ICBC statement on Legal Services Branch litigation review
February 6, 2019
We welcome the report and findings of this independent review conducted by the Legal Services Branch.
The report gives a positive assessment of ICBC's settlement and litigation practices, particularly related to injury claims, describing ICBC's claims management practices to be "generally sensible and well executed" and that "ICBC is running a very sound claims/legal department". The report also identifies some opportunities for improvement at ICBC but also acknowledges that many of these are already underway.
Importantly, the report validates our increased focus on reducing the cost pressures litigated injury claims are putting on the insurance rates all British Columbians are paying. The report also recommends "ICBC should increase its use of formal offers" to settle claims, which is central to the approach we are now taking.
The findings of the report also substantiate some of the key challenges we are currently facing with trying to settle litigated injury claims in a timely and fair manner.
We currently only have plaintiff demands on less than 10 per cent of our open injury claims making it very difficult for us to make appropriate settlement offers. The report states:
"… ICBC often does not receive objective evidence of injury in a timely way. It is extremely difficult for ICBC to assess rationally a claim at an early stage and make a fair offer accordingly."
"Plaintiffs in particular should be influenced to advance their claims more promptly and produce objective information to ICBC much sooner. The motivating purpose is to allow ICBC reasonably to assess and address claims exposure much earlier based on objective information. Thus equipped with better information sooner, the notion is that fair settlement is also more likely to occur earlier than under the current model."
"Assuming retention of British Columbia's relatively unfettered litigation based model, modifications should be made which compel claimants to support their claims with objective information much sooner – including before action."
Conversely, on behalf of our customers (defendants), we have made settlement offers on approximately 57 per cent of open litigated injury claims, showing we are making efforts to settle based on the information that has been made available to us. However, in many cases, our offers are not even responded to. This report agrees:
"ICBC will often make an offer to settle early in the life of the claim. That offer will be based on the information then available to an ICBC adjuster. Often that information may be limited but the files reveal some effort to construct a sensible proposal. ICBC then releases the offer. The striking point is the number of occasions on which that offer, at least according to the information on file, gets no response whatsoever. The plaintiff or plaintiff's counsel do not reject it, or indicate why it is unacceptable, or make a counter."
"On the sample, it simply cannot be said that ICBC unreasonably delays negotiations or unreasonably attempts to drive down the quantum of settlement."
"With respect to offers and demands, ICBC cannot reasonably be expected to negotiate in a vacuum or against itself. It is the plaintiff's choice to allow the claim to unfold within the adversarial system…"
In the overview of the report, the Legal Services Branch concludes:
- "Justified or not, ICBC has long been criticized for making inappropriately low settlement offers with the alleged effect of driving claimants to retain counsel; and then unnecessarily driving lawsuits to trial. Both examples would generate concomitant legal costs. It may be stated at the outset that the reviewed claims files do not validate that criticism whatsoever. ICBC is not responsible in any observable, systematic way for making inappropriate offers or inappropriately pressing cases to trial and thus unnecessarily generating legal costs. Instead, the claims files reveal beyond dispute that the longer the time taken to resolve a claim, the higher the cost."