In Arsenovski v. Bodin, Gould, and ICBC, the Plaintiff and her husband, who were recent immigrants, were walking across the street when a motor vehicle struck the Plaintiff’s husband, who fell to the ground. The Plaintiff also fell to the ground, but did not recall whether or not she was hit by the motor vehicle.

 

Through the assistance of a friend, as the Plaintiff and her husband faced a significant language barrier issue, an ICBC claim was made. A written statement was also signed by the Plaintiff in front of an ICBC adjuster.

 

The file was worked on by an injury adjuster, as well as an officer of the Special Investigations Unit (SIU). The officer recommended to Crown Counsel that the Plaintiff be charged with fraud over $5,000.00, and that both the Plaintiff and her husband be charged with making a false statement. The Crown eventually charged the Plaintiff with making a false statement, however the charge was stayed at the start of the criminal trial, as it turned out the statement was not in fact false.

 

The Plaintiff then sued the Defendant for malicious prosecution and, in the alternative, negligent investigation, alleging that the ICBC, its’ adjusters, and its’ investigators deliberately misstated evidence to support the criminal charges. Counsel for the Defendant argued that the ICBC investigators had information supporting the recommendations to Crown Counsel, and that they had no malice against the Plaintiff.

 

The Court commented that the alleged making of a false statement by the Plaintiff was an invention on the part of the SIU officer, as no such statement was ever made. In reference to the motives of the SIU officer, the Court further noted that the officer’s report had focused on the Plaintiff’s potential injury claims, which had yet to be filed at that point, and had also focused on the Plaintiff being a recent immigrant who had just applied for refugee status, who was also on social assistance.

 

The Court would eventually order punitive damages against ICBC in the amount of $350,000.00

 

[380]     Nonetheless, I find that the conduct of the liable defendants was so high-handed, reprehensible and malicious that it offends this Court’s sense of decency and is deserving of the punishment of punitive damages. I therefore find that the plaintiff is entitled to punitive damages as against Mr. Gould and ICBC.

 

[393]     Given ICBC’s role as motor vehicle insurer for a majority of drivers in British Columbia, there is a need to ensure deterrence of behaviour of this sort on its part. It cannot be said that an award of punitive damages will cause it financial hardship. An award that is too small could be seen as simply the cost of doing business. ICBC stood to gain an advantage from its conduct.

 

[394]     There is no doubt that conduct of the kind that occurred in this case could dissuade people who have proper claims from vigorously pursuing them against ICBC, and could even dissuade lawyers from acting on a controversial claim for fear that ICBC will disparage them and cause trouble for them or their clients in the future. A strong message of denunciation must be sent to ICBC.

 

[395]     While the community would find it reasonable for ICBC to fight fraud, I am confident that the residents of British Columbia would find it outrageous for a public corporation to use its resources maliciously. The conduct that occurred here must be condemned and punished to reflect the community’s censure and to ensure that the message is brought home to the corporation and its employees not to engage in this kind of misconduct again. The residents of British Columbia are entitled to expect professional, objective treatment by the employees of ICBC, as well as an appropriate degree of cultural sensitivity towards people who are recent migrants from other countries.

If you have been injured in a motor vehicle accident, whether it was your fault or not, ICBC may try to state that you are in breach of your insurance policy, and as such are not entitled to anything. In an accident which is not your fault, the repercussions can be less severe, as you may be denied coverage for accident benefits, but you would still have the right to commence an ICBC claim for your injuries against the at-fault party. However, the ramifications can be much more severe if you in fact cause a motor vehicle accident, and ICBC holds you in breach of your insurance policy. In such situations, ICBC will pay out any injury claim brought by another party, and then come after you for the money.

 

ICBC is supposed to treat you fairly in determining whether or not you have breached your policy. If they don’t, they could, in certain circumstances, be seen as acting in bad faith. Common examples of bad faith include when the insurance company intentionally denies your claim by claiming false or fake policy exemptions in order to deliberately mislead an insured, by adjusting a claim in a dishonest manner, by failing to promptly process a claim, by exercising total inaction on a claim, by not responding at all to a claim, or by other forms of intentional misconduct in the handling of your claim. It can be a difficult claim to prove in a court of law, but can be accomplished under the right circumstances.

 

In McDonald v. ICBC, an individual suffered injuries in a motor vehicle accident, and brought an ICBC claim against the other driver. ICBC paid the claim out, however was of the opinion that the Defendant was in breach of her insurance policy for driving while intoxicated. As a result, they went after their insured for the amount paid out. The insured then brought an action against ICBC, seeking a declaration that she was entitled to her insurance coverage, and also sought punitive damages against ICBC. The Court agreed with the Plaintiff, and further, allowed $75,000 in punitive damages.

 

[180]     There are two main streams to the plaintiff’s bad faith claim.

 

[181]     In the first place, she contends that from the outset the conduct of Ms. Baadsvik and her managers was unreasonable, misguided and aimed at advancing ICBC’s interests to the detriment of her welfare.  She submits that ICBC’s investigation into and its assessment of the crucial issue of whether she was Incapacitated at the time of the accident was manifestly deficient.  The plaintiff’s companion assertion is that instead of diligently gathering relevant information about her sobriety and assessing it in an objective and timely way, once ICBC had in hand some information that might support the possibility of an alcohol breach, it effectively closed its mind to any countervailing explanation for the accident.

 

[184]     ICBC denies that it acted unfairly or in any way violated the duty of fair-dealing and good faith owed to the plaintiff.  It defends its investigation and assessment relative to the alcohol-related breach matter as being balanced, thorough and fair …

 

[188]     Bad faith is a term of convenience and does not carry a precise legal definition.  Like many other judicial constructs, such as fairness and reasonableness, the notion of what will constitute bad faith is highly dependent on the factual context within which it is said to have arisen.  It is therefore axiomatic that a bad faith claim must be evaluated in light of the surrounding circumstances on a case-by-case basis:  a closed category of defining attributes is neither possible nor desirable.  That said, judicial treatment of insurer bad faith has resulted in the development of useful principles that have served to shape the contours of its meaning.

 

[189]     Stated in overview, a typical insurer bad faith claim encompasses a constellation of acts undertaken by an insurer that offend or run counter to the broad duty of good faith and fair dealing inherent in the insurance contract.  The misconduct is often aimed at or has the effect of obtaining an advantage or gain for the insurer, at the expense of the interests of the insured.  Evidence of conduct that amounts to fraud or corrupt motive might be present, but it need not be.

 

[249]     An insurer does not have to have an iron-clad case in order to deny coverage.  It is not expected to investigate a claim with the skill and forensic proficiency of a detective.  Nor is it required to assess the collected information using the rigorous standards employed by a judge.  The duty of good faith does not impose a standard of absolute liability in respect of an insurer’s wrong decision.  The duty simply dictates that an insurer bring reasonable diligence, fairness, an appropriate level of skill, thoroughness and objectivity to the investigation, and the assessment of the collected information with respect to the coverage decision.  My criticisms of the calibre of Ms. Baadsvik’s investigation and the shortcomings of her ultimate assessment should not be interpreted as suggesting that each individual omission or failing is, of itself, necessarily a violation of good faith and fair dealing.  It is their cumulative effect that constitutes a breach of its duty of good faith. 

 

[259]     ICBC engaged in settlement negotiations and concluded a settlement binding the plaintiff without appointing legal counsel on her behalf, all the while investigating her potential breach of contract.  The plaintiff was never informed of the settlement discussions despite the fact that ICBC knew that the damages in the To Action were likely to be significant and that the plaintiff would potentially have to bear them personally.  Indeed, after Ms. Baadsvik’s final discussion with Constable Wood on April 1, she was essentially on the brink of deciding that the plaintiff was in breach and that ICBC would not be indemnifying her.  The nature and sequence of these events, all fully within ICBC’s control, was manifestly unfair.