Insurable Interest

In sickness and in health … BC's Health Care Costs Recovery Act comes into force

On December 8, 2008 the government declared the Health Care Costs Recovery Act S.B.C. 2008, c. 27 will come into force on April 1, 2009, thereby marrying the Ministry to almost all personal injury claimants in British Columbia. The new procedure applies to all personal injury lawsuits filed in BC after that date.

HIGHLIGHTS OF ACT

• If the beneficiary of health care services (i.e. the plaintiff) issues a lawsuit for personal injuries or death, he or she must include a health care services claim in that lawsuit.
• The health care claim will include all government funded medical services, including hospital costs, medicare, continuing care costs, prescription drugs, and the present value of the future health services which the plaintiff can "reasonably be expected to receive". [s. 2]
• If the personal injuries are caused by 2 or more wrongdoers, they are each liable for a percentage of the medical costs equal to the percentage of fault attributed to them. [s. 17]
• Payments to the plaintiff under a judgement or settlement will take priority over payments to the Minister if there are limits issues. [s. 18]
• A claimant must notify the government of any legal proceeding within 21 days of starting a lawsuit. [s. 4]
• Any insurer who becomes aware its insured has or may have caused personal injuries to another person must notify the government within 60 days, and must then comply with the Ministry's requests for further information. [s. 10]
• The government is subrogated to the beneficiary's right to recover past and future health costs, and may intervene and assume conduct of the health services portion of the lawsuit or commence a separate proceeding in its own name or in the name of the beneficiary, with or without the latter's permission. [s. 6, 7 and 8] Any lawsuit in the government's own name is subject to a limitation period which can extend up to 6 months following the expiry of the beneficiary's right to commence suit. [s. 8 (5)]
• Plaintiffs must give notice to the Ministry at least 21 days before they enter into any settlement. The Ministry must consent to a settlement failing which any release given as part of the settlement is void. [s. 12, 13]
• The Act does not apply to injury claims brought against wrongdoers having coverage under the Insurance (Vehicle) Act (i.e. ICBC insureds), or where the injury is covered under the Worker's Compensation Act or to tobacco related wrongs as defined in the Tobacco Damages and Health Care Costs Recovery Act. [s. 24]
• The Regulations to the Act provide for an exemption for legal proceedings under the Small Claims Act. [Regulations s. 5]
• The Regulations also set out the form of the Notices required to be given under the Act and, in an acknowledgment of the electronic age, provide that they may be served by email. [Regulations s. 7]

PROCEDURE ESTABLISHED BY ACT

The procedure set out by the Act for the conduct of a litigated personal injury matter may be summarized as:

Pre-litigation

• An Insurer must notify the Minister, using the prescribed form, within 60 days of becoming aware of an act or omission by their insured which may have caused or contributed to an individual's personal injury or death.
• Upon becoming notified by the Insurer, the Minister may request the Insurer provide copies of the Insured's Policy, any police reports and any pleadings. The Insurer must comply with this request before the date specified by the Minister in the request.

Litigation

• At least 21 days after commencing legal proceeding the Plaintiff, using the prescribed form, must give written notice to the government.

Settlement

• At least 21 days before a Plaintiff enters into a settlement agreement they must, using the prescribed form, give notice to the Minister.
• Once terms of a settlement are reached the payor (Defendant or Third Party) must, in the prescribed form, give the Minister notice of the proposed terms of the settlement including copies of Releases or Covenants not to Sue.
• The settlement and Release are not valid until the Minister consents in writing to their proposed terms.
• A person liable to make payments under a settlement (Defendant or Third Party) must submit payment of the health care costs to the Minister within 60 days following the date of the Minister's consent to the settlement. Upon request, an extension of this period of time may be approved by the Minister.

Final disposition of claim

• Before a Notice of Discontinuance or Consent Dismissal Order is filed, a consent of the Minister must be filed with the court.
• A court must not set aside, dismiss or strike out a health care services claim unless they are satisfied that the government has been given a reasonable opportunity to appear.
• A court must not make a final order disposing of a proceeding unless they are satisfied that the government has been given the required written notice of the claim and of the application for the order of final disposition.

EFFECT OF ACT

Starting April 1, 2009, the conduct of a personal injury action in British Columbia will have a new layer of complexity. The Health Care Costs Recovery Act will affect not only the handling and procedure of the lawsuit but may also significantly increase the potential quantum of the claim.

The wording of the Act may be found at www.leg.bc.ca/38th4th/3rd_read/gov22-3.htm and the Regulations with attached proscribed notice forms at www.cwilson.com/insurance/reviews/HCCRA-Reg.pdf.

Clark Wilson is putting together a more detailed brochure respecting the new legislation and the claims procedures and if you'd like to receive a copy, just let us know.