Claims Involving Out-of-province Insurers or Accidents (12:XIII)

A. Conflict of Law Issues

Following Tolofson v Jensen (1995), 100 BC L R (2d) 1, in Canada, the substantive law to be applied in torts is the law of the place where the activity occurred, rather than the place where the action is being tried.

When foreign law applies to an action commenced in BC, unless all counsel can agree on the substantive law that applies, counsel seeking to rely on the foreign law has the burden of proof to establish the content of that law. This is often supported by expert opinion evidence in court.

1. Limitation Periods

Subsequent cases have confirmed that limitation laws are generally (but not always) substantive.

2. The access of damages

The court in Wong v Wei, (1999), 65 BCL.R. (3d) 222 (SC) drew a distinction between the availability of heads of damage, which is a matter of substantive law, and the assessment or quantification of damages, which is a matter of procedure.

B. Jurisdiction

If an accident occurs outside BC and the defendant(s) resides outside of BC, the issue of jurisdiction should be carefully examined before the limitation period expires in either jurisdiction.

Counsel should keep in mind that a plaintiff has two claims, one in tort and the other against a first party insurer for Part 7 or equivalent) benefits. The jurisdiction issue for the two claims should be considered separately.

The defendant can challenge BC court’s jurisdiction on the basis that the BC court has no jurisdiction to hear the matter at all (i.e. the court lacks jurisdiction simpliciter) or that there is a more convenient jurisdiction within which the case may be heard (i.e. the defendant argues that the BC court is forum non conveniens).

The BC court has jurisdiction simpliciter where there is real and substantial connection between BC and the defendant or between BC and the subject matter of the action. Section 10 of CJPTA lists the circumstances in which it is presumed that there is a real and substantial connection.

In situation involving parallel proceedings in two jurisdictions, it may be necessary to engage in a forum conveniens analysis to determine the most convenient jurisdiction within which to hear the matter. In determining the most efficient forum to hold the trial, a court may consider, among other things: where witnesses live; whether injury or disability makes it difficult for one party to travel; and which substantive law will apply (applying complex foreign laws in a BC court may require expensive expert witnesses to be called).

C. Out-of-province Insurers

1. Interprovincial or International Reciprocity

Each Canadian province and territory and each U.S. state has legislation governing the licensing, operation, and insurance coverage of motor vehicles. A complete listing of all BC and extra-provincial insurance companies who are eligible for automobile insurance is available on the Financial Institutions Commission website.

The out-of-province insurer has an obligation to: i) file an appearance in BC court; ii) not raise any coverage defence which would not be available to any insurer in BC respecting BC insured; and iii) pay any motor vehicle judgment against the insured up to the minimum liability limits required by BC (i.e. $200,000).

2. No Fault Benefits and Underinsured Motorist Protection (UMP) Entitlements

Section 83(2) of IVA provides that a person who has a claim for damages and who receives or is entitled to receive benefits respecting the loss on which the claim is based, is deemed to have released the claim to the extent of the benefits. Thus, the section provides a defence, limiting the extent of liability to a defendant where the plaintiff is entitled to benefits under the IVA or another vehicle insurance scheme. This defence is also available for out-of-province insurers who eligible to provide insurance in BC. The defendant bears the burden of proving the amount of any entitlement (irrespective of actual payment).

An out-of-province insurer may also be liable to provide UMP coverage notwithstanding that its policy does not include such coverage.

3. Optional Insurance Contracts and Excess Coverage

Section 80 of IVA provides that if there is an optional insurance contract and any other vehicle insurance (none of which are identified as being issued “in excess” of the others) then each insurer is liable only for the rateable proportion of any loss liability or damage. For example, if Policy A provides coverage up to $100,000 and Policy B Provides coverage of $300,000 and the liability of the insured is assessed at $100,000 then Policy A would pay out $25,000 and Policy B would pay $75,000.

Policies providing coverage “in excess” will be triggered only if the limit of other insurance coverage is reached. Part 4 of the IVA regulates contracts for excess and optional insurance coverage.

There is no formal, established claims-handling protocol between ICBC and private excess auto insurers in BC. Absent any express agreements between ICBC and the excess insurer, neither insurer has any control over the other. Therefore, the plaintiff’s counsel should not assume that ICBC is sharing all information and documents with the excess insurer.

4. Service Outside BC

a) Without a Court Order

According to Rule 13(1) of the Supreme Court Rules in any of the circumstances enumerated in s 10 of the Court Jurisdiction and Proceedings Transfer Act (CJPTA), the BC plaintiff can serve the out-of-province defendant without order of the court.

Notable circumstances for which this is the case include:

• Actions concerning a tort committed in BC; and
• Actions concerning contractual obligations, where: i) the contractual obligations, to a substantial extent, were to be performed in British Columbia; or ii) by its express terms, the contract is governed by the law of British Columbia.

b) With Leave of the Court

The BC plaintiff must obtain an order for service outside BC if the facts of the claim do not fall within one of the recognized categories listed in s 10 of CJPTA.