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Good advice.

An Unconstitutional Cap: Le v. BC has struck down a law restricting disbursements

DBM Law Blog

Introduction

In 2020, the BC Government introduced new legislation to save costs on car accidents’ personal injury claims.  The law limited the number of expert witnesses to just three, and $3,000.00 was the highest amount an unsuccessful party could recover for the cost of an expert report.  In a further effort to limit expenses, the Government created a regulation in 2021 that imposed a 6% cap on the amount of disbursements a party could recapture in a court award or settlement.  The 2021 regulation was met with opposition from lawyers who argued that the regulation was another attempt by the government to trim costs at the expense of injured parties.  A petition to the Supreme Court was made by two parties injured in motor vehicle accidents, along with the Trial Lawyers Association of BC, who argued that the disputed regulation was unconstitutional.   

The Supreme Court of British Columbia struck down the regulation that placed a limit on how much an injured party could recoup in legal fees if they won a motor vehicle injury claim.  The Supreme Court decided that the law posed a barrier to people seeking justice in the courts because the limit affected how they could use evidence in arguing their claims.  This evidence includes expert medical reports to prove specific injuries, economist reports to illustrate a person’s loss of future wages, or functional capacity reports to demonstrate a person’s work limitations.  All these reports pose an expense.   The limit prevented injured parties from making their best case because they had to consider the financial repercussions of not recovering the full amount spent on evidence that would help advance their claim.  After the Court’s decision, parties are no longer restricted and can recoup the entirety of the legal fees spent in the progress of their action.  They can now gather the best evidence available to assist them in receiving compensation for their injuries.

 

The Law at Issue

The Court in Le v. British Columbia (Attorney General), 2022 BCSC 1146 [Le], determined that a statutory cap on disbursements was unconstitutional.   The provision at issue was section 5 of the Disbursements and Expert Evidence Regulation (the “Regulation”), a regulation which was created under section 12.1 of the Evidence Act (the “EA”).  Section 5 of the Regulation imposed a limit on disbursements relating to vehicle injury claims, in which a plaintiff was only able to receive a maximum of 6% of a total damages award or of an accepted settlement amount. 

Disbursements are expenses incurred by a party’s lawyers in the progress of an action.  For example, a plaintiff in a personal injury claim will pay for an expert medical report and other reports to assist their case.  The problem with section 5 was that it placed a financial constraint on a plaintiff’s ability to gather evidence.  Expert reports are expensive, and having experts testify at trial creates a further expense.  Smith J. noted that some plaintiffs realized they had to forego arguing part of their claim because they could not afford the documentation to support it.  If a plaintiff’s disbursements exceeded the 6% limit, the rest of the disbursements would need to be paid out of the damage award. 

 

The Court’s Reasons

If a regulation is unconstitutional or is inconsistent with an enabling statute (the law that allows for the creation of the regulation), then it will be struck down.  The BC Supreme Court found that section 5 of the Regulation created a financial obstacle for plaintiffs seeking the court’s decision on their case.  Section 12.1 of the EA limits a party to three experts; however, the section also creates the judicial ability to permit further expert evidence if the limit causes prejudice to a party’s case.  Accordingly, more expert evidence would result in more costs.  The Court determined that section 5 of the Regulation was inconsistent with section 12.1 of the EA because section 5 failed to recognize the judicial discretion to allow for the incurrence of further costs.  This inconsistency prevented access to the courts and therefore contravened the constitutionally established provincial legislative power to create laws relating to the administration of justice.

Implications 

Since section 5 was determined to be of no force or effect, moving forward, plaintiffs in motor vehicle injury claims can focus more on gathering the expert evidence required to bolster their claim instead of being concerned with the financial restrictions the 6% cap rule created.  In paragraph 15 of the decision, Smith J. “[could] not ignore the reality that the impugned regulation operates to the immediate and primary benefit of ICBC.”  What was created for ICBC’s benefit consequently produced a detriment to the plaintiffs seeking to be fairly compensated for the injuries they sustained in motor vehicle accidents, and thus, the BC Supreme Court rightfully removed a barrier to plaintiffs seeking justice. 

If you have any questions about this topic, we would love to hear from you. Our team of lawyers in Coquitlam is here to support you and to help you make the best decision for you and your family. 

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