Court strikes down cap on costs for auto injury experts

B.C.’s Supreme Court has struck down as unconstitutional the province’s 6% cap on disbursements for experts in personal injury actions arising from auto accidents – one feature of the Insurance Corporation of B.C.’s attempt to control its auto insurance claims costs.

The province’s public insurer recently won a different case that challenged the constitutionality of a central pillar of its May 2021 auto insurance reforms (i.e. who has the authority to hear minor auto injury cases). But in Le v. British Columbia (Attorney General), released July 8, the B.C. Supreme Court found the regulation that established a 6% cap on disbursements for experts in personal injury lawsuits was inconsistent with the enabling statute’s purpose.

The statute implementing the province’s auto reforms recognizes the court’s discretion to consider the proportionality of experts required to prove the injured claimant’s case. The regulation enabling the 6% cap on disbursements, on the other hand, takes away the court’s discretion, effectively restricting how many experts injured claimants may choose to present evidence in their case, the B.C. Supreme Court ruled.

Thi Sau Le is a 77-year-old retiree. She alleges in a separate court proceeding that she was struck by three vehicles while attempting to cross Victoria Drive in Vancouver on Jan. 3, 2020.

Le’s counsel in that action believes that, due to the nature of her injuries and her personal circumstances, the cost of assembling the expert evidence necessary to prove all of her injuries and their impact on her will likely be between $30,000 and $50,000 (double that, if the experts are called to testify at trial). This would significantly exceed 6% of her anticipated damage or settlement award.

Le’s lawyers argued the province’s 6% cap regulation is unconstitutional because it disproportionately limits her ability to call experts required to make her case.

“Counsel for the petitioner Ms. Le in her personal injury actions estimates that, due to the number of different injuries involved, experts in up to eight different medical or therapeutic specialties will be needed to prove her damages,” the B.C. Supreme Court observed. “She may also have to incur disbursements to retain an accident reconstruction engineer for the purpose of proving liability and, because Ms. Le is not fluent in English, an interpreter to attend at examinations for discovery and trial.”

The B.C. Supreme Court found the 6% cap regulation was flawed because it was inconsistent with the purpose of the enabling statute of the province’s auto reforms. The enabling statute grants the court discretion to deal with the need for experts proportionately. (For example, although there is a limit to three experts in minor auto injury cases in B.C.’s new auto reform legislation, the law gives courts discretion to go with a higher number of experts if the case is particularly complex.)

The way the regulation capping disbursements is currently written, an injured claimant is entitled to recover costs for disbursements for expert evidence of up to 6% of either the total damages awarded by the court or of the amount agreed to in settlement (subject to specific exceptions).

But as the B.C. Supreme Court noted in its July 8 decision, total damages can vary widely, depending on whether the losses include future loss earnings.

For example, the B.C. Supreme Court noted that if an injured claimant is young, and future lost earnings are in play, damage awards can be very high, meaning the 6% cap would be very high as well, allowing disbursements for many experts’ opinions and testimony. However, if the injured claimant is elderly or retired, future lost income would be less of a factor, reducing the damage or settlement award, and thus also the 6% cap. The result is that the regulation is not always proportionate to the requirements of the case.

“In 2019, ICBC resolved a total of almost 24,000 claims,” the court noted, citing evidence supplied by Christopher Ryan, director of claims strategy and programs for ICBC. “The vast majority resulted in total awards or settlements of $100,000 or less. In 72% of those cases, the plaintiff’s disbursements were in an amount equal to or less than 6% of the award or settlement.

“The experience was similar at the other end of the spectrum. In cases where the award or judgment was more than $1 million, a 6% cap would have been sufficient to cover all disbursements in 75% of cases.

“However, disbursements exceeded 6% of the award or settlement in approximately two thirds of the cases where plaintiffs received an amount between $100,000 and $1 million.”

Since lawyers don’t know what the final award will be, they are often left guessing about whether disbursement costs for experts will be within 6%. “Plaintiffs and their counsel therefore will not know what amount can be spent without risk of exceeding the 6% limit,” as the court noted. “The [B.C.] Attorney General acknowledges that this may require plaintiffs to make decisions about what part of their case they wish to pursue or abandon.”

Ultimately, the court found the regulation discriminated against the injured claimants in a way that it did not against the defendants.

“The impugned regulation applies a fixed limit [of 6%] only on the recovery of disbursements by plaintiffs and gives the court no discretion to permit exceptions in the circumstances of individual cases,” the court ruled, striking down the cap regulation as both administratively unfair and unconstitutional. “But where a defendant is entirely successful, such as when the plaintiff fails to prove liability, the disbursements recoverable by the defendant are, of necessity, left entirely to the court’s discretion.”

 

Feature image courtesy of iStock.com/Pornpak Khunatorn