Sunday, February 1st-0.7°C
Injury Wise

What do I pay ICBC for anyway?

If you have had ongoing dealings with ICBC as a result of a car accident than you have likely had the pleasure of dealing with at least two sides of ICBC. Initially the relationship starts off pleasant but as the relationship continues the lines of communication and mutual understanding fade. Now, in fairness to many of the adjusters who handle personal injury files, this is not the fault of the adjuster but the fact that the adjuster wears two hats along with having to follow ICBC’s unreasonable and arbitrary policies. These two hats are confusing to clients and I often hear, “So what do I pay ICBC for anyway?”

Let me try to explain. In most car accidents in British Columbia, ICBC is your insurer but they are also the insurer for the other people involved in the collision. In simple terms, ICBC acts for the good guy (white hat) and the bad guy (black hat) on the same case. A very clear conflict of interest.

White hat - If you are the injured party and you are not at fault for the collision (aka innocent party) then ICBC is your insurer for:

1. Accident benefits, also known as no fault benefits or Part 7 benefits. This is very basic insurance coverage that is designed to provide very modest insurance coverage for wage loss (up to $300/week), medical and rehabilitation benefits (a portion of these expenses) and death benefits. It is not full compensation. ICBC is not a disability insurer, nor can you buy this coverage from them. To get complete compensation from ICBC, you need someone else to be at fault and insured by ICBC with policy limits sufficient to cover your claim. In short, you need someone to sue with money (usually insurance money).

2. UMP (Underinsured Motorist Protection) – this is additional coverage if the person at fault does not have enough insurance to pay for your claim. Additional UMP coverage can be purchased at a very low cost.

3. Hit and run coverage - this is additional coverage where you do not know who is responsible (who to sue) for your claim (Note: very specific steps need to be followed for this coverage to be effective – see my previous article ICBC Ought to Include a Warning.)


Black hat - If you are the person at fault for the collision then ICBC is your insurer for:

1. Accident benefits – for you, even if you are at fault (see description above).

2. Repairing or replacing your vehicle (if you bought collision coverage).

3. Paying valid claims that any other person involved in the collision makes against you for vehicle damage and injury up to your policy limits (between $200,000 and $5 million depending on what coverage limits you bought). Without this insurance you would personally have to pay any damages awarded by a court to a person injured in a car accident that was your fault. If insured, ICBC will negotiate with the injured party on your behalf and if necessary, settle or defend a lawsuit. If the other party’s claim is more than your insurance coverage, you are personally responsible for anything in excess of your policy limits.


In summary, what you primarily pay ICBC for when you buy auto insurance, besides repairing or replacing your vehicle, is insurance coverage to defend and payout any damages awarded or agreed to on your behalf up to the limits of your insurance policy. You do not pay ICBC to provide you with full compensation if you are hurt. What this means is that if you are badly hurt in an accident, in order to obtain complete compensation, you are going to need someone to sue (make a claim against). More specifically, and from a practical level it means that ICBC primarily acts for the black hat and if you are the injured party you are going to have to wait until the end of your claim to get most of your money. ICBC has no obligation to pay your ongoing expenses, beyond what is covered under your accident benefit coverage until the end of the claim. That being said, ICBC may choose to pay more than their legal obligation for a period of time in hopes that you will not retain a lawyer, but the bottom line is that they do not have to pay everything until the end of the file. As a result, whenever you are dealing with ICBC as the innocent party it is important to keep in mind that ICBC simply cannot act in the best interests of both people they insure (white hat and black hat) at the same time.


*Important Note: The information contained in this column should not be treated by readers as legal advice and should not be relied on without detailed legal counsel being sought.


Working under the table

They say there are only two things that are certain in life: death and taxes. Not exactly an uplifting thought, but true nonetheless. Some people try to avoid paying tax by “working under the table,” also referred to as “moonlighting” or working “off the books” but the reality is that this practice can eventually kick you in the backside, something I see all too often in my personal injury practice.

The obvious problem with working under the table is that it is illegal. It can result in criminal convictions, fines, jail time and penalties (for more information see: CRA – About the underground economy). Clearly if you work under the table you are not expecting to get caught, but some people do and CRA (Canada Revenue Agency) appears to have very little mercy.

I have never met anyone who anticipated being seriously injured in an accident, rendering them unable to work; so not surprisingly, most people have not thought about the fact that if their primary income is earned under the table or is unreported and they are injured in an accident, they will not have a typical claim for income loss.

Where your income is earned under the table or is unreported, you can still make a claim for income loss, but if you do, it comes with inherent risk of CRA knocking on your door for back taxes. You will also not qualify for Employment Insurance or wage loss benefits with ICBC, you will have no workers compensation coverage and you are going to have a much more difficult time claiming any past or future wage loss in an accident claim. As a result, if you can’t work for any real length of time, chances are you will lose everything you have worked so hard under the table for, because you won’t have any replacement income. Unless you have significant savings or access to other income, you won’t be able to pay your mortgage, or your rent, or any of your bills while you are recovering from your injuries.

The other problem is that in addition to not being able to make a proper wage loss claim, it can impact your credibility and reliability of your evidence with respect to your injury claim. Like it or not, we have to pay taxes. If you avoid paying taxes, the court (and ICBC) will hold that against you in all aspects of your claim. If you have been injured in an accident, and you have been working under the table, you may want to speak to a tax lawyer about CRA’s Voluntary Disclosure Program, which is an opportunity to put you in good standing with CRA and possibly help improve your injury claim.


*Important Note: The information contained in this column should not be treated by readers as legal advice and should not be relied on without detailed legal counsel being sought.

Is this a fair offer from ICBC?

“Is this a fair offer from ICBC?”…. “How much should I settle for?”… “What is my claim worth?” These are just some of the questions I regularly get asked. If I could create an app that would answer these questions, many personal injury lawyers would be out of business. If you are a tech person, don’t get too excited about the business opportunity. The reason there is no app for these questions is because each claim is unique and there is a significant amount of information and analysis that goes into properly answering these questions. Even an experienced personal injury lawyer will not be able to tell you the precise value of your claim over the phone or by email, but with just some basic information, he or she can often advise you if the offer appears to be too low. As for what your claim is precisely worth, that is more involved. Below are some of the questions that help personal injury lawyers assess the value of your claim.

Have you recovered from your accident? – If you have not recovered, or you have not reached maximum medical improvement, chances are it is too early to properly assess whether the offer is fair, but it is not too early to retain a lawyer. For more information on the right time to assess the value of your claim, see my previous article: When Should I settle with ICBC?

Who is at fault for your accident? – The value of your claim may be reduced if you are partly at fault for your accident. For more information on proving liability, see my previous article: Proving Liability in an Injury Claim.

Did you contribute to your injuries? – If you are partly to blame for your injuries, such as not wearing a helmet while riding a bicycle, not wearing your seatbelt while riding in a car or traveling with an intoxicated driver, than you may be found partially or completely at fault for your injuries and the value of your claim will be reduced.

Were your injuries caused by the accident or something else? – The defendant is only responsible for compensating you for injuries caused by the accident. A defendant does not have to pay for injuries that are unrelated to the accident or symptoms that would have appeared absent the accident. The defendant is responsible for aggravation of pre-existing conditions. Causation can be a very tricky issue. For more information on proving causation, see my previous article: Proving Causation in an Injury Claim.

What are the damages you have suffered as a result of the accident? – Once you have addressed the above issues, the next question is what are the damages you have suffered? There are several different categories of damages that need to be assessed and added up to determine the value of your claim. The main categories are set out below:

Pain and Suffering – you are entitled to be compensated for the pain and suffering you have endured as a result of the accident. The information generally taken into consideration includes: your age, nature of the injury, severity and duration of pain, disability, emotional suffering, loss of impairment of life, impairment of family, marital and social relationships, impairment of physical and mental abilities, loss of lifestyle, and stoicism (Stapley v. Hejslet 2006 BCCA 34). To arrive at a figure, the facts of your case are compared to the facts of other similar cases that have gone before the court. There are no specific values for specific injuries. Experienced personal injury lawyers can often ballpark the pain and suffering value of claims, without looking at the case law at least in terms of small (under $25,000), medium ($25,000 to $100,000) and large claims ($100,000-$350,000). The present upper limit is approximately $350,000 which is reserved for catastrophic cases.

Special Damages – you are entitled to be compensated for all reasonable expenses that you have incurred as a result of the accident. These include things like massage therapy, physiotherapy, chiropractors, psychologists, counsellors, acupuncture, medication, medical devices, mileage to and from appointments, parking or taxi fares for appointments, nursing costs, etc. Basically, if you had to buy it because of your accident and it was a reasonable and necessary expense, you can recover it.

Past Wage Loss/Past Loss of Earning Capacity – you are entitled to be compensated for income you would have earned, but did not earn as a result of the accident. If you did not suffer a wage loss, but lost time from a sick bank or holiday bank you are also generally entitled to be compensated for this loss. If you are self-employed or a business owner and you suffered financial loss as a result of your accident this is also compensable.

Future Wage Loss/Future Loss of Earning Capacity – if you have suffered a disability as a result of the accident and there is a real and substantial possibility that your disability will have an impact on your ability to earn a living in the future than you are entitled to compensation for this loss.

Future Cost of Care – if you will have ongoing expenses related to the accident that are medically justified, such as assistance, equipment, facilities and treatment costs, than you are entitled to be compensated for those expenses provided that they are reasonable in the circumstance.

Past and Future Loss of Housekeeping Capacity – if you are unable to perform household tasks as a result of the accident than you are entitled to compensation for this loss.

In Trust Claim – if as a result of your accident a friend or family member provides services outside the range of his or her normal duties, and if that individual had not stepped in you would have otherwise had to hire someone else to do those duties, than you are entitled to claim compensation in-trust for the services of that person.

For more information on proving damages, see my previous article: Proving Damages in an Injury Claim.

Have you followed your health care providers’ advice? – You are obligated to do everything you reasonably can do to get better. This means that you need to seek medical assistance and generally speaking, follow the advice of your caregivers. If you choose not to follow their advice, this is called a failure to mitigate your damages and the value of your claim may be reduced.

Once all of the above information is considered and the supporting evidence is provided, a personal injury lawyer can provide you with a proper legal opinion on the value of your claim. If you have received an offer from ICBC and want to know if it is fair, I recommend contacting a personal injury lawyer. Most personal injury lawyers do not charge for phone calls, emails or initial consultations.


Cost of an Injury Lawyer

Let’s face it; nobody wants to pay for legal services if they do not have to, but if you have been injured in an accident you may have thought about hiring a lawyer to help you navigate your claim. If you have not hired a lawyer, one of the reasons might be that you think that lawyers are expensive. So, what is the cost of hiring a personal injury lawyer anyway?

There are two ways personal injury lawyers typically charge for their services: 1) contingency fee agreements; and 2) hourly rate agreements. The majority of personal injury claims are done on a contingency fee basis (where your lawyer’s fee is contingent on the result obtained) because most clients who are injured cannot afford to hire a personal injury lawyer by the hour. Without the option of contingency fee agreements, there would be very little access to justice for those injured through no fault of their own.

The Law Society of British Columbia regulates contingency fee agreements. The maximum remuneration your lawyer can charge you for injury or death related to a motor vehicle accident is 33 1/3% of the amounts recovered. For any other personal injury or wrongful death claim (i.e. medical malpractice, slip and falls, assaults, product liability, etc.), the maximum amount your lawyer can charge you is 40% of the amounts recovered. Some lawyers will charge a flat percentage whereas other lawyers will charge different percentages, on a sliding scale, depending on the stage of the lawsuit. The amounts charged by different lawyers may vary but they are all subject to the rules of the Law Society.

If your claim is high risk or collection may be an issue (i.e. assault claims), you may only be offered the option of an hourly rate agreement. According to a poll by Canadian Lawyer Magazine in 2013, national hourly rates ranged from about $193-$375 or more. If you have to pay by the hour, yes, hiring a lawyer can be expensive but in some cases, it is more cost effective then hiring a lawyer on a contingency fee basis.

In addition to your lawyer’s fee for the work performed, in both contingency fee agreements and hourly rate agreements, your lawyer will also charge for disbursements. These are the firm’s out-of-pocket expenses required to pursue the claim. Some lawyers charge disbursements on a monthly or intermittent basis but with most contingency fee agreements you are charged for disbursements at the end of the claim. If you are billed at the end, you are usually charged interest. Disbursements include things like: photocopying, scanning, the cost of filing the claim with the court, the cost to obtain medical records and reports, courier charges, transcripts, legal research, etc. The most expensive disbursements in personal injury claims are typically the cost of hiring experts (medical and liability experts) and their reports. In high risk claims, you may be required to pay for certain disbursements up front.

The good news is that the successful party in a lawsuit is entitled to recover “costs and disbursements.” An award of “costs” is a partial indemnity of your actual legal costs. An award of “disbursements” is reimbursement for those disbursements that are considered to be necessary and reasonable in pursuing your claim. Therefore, when your lawyer is attempting to settle your claim, in addition to the damage portion of your claim, your lawyer will also attempt to maximize recovery of costs and disbursements. An award of costs is estimated using a court tariff system (a point system for each step taken in the lawsuit). Unfortunately, it is only partial compensation of your actual legal costs. In most cases, the majority of the disbursements are recovered, but not 100%. In cases where liability (who is at fault) is a significant issue, the amount of costs and disbursements recovered will vary significantly. The bad news is that the government charges tax on legal fees and most disbursements.

Every claim is different, so it is difficult to say with any degree of certainty what hiring a personal injury lawyer will cost you. However, as an example in a contingency fee arrangement, if ICBC offers to settle your claim for $10,000 plus disbursements, you will likely end up with between $5,800 and $7,200 in your pocket after payment of legal fees and disbursements. If ICBC offers to settle your claim for $100,000 plus $10,000 in costs, plus disbursements, you will likely end up with between $67,000 and $80,000 in your pocket after payment of legal fees and disbursements. The variation will depend on the percentage charged and whether there are any disbursements ICBC is refusing to pay. In my opinion, you will almost always end up with more money in your pocket with the assistance of a knowledgeable personal injury lawyer then without. Settlement offers made to you without legal counsel are typically, although not always, significantly lower in value. In some cases, the settlements offered are dramatically lower (i.e. more than 5-7 times lower) than what is obtained through competent counsel work. Most personal injury lawyers do not charge for initial consultations. So, if you want to know if it would make sense to hire a lawyer in your case and what it will cost you, I recommend booking an initial consultation.


*Important Note: The information contained in this column should not be treated by readers as legal advice and should not be relied on without detailed legal counsel being sought.

Read more INJURYwise articles



The views expressed are strictly those of the author and not necessarily those of Castanet. Castanet presents its columns "as is" and does not warrant the contents.

Previous Stories

RSS this page.
(Click for RSS instructions.)