regulations, BC Reg 26/58, outlines the various breaches and/or offences of the MVA and the corresponding point penalties recorded.

Starting June 10, 2019, any traffic ticket a driver gets will have the potential to increase their ICBC insurance rates. Traffic tickets will be broken down into two categories: high-risk tickets and regular traffic tickets. High-risk tickets include but may not be limited to:

Impaired driving incidents, including a 24-Hour Prohibition from driving, a 3-day prohibition from driving, a 7-day prohibition from driving, a 30-day prohibition from driving, or a 90-day Immediate Roadside Prohibition or Administrative Driving Prohibition. The increased insurance rates for impaired driving incidents will also include any individuals who have criminal convictions for impaired driving, refusing to provide a breath sample. The individual will be required to pay increased insurance rates once the individual‘s mandatory driving prohibition is over.
Electronic Device tickets, which increases insurance rates on top of adding to the Driver Risk Premium
Excessive Speeding tickets, which also increases insurance rates on top of adding to the Driver Risk Premium
Driving While Prohibited charges
Criminal Code driving convictions

These increased insurance rates would start on September 1, 2019.

4. Waiver

Section 85 of the IVA allows ICBC to waive a term or condition of an insurance contract (also known as “the plan”). However, in order for a term or condition to be waived, the waiver must be in writing and signed by an ICBC officer.

B. Application of the Current Legislation, and Transitional Provisions

On June 1, 2007, the IVA and accompanying IVR were amended. Transitional provisions in Parts 1, 4, and 5 of the IVA dictate which regime, old or new, will apply to a particular claim (ss 1.2, 58, and 74 respectively).

Generally, it is safe to say that the IVA and the IVR, taken as a whole, apply to:

Insurance policies under the universal compulsory vehicle insurance plan set out by the Act (the “plan”) that take effect on or after June 1, 2007;
Optional insurance contracts that take effect on or after June 1, 2007;
Any claims that arise under these insurance plans or contracts; and
Insured persons, and insurers, and ICBC in relation to these insurance plans or contracts.

NOTE: TThe critical time to look at is the date on which the individual insurance policy or contract came into effect, or was renewed.

Claims and parties to the claims in relation to an insurance policy that came into effect before June 1, 2007 will continue to be governed by the old IMVA and IMVAR. It is entirely possible for a single accident to trigger the operation of both the old and new Acts simultaneously, (albeit in relation to different aspects of the resultant legal issues).

Although the IVA and IVR cover both ICBC and private insurer plans, some parts of the Act and Regulation apply only to one or the other. Specifically, the parts of the Act and Regulation that govern ICBC are Parts 1, 5, and 6 of the Act and Parts 1, 2, 3, 4, 5, 6, 7, 8, 10, 11, 12, and 14 of the Regulation. The parts of the Act and the Regulation that govern the private insurers are Parts 4, 5, and 6 of the Act and Parts 13 and 14 of the Regulation.

Furthermore, the IVA and IVR apply to both universal mandatory coverage and optional coverage. Part 1 of the IVA applies to ICBC’s mandatory coverage only. Part 4 of the IVA applies to optional coverage. Parts 5 and 6 of the IVA apply to both mandatory coverage and optional coverage.

C. Seeking Legal Counsel for Your Claim

Most personal injury lawyers will take motor vehicle accident claims on a contingency basis (a percentage of the total sum recovered) and offer a free consultation. Since this means that there is usually no cost barrier, it is often wise to at least consult a lawyer to ensure that you will receive the amount to which you are entitled. Here are a few things to be aware of when consulting a lawyer for your claim:

1. Contingency Fees

Contingency fees are variable; some lawyers use a sliding scale so that the fee increases as the trial date approaches. The Law Society of British Columbia imposes limits on contingency fees for motor vehicle injuries, and the claimant is unlikely to encounter lawyers who charge more than 33.33 per cent.

2. The Contingency Fee Contract

The contingency fee contract must be in writing and must contain a provision that it is the claimant’s right to have the contract reviewed by the Supreme Court for reasonableness.

Contingency fee contracts often provide that if the claimant discharges the lawyer, the claimant will have to pay an hourly rate for services up to the date of discharge and that these fees must be paid before the lawyer will transfer the file to another lawyer. A claimant who discharges a lawyer can have the lawyer’s bill reviewed by a Registrar of the Supreme Court in a hearing called an Assessment. The Registrar will make a ruling about the reasonableness of the bill and whether the claimant should be required to pay the bill right away.

3. Disbursement Costs

Disbursement costs are the expenses incurred for photocopying, medical reports, transcripts of evidence, police reports, motor vehicle searches, etc. Law firms will often pay these costs for the claimant and collect them at the end of the lawsuit. Some law firms take a retainer fee for disbursements.

4. Marshalling of Reports

Over the course of the claim, the claimant’s lawyer will collect your medical records, typically for the period from 2 years before the motor vehicle accident to the period following the accident, and deliver them to the defence counsel. As a claimant in a personal injury action, it is important to be diligent in pursuing recommended medical treatment and visiting a family physician, as clinical medical records are typically only generated when a patient attends at an appointment. The lawyer for the claimant and for the defendant(s)/ICBC may also arrange for independent medical evaluations with specialized doctors over the course of the claim.

If there is a claim for loss of prospective earnings or cost of future care, the claimant’s lawyer may also collect and deliver economic briefs and reports by vocational specialists, accountants, actuaries, and other non-medical professionals. This will require the claimant to draft a letter granting their lawyer signing authorization. – this letter should address who is receiving the authorization (in this case, the lawyer) and for what purpose, related issues, or kinds of documents (in this case, disclosures) the authorization is for,

The claimant’s lawyer will also receive defence reports and expert summaries. All of this goes on behind the scenes. Claimants wishing to have a more active role in their file should not hesitate to contact their lawyers for periodic updates.

5. Limitation on Experts (affecting all trials taking place after October 1, 2020)

Amendments are introduced to the Evidence Act, RSBC 1996, c.124 [EA] which will limit the number of experts and expert reports that are used on the issue of damages in most trials, with judicial discretion to allow for additional experts in appropriate cases. The purpose of the amendments is to decrease the cost, complexity, and delay associated with using many experts in a trial. As a result, claims will be resolved more efficiently in court.

See ICBC Evidence Act Ammendments and BILL 9 – 2020 - EVIDENCE AMENDMENT ACT, 2020 [EAA]

Proposed Changes:

1) For fast track claims (where the amount sought by the plaintiff is less than $100,000.00), there will be a limit of one expert and one expert report per party, EAA 12.1 (2)(b).

2) For claims that are not considered to be fast track claims, there will be a maximum of three experts and expert reports for each party, EAA 12.1 (2)(a).

3) Parties involved in the claim can agree to use more experts than the limit if every party to the claim agrees, EAA 12.1 (4)(a)(b).

4) EAA 12.1(5) provides judicial discretion to allow for additional experts beyond the limitation for cases where:

a. The subject matter of additional expert to be tendered has not already been addressed by the other experts. EAA 12.1 (6)(a)

b. Without the additional expert evidence, the party making the application would suffer prejudice disproportionate to the benefit of not increasing the complexity and cost of the proceeding. EAA 12.1 (6)(b)

5) A limit is placed on the maximum amount recoverable from an unsuccessful litigant to $3,000.00 per each expert report in motor vehicle personal injury cases, EAA 12.1 (9)(a)(i)(A). The total recoverable disbursements in motor vehicle personal injury cases will also be limited to 5% of the judgment or settlement, EAA 12.1 (9)(a)(i)(B).

6) Disbursements include all expenses used for the purpose of the lawsuit including expenses such as courier fees and photocopying. It will not include fees payable to the Crown such as filing fees, court fees, and jury fees. EAA 12.1 (9)(a)(ii).

Exceptions:

1) The limitation of the number of experts will not apply if an expert report has been served before February 6, 2020, and the trial date set out in the notice trial is before October 1, 2020, EAA 12.2 (2)(b)

2) The $3,000.00 limit to recoverable on expert reports and the 5% limit on disbursements would not apply if the cost for experts has already been incurred prior to February 6, 2020, or a notice of trial has been filed and served prior to February 6, 2020, for a trial before October 1, 2020. EAA 12.2 (3)(b)