The anticipated decision from the BCSC in regards to the capped disbursements relating to personal injury actions arising from motor vehicle collisions in British Columbia has finally been released and published today on the BCSC website and has been deemed “of no force or effect”. The simple conclusion: I declare that s. 5 of the disbursements and expert evidence regulation is inconsistent with the enabling statute, s. 12.1 of the Evidence Act, and contrary to s. 96 of the Constitution Act, 1867. It is therefore of no force or effect.
The question remains, will this decision be appealed? and if not, how will this impact the legal industry as it relates to tort claims and ICBC? Will the government back peddle with their no-fault legislation? All this remains to be seen.
Here is a copy of the actual decision for your review.
INTRODUCTION
[1] The petitioners ask the court to declare invalid a regulation that limits the recovery of disbursements by the successful parties in personal injury actions arising from motor vehicle accidents. The challenge is brought on both administrative law and constitutional grounds.
[2] The Lieutenant Governor in Council (“LGC”)—that is, the provincial cabinet— enacted the Disbursement and Expert Evidence Regulation, B.C. Reg. 210/2020 (the ‘impugned regulation”) as a regulation under the Evidence Act, R.S.B.C. 1996, c. 124 [EA] by Order in Council No. 468/2020, later amended by B.C. Reg. 31/2021 pursuant to Order in Council No. 75/2021. It caps the disbursements that a successful plaintiff may recover to an amount equal to 6% of either the total damages awarded by the court or of the amount agreed to in a settlement, subject to some specific exceptions. Where a defendant is successful and a plaintiff receives no damages, the recovery of disbursements by the defendant is a matter for the court’s discretion.
[3] It is common ground that the regulation will likely have the most impact on cases decided at trial or settled shortly before trial and that, in those cases, the most significant disbursements are usually fees charged by medical and other expert witnesses for their opinion reports and testimony.
[4] There is also no dispute that the regulation and the EA amendment authorizing it were a legislative response to the decision of the Chief Justice of this Court in Crowder v. British Columbia (Attorney General), 2019 BCSC 1824 [Crowder]. That decision struck down an earlier provision, enacted as part of the Supreme Court Civil Rules, that limited each party in a motor vehicle personal injury action to three expert witnesses on damages.
THE PARTIES
[5] The petitioner Thi Sau Le is a 77-year-old retiree who alleges in a separate proceeding that she was struck by three vehicles while attempting to cross Victoria Drive in Vancouver on January 3, 2020. Her counsel in that action believes that, due to the nature of her injuries and her personal circumstances, the cost of assembling the expert evidence necessary to prove all of her injuries and their impact on her will significantly exceed 6% of her total damages.
[6] The petitioner Bong Wong Kim settled a motor vehicle action on March 23, 2021—some six weeks after the regulation came into effect. He is subject to the limit on disbursement recovery contained in the regulation, although he says 99% of his disbursements were incurred before the regulation became effective.
[7] The petitioner Trial Lawyers Association of British Columbia (the “TLABC”) is a is a non-profit society with a membership of more than 1400 legal professionals.
[8] The respondents, in addition to the Attorney General of British Columbia (the “Attorney General”), are the defendants in the actions brought by the petitioners, Ms. Le and Mr. Kim (the “MVA Respondents”).
THE IMPUGNED REGULATION
[9] The impugned regulation was made under the authority of s. 12.1 of the EA (the “enabling statute”) which was added to the EA by s. 1 of the Evidence Amendment Act, S.B.C. 2020, c. 7. That legislation came into force on August 10, 2020 and includes a provision allowing the Lieutenant-Governor in Council to make regulations limiting disbursements in “vehicle injury proceedings.” The relevant portions are:
Limitation on expert evidence in vehicle injury proceedings
12.1 …
(2) Except as provided under this section or the regulations,
(a) a party to a vehicle injury proceeding, other than a fast track vehicle injury proceeding, must not tender the following at trial:
(i) expert evidence on the issue of vehicle injury damages, of more than 3 experts;
(ii) more than one report on the issue of vehicle injury damages from each expert referred to in subparagraph (i),
(b) a party to a fast track vehicle injury proceeding must not tender the following at trial:
(i) expert evidence on the issue of vehicle injury damages, of more than one expert;
(ii) more than one report on the issue of vehicle injury damages from the expert referred to in subparagraph (i), and
(c) the court must not allow a party to tender expert evidence at the trial of a vehicle injury proceeding if doing so would result in exceeding the limits set out in this subsection.
(3) Despite subsection (2), if the parties to a vehicle injury proceeding appoint a joint expert, a party may tender at trial the expert evidence of that joint expert.
(4) With the consent of all other parties to a vehicle injury proceeding, a party may tender at trial
(a) expert evidence of one or more additional experts, despite the limit set out in subsection (2) (a) (i) or (b) (i), or
(b) one or more additional reports from an expert referred to in subsection (2) (a) (i) or (b) (i) or paragraph (a) of this subsection, despite the limit set out in subsection (2) (a) (ii) or (b) (ii), as applicable.
(5) On application by a party to a vehicle injury proceeding, the court may, if satisfied that the conditions set out in subsection (6) are met, grant leave to
(a) allow expert evidence of one or more additional experts to be tendered, despite the limit set out in subsection (2) (a) (i) or (b) (i), or
(b) allow the party to tender as evidence one or more additional reports from an expert referred to in subsection (2) (a) (i) or (b) (i), (4) (a) or paragraph (a) of this subsection, despite the limit set out in subsection (2) (a) (ii) or (b) (ii), as applicable.
(6) The following are the conditions for the purposes of subsection (5):
(a) the subject matter of the additional evidence to be tendered is not already addressed by expert evidence permitted under subsection (2) or (4);
(b) without the additional expert evidence, the party making the application would suffer prejudice disproportionate to the benefit of not increasing the complexity and cost of the proceeding.
…
(8) Nothing in this section limits any authority of the court to appoint the court’s own experts on the court’s own initiative.
(9) For the purposes of this section, the Lieutenant Governor in Council may make regulations as follows:
(a) respecting disbursements, including but not limited to the following:
(i) establishing limits on the amount of disbursements that are payable to a party in a vehicle injury proceeding, including, without limitation, establishing limits
(A) on the amount of disbursements payable for an expert report,
(B) on the amount of disbursements payable as a percentage of the total amount recovered in an action, and
(C) in relation to expert evidence by reference to the number of experts tendering evidence at a trial or the number of reports by experts tendered at trial;
(ii) authorizing the court to make an order
(A) for the amount of disbursements that are payable to a party in a vehicle injury proceeding in circumstances in which limits established under subparagraph (i) do not apply, or
(B) determining whether to include or exclude prescribed disbursements when determining the application of a limit established under subparagraph (i);
…
(d) providing for exemptions from the application of subsection (2) or a regulation made under this section, including but not limited to regulations that
(i) establish circumstances in which the exemption applies, and
(ii) set conditions of, or limitations on, the application of the exemption.
(10) If a regulation made under subsection (9) (a) (i) or (b) (i) is inconsistent with a rule made under the Court Rules Act, the regulation under subsection (9) (a) (i) or (b) (i) prevails.
[10] The petitioners do not raise any issue about the validity or constitutionality of the enabling statue. Their challenge is limited to the impugned regulation that was purportedly made under the statute’s authority. The regulation in its present form was made effective by Order in Council on February 12, 2021, but has retroactive effect.
[11] The petition is primarily concerned with s. 5 of the impugned regulation, which creates a “disbursement limit” or “cap” equal to 6% of the total damages awarded by the court or paid in settlement before trial. Disbursements paid to the Crown are excluded from that calculation and remain fully reimbursable, as are disbursements incurred by a party who is awarded special costs. The court is given discretion to also exclude from the calculation the cost of an expert report on liability, but not the cost of that expert’s attendance at trial. The limits do not apply if a notice of trial was filed and served before August 12, 2020. Sections 3, 4 and 5 of the impugned regulation read:
Exemptions for certain expert evidence
3 (1) In this section, “responding report” means a report served under Rule 11-6 (4) of the Supreme Court Civil Rules.
(2) The limits in relation to expert evidence set out in section 12.1 (2) of the Act do not apply to an expert or expert’s responding report if a party serves the responding report to respond to a report that was served on the party within 126 days before the scheduled trial date for the vehicle injury proceeding.
(3) The limit in relation to reports from experts set out in section 12.1 (2) (a) (ii) or (b) (ii) of the Act does not apply to a supplementary report referred to in Rule 11-6 (5) or (6) of the Supreme Court Civil Rules.
Disbursements allowed for expert reports in vehicle injury proceedings
4 (1) Subject to subsection (3) and section 5, only the following amounts may be allowed or awarded to a party in a vehicle injury proceeding, other than a fast track vehicle injury proceeding, as disbursements for reports from experts on the issue of vehicle injury damages:
(a) the amount incurred by the party for up to 3 reports, whether or not the reports were tendered at trial, provided that
(i) each report was served in accordance with all applicable rules of the Supreme Court Civil Rules, and
(ii) each report was prepared by a different expert;
(b) the amount incurred by the party for any of the following reports, provided the report was served in accordance with all applicable rules of the Supreme Court Civil Rules:
(i) a report referred to in section 3 (1) or (2) of this regulation;
(ii) a report allowed under section 12.1 (3), (4) or (5) of the Act;
(c) the amount incurred by the party for a report prepared by an expert appointed by the court on the court’s own initiative under Rule 11-5 (1) of the Supreme Court Civil Rules.
(2) Subject to subsection (3) and section 5, only the following amounts may be allowed or awarded to a party in a fast track vehicle injury proceeding as disbursements for reports from experts on the issue of vehicle injury damages:
(a) the amount incurred by the party for one report, whether or not the report was tendered at trial, provided that the report was served in accordance with all applicable rules of the Supreme Court Civil Rules;
(b) the amount incurred by the party for a report referred to in subsection (1) (b);
(c) the amount incurred by the party for a report referred to in subsection (1) (c).
(3) The limits set out in subsections (1) and (2) do not apply
(a) to amounts that were necessarily or properly incurred before February 6, 2020 for a report from an expert, or
(b) to a vehicle injury proceeding if
(i) a notice of trial was filed and served before February 6, 2020, and
(ii) the trial date set out in the notice of trial filed in relation to the vehicle injury proceeding was before October 1, 2020.
[en. B.C. Reg. 31/2021, Schedule, s. 2.]
Limits on amount of disbursements
5 (1) In this section:
“disbursement limit” means, in relation to a vehicle injury proceeding,
(a) the amount that is 6% of the total award of damages assessed by the court in the vehicle injury proceeding or, if an offer to settle the vehicle injury proceeding is accepted, 6% of the amount offered, or
(b) if the court dismisses the vehicle injury proceeding or, at the conclusion of the vehicle injury proceeding, does not make an award of damages, the amount determined by the court;
“excluded disbursements” means the following:
(a) fees payable to the Crown under the Supreme Court Civil Rules;
(b) fees payable to the sheriff for non-refundable deposits in civil jury trials under the Supreme Court Civil Rules;
(c) disbursements incurred by a party if the court ordered the costs of the proceeding to be paid as special costs;
(d) disbursements incurred for an expert report on the issue of liability, if the court ordered that those expenses are excluded disbursements.
(2) Only the following may be allowed or awarded to a party in a vehicle injury proceeding as disbursements:
(a) disbursements up to the disbursement limit;
(b) excluded disbursements.
(3) The limits set out in subsection (2) do not apply
(a) to a vehicle injury proceeding if
(i) a notice of trial was filed and served before August 12, 2020, and
(ii) the trial date set out in the notice of trial filed in relation to the vehicle injury proceeding is before June 1, 2021, or
(b) to a vehicle injury proceeding if
(i) a notice of trial was filed and served before August 12, 2020,
(ii) the trial date set out in the notice of trial filed in relation to the vehicle injury proceeding is on or after June 1, 2021, and
(iii) the court is satisfied that the party necessarily or properly incurred disbursements before August 12, 2020 in excess of the disbursement limit.
[en. B.C. Reg. 31/2021, Schedule, s. 2.]
EFFECTS OF THE REGULATION
[12] A regulation can be set aside only if it is found to be unconstitutional or if it is inconsistent with the objective or scope of the enabling statute. The court has no jurisdiction to rule on the merits of the regulation, its likely efficacy, or the wisdom of the policy that gave rise to it. That said, the impugned regulation cannot be properly understood without reference to its practical impact, including some obvious anomalies that it creates.
[13] Expert opinion evidence plays a crucial role in any case where a plaintiff seeks damages for personal injury. The plaintiff has the onus of proving the existence, causation and present and future impacts of their injuries, all of which requires evidence of medical and other experts.
[14] In addition to a judgment for damages or an amount paid in settlement, a successful plaintiff usually recovers costs and disbursements. The recoverable disbursements include the reasonable cost of obtaining expert evidence. In most cases arising from motor vehicle accidents, those are not actually paid by the individually named defendants, but by the Insurance Corporation of British Columbia (“ICBC”), a provincial crown corporation that has a monopoly on basic automobile insurance in the province.
[15] The impugned regulation applies only to actions for personal injuries arising from motor vehicle accidents (although amendments to the enabling statute would permit its extension to other personal injury cases). I therefore cannot ignore the reality that the impugned regulation operates to the immediate and primary benefit of ICBC. That reality was previously recognized by this Court in Meckic v. Chan, 2022 BCSC 182, where Kent J. said at paras. 10 and 12:
[10] The thinly veiled purpose of this legislation is to improve the finances of ICBC by reducing the quantity of expert evidence in motor vehicle accident liability claims and to thus both reduce litigation costs and produce lower damage awards whether by way of settlement or at trial.
…
[12] While all of this may serve the best financial interests of the government and its Crown corporation auto insurance monopoly, it makes more challenging the already difficult task of the Court in determining the nature and extent of the plaintiff’s injuries and the appropriate medical treatment that might be required in the future.
[16] A claim for personal injuries arising from a motor vehicle accident is but one kind of action in the tort of negligence. The impugned regulation only limits the disbursements recovered by a plaintiff who was injured in an accident caused by the negligence of a vehicle driver. It will have no application to a plaintiff who suffers the same injuries in, for example, a fall caused by the negligence of an occupier of property or in a negligently performed medical procedure.
[17] There is no necessary or direct relationship between the amount of a damages award and the amount of disbursements that had to be incurred to obtain it. I can and do take judicial notice that an obviously severe or catastrophic injury and the resulting large damages may be easier to prove than a relatively less serious but more subtle injury. In the latter type of cases, defendants rarely ignore an opportunity to argue that some portion of a plaintiff’s claim cannot be allowed because the plaintiff has failed to call the appropriate expert.
[18] Even identical injuries requiring the same disbursements for expert evidence can produce widely varying awards or settlements. For example, two plaintiffs with identical injuries may each receive an award that includes an amount for past and/or future loss of earning capacity. That head of damages is often assessed with reference to a plaintiff’s pre-accident income, resulting in a higher total award for the higher income plaintiff. A plaintiff who was, for example, a highly paid professional may receive a total award large enough to recover all or most of their disbursements on the 6% formula, while a plaintiff with the same injuries who worked at minimum wage may only recover a small portion.
[19] In the same way, the total amount of an award or settlement may differ between similarly-injured plaintiffs based solely on age. A plaintiff who is nearing retirement age will receive a smaller award for loss of future earning capacity, and therefore a smaller total award, than a younger plaintiff with similar pre-accident income.
[20] The petitioner Ms. Le provides a specific example. Her counsel says in an affidavit that due to “the extent, severity, and wide-ranging nature” of her injuries, the cost for medical-legal reports will likely be between $30,000 and $50,000, with those costs doubling if the experts are required to attend at trial.
[21] But because of Ms. Le’s age, there will be no claim for lost earning capacity and any award for the cost of necessary future care will be subject to her remaining life expectancy. Therefore, counsel expects the cost of assembling the necessary evidence to significantly exceed 6% of any damage award.
[22] The enabling statute and the impugned regulation include a presumptive limit of three experts for each party, subject to the court’s discretion to allow additional experts in defined circumstances. Like the Chief Justice in Crowder (at para. 60), I can and do take judicial notice that there are cases that require more than three expert witnesses and that plaintiffs who bear the onus of proof on most damages issues often call more evidence than do the defendants.
[23] For example, in a case involving a claim for loss of future earning capacity, the court of appeal has made clear that the court must decide on the basis of evidence whether there is a potential future event that could lead to a loss of capacity, then must decide whether there is a real and substantial possibility of that event occurring, then must assess the value of that possible future loss: Rab v. Prescott, 2021 BCCA 345 at para. 47.
[24] In a typical case, proof of that head of damages alone requires the evidence of two experts—a functional capacity evaluator to prove limitations on the plaintiff’s ability to work and an economist to permit some assessment of what the plaintiff’s future earnings might have been in the absence of the injury and the present value of what they are now able to earn. That is in addition to whatever medical evidence is necessary to prove the underlying injuries and their severity. Depending on the combination of injuries involved, that may require evidence of specialists in more than one area of medicine.
[25] Rule 14-1(5) of the Supreme Court Civil Rules provides that the costs recoverable by a successful party must include a reasonable amount for disbursements that “have been necessarily or properly incurred in the conduct of the proceeding.” The impugned regulation supersedes that rule: s. 12.1(9) of EA. Counsel for the respondent Attorney General concedes that some plaintiffs will be denied part of the recovery they would otherwise be entitled to.
[26] By way of example, the plaintiffs have put forward evidence of six cases involving clients of a single law firm that went to trial in 2019 or early 2020. While that evidence does not purport to be a scientific survey of all cases that come before the court, there is no suggestion that the disbursement expenses referred to are atypical.
[27] The plaintiffs in those cases each relied on between five and nine experts and incurred total disbursement expenses ranging from approximately $48,500 to $137,000. Total damages awarded to those plaintiffs ranged from a low of $248,222 to a high of $1,148,254.
[28] If the impugned regulation had been in effect, disbursements in all cases would have exceeded the 6% limit—ranging from 11% to 31% of the damages award. By my calculations, five of those plaintiffs would have each recovered between 50% to 60% of their disbursements and one would have recovered only 19.25%.
[29] (In Crowder, the Chief Justice did not rely on similar sampling evidence because he could take judicial notice of the number of experts that may testify in a case. Here, the evidence includes the actual cost of obtaining and presenting that evidence, which cannot be a subject of judicial notice.)
[30] Counsel for the petitioner Ms. Le in her personal injury actions estimates that, due to the number of different injuries involved, experts in up to eight different medical or therapeutic specialties will be needed to prove her damages. She may also have to incur disbursements to retain an accident reconstruction engineer for the purpose of proving liability and, because Ms. Le is not fluent in English, an interpreter to attend at examinations for discovery and trial. He states:
21. Based on my experience and while acknowledging that I do not yet know what the total damages will be with any degree of certainty, I anticipate that the cost of assembling the expert evidence necessary to prove the case will significantly exceed 6% of the overall damages, particularly given the complexity of her injuries and the absence of any wage loss. Any costs incurred in excess of 6%, if that limit applies to Ms. Le, would ultimately serve to reduce her recovery of her future care costs and/or her damages for pain and suffering. As a result of that limit, I, as counsel, and Ms. Le, as client through her daughter Ms Nguyen, will face difficult trade-offs between ensuring that Ms. Le’s claim is fully investigated and convincingly proven, on one hand, with minimizing the financial impact and risk to Ms. Le on the other.
[31] The respondents have provided some broader statistical evidence on this point from Christopher Ryan, director of claims strategy and programs for ICBC. In 2019, ICBC resolved at total of almost 24,000 claims. The vast majority resulted in total awards or settlements of $100,000 or less. In 72 percent of those cases, the plaintiff’s disbursements were in an amount equal to or less than 6% of the award or settlement. The experience was similar at the other end of the spectrum. In cases where the award or judgment was more than $1 million, a 6% cap would have been sufficient to cover all disbursements in 75 percent of cases. However, disbursements exceeded 6% of the award or settlement in approximately two thirds of the cases where plaintiffs received an amount between $100,000 and $1 million.
[32] Mr. Ryan also presents statistics suggesting that in the first nine months of ICBC’s fiscal year ending in March 2022, after the impugned regulation came into effect, the average amount of settlement or judgment was approximately $100,000 and disbursements averaged only 6.8 percent. It is difficult to determine how meaningful those averages are in light of the numerical predominance of smaller cases.
[33] The final amount of a settlement or judgment is not easily predictable at the time the costs for expert reports and/or testimony are incurred. Plaintiffs and their counsel therefore will not know what amount can be spent without risk of exceeding the 6% limit. The Attorney General acknowledges that this may require plaintiffs to make decisions about what part of their case they wish to pursue or abandon.
[34] The impugned regulation applies a fixed limit only on the recovery of disbursements by plaintiffs and gives the court no discretion to permit exceptions in the circumstances of individual cases. But where a defendant is entirely successful, such as when the plaintiff fails to prove liability, the disbursements recoverable by the defendant are, of necessity, left entirely to the court’s discretion.
CROWDER V. BRITISH COLUMBIA (ATTORNEY GENERAL)
[35] The LGC’s first attempt to limit amounts paid for expert evidence came through a change to the Supreme Court Civil Rules that was enacted in 2019. What was then Rule 11-8 limited each party in a motor vehicle action to three experts on the issue of damages, with only one report from each expert. Disbursement recovery for expert reports was also limited to three reports and trial testimony of those experts. Exceptions were allowed for additional reports by consent, responding reports, a joint expert ordered by the court, or an expert appointed by the court.
[36] In Crowder, on which the petitioners rely heavily, Hinkson C.J.S.C. found that Rule 11-8 (the “impugned Rule”) purported to change the substantive law of evidence and that the power of the LGC under the Court Rules Act, R.S.B.C. 1996, c. 80 to make procedural rules of court did not include the power to make such substantive changes.
[120] I find that the effect of the impugned Rule is to change the substantive law of evidence that has guided this Court from its inception, and I find that this is not one of the exceptional cases referred to by Justice Lambert where the Rules may create new substantive law. Accordingly, I find that the Rule 11-8 Orders (and with it, the impugned Rule) are not authorized by the Act.
[37] The Chief Justice acknowledged at para. 121 that “changes to the substantive law could be made under primary legislation such as the Evidence Act.” But recognizing that possibility, he went on to consider a further, constitutional issue of whether the impugned Rule infringed on the court’s core jurisdiction under s. 96 of the Constitution Act, 1867:
[130] Section 96 of the Constitution Act, 1867 gives the federal government the power to appoint the judges of the superior, district and county courts in each province. While the bare wording of s. 96 refers only to judicial appointments, its broader import is to protect the “core jurisdiction” of the provincial superior courts from either federal or provincial abolition or removal: [citations omitted].
[38] The impugned Rule was found to infringe on the court’s core jurisdiction by limiting the court’s ability to hear evidence necessary to decide the case before it, and that defect was not addressed by the portion of the rule allowing the court to appoint experts.
[184] While I accept the submission of the Attorney General that the impugned Rule does not prevent the court from receiving expert evidence entirely, I find that instead of leaving it to the litigants to meet their burden of proof by adducing the necessary evidence, it places a duty on the court to ensure that it has sufficient expert evidence before it determines a proceeding on its merits.
[185] Considering the totality of the submissions and the evidence before me, I find that the impugned Rule compromises and dilutes the role of the court, and encroaches upon a core area of the court’s jurisdiction to control its process.
[39] Crowder was not appealed. Instead, the Legislature recognized the Chief Justice’s statement that the EA may be able to do what the Supreme Court Civil Rules could not and re-enacted the three-expert limit in the new s. 12.1 of the EA. However, it did so with an important qualification. Sections 12.1(5) and (6) state that, notwithstanding the presumptive limit of three experts, the court has discretion to allow a party to call more experts in order to prevent a party from suffering “prejudice disproportionate to the benefit of not increasing the complexity and cost of the proceeding.”
[40] That discretion was not present in the former Rule 11-8. If the discretion had not been added to s. 12.1, the fact that the limit was contained in the EA may or may not have protected it from constitutional challenge, based on the same encroachment on the court’s core jurisdiction that was found in Crowder.
TRIAL LAWYERS ASSOCIATION OF BRITISH COLUMBIA V. BRITISH COLUMBIA (ATTORNEY GENERAL)
[41] After this matter was argued, the court of appeal released its judgment in Trial Lawyers Association of British Columbia v. British Columbia (Attorney General), 2022 BCCA 163 [Trial Lawyers 2022]. Because that case also dealt with changes to way motor vehicle personal injury cases are adjudicated, counsel were given the opportunity to make further submissions.
[42] Trial Lawyers 2022 upheld the constitutionality of legislation that gave jurisdiction over “minor injuries” to the Civil Resolution Tribunal, which was created by the Civil Resolution Tribunal Act, S.B.C. 2012, c. 25. The tribunal was given jurisdiction to determine whether an injury is minor and to determine liability and damages up to its monetary limit of $50,000.
[43] Referring to a consultant’s report relied upon by the Province, Bauman C.J.B.C. said at para. 148:
[148] The need for “experimentation”—for innovation—in access to civil justice for victims of minor injuries suffered in motor vehicle accidents in British Columbia is self-evident in light of the EY Report. That report makes clear that the existing system of compensating for minor personal injuries in tort is threatening the viability of the public insurer, ICBC, and equally the actual compensation recovered by the victims of these minor injuries. …
[44] The Chief Justice also said at paras. 171 and 172:
[171] It is a jurisdiction directed at injuries that presumptively, but not irretrievably so, are limited to $50,000 in total compensation at this time, a sum not appreciably greater than the current jurisdiction of the Small Claims Court in British Columbia.
[172] Clearly a broad and important field of tort claims and the compensatory regime in respect thereof is left to the superior courts in British Columbia. The law of negligence and compensation for damages suffered thereby will continue to be developed in the superior courts and will guide the CRT in the exercise of its jurisdiction under the impugned scheme.
[45] Trial Lawyers 2022 was a challenge to a statute on purely constitutional grounds. It did not raise an administrative law issue, such as the petitioners raise here, of whether a regulation is consistent with its enabling legislation.
[46] On the constitutional issue, the Court was dealing with the entire removal of a certain category of cases from this Court’s jurisdiction. Those cases will not be affected at all by the regulation at issue here because, by virtue of the definition of “vehicle injury proceeding” in s. 12.1(1) of the EA, the impugned regulation applies only to proceedings in this Court.
[47] This case therefore deals with what the Bauman C.J.B.C. called the “broad and important field of tort claims” that remain within the Court’s jurisdiction. In my view, there is a distinction between legislation that removes a matter from the court’s jurisdiction and a regulation that is alleged to limit the evidence that will be available to the court on a matter that remains in the court’s jurisdiction. The latter raises very different issues and requires different analysis. To the extent the constitutional analysis in Crowder is relevant here, nothing in Trial Lawyers 2022 explicitly or implicitly calls that authority into question.
ADMINISTRATIVE LAW ANALYSIS
[48] The petitioners argue that, because of consequences like the ones I set out above, the impugned regulation is arbitrary and unfair, but they recognize that the court’s agreement or disagreement with that characterization is irrelevant. The court is not empowered to strike down a regulation based on its own view of fairness. A regulation may impose adverse consequences on those subject to it if the enabling statute permits those consequences. As I have said, no challenge to the validity or constitutionality of the enabling statute is before me.
[49] Regulations enacted by the LGC benefit from a presumption of validity and can be found to be ultra vires only if they are inconsistent with the objective of the enabling statute or the scope of the statutory mandate: Katz Group Canada Inc. v. Ontario (Health and Long-Term Care), 2013 SCC 64 [Katz] at paras. 24 and 25. The nature of the inquiry was explained in the following statement adopted at para. 24:
In determining whether impugned subordinate legislation has been enacted in conformity with the terms of the parent statutory provision, it is essential to ascertain the scope of the mandate conferred by Parliament, having regard to the purpose(s) or object(s) of the enactment as a whole. The test of conformity with the Act is not satisfied merely by showing that the delegate stayed within the literal (and often broad) terminology of the enabling provision when making subordinate legislation. The power-conferring language must be taken to be qualified by the overriding requirement that the subordinate legislation accord with the purposes and objects of the parent enactment read as a whole.
[50] Writing for the Court in Katz, Abella J. said at para. 28 that in order to be found inconsistent with the statutory purpose, regulations “must be “irrelevant”, “extraneous” or “completely unrelated”” to that purpose. However, in Green v. Law Society of Manitoba, 2017 SCC 20, Abella J. (dissenting but not on this point) said at para. 78 that “the list of adjectives set out in para. 28 [of Katz] does not represent an exhaustive template … there are other grounds for finding delegated legislation to be unreasonable.”
[51] In dealing with other forms of delegated legislation, such as municipal bylaws, the Court has applied a limited test of reasonableness.
[52] In Catalyst Paper Corp. v. North Cowichan (District), 2012 SCC 2 [Catalyst], a case dealing with a municipal taxation bylaw, the Court said at para. 25:
[25] Reasonableness limits municipal councils in the sense that the substance of their bylaws must conform to the rationale of the statutory regime set up by the legislature. The range of reasonable outcomes is thus circumscribed by the purview of the legislative scheme that empowers a municipality to pass a bylaw.
[53] In West Fraser Mills Ltd. v. British Columbia (Workers’ Compensation Appeal Tribunal), 2018 SCC 22 [West Fraser], which dealt with an occupational health and safety regulation, the Court said at para. 12:
[12] Determining whether the regulation at issue represents a reasonable exercise of the delegated power is, at its core, an exercise in statutory interpretation, considering not only the text of the laws, but also their purpose and the context. The reviewing court must determine if the regulation is “inconsistent with the objective of the enabling statute or the scope of the statutory mandate” to the point, for example, of being “‘irrelevant’, ‘extraneous’ or ‘completely unrelated'”: Katz Group Canada Inc. v. Ontario (Health and Long-Term Care), 2013 SCC 64, [2013] 3 S.C.R. 810, at paras. 24 and 28. To do this, the Court should turn its mind to the typical purposive approach to statutory interpretation and seek an “interpretative approach that reconciles the regulation with its enabling statute”: Katz, at paras. 25-26.
[54] I note that passage confirms that the terms “irrelevant”, “extraneous” and “completely unrelated”, as used in Katz, are examples and not a definitive test. In West Fraser, the Court concluded that the governing statute conferred a “broad and unrestricted delegation of power” to make “any regulation that may reasonably be construed to be related to workplace health and safety.”
[55] The test of reasonableness described in cases like Catalyst and West Fraser does not invite the court to consider the reasonableness of the policy behind a regulation or of its outcome. In Catalyst, the Court specifically rejected a test of “demonstrable rationality in terms of process and outcome” (at paras. 22 and 23). The test of reasonableness in this context is limited to consideration of whether the subordinate legislation embodies a reasonable interpretation of the authority conferred by the governing statute.
[56] The Attorney General argues that regulations made by the LGC are not subject to the same scrutiny as regulations and bylaws of subordinate bodies such as municipalities or administrative agencies. Among the authorities cited for that proposition are Canada (Minister of Citizenship and Immigration) v. Vavilov, 2019 SCC 65 [Vavilov] at para. 111 and References re Greenhouse Gas Pollution Pricing Act, 2021 SCC 11 [Greenhouse Gas] at para. 73. I do not read either of those passages as authority for the distinction the Attorney General relies on. In Vavilov, the Court said:
[111] It is evident that both statutory and common law will impose constraints on how and what an administrative decision maker can lawfully decide: see Dunsmuir, at paras. 47 and 74. For example, an administrative decision maker interpreting the scope of its regulation-making authority in order to exercise that authority cannot adopt an interpretation that is inconsistent with applicable common law principles regarding the nature of statutory powers: see Katz Group Canada Inc. v. Ontario (Health and Long-Term Care), 2013 SCC 64, [2013] 3 S.C.R. 810, at paras. 45-48. Neither can a body instructed by legislation to determine what tax rate is applicable in accordance with an existing tax system ignore that system and base its determination on a “fictitious” system it has arbitrarily created: Montréal (City), at para. 40. Where a relationship is governed by private law, it would be unreasonable for a decision maker to ignore that law in adjudicating parties’ rights within that relationship: Dunsmuir, at para. 74. Similarly, where the governing statute specifies a standard that is well known in law and in the jurisprudence, a reasonable decision will generally be one that is consistent with the established understanding of that standard: see, e.g., the discussion of “reasonable grounds to suspect” in Canada (Minister of Transport, Infrastructure and Communities) v. Farwaha, 2014 FCA 56, [2015] 2 F.C.R. 1006, at paras. 93-98.
[57] The portion of the Greenhouse Gas that the Attorney General relies on reads, in part:
[73] It is notable that the GGPPA does not itself define the word “stringency” used in ss. 166 and 189. But this does not mean that the Governor in Council’s discretion with respect to listing is “open-ended and entirely subjective”: Alta. C.A. reasons, at para. 221. Rather, the Governor in Council’s discretion is limited both by the statutory purpose of the GGPPA and by specific guidelines set out in the statute for listing decisions: see Canada (Minister of Citizenship and Immigration) v. Vavilov, 2019 SCC 65, at para. 108; Katz Group Canada Inc. v. Ontario (Health and Long-Term Care), 2013 SCC 64, [2013] 3 S.C.R. 810, at para. 24. …. In other words, although the Governor in Council has considerable discretion with respect to listing, that discretion is limited, as it must be exercised in accordance with the purpose for which it was given. The Governor in Council certainly does not, therefore, have “absolute and untrammelled ‘discretion'”: Vavilov, at para. 108, quoting Roncarelli v. Duplessis, [1959] S.C.R. 121, at p. 140.
[58] As I read those statements, the test of reasonableness, in the limited sense of reasonable interpretation of the governing statute, applies equally to all subordinate legislation. The test is a deferential one that recognizes the governing statute may be subject to a range of possible reasonable interpretations, but the LGC does not benefit from any different or broader definition of reasonableness.
[59] That was the approach adopted by the Federal Court of Appeal in Portnov v. Canada (Attorney General), 2021 FCA 171. The Court said at paras. 19 and 20:
19 There are three parts to the Katz rule: (1) when a party challenges the validity of regulations, the party bears the burden of proof; (2) to the extent possible, regulations must be interpreted so that they accord with the statutory provision that authorizes them; and (3) the party must overcome a presumption that the regulations are valid. On the third part, Katz suggests (at paras. 24 and 28) that the presumption is overcome only where the regulations are “irrelevant”, “extraneous” or “completely unrelated” to the objectives of the governing statute. A leading commentator on Canadian administrative law calls this “hyperdeferential”…
20 The first two parts of the Katz rule are well-accepted, judge-made principles. The third part — the presumption and the very narrow ways it can be rebutted — is more controversial. In my view, later jurisprudence from the Supreme Court, particularly Vavilov, has overtaken it.
[60] And at para. 27:
27 More fundamentally, Vavilov instructs us to conduct reasonableness review of all administrative decision-making unless one of three exceptions leading to correctness review applies. This applies to regulations as a species of administrative decision-making… For good measure, Vavilov cites Green and West Fraser with approval — cases that conducted reasonableness review without applying the Katz rule: see paragraph 24, above. Finally, the Katz rule applies across-the-board to all regulations regardless of their content or context. This sits uneasily with Vavilov which adopts a contextual approach to reasonableness review.
[61] Applying that analysis to the impugned regulation, it is clear that the legislature gave the LGC broad discretion to limit the disbursements recoverable for expert evidence. One of the possible methods the LGC is specifically empowered to choose for that purpose is a limit based on a percentage of the total award and that is exactly what the LGC has done.
[62] However, that power and its exercise must be viewed more broadly in the full context of the relevant sections of the EA and the private law litigation it governs.
[63] The Attorney General argues that the purpose of the statute and the regulation is to enforce the need for proportionality in vehicle injury litigation and relies on statements to that effect in the legislative debate on the EA amendments.
[64] The concept of proportionality was specifically added to the Supreme Court Civil Rules in the 2010 with Rule 1-3(2), which reads:
Proportionality
(2) Securing the just, speedy and inexpensive determination of a proceeding on its merits includes, so far as is practicable, conducting the proceeding in ways that are proportionate to
(a) the amount involved in the proceeding,
(b) the importance of the issues in dispute, and
(c) the complexity of the proceeding.
[65] Although proportionality is intended to be an overarching consideration, it has not proved to be an easy one to apply in practice. As was said in Geller v. Sable Resources Ltd., 2014 BCSC 171 at para. 11:
There is always a difficulty in defining cut-offs in legal matters strictly in monetary terms. The amount involved may bear no relation to the complexity of a matter, the importance of a matter to the parties, or its value as a precedent.
[66] Proportionality, as the rule defines it, is even more difficult to apply in personal injury cases than it may be in some other areas of civil litigation. Parties are often unable to make a reasonable estimate of the “amount involved” until expert reports have been obtained and exchanged 84 days before trial. Even then, the matters shown to be at issue may be such that the amount involved is ultimately defined as whatever the court finds it to be based on the evidence.
[67] Nevertheless, the enabling statute creates, in s. 12.1(2), a presumptive limit of three experts on damages for each party in vehicle injury cases. In effect, the legislature has deemed that to be the ordinary limit of what is to be considered proportional. As part of that deemed proportionality, it has given the LGC broad discretion to define what it considers a reasonable and proportional amount of recoverable disbursements.
[68] But the same statute also recognizes that there will be cases where a proper regard to proportionality and the interests of justice may introduce different requirements. The statute gives the court discretion to allow a party to call evidence of additional experts if application of the presumptive limit would result in serious prejudice. To repeat, s. 12.1(6)(b) allows the court to permit additional experts if:
(b) without the additional expert evidence, the party making the application would suffer prejudice disproportionate to the benefit of not increasing the complexity and cost of the proceeding.
[69] The plain language of that section includes the legislature’s recognition that additional costs will be involved in cases where the court exercises that discretion.
[70] The impugned regulation applies the same limit of 6% of total damages to all cases, without regard to the legislature’s recognition of judicial discretion and the increased costs likely to flow from it. The discretion is specifically provided to avoid serious prejudice, but the impugned regulation creates a financial barrier or disincentive, and therefore possible further prejudice, to litigants asking the court to exercise that discretion.
[71] Because the impugned regulation fails to recognize the judicial discretion contained in the governing statute, I find it to be inconsistent with the objective, language and purpose of the statute and is therefore not authorized by s. 12.1 of the EA.
[72] Although I find that lack of judicial discretion to be the major reason the impugned regulation is inconsistent with the enabling statute, there is a further inconsistency in relation to some cases. Section 12.1 of the EA creates a limit that expressly applies to expert evidence on “vehicle injury damages.” In authorizing the LGC to enact regulations, it provides the LGC may do so “[f]or the purposes of this section [12.1 of the EA].” It says nothing about experts needed to prove a defendant’s liability. But s. 5(1) of the impugned regulation also denies recovery of the cost of a liability expert’s attendance at trial. I find that to be a limitation on recovery not contemplated by the governing statute.
CONSTITUTIONAL ANALYSIS
[73] The above analysis is based on administrative law principles. But if I am wrong in my application of those principles, I would reach the same result on constitutional grounds.
[74] In Crowder, the Chief Justice found that the rule at issue unconstitutionally infringed on the court’s “core jurisdiction” by limiting the court’s discretion and its ability to hear evidence necessary to decide the case before it:
[164] The impugned Rule does more than limit the court’s discretion; it eliminates it, and that is the petitioners’ complaint.
[75] Although the impugned Rule made an exception for additional experts appointed by the court, the Chief Justice said at para. 167 that it had the effect of asking the court “to play an investigatory function by appointing expert witnesses, in contrast to its usual impartial, adjudicative role.” At paras. 171 and 172, he said:
[171] The rules respecting court-appointed and jointly appointed experts were already in the Rules before the impugned Rule was enacted. So, the “residual discretion” relied upon by the Attorney General in his submissions is not created or preserved by the impugned Rule. In other words, Rule 11-8 does not add anything to the rules of civil procedure; its effect is only to take away judicial discretion.
[172] Instead, the impugned Rule places the court in a role that it should not be placed in. Transferring the responsibility of ensuring that there is relevant evidence upon which to decide the issues in a personal injury case from the parties to the court does, in my view, intrude upon what has, to date, been the core function of the court: to decide a case fairly upon the evidence adduced by the parties.
[Emphasis in original.]
[76] I refer again to the Chief Justice’s conclusion on this point:
[184] While I accept the submission of the Attorney General that the impugned Rule does not prevent the court from receiving expert evidence entirely, I find that instead of leaving it to the litigants to meet their burden of proof by adducing the necessary evidence, it places a duty on the court to ensure that it has sufficient expert evidence before it determines a proceeding on its merits.
[185] Considering the totality of the submissions and the evidence before me, I find that the impugned Rule compromises and dilutes the role of the court, and encroaches upon a core area of the court’s jurisdiction to control its process.
[77] The new s. 12.1 of the EA preserves the discretion that was found to be fatally absent in Crowder, but the petitioners argue that the impugned regulation hollows out that judicial power by creating situations where evidence the court requires cannot realistically be tendered because of the costs and risks imposed on the individual plaintiff. They say the government cannot, with one hand, rely upon and use the discretionary power of the court as a safeguard for constitutionality, while with the other hand, use the impugned regulation to prevent or impede the parties’ evidence from being adduced.
[78] The Attorney General argues that the constitutional right to place necessary evidence before the court does not include a constitutional or common law right to a costs regime that requires the opposite party to pay the costs of obtaining and adducing that evidence. The Attorney General points out that costs regimes adopted by different jurisdictions range, at one extreme, from no costs at all, as in most U.S. jurisdictions, to, at the other extreme, full indemnity as in the United Kingdom. That is generally true, although I have been referred to no jurisdiction that singles out for different treatment a particular category of individual plaintiffs and defendants within a single cause of action.
[79] The petitioners do not suggest a constitutional right to a particular costs regime. They submit the issue is one of access to justice.
[80] In some cases, the petitioners argue, the impugned regulation will place the disbursement cost of proceeding to trial entirely upon the plaintiff because, based on the amount of damages the plaintiff hopes to prove, the cap will have been exhausted before trial. In other cases, plaintiffs may decide they simply cannot afford to proceed with some portion of their claim or to present the evidence the court requires to consider an award under a particular head of damages. The Attorney General acknowledges that some plaintiffs will have to make those choices and that is indeed one of intended effects of the impugned regulation.
[81] Where a plaintiff has incurred disbursements that exceed the 6% maximum, the disbursements will have to paid out of the damage award, reducing the amount the court has found to be necessary to replace lost income or provide necessary future care.
[82] The Attorney General and the MVA Respondents point out that there is nothing unusual about plaintiffs not actually receiving the full amount of their damage award or settlement. Plaintiffs must also pay legal fees, usually a percentage of the award or settlement set out in a contingency fee agreement. However, a shortfall due to the need to pay legal fees arises out of a contractual arrangement freely entered into between the plaintiff and counsel. That is not comparable to a situation where that result is imposed by legislation.
[83] In arguing that there is no constitutional right to a particular economic model of litigation or costs regime, the Attorney General relies on British Columbia (Attorney General) v. Christie, 2007 SCC 21 [Christie], where the Supreme Court of Canada considered a challenge to a 7% tax on the cost of legal services. It rejected the idea of a broad constitutional right to “legal advice, services and disbursements.” (at para. 13).
[84] In effect, the Attorney General argues that if there is no universal constitutional right to the assistance of a lawyer, there can be no such right to the assistance of an expert witness. The difference, in my view, is that the ability of a party to obtain and present expert evidence goes to that party’s ability, with or without counsel, to provide the court with the evidence it needs to decide a case on its merits.
[85] I agree with the petitioners that the more applicable authority is Trial Lawyers Association of British Columbia v. British Columbia (Attorney General), 2014 SCC 59 [Trial Lawyers 2014]. That case concerned hearing fees that a party had to undertake to pay in order to obtain a trial date. It arose out of a family law case where the total hearing fees would have been in an amount that almost equalled the net monthly income of the family (at para. 5).
[86] Referring to s. 92(14) of the Constitution Act, 1867, which gives a provincial legislature power make laws in relation to the administration of justice in the province, the Court said at para. 24:
[24] On its face, s. 92(14) does not limit the powers of the provinces to impose hearing fees. However, that does not mean that the province can impose hearing fees in any fashion it chooses. Its power to impose hearing fees must be consistent with s. 96 of the Constitution Act, 1867 and the requirements that flow by necessary implication from s. 96. …
[87] The hearing fee scheme at issue was found to unconstitutionally prevent access to the courts because it did not provide the court with sufficient discretion to allow exemptions in appropriate cases:
[43] I conclude that s. 92(14), read in the context of the Constitution as a whole, does not give the provinces the power to administer justice in a way that denies the right of Canadians to access courts of superior jurisdiction. Any attempt to do so will run afoul of the constitutional protection for the superior courts found in s. 96.
…
[48] It is the role of the provincial legislatures to devise a constitutionally compliant hearing fee scheme. But as a general rule, hearing fees must be coupled with an exemption that allows judges to waive the fees for people who cannot, by reason of their financial situation, bring non-frivolous or non-vexatious litigation to court. A hearing fee scheme can include an exemption for the truly impoverished, but the hearing fees must be set at an amount such that anyone who is not impoverished can afford them. Higher fees must be coupled with enough judicial discretion to waive hearing fees in any case where they would effectively prevent access to the courts because they require litigants to forgo reasonable expenses in order to bring claims. This is in keeping with a long tradition in the common law of providing exemptions for classes of people who might be prevented from accessing the courts – a tradition that goes back to the Statute of Henry VII, 11 Hen. 7, c. 12, of 1495, which provided relief for people who could not afford court fees.
[88] In coming to that conclusion, the Court specifically distinguished Christie:
[41] This Court’s decision in Christie does not undermine the proposition that access to the courts is fundamental to our constitutional arrangements. The Court in Christie – a case concerning a 7 percent surcharge on legal services – proceeded on the premise of a fundamental right to access the courts, but held that not “every limit on access to the courts is automatically unconstitutional” (para. 17). In the present case, the hearing fee requirement has the potential to bar litigants with legitimate claims from the courts. The tax at issue in Christie, on the evidence and arguments adduced, was not shown to have a similar impact.
[89] I note in passing that, although the majority of the Court in Trial Lawyers 2014 decided the matter on constitutional grounds, Cromwell J., in a separate concurring judgment, reached the same result on the administrative law principles discussed earlier in these reasons.
[90] The impact of the impugned regulation on individual plaintiffs will obviously vary depending on the circumstances of each plaintiff and the issues in each case. But I am satisfied, on the basis of the evidence and on those aspects of the civil litigation system of which I am entitled to take judicial notice, that the impugned regulation, in its present form, will prevent or discourage some plaintiffs from accessing the court for a decision of their case on its merits. Some plaintiffs will be unable to marshal all of the evidence necessary to prove all aspects of their case without sacrificing other reasonable expenses or necessary portions of their compensatory damages. Others may have the evidence in the form of the necessary expert reports, but will be unable to proceed to trial because of the additional costs and risks associated with having those experts testify.
[91] Like the hearing fees that were at issue in Trial Lawyers 2014, a limit on disbursements comes within the province’s constitutional jurisdiction over the administration of justice, but that jurisdiction must be exercised in a manner that is consistent with other constitutional requirements:
[32] The historic task of the superior courts is to resolve disputes between individuals and decide questions of private and public law. Measures that prevent people from coming to the courts to have those issues resolved are at odds with this basic judicial function. The resolution of these disputes and resulting determination of issues of private and public law, viewed in the institutional context of the Canadian justice system, are central to what the superior courts do. Indeed, it is their very book of business. To prevent this business being done strikes at the core of the jurisdiction of the superior courts protected by s. 96 of the Constitution Act, 1867. As a result, hearing fees that deny people access to the courts infringe the core jurisdiction of the superior courts.
[92] In the absence of a provision that preserves judicial discretion to relieve against the consequences of the impugned regulation in appropriate cases, including cases where the court exercises its related discretion to allow a party to exceed the presumptive limit of three experts, I find that the impugned regulation, as with the rule that was at issue in Crowder, “compromises and dilutes the role of the court, and encroaches upon on a core area of the court’s jurisdiction to control its process.” (Crowder at para. 185).
CONCLUSION
[93] I declare that s. 5 of the disbursements and expert evidence regulation is inconsistent with the enabling statute, s. 12.1 of the Evidence Act, and contrary to s. 96 of the Constitution Act, 1867. It is therefore of no force or effect.
[94] The parties are at liberty to make written submissions as to costs of this petition, provided that the petitioners do so within 30 days of the date of these reasons. The respondents may reply to those submissions within two weeks of their receipt and the petitioners may file any reply one week later.
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