Insurable Interest

First Court Decision on B.C.'s New Health Care Costs Recovery Act

A British Columbia Supreme Court judge has issued what appears to be the first recorded decision involving B.C.'s new Health Care Costs Recovery Act. In MacEachern v. Rennie, the plaintiff applied to amend the statement of claim to include a health care costs recovery claim. In dealing with the application, Mr. Justice Ehrcke addressed how the B.C. government's health care costs are proven under the new Act and touched on an intriguing issue concerning time limits.

The plaintiff in MacEachern had received extensive government-funded medical treatment for severe injuries she sustained in a motor vehicle accident in September 2005. She sued the offending driver and other defendants in June, 2007 and the case went to trial in March, 2009. The Health Care Costs Recovery Act came into force on April 1, 2009, during the ongoing trial.

The Act contains retroactive provisions which allow the government to seek recovery through subrogated or independent proceedings. However, these avenues are subject to certain restrictions, including time limits. Several weeks into the trial, the plaintiff sought to amend her pleadings to include a claim of $875,457.84 for the government's medical expenses. The Defendants opposed the amendment, arguing that: (1) the subrogated claim was a new cause of action; and (2) the government would not be prejudiced because it had an independent right to pursue its claim, and the late amendment would disrupt the trial and deny the defendants the opportunity to properly explore and defend against the health care costs claim.

The significance of the first issue is that it concerns whether the government can resurrect a health care costs claim beyond its expired time limit by "piggybacking" on a plaintiff's personal injury action that was filed within time. As noted, the defendants in this case argued the government's claim was a new cause of action. If this characterization had been accepted, the judge would presumably have ruled the claim was time barred. The plaintiff and government argued the government's claim was merely a clarification of the plaintiff's existing claim for special damages. In the end, the judge found it unnecessary to answer this intriguing question.

In addition to the time limits issue, the defendants argued that the late amendment would deny them both the opportunity to examine the plaintiff for discovery on the medical expense claim and the opportunity to call their own witnesses to challenge the claim. The plaintiff and government answered that discovery and calling witnesses would make no difference because the Act prevented any challenge to the accuracy of the government's claim. They cited section 16(1) of the Act which provides that a government certificate setting out what treatments were provided is "proof of those health care services" and section 16(2) which says a certificate setting out the cost of those services is "conclusive proof of the past cost of health care services." The judge disagreed, finding that the defendants would be entitled to challenge certain aspects of the government claim and that the late amendment would deny the defendants the opportunity to do so.

The judge ruled that, notwithstanding the filing of a certificate of services under section 16(1), it was open to the defendants to contest whether all the health care services claimed in the certificate were attributable to the accident. While the defendants could not challenge the fact that the specified services were provided or what the services cost, they could challenge whether the accident in question was the cause. Presumably, although this point was not addressed by the judge, the defendants would also be allowed to investigate and argue whether particular treatments were reasonably necessary.

In the end, the amendments were denied based on the lateness of the plaintiff's application and the prejudice to the defendants that would have arisen in that particular case if the amendments had been allowed. As a result, while the case will be of assistance on the issue of whether government claims can be challenged (it appears that they can), the limitation issues that will be on every personal injury defendant's mind will have to wait for another day.

The judgment can be found online here: http://www.courts.gov.bc.ca/jdb-txt/SC/09/06/2009BCSC0652.htm. You may also wish to read Jonathan Hode's helpful paper at www.cwilson.com/pubs/insurance/jlh2.