Deduction of Part 7 benefits from tort judgment
This page provides information on the rule that Part 7 benefits that the plaintiff in a tort claim was paid, or would have been entitled to, will be deducted from the tort judgment.
Overview of rule that Part 7 Benefits are deducted from tort judgment
The general rule is that a person injured by the negligence of another person can recover all costs they incur as a result of those injuries from that negligent person. However, that general rule is modified by legislation that applies in British Columbia such that the tort damages available to a motor vehicle accident plaintiff are reduced by amount of benefits that the claimant did receive, or could have received, under Part 7 (or other similar insurance). In other words, when assessing tort damages the court determines the total amount that the plaintiff is entitled to (including for past and future medication and medical care costs, past and future loss of earnings, etc.) and then deducts the amounts that the plaintiff has received, or will be entitled to receive in the future, under Part 7.
The fact that benefits the plaintiff has received or will be entitled to will be deducted from the tort damages means that claimants who are making tort claims must also commence and fully prosecute claims under Part 7 to ensure that they actually receive the Part 7 benefits that they are entitled to. If they fail to do so, ICBC will (if the matter proceeds to trial) nevertheless argue for deduction of all benefits from the tort damages assessed at trial and if the claimant did not obtain all available compensation under Part 7 he or she will ultimately receive reduced compensation.
While it is important for all claimants who have tort claims to realize the importance of making Part 7 claims to protect the value of their tort claims, the actual deduction of Part 7 benefits from the tort judgments has more to do with tort claims than Part 7 claims and therefore issues regarding deduction of Part 7 benefits from tort judgments are discussed in detail in the tort claim section of the website. Navigate to the tort claim section of the website using the menu on the left.
Arguments regarding entitlement to benefits often made in tort claims
It is interesting to note that many of the disputes about what is covered under Part 7 are actually litigated in the context of tort claims i.e. after judgment has been rendered in the tort claim the parties then make arguments on how much should be deducted from the judgment on account of future Part 7 benefits the claimant will be entitled to receive. At that point the lawyer for the claimant will make arguments that minimize what will likely be paid under Part 7 (so that the deduction from the tort judgment is smaller and the amount received immediately is increased), and the lawyer for ICBC will make arguments that maximize the future coverage under Part 7 (so that the deduction is greater and the amount paid now is reduced). This is the opposite from the situation where a claim for Part 7 benefits is being advanced by a claimant under Part 7; in which case the claimant argues for broader coverage and ICBC argues for narrower coverage. Amusing situations have arisen where plaintiff lawyers and ICBC have switched their views depending on whether they were arguing the issue in a Part 7 claim or in the context of a deduction from a tort claim (see Raguin v. Insurance Corporation of British Columbia, 2011 BCCA 482 at para. 19), but courts have held that the correct answer to any question regarding entitlement to benefits should not depend on whether it is an application for benefits or assessment of benefits to be deducted:
As a matter of statutory interpretation, the breadth of s. 88(1) should not depend on whether the court is being asked to make a deduction from a tort award or allow a claim in an action for recovery of mandatory benefits.
(Raguin v. Insurance Corporation of British Columbia, 2011 BCCA 482 at para. 24).
Where the tort claim proceeds to trial and the court makes an assessment of the Part 7 benefits the plaintiff will be entitled to in the future that assessment will not necessarily limit the amount of Part 7 benefits the plaintiff can actually claim from ICBC. In other words, after resolution of the tort claim the plaintiff’s Part 7 claim may remain unresolved and in that case the plaintiff can proceed with claiming benefits and may indeed ultimately obtain more than was estimated at the end of the tort claim. This outcome has been confirmed by the courts:
The claims must be assessed by the trial judge and deducted from an award of damages. Nevertheless, the plaintiff remains entitled to claim future Part 7 benefits after judgment and to receive them, even though they exceed the assessed amount, always provided the claims meet the statutory criteria… the cases demonstrate that Part 7 benefits continue to be claimable even after a tort judgment.
(Mawji v. Insurance Corp. of British Columbia, 2001 BCSC 1610 at para. 7).
The amount of benefits that the plaintiff will receive in the future is determined by the provisions of the Act. These may well be in excess of the amount estimated by the trial Judge in his award.
(Fisher v. Wabischewich, 1978 CanLII 359 (BCCA) cited in Sovani v. Jin et al, 2005 BCSC 1285 at para. 17).
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