It’s time to privatize auto insurance in BC!

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The vast majority of British Columbians are sick and tired of ICBC and its excuses.  We have been through a year of ICBC blaming claimants, the courts and lawyers for its allegedly poor financial performance.  At the same time insiders of ICBC have publicly said that there was no “financial mess” and that the corporation was actually going to make a profit in 2018.  ICBC used the excuse of financial performance to have the government change the legislation that applied to it so that it could unload costs onto private insurers and reduce claims costs by circumventing the law of damages with an injury cap.  And after doing that ICBC significantly raised rates for everyone.  

Over the last few years in my practice as a senior litigation lawyer I have dealt with ICBC on multiple claims where they have taken very unreasonable positions and caused matters to go to trial, only to cost the corporation hundreds of thousands of dollars more for a particular claim.  In some cases millions of dollars more.  Recently there was another example of this in a case that went to trial (and is now public record) called Bonneau v. Neate et al.  The ICBC adjuster took a very unreasonable position on damages, even though liability was admitted, and refused to put any more money on the table to resolve the claim.  The end result was that ICBC paid over $100,000 more than it could have resolved the claim for, and also will have to pay double costs on top of that.  The Supreme Court rules provide for an increase in costs where a party unreasonably failed to accept a reasonable offer to resolve the claim.  In the last few years the number of claims where ICBC has taken a similar position has increased significantly.  It appears to be an intentional plan to run up the costs and the only conclusion one can reach is that they’re doing so because they have easy targets to blame: claimants, or injured people, the courts and of course lawyers.  It also allows them to hide their poor business practices because they can blame others and not take responsibility for their failed performance.

All of this supports the need to privatize auto insurance in British Columbia and get rid of the ICBC monopoly. At the end of the day, ICBC as a monopoly is just another form of indirect taxation of consumers in British Columbia.  The profits it has made over the years has gone to the government’s general revenues and not been kept in the corporation.  Both main political parties are guilty of this.  The politicians do ICBC’s bidding to cover up its inefficient business practices and give it more tools to take away the rights of injured people in B.C. and so there’s no solution politically between either of the parties.  The simple reality is ICBC should be privatized and an open market for competition for auto insurance should be in place in British Columbia.  It works in other jurisdictions in Canada to lower auto insurance premiums; it should happen here.
Michael Yawney QC is a senior litigation partner at Nixon Wenger LLP, the North Okanagan’s largest law firm. He has been a member of the Association for Injured Motorcyclists (AIM) for many years, on the Board of Governors for the Trial Lawyers Association of British Columbia, is a member of the Canadian Bar Association and has represented many personal injury clients. The opinions expressed herein are the opinions of the writer and are based solely on his views and experience over the many years he has practiced personal injury law in British Columbia.

More ICBC Misinformation…

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A recent court decision by Chief Justice Hinkson where the government’s unilateral changes to the Supreme Court Rules without the usual consultation with the legal profession and the judiciary was found unconstitutional has resulted in more political rhetoric, ICBC excuses and misinformation. The Attorney General David Eby responded to the ruling by alleging that the government would now be out $400 million in revenue and would no longer have a surplus. He also alleged that ICBC paid out $1.9 billion to law firms (as part of a smear tactic to mislead the public as to lawyers and judges being the problem, not the actions of ICBC!).  We pay taxes to the government to fund it’s operations; to suggest that a court case means no government surplus is absurd and exposes the real basis for ICBC: indirect taxation!

This misinformation has to stop.  ICBC’s own employees have said there is no dumpster fire at ICBC and that the losses claimed are not correct. ICBC regularly uses “numbers” it creates to lobby the government to do it’s bidding. For example, within the last year magically creating almost $700 million in “estimates for losses” with a stroke of a pen (by re-assessing claim exposures – allowing it to adjust up an exposure to create a picture of more financial loss).  From the last financial statement published by  ICBC in March of 2019, it has an arbitrary “change in estimates for losses” of over $1.2 billion. It also notes that it’s revenues are nearly $6 billion dollars with total assets of over $16 billion….yet it claims that law firms were paid $1.9 billion with the impression that they are sucking the corporation dry!  This is simply misinformation to deflect responsibility! Neither Eby or ICBC have told you that litigated claims with law firms representing plaintiffs is only a small proportion of the claims it pays out in any given year; this isn’t stated because they want the public to blame lawyers, judges and injured people for the high cost of premiums and not tell you the real truth of it’s financial operation. ICBC doesn’t tell you how it has created millions and millions of unnecessary extra costs by refusing to deal fairly with claims; running claims to trial that should resolve and costing the corporation significant extra costs.  I have many clear examples of this, in particular with two claims within the last year that went to trial;  ICBC’s refusal to consider fair offers to resolve the claims has resulted in over $600,000.00 in unnecessary expense for the Corporation.  That is  only on two claims, there are many more examples of the same thing and it happens all the time. Right now ICBC’s strategy is to run every claim to trial to increase the costs to help continue the blame game and deflection of responsibility.  

ICBC gets away with this because it is not accountable. It simply blames claimants, lawyers and judges…and doesn’t take responsibility.  Ask yourself why we pay the highest rates in the country and why ICBC would lie about it’s financial performance?  So it can continue to deflect responsibility and blame others… and carry on providing government with revenue that amounts to indirect taxation, while raising insurance rates.

Michael Yawney QC is a senior litigation partner at Nixon Wenger LLP, the North Okanagan’s largest law firm. He has been a member of the Association for Injured Motorcyclists (AIM) for many years, on the Board of Governors for the Trial Lawyers Association of British Columbia, is a member of the Canadian Bar Association and has represented many personal injury clients. The opinions expressed herein are the opinions of the writer and are based solely on his views and experience over the many years he has practiced personal injury law in British Columbia.

ICBC delays, result in judgement of over $804,000.00 plus costs

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Michael Yawney QC, was retained by a professional woman in her early 40’s after she suffered injuries in an October 9, 2013 motor vehicle collision where she was hit hard from behind when she was stopped at a crosswalk to allow a pedestrian to cross the road.  The defendant driver had failed to slow down and stop, despite the cross walk.  There was extensive damage to the defendant vehicle but very little visible damage to the plaintiff’s vehicle.  The woman believed that should would bounce back and be okay, and worked hard with rehab to get back to work. Unfortunately, after multiple attempts to get back to work and to get better, she was diagnosed with permanent chronic pain and disability. Despite this she kept working as much as she could as she supported herself and her daughter.  ICBC took the position that the woman could not have been injured significantly and refused to resolve her claim on a fair basis despite having to admit liability as it was a rear end collision caused by the defendant. Despite numerous attempts by the plaintiff to resolve the claim fairly, ICBC forced the matter to trial. The first trial date did  not proceed because there was no court time available.

 

Michael Yawney QC, along with partner Allyson Edwards and associate Allison Jaquish, took the matter to trial in January of 2018. Before doing so, further attempts were made to try and resolve the claim fairly; all of which ICBC ignored. Judgement was rendered on March 18, 2019 for over $804,000.00 plus costs. Because of the attempts of Mr. Yawney and his team prior to trial to fairly resolve the claim, the plaintiff was awarded double costs due to the conduct of ICBC in refusing to accept reasonable offers before both scheduled trial dates. To further compound matters, ICBC refused to resolve costs and further court time had to be taken up to decide that issue.

 

This case is another example of where ICBC, despite its usual blaming of insureds and claimants for high costs, created well over $500,000.00 in extra costs compared to what it could have resolved the claim for prior to trial. This is on one claim! This happens all the time with ICBC claims, but they never tell us that when talking about ICBC’s financial performance. It is always the claimants, lawyers and judges that get blamed for it’s poor performance and high claims costs.   This case is one of many over the last several years where ICBC’s claims management and business practices results in millions of dollars of needless extra cost simply because of the way it chooses to do business. Private insurers always factor in costs and cost savings when adjusting claims; ICBC doesn’t seem to care because it can always go to the government to bail it out and make changes so it doesn’t have to take responsibility for it’s poor business practices. This is the real problem with auto insurance in British Columbia and why over 80% of British Columbians want auto insurance privatized and ICBC sold off. The $500,000.00 wasted on this one claim would go a long way to saving many people from paying higher insurance premiums. We should all be asking that ICBC disclose similar instances when it complains about high claims costs!

WHAT THE HECK IS HOTCHPOT??

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“Her piece of cake is bigger than mine! It’s not fair!!” As a mother of 2 young children, this is something I hear on a regular basis. It drives me a bit crazy, but as parents, when it comes to our kids, we all know how important the concept of “fairness” can be.
Many parents fret over how they will equalize their wills where they have made unequal gifts, advances or loans to their kids over the years. Parents with the financial means sometimes advance money to a “financially dependent” child to help with living expenses or help them buy a car or house, to the exclusion of their other children who are “financially independent”. These parents often expect that when they pass away, the money they have advanced to their financially dependent child or children while they were alive will be considered advanced on account of the children’s inheritances, NOT separate gifts over and above their inheritances.
Have no fear, the “Hotchpot Clause” is here. The legal and accounting concept known as a hotchpot clause is available to deal with the equalization of the shares of the beneficiaries of a person’s estate where one or more of the beneficiaries has already received money from a parent during the parent’s lifetime. It prevents a beneficiary (usually a person’s child) from double dipping where a parent intended that any money they’d given to that child during their lifetime to be a pre-payment of an inheritance, instead of an advance above and beyond the intended inheritance.
The hotchpot concept is best illustrated by an example:
John and Martha Moneybags have 3 children, David, Suzie, and Barbie. John and Martha have an estate of $900,000.00. David, their eldest, suffers from an entitlement curse, and has never held a long term job or finished university. However, he can do no wrong in his dad’s eyes and over the past few years, John has advanced David $100,000 to fund his backpacking and skiing lifestyle. Suzie’s marriage recently broke up and her husband left her with 3 young children. John and Martha recently advanced $200,000 to Suzie to help her purchase a house. Barbie has a successful toy store business, and while not wealthy, she makes a good living.
John and Martha intend to have their $900,000 estate split equally when they die, but they want the money previously advanced to David and Suzie to be accounted for, such that Barbie gets 1/3 of their estate, including amounts previously advanced to David and Suzie. If John and Martha were to die in a plane crash today, their current wills state that their estate is to be divided equally among their 3 children, so each child would get $300,000 (1/3) each, which is not their intention.
Had John and Martha met with their lawyer before the plane crash, their lawyer could have updated their wills with a hotchpot clause, such that their estate would be considered to have been $1,200,000 ($900,000 + $100,000 advanced to David + $200,000 advanced to Suzie). Thus, when the estate was settled, Barbie would receive $400,000 ($1,200,000/3), David would receive $300,000 ($400,000 – $100,000) and Suzie would receive $200,000 ($400,000 -$200,000).
A hotchpot clause requires evidence of provable amounts advanced to beneficiaries, so it is very important for parents to keep good records of money provided to their children. Bad, or no book-keeping may render a hotchpot clause ineffective.
Where parents intend to split their estate equally amongst their children/beneficiaries, but have made loans, advanced funds for house purchases, or just given money to their children in unequal amounts while alive, their estate planning should include consideration of those gifts and loans, with proper evidence, and their lawyer should draft a hotchpot clause in their wills.

Elise Allan is a Partner at Nixon Wenger LLP who works extensively with individuals, assisting them in such matters as the purchasing and selling of real estate, preparing Wills, Powers of Attorney and Representation Agreements as well as obtaining Grants of Probate.

Builders Liens and Time Limits

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Under the Builders Lien Act, contractors, sub-contractors, workers, and material suppliers are provided with two distinct types of liens. The first type of lien, known as a “builders lien” or a “lien against land”, is a lien against the land and buildings to which the construction professional have contributed labour or materials. The second type of lien, known as the Shimco lien (named after the case that first recognized such a lien in British Columbia) or the “holdback lien”, provides construction professionals with a lien against the holdback funds that should be retained by the person that is next highest in the construction pyramid (i.e. the funds that arise from the required deduction of 10% of the value or material as they are actually provided, or 10% of the amount of any payment made on account of the contract or subcontract).
The rights which flow from both the lien against land and the Shimco lien are powerful tools which enable unpaid construction professionals to seek compensation directly from the owner of the land to which they contributed labour or materials. However, there is a crucial catch: time limits must be respected in order for a construction professional to exercise these lien rights. If the time limits are not respected, lien rights are extinguished.
The Time Limits:
As a practical matter, if a construction professional has not provided any labour or materials to a construction site in 30 days, and payment has not yet been made by the owner, contractor, or subcontractor, that construction professional should consider having a conversation with his lawyer. As discussed below, for both legal and practical reasons, the process needed to exercise both a lien against land or a Shimco lien should be commenced as quickly as possible, as lien rights expire very quickly.
With respect to a traditonal builders lien / lien against land, the timelines that must be respected depend on whether the owner had hired a head contractor (meaning, a contractor that is engaged to perform substantially all of the construction work, or, in other words, a general contractor), whether there is an owner-developer or construction management relationship (i.e. the owner has direct contracts with all construction professionals), and whether the construction project is on a strata lot.
For contracts where the owner had hired a head contractor, construction professionals must file a document, entitled, “claim of lien”, with British Columbia’s Land Title Office, with respect to the land where materials or services were provided. The claim of lien document must be filed 45 days after the earliest of:
1.    substantial completion of the head contract;

2.    termination of the head contract;

3.    abandonment of the head contract;

4.    issuance of a certificate of completion for the head contract or any subcontract under which the construction professional had been retained; or

5.    for strata lots, the date the strata lot is conveyed to the purchaser or the date that strata unit is occupied.
Similarly, where there is there is an owner-developer or construction management relationship, the claim of lien document must be filed 45 days after the earliest of:
1.    substantial completion of the construction project;

2.    abandonment of the construction project;

3.    issuance of a certificate of completion for any contract or subcontract under which the construction professional had been retained; or

4.    for strata lots, the date the strata lot is conveyed to the purchaser or the date that strata unit is occupied.

Though there are a variety of complications that arise from these timelines, the practical questions that should be asked are:
i) has a certificate of completion been issued (this will invariably be issued by a third party engineer or architect) with respect to any part of the project?
ii) has the general contractor completed, abandoned, or terminated its contract with the owner?
iii) has the construction project been completed or abandoned? and
iv) if dealing with a strata lot, has someone bought the lot is living in the unit?
If the answer to any of these questions is “yes”, and, as a construction professional, you are unpaid, your lien rights may be on the way to expiring, and you should quickly seek to speak with your lawyer.
Finally, even after a claim of lien document is filed, an action to enforce that claim of lien, along with an associated certificate of pending litigation, must be filed within one year of the filing of the claim of lien.
With respect to the Shimco lien, the Builders Lien Act provides no express timelines that must be satisfied. However, from a practical perspective, swiftness of foot in advancing the Shimco lien is critical, because the Shimco lien can only be advanced before holdback funds have been dispersed, and the strategic usefulness of the Shimco lien lies in the fact that it can be advanced even when the typical builders lien / lien against land has expired.
The law is quite clear that the Shimco lien is extinguished if the holdback funds have been disbursed before the lien is advanced. As stated by the British Columbia Court of Appeal, in Wah Fai Plumbing & Heating Inc. v. Ma, 2011 BCCA 26:
[40]           Shimco does not deal with these circumstances.  Nor can the Act be interpreted to provide that where there is no holdback, or a holdback has been wrongfully paid out, a person whose land lien has been extinguished may later commence proceedings to enforce a lien against a nonexistent holdback.
[41]           The appellant argues there is no limitation in the Act for enforcing a lien against the holdback.  It claims that proceedings to enforce a lien against a holdback may be commenced any time before the holdback is paid out, subject only to the six-year limitation period provided in s. 3(5) of the Limitation Act, R.S.B.C. 1996, c. 266.  It argues further, citing s. 4(4) of the Limitation Act, that the amendment to the statement of claim in August 2006 to claim the holdback lien did not have the effect of commencing a new action, and its claim against the holdback should be considered to have arisen when it originally filed the writ and statement of claim in August 2002.
[42]           The appellant cites no authority for its suggestion that s. 4(4) of the Limitation Act should be given retroactive effect, and I see no basis in principle to so find in this case.  In any event, it would not change the result:  the appellant is not entitled to claim a lien against a nonexistent holdback.
Or, in other words, once the holdback funds are gone, they’re gone: The claim associated with the Shimco lien must be advanced before the holdback funds are paid out.
Considered together, the time limits associated with the liens provided under the Builders Lien Act are traps for the unwary. Whether considering a typical builders lien, or whether considering a Shimco lien, construction professionals have limited time to act to ensure that lien rights are not extinguished.
Christopher Hart is an Associate at Nixon Wenger LLP where he enjoys a wide ranging civil litigation practice, with a particular emphasis on estate litigation, commercial litigation, property litigation, and construction law.

Claim resolves for $650,000.00 plus costs & rehabilitation expenses

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A woman in her late 30’s was referred to Michael Yawney QC by a friend. She had suffered a severe whiplash injury after she was rear ended in traffic in Kelowna, BC.  The injuries completely disabled her from working. The claim was resolved at mediation a few weeks before trial for over $650,000.00 plus costs and plus future rehab expenses to help her cope with the effects of her injuries.  The key issue in dispute was her residual ability to work.

Electrocution injury claim expedited and resolves for $2,000,000.00 plus costs

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Michael Yawney QC was asked to assist a young man and his family as a result of an electrocution injury that occurred on rented property. The young man was seriously injured when a faulty electrical circuit that was not installed in accordance with electrical code requirements, resulted in his being electrocuted.  The financial impact on the family was devastating as the young man was unable to work due to his injuries.  Mr. Yawney and his team helped the family by arranging financial assistance and medical assessment of the injuries, and most importantly, was able to expedite the claim through the courts to help minimize the financial impact. The claim was resolved a few weeks before a lengthy trial for close to $2,000,000.00 plus costs.

Executors

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In your will, the executor is the person you name to settle your estate after your death. The executor is responsible for, among other things, determining what your assets and liabilities are at the time of your death, safeguarding those assets until they are distributed to the beneficiaries, paying your debts and filing your tax returns. They are also required to gather information about your beneficiaries and family members, including confirming legal names and addresses and identifying anyone under the age of 19. Your executor will apply for a grant of probate if one is required and ultimately distribute your assets according to your wishes.
It is important to choose your executor carefully to make sure your estate is settled efficiently and effectively. An ideal executor is someone who is organized, will deal with your assets and relatives objectively, and has loads of patience. Having an executor who lives in the same area as you is helpful but not necessary. It is also important that your executor survives you and has capacity at the time your will comes into effect.
Before appointing someone as your executor in your will, it is good practice to confirm that he or she is able and willing to take on that role. An alternate executor should be appointed in case the first executor can’t act.
There are a few circumstances where the intended executorship might fail:
1.    If you die before you have prepared a will, it is called dying intestate. The court must appoint someone to administer your estate. The court will look to who has the most interest in the estate – typically your closest surviving family member. (For more information on dying intestate, see Dying Without a Will

2.    If the executor named in your will declines, dies or is incapable of taking on the role, and you have no surviving or willing alternate executors, the court must appoint someone to administer your estate in accordance with your will. This person might not be permitted to act as administrator without posting an estate bond to protect creditors and beneficiaries who minors or incapable in the event the estate assets are administered improperly.

3.    If your sole or last surviving executor (“Your Last Executor”) received a grant of probate and then becomes incapable or dies before finishing his or her duties, the executor appointed by Your Last Executor in his or her will may be in a position to take over the administration of your estate. This is called the “chain of executorship” and it will not apply to all cases where Your Last Executor can no longer act before the administration of the estate is completed.

4.    The chain of executorship is broken if Your Last Executor left no will or did not appoint an executor or has no surviving willing and able executors. In those circumstances, the person with the most interest in your estate – typically a beneficiary – can apply to be substituted as the administrator of your estate.
Be sure to review your will regularly and be aware of the health and personal circumstances of your primary and alternate executors. If one or all of your executors are no longer able to act, make arrangements to update your will.

Krystin Kempton is a Partner at Nixon Wenger LLP where she has a general solicitor’s practice, advising corporate and individual clients on corporate and commercial transactions, lending and borrowing, wills and estates and real estate matters.
 

Claim resolves for $85,000.00 plus costs & future rehabilitation expenses

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Michael Yawney QC was retained by an aboriginal man and his wife for a head on collision in winter conditions on Hwy 97 north of Vernon.  The man suffered soft tissue injuries that required hospitalization. Liability for the collision was admitted. The claim was resolved prior to trial for $85,000.00 plus costs and plus future rehab expenses. The man had substantially recovered, however, he required ongoing physiotherapy and medications to assist him in managing his symptoms.

Avoid Probate Fees

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Probate fees are fees paid to the province to obtain a Grant of Probate from the British Columbia Supreme Court when a person dies. The fee is based on the value of the deceased person’s assets and can be generally estimated at 1.4% of the value of the assets. There are some adjustments, but the 1.4% provides a small overestimate of the fee. A Grant of Probate is generally required to enable the Executor to sell or otherwise deal with the deceased person`s assets.

However, not all of a person`s assets while alive may form part of that person`s estate and require a Grant of Probate to enable transfer. For example, an RRSP, RRIF, or TFSA that designates a beneficiary who survives the deceased person, will transfer directly to that beneficiary and not form part of the deceased`s estate that is subject to probate. Life insurance naming a beneficiary will go to the named beneficiary and not become part of the estate. And assets that are owned with one or more other persons as joint tenants can pass to the surviving joint tenants rather than to the estate.

Owning assets as joint tenants is a common circumstance for spouses. Most couples will own their home as joint tenants, have joint bank accounts, and often own vehicles jointly. For most couples*, it makes sense to also name the spouse as beneficiary for life insurance, RRSPs, RRIFs, and TFSAs. Consequently, upon the death of one spouse, all assets may transfer to the surviving spouse without the need to obtain a Grant of Probate.

Given the savings of time and money in avoiding a need for probate when the first spouse dies, we find that many surviving spouses are interested in adding children to title to a home or recreational property, or to bank accounts, in an effort to avoid future probate fees. While that can be effective to avoid probate, the transfer of ownership has many consequences that may not be intended.

Adding another person to title, or to a bank account, is a transfer of ownership. If the asset were a recreational property or an investment account, the transfer will be a disposition for income tax purposes and may trigger an obligation to pay capital gains tax. If you add a child to title to your principal residence and that child does not live in the residence, capital gains tax could become payable on part of the future increase in value of the home as part of the principal residence exemption may be lost. Once ownership is changed, control is lost, such that any future decision regarding a home or recreational property, including whether or not to sell or mortgage it, will require agreement of all owners. The asset would also be at risk of a claim by any creditors of the person that was added as an owner as well as claims by that person’s spouse in a family law claim.

Notwithstanding the consequences of adding a joint owner to an asset, there are circumstances where it is a good planning option. It is most important to clearly understand both the intended and unintended consequences of any change of ownership of any asset, and to clearly document the intent of any change. If one child is added to a bank account, should the balance of that account go to that child upon your death or do you intend that the balance be split among all your children. Future disputes can be avoided or minimized if intentions are well documented. A failure to properly document intentions often results in lengthy disputes that are expensive and permanently damage family relationships.

Probate fees are significant enough that it makes sense to at least consider options to avoid the need to obtain a grant of probate. But any changes in ownership should only be undertaken after careful consideration of the consequences of such change within the context of a person`s overall estate plan, and taking into account family dynamics that may create greater risks. All of these factors require a good conversation with your legal advisor to ensure any effort to save probate fees does not create problems that will be much more expensive and damaging to address.

*There are exceptions as each family is unique. You should seek legal advice that reflects your individual circumstances when planning for the eventual disposition of your assets upon death.

Tom Christensen, Q.C., has a general solicitor’s practice, assisting clients with business matters, wills and incapacity planning, the administration of estates, and real estate conveyancing and financing matters. He has a particular interest in assisting families with the transition of assets from one generation to the next through effective personal and business succession planning as well as resolving estate disputes outside of court.

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