“Meagre” Plaintiff Income Keeps Court From Awarding Costs to Successful Defendant

Today’s guest post comes from B.C. injury claims lawyer Erik Magraken

Reasons for judgement were released today by the BC Supreme Court, Vancouver Registry, demonstrating judicial discretion in dealing with costs after a plaintiff fails to beat a defence formal offer at trial.

In today’s case (Barta v. DaSilva) the Plaintiff was injured in a 2007 collision and sued for damages.  The Plaintiff alleged traumatic brain injury and argued that he had millions in losses as a result.  At trial a jury rejected the alleged brain injury and awarded damages of $77,000 for the Plaintiff’s proven injuries.  Prior to trial ICBC offered to settle the case for $150,000.

The Plaintiff sought full costs for the trial where ICBC sought to have the Plaintiff pay their post offer costs or simply strip each party of costs for the trial itself.  In the end the court ordered that each party bear their own costs of the trial.  In finding this fair the court noted that due to the Plaintiff’s ‘meagre‘ income there would be “no utility in imposing the costs of the trial on the plaintiff.”.

In reaching this decision Mr. Justice Affleck provided the following reasons:

[12]        The defendant’s offer of $150,000 plus costs and disbursements was a serious offer. The plaintiff ought to have known that the defendant’s legal advisers had a plausible basis for concluding that the plaintiff would be unable to prove a causal connection between his accident injuries and his financial losses. In my opinion the defendant’s offer ought reasonably to have been accepted.

[13]        The relative financial position of the parties is of no consequence on this application. The defence was conducted by ICBC, which obviously has much greater financial strength than the plaintiff, but unless it used that strength improperly in this litigation that is a neutral factor: See Vander Maeden v. Condon, 2014 BCSC 677.

[14]        When its offer to settle was not accepted the defendant had no serious option but to defend the action at trial. The result was an award of damages about one half the offer made by the defendant. In that circumstance the deterrent function of the costs rule would be nullified if I exercise my discretion by awarding costs to the plaintiff throughout as he submits I should. I declined to do so.

[15]        The evidence at trial indicates that the plaintiff’s assets were severely depleted by the effects of the financial downturn in 2008 and 2009. Mr. Creighton informed me that his client’s income is now meagre. I can see no utility in imposing the costs of the trial on the plaintiff.

[16]        My order is that the plaintiff is entitled to his costs and disbursements to and including May 15, 2014, and that thereafter the parties will each bear their own costs and disbursements. I recognize that the usual order would be to impose the costs following the defendant’s offer on the plaintiff. The defendant, however, has proposed the disposition which I have made, which I consider to be generous to the plaintiff in the circumstances.

Where to Invest With Increasing Interest Rates

South of the border, the chair of the Federal Reserve, Janet Yellen, is primed to announce a hike in interest rates in the coming weeks. Although this move may already be largely priced in to the equity markets, Canadian investors still need to stop and take a serious look at their investment holdings.

Although a small interest rate increase is by no means a disastrous event for investors, the reality is, what were otherwise fantastic returns may diminish to adequate returns. Higher interest rates translate to higher interest costs and lower net profit. Investors need to reset expectations in the years to come.

Many asset classes will decline in value if interest rates rise, so investors need to ask the question: “Where do I invest to benefit from rising interest rates?”

Obviously, long term bonds, REITs, and utility companies are not going to be anywhere the top of the list. Instead, the list will be topped by banks and insurance companies. In Canada, we have three large insurance companies that dominate the marketplace. Let’s look at each insurance company.

Manulife Financial Corp. (TSX:MFC)(NYSE:MFC)

Currently, Manulife is Canada’s biggest insurance company. Investors taking a new position will be offered a dividend yield of almost 3.5% and are picking up shares at a premium to tangible book value of 50% with a trailing price-to-earnings (P/E) ratio of 17 times.

Great-West Lifeco Inc. (TSX:GWO)

While the shares of Canada’s second-largest insurer are much less volatile, the dividend yield is approximately 4%, and shares trade at more than double the tangible book value. Although the trailing P/E is less than 14, shares are not necessarily a fantastic deal depending on what metric is used to evaluate the security.

Sun Life Financial Inc. (TSX:SLF)(NYSE:SLF)

Shares of Sun Life offer new investors a dividend yield of just under 3.5% and trade at a premium to tangible book value in the amount of 82%. The trailing P/E ratio is currently 12.3 times.

While investors may be looking for somewhere to hide in the face of rising interest rates, the truth is that many other investors have already found their way into Canada’s insurance companies and big banks. Although valuations may not seem very attractive at current levels, the importance for investors is to understand what rising rates mean for the companies they are investing in.

As insurance companies invest the premiums received (this is called the float) into short-term, very low risk investments, the increase in interest rates will greatly benefit these companies over time.

Looking at all three Canadian insurers, investors should note the volatility and dividend yield of each stock. While low payout ratios translate to more money reinvested into the company, the truth is, growth is only good if it is profitable. Sometimes boring is better!

Six “pro” strategies for today’s highly uncertain market

Motley Fool Canada’s $250,000-real-money-portfolio service, Motley Fool Pro, is currently closed to new members. But lead advisor Jim Gilles is doing something special for investors who are worried about the market and where it will head in 2017.

He’s revealing the six strategies he uses in Pro to help members guardrail their portfolios and make money in up, down, and sideways markets.

B.C. emergency programs receive $80 million for protection efforts

VICTORIA _ The British Columbia government will spend $80 million this year in emergency programs, up from the $65 million it spent last year.

Naomi Yamamoto, minister of state for emergency preparedness, says $32 million will go to the Union of B.C. Municipalities to establish a fund that supports disaster response and recovery programs, including mapping evacuation routes.

She says the government will provide $10 million to numerous public safety groups, including Vancouver’s heavy urban search and rescue team, to support skills training and purchase equipment.

Yamamoto says the $80 million comes from the government’s budget surplus and money in its emergency preparedness fund.

She says spending in community emergency programs will help the province cope with floods, fires and earthquakes.

Bill Adams of the Insurance Bureau of Canada says there are estimates that a major earthquake in southern B.C. could cause damage valued at $75 billion.

Pub Found Partly At Fault for Crash Caused by “Visibly Intoxicated” Patron

Today’s guest post comes from B.C. injury claims lawyer Erik Magraken

Reasons for judgement were released today by the BC Supreme Court, Vancouver Registry, finding a Pub jointly and severally liable for a collision by a patron who was served alcohol to the point of visible intoxication.

In today’s case (Widdows v. Rockwell) the Defendant drove a vehicle and collided with the Plaintiff pedestrian.  The crash caused severe injuries, including brain damage.

At the time the Defendant was “quite literally, falling-down drunk.“.

Prior to the crash the Defendant was drinking at a local pub. In finding the pub jointly and severally liable for over serving a patron and failing to take reasonable steps to ensure he was not driving Mr. Justice Kent provided the following reasons:

[58]         Insofar as Rockwell’s consumption is concerned, I do not accept his evidence that he only consumed 2 1/2 beers at the pub.  Rather, I find as a fact that each of the co-workers bought at least one round of drinks for the other members of the group (and possibly more) and that Rockwell himself bought at least two rounds that included beer (for himself and Sauve), vodka (for Sahanovitch) and Fireball whiskey shooters (for all).  I find as a fact that by the time he left the pub to retrieve his truck, Rockwell had consumed at least five to six drinks, a combination of beer and liquor, and that he was significantly intoxicated by alcohol.  I also have no doubt, and I find as a fact, that the influence of alcohol on Rockwell was exacerbated by both a lack of food in the preceding 12 to 15 hours (and probably longer), and a high level of fatigue caused by extremely long work hours and inadequate sleep over an extended period of time.  His ability to drive safely was significantly impaired when he left the pub.

[59]         I recognize another possible theory of Rockwell’s intoxication is that he drank only two to three beers at the pub and in the two-hour period thereafter, he consumed substantial quantities of beer and/or liquor, whether at home or elsewhere, before the accident occurred.  While it certainly appears that Sahanovitch was an aggressive and irresponsible drinker of a sort who might engage in such behaviour, there is no evidence to support such a characterization of Rockwell.  When one subtracts the amount of time that it would have taken for Rockwell to drive home, this theory would require him to have consumed an enormous amount of alcohol in less than an hour, a proposition which is not consistent with his previous conduct and which, assessed from the perspective of robust logic and common sense, amounts to nothing more than wishful thinking and unfounded speculation on the part of Cambie Malone’s.

[60]         I am also satisfied however, and find as a fact, that Rockwell did indeed consume further alcohol after he departed the pub.  On the balance of probabilities, I find that this occurred at his residence and included consumption of vodka or other liquor in quantities more than Rockwell claims in his evidence.

[61]         It is not necessary to ascribe a precise figure to the amount of alcohol that Rockwell consumed after he left the pub.  It is sufficient to find that he was significantly intoxicated when he left the pub and that he became even more severely intoxicated through the consumption of additional alcohol before the accident happened…

[73]         In this particular case the affidavits from the pub employees all referred to the employees having successfully completed the “Serving It Right”, which is British Columbia’s mandatory “Responsible Beverage Service Program”.  This is a program sponsored by the provincial government and the hospitality industry which offers information about intoxication, as well as guidelines and suggestions for, as the tagline suggests, “responsible beverage service”.  Rather cleverly, none of the employee affidavits expressly disclosed the information and conduct guidelines suggested in the “Serving It Right” program.  Instead, all that was proffered was what was said to be Cambie Malone’s written “Policies and Procedures” which included the following paragraph:

It is your responsibility to ensure patrons do not become intoxicated while in the establishment.  You must refuse entrance and/or service to any person who is apparently under the influence of alcohol or drugs.  Moreover, persons visibly under the influence of drugs or alcohol may not be permitted to remain in the establishment.  You must refuse the person service, have the person removed and see that they depart safely.  Intoxicated persons must NOT be permitted to drive.  It is your duty to ensure that a safe ride home is used.  This is a crucial responsibility of everyone in the alcohol service industry.

[74]         While the standard of care expected of a commercial host will, in large part, be governed by the particular circumstances of any given case, there are several general standards of conduct that could well apply simply as a matter of common sense, including:

·       ensure there are adequate supervision, monitoring and training systems in place so employees know and abide by responsible serving practices;

·       ensure there is a sufficient number of serving staff on duty so that effective monitoring of alcohol consumption by patrons is possible;

·       ensure employees know the signs of intoxication and the various factors that influence intoxication (gender, weight, rate of consumption, food, et cetera);

·       inquire if the patron is driving and identify any “designated driver” for groups of patrons;

·       know how to estimate blood-alcohol concentrations and ensure any driver does not consume more than the appropriate number of drinks to stay on the “right side” of the legal limit;

·       display “tent cards” on tables, posters on walls and washrooms, and menu inserts with easy-to-read charts and information about blood-alcohol concentration;

·       ask apparently-intoxicated patrons if you contact anyone to assist them or if you can get them a taxi and, if necessary, offer to pay for it;

·       display posters advertising free ride-home services available in the neighbourhood; and

·       if the patron rejects alternative options and insists on driving, despite being urged otherwise, contact the police to seek assistance and/or provide whatever information might encourage their intervention.

[75]         None of these things occurred in the present case.  Rather, the pub’s employees utterly failed in abiding by their own employer’s directive that “intoxicated persons (e.g., Rockwell) must not be permitted to drive”.  I have no hesitation in concluding that the employees, and therefore Cambie Malone’s, did not meet the requisite standard of care in the circumstances of this particular case and that their conduct was accordingly negligent.

Ever wonder why your car insurance fees are so high? We all pay the price for fraud

Lorraine Sommerfeld

What if I told you that between $116 and $236 per year of your insurance premium went to line some liar’s pocket?

It’s Fraud Prevention Month, and car insurance costs – especially in Ontario – continue to escalate. While the amount you pay is the usual calculus of where you live, the driving histories of those who drive your car, how difficult the car is to steal and how much it costs to repair, fraudulent claims remain a substantial portion of that bottom line you are charged each year.

Fraud rings are headline grabbers, as they should be. Sophisticated criminals often working quite literally from street level (those who stage crashes) on up through the ranks of tow truck operators, lawyers and medical providers cost us all.

But what about that time you had the front end collision and had the body shop take care of that older dent in your door while it was in the shop? What if your neck wasn’t really that sore anymore, but you had the chance to keep going to massage appointments for just a few weeks longer? When kids broke into all the cars in your neighbourhood and you suddenly “remembered” you’d left your camera in the car that night, instead of just a cupholder full of change? These opportunistic crimes also add a more substantial tally to insurance fraud than you might realize.

Dr. Yoel Inbar is an assistant professor of psychology at the University of Toronto, specializing in social and personality psychology. He focuses on moral decision making. What makes us tick. What makes us steal.

“There are several things at play,” he explains. “There’s an assumption this is a victimless crime. That the loss will be against a huge company, instead of against the collective, the other customers. We know, of course, that these costs all translate into higher premiums for all of us.”

People who would not steal a pair of boots from a retail outlet may not feel morally compromised tossing in a few older dings and dents to a larger repair job that has been warranted.

“There is an element of justification, in some cases,” Inbar explains. “You’ve been paying into this insurance pot for so long and not getting anything from it. Some people almost see it as a savings account.”

He also notes we take our cues from what is happening around us, what we come to perceive as norms. “The idea can develop that everybody else is doing it, so I can, too.”

The Financial Services Commission of Ontario (FSCO) states nearly 10 per cent of Ontarians admit committing auto insurance fraud, and 20 per cent know someone who has. The bad news for those contemplating sharing your stories? Fifty-eight per cent have no problem throwing a friend or acquaintance under the reporting wheels. The Ontario figures show males are significantly more likely to participate in fraudulent behaviour, as are millennials. Baby boomers have a better grasp (83 per cent) of what constitutes fraud over millennials (56 per cent), which perhaps explains the gap – sort of. “I didn’t know any better” doesn’t pass the smell test for this one, though.

You might read headlines of organized crime rings shaking down the auto insurance industry and wonder why you should be bothered if your neighbour scores a little extra body work on his or her banged up Impala. You should care because, while those scamming rings get a lot of media attention, in actuality, they aren’t the nuts and bolts of the fraud infrastructure. According to the latest figures available from the Insurance Bureau of Canada (IBC), a KPMG report put out in 2013 using 2010 figures estimates total fraud in Canada at between $768 million and $1.56 billion. They break that figure out into three types of fraud: organized (those headlines), premeditated and opportunistic; they peg the organized crime fraud at between $175 million and $275 million.

Premeditated involves things like treatment programs that never take place; parts of the medical industry capitalizing on either a patient’s lack of knowledge about what they are signing or simply having patients sign blank treatment programs. Opportunistic fraud is that phantom camera in the break-in or the additional mechanical claims.

Even if the organized component of that estimate is low, that still leaves a wide margin of insurance fraud that is being paid out to elements that you and I, average consumers, have much control over. We are ripping off each other. Don’t sign blank treatment schedules from healthcare providers, and make sure you understand just what is being proposed. I’ve had this happen and didn’t even realize until months later. The (now gone) provider had claimed treatments I’d never even heard of, much less received. In a post-crash fog, I’d just been desperate for someone to get me back to work.

Professor Inbar notes that human nature is flexible, and that “possessing salient information can have a surprisingly large effect on the decisions we make.” Small tweaks can lead to big change. Insurance fraud is very much about who is watching. He notes studies have shown people react differently with something as basic as a pair of cartoon eyes attached to their monitor, or a mirror. By now we’ve all grown used to the idea that we are constantly being monitored and filmed; maybe reining in insurance fraud will be an upside to that intrusion.

Make a plan for what you will do in the event of a crash, like where you’d have your vehicle towed. Demand detailed medical and repair reports. Don’t sign blank authorizations. Ask for help if you’re unsure.

You can anonymously report suspected insurance fraud. In Ontario, contact FSCO (855-5TIP-NOW) or for all of Canada IBC (877-IBC-TIPS), or Crimestoppers.

Source: Driving.ca

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