Does the insurance exception rule apply to cost of future care awards for prescribed medication when the Plaintiff benefits from an extended medical health plan ?

The principle generally is that a plaintiff is only entitled to be compensated for his or her actual loss. Therefore, if medication has been prescribed and there is medical support for a cost of future care award for medication over one’s lifetime, should there be a deduction on the award due to the fact that the subject Plaintiff may have the benefit of an extended medical health plan?

In Clayton v. Barefoot, 2018 BCSC 239, this issue is discussed and analysed.

The Court concluded that the insurance exception rule does not apply to cost of future care awards. In reasoning on this issue, the Court stated that a Plaintiff may, over their lifetime, change jobs and there is no guarantee that the Plaintiff will continue to benefit from an extended medical health plan.  However, if such a plan exists, it should be a considering factor “when determining a reasonable award for future costs of medication”

Example:

In Chappell v. Loyie, 2016 BCSC 1722 at para. 276 the Plaintiff claimed $50,000 for medication that was prescribed.  The Court took into consideration that there was an extended medical health plan that covered the cost of medication up to 80%.  The Court considered that such a plan was held by the Plaintiff and reduced the claim of cost of future care to $25,000.

In the current case, the Defendant disputed the amount claimed by the Plaintiff in this case (although the original amount claimed is not noted) – the Defendant’s position was that $5,000. was appropriate. The Court awarded $20,000 for cost of medication that the Plaintiff was taking for her low back back.

The Court’s Analysis & Conclusion:

Medications

[228]     Funding is sought for the prescription medication that Ms. Clayton is taking and for the Robaxacet for her lower back pain. Ms. Clayton testified that she is now taking Robaxacet every other day to manage her pain symptoms.

[229]     The defendant submits that costs for the prescription drugs appear to be covered by her benefits plan as there was no claim advanced for this in the special damages claim. The defendant, however, has not indicated a case authority that explains how this impacts my analysis. The defendant concedes that there is medical justification for the prescription medication that Ms. Clayton is taking. The defendant agrees that some funding should be provided for ongoing pain medication and suggests an amount no more than $5,000.

[230]     In Cunningham v. Wheeler, [1994] 1 S.C.R. 359 at 401, Cory J. writing for the majority explained the principle underlying the private insurance exception to damage entitlement:

Recovery in tort is dependent on the plaintiff establishing injury and loss resulting from an act of misfeasance or nonfeasance on the part of the defendant, the tortfeasor. I can see no reason why a tortfeasor should benefit from the sacrifices made by a plaintiff in obtaining an insurance policy to provide for lost wages. Tort recovery is based on some wrongdoing. It makes little sense for a wrongdoer to benefit from the private act of forethought and sacrifice of the plaintiff.

[231]     The private insurance exception is often challenged in the context of special damages. For example, in Napoleone v. Sharma, 2008 BCSC 1746, Bruce J. was unable to apply the private insurance exception to an award of special expenses because there was no evidence of any consideration passing between the plaintiff and employer in respect of the plaintiff’s extended health benefit. At paras. 9-12, Her Ladyship wrote:

[9]        Whether the plaintiff has paid for private insurance or has obtained these benefits through an employment contract, the exception will apply. It is also irrelevant that it is the plaintiff’s husband who secured these benefits. See, Brennan at para. 182-3. However, the onus rests with the plaintiff to prove he or she has paid for the provision of insurance benefits in some fashion. As Cory J. says in Cunningham at para. 94:

In my view, Ratych v. Bloomer, supra, simply placed an evidentiary burden upon plaintiffs to establish that they had paid for the provision of disability benefits. I think the manner of payment may be found, for example, in evidence pertaining to the provisions of a collective bargaining agreement just as clearly as in a direct payroll deduction.

[10]      There is no evidence before the court as to what, if any, consideration passed between Mr. Napoleone and his employer in respect of the extended health benefits. There is no evidence of whether Mr. Napoleone pays all or a portion of the insurance cost or whether it was negotiated as a part of a collective bargaining scheme. The only evidence before the court is that the plan was secured through Mr. Napoleone’s employer and it covers 80% of Mrs. Napoleone’s health related expenses.

[11]      Without an evidentiary foundation to support the claim, I am unable to apply the private insurance exception to the case at hand. As Cory J. says at para. 93 of Cunningham, it is only when this evidentiary requirement is met that the court may be satisfied the plaintiff has shown the prudence and corresponding deprivation that underlies the exception and permits double recovery.

[12]      For these reasons, I must dismiss Ms. Napoleone’s claim for the gross cost of the special expenses.

[232]     I am not convinced that such reasoning should apply with respect to costs of future care. Although it appears that Ms. Clayon’s current employee benefits plan covers 80% of the cost of prescription medication, there is no evidence that Ms. Clayton will continue to have this same coverage or will continue to be employed by her current employer. I note that in Tabet v. Hatzis, 2013 BCSC 1167 at para. 107, Dickson J. (as she then was) said that “[t]he cost of future extended health benefits should not be deducted from the cost of future case award based on the principles enunciated in Cunningham v. Wheeler”.

[233]     In my view, the appropriate approach is the one taken by Fisher J. (as she then was) in Chappell v. Loyie, 2016 BCSC 1722 at para. 276, in which Her Ladyship took the plaintiff’s extended medical benefits into consideration when determining a reasonable award for future costs of medication:

Medications

[276]    Mr. Chappell claims $50,000 for medications. In my view, this does not sufficiently take into account the fact that his extended medical benefits cover 80% of this cost to age 60 while he remains employed by the Corporation of Delta. Given this, as well the need for medications related to non-accident injuries, this amount must be reduced further and I consider an award of $25,000 to be reasonable.

[234]     Applying this approach to the evidence before me, I am of the view that an award of $20,000 for the future costs of prescription drugs and Robaxacet is appropriate.

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