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AUTOMOBILE INSURANCE - Accident benefits - Deductions

Tuesday, December 08, 2020 @ 6:43 AM  

Lexis Advance® Quicklaw®
Appeal by the insurer, Insurance Corporation of British Columbia (ICBC), from a judgment calculating benefits owed to the insured, Lindblad. The insured sustained a severe injury in a 2013 automobile accident. She initially received monthly long-term disability (LTD) benefits of $2,930 under a private group policy administered by GWL together with Part 7 benefits from the appellant. In 2015, the insured’s tort action was settled for $988,182. The settlement amount was not attributed to different heads of damages, nor did it release the appellant of its obligations to pay Part 7 benefits. The settlement, as tort compensation, offset the LTD benefits payable by GWL. To calculate the offset, the insured and GWL agreed that $145,000 of the settlement was attributable to past wage loss, and $323,758 was attributable to future wage loss, entitling GWL to reimbursement of $33,190. Ongoing LTD monthly benefits were accordingly reduced to $2,355. A dispute arose over whether Part 7 benefits payable by the appellant were to be calculated based on the initial LTD benefit, or the net benefit post-offset. The chambers judge held that the Part 7 benefits were to be calculated in relation to the net amount. ICBC appealed.

HELD: Appeal dismissed. The chambers judge correctly found that the net group plan benefit was to be used in calculating the insured’s Part 7 benefits. To find otherwise would improperly conflate the contractual provisions in the plan with the Regulation. The group plan clearly provided for a reduction arising from other disability income, including monies received from a settlement or damages award. The insured’s initial benefit was reduced accordingly. Under ss. 81(1) and 81(2) of the Regulation, the insured continued to have entitlement to benefits that reflected the offset under the group plan. To reach a different conclusion would result in ICBC obtaining the advantage of the amount initially payable and paid under the plan as opposed to what the insured actually received once the terms of the settlement were put into effect.

Lindblad v. Insurance Corp. of British Columbia, [2020] B.C.J. No. 1738, British Columbia Court of Appeal, D.C. Harris, G. Dickson and P. Abrioux JJ.A., November 6, 2020. Digest No. TLD-December72020004