The Insurance Corporation of British Columbia (ICBC) provides coverage up to $200,000 for anyone who is injured by an uninsured motorist on a B.C. road or highway. This B.C. government fund is similar to the Motor Vehicle Accident Claims Fund (MVACF), which is the ‘payer of last resort’ in Ontario when there is no other insurance available for injuries or property damage resulting from a motor vehicle accident that takes place in Ontario. Like the ICBC, the maximum payout for damages due to injury by the MVACF is $200,000. The MVACF and ICBC are also available to non-residents of the respective provinces.
A civil action, Arsenovski v. Bodin, was commenced after a pedestrian was injured and and applied to the ICBC for coverage. The lawsuit was brought against three defendants — ICBC as well as two agents assigned to the plaintiff’s case — and it accused the defendants of malicious prosecution, and alternatively, negligent investigation. The suit also stated that ICBC, its investigators and adjusters misstated evidence to support criminal charges laid against the plaintiff.
This action arose after a pedestrian, Mr. Arsenovski, was struck by a car turning left, while he and his wife were crossing the street on or near a crosswalk one evening. Mrs. Arsenovski also fell and was later found to have sustained soft-tissue injuries, but could not remember the circumstances that caused her to fall.
The couple were refugees who had recently moved to Canada and spoke little English. On the advice of a friend, the couple reported the incident to the ICBC. Mrs. Arsenovski hoped that the ICBC would provide assistance with her medical and ambulance bills only, and did not advance a claim for injuries. After an initial meeting with an ICBC adjuster, Mrs. Arsenovski signed her statement, which she made with the help of a translator, at which her point her case was referred to two agents employed by ICBC, Mr. Bodin and Mr. Gould. This was the only statement the plaintiff made to the ICBC.
Mr. Bodin was a bodily injury adjuster and Mr. Gould worked with the Special Investigations Unit. Mr. Gould was a former RCMP officer and in his role as Special Provincial Constable for ICBC, he had police powers pursuant to the Police Act. After reviewing the Arsenovski case, Mr. Gould submitted a report to the Crown Counsel (RTCC) which recommended that charges be laid against the couple for making a false statement, as well as a $5,000 charge against Mrs. Arsenovski for fraud.
After reviewing the RTCC, the Crown accepted one of the recommendations and charged Mrs. Arsenovski with making a false statement. However, on the day Mrs. Arsenovski’s criminal trial was to begin, the Crown decided to withdraw the charge. The plaintiff subsequently commenced her lawsuit against the defendants, Mr. Bodin and Mr. Gould, for malicious prosecution and the ICBC, for negligent investigation. The defendants argued that they should not be held to a standard of perfection or judged with hindsight and that there was no motive of malice against Mrs. Arsenovski.
The case was tried in the Supreme Court of B.C. and the judge, Madam Justice Griffin, ruled in favour of the plaintiff and decided that ICBC and the agents were jointly liable to Mrs. Arsenovski. The judge found Mrs. Arsenovski to be a very credible witness and did not believe she attempted to exaggerate or mislead the ICBC.
Justice Griffin referred to the medical evidence, which included a report from hospital personnel that examined Mrs. Arsenovski on the night of the accident as well as reports from a family doctor who Mrs. Arsenovski saw multiple times after the accident. Both reports documented evidence of bruising on Mrs. Arsenovski and that her ankle appeared turned and swollen. Her family doctor also noted that the plaintiff complained of pain in both shoulders and there was evidence of soft-tissue injuries.
The judge pointedly noted that the ICBC investigators did not obtain Mrs. Arsenovski’s medical records from her family doctor before preparing and submitting the RTCC. And, when they did finally obtain her medical reports, before the criminal trial was scheduled to begin, they made no attempts to amend the RTCC.
While Justice Griffin found the plaintiff to be credible and without an intention to mislead, she did not feel the same about the ICBC investigators. One of the witnesses for the defendants referred to himself as an ‘independent’ adjuster but was actually not independent of the ICBC. The judge found this witness to be an extremely arrogant and disrespectful witness and stated, his “tone and demeanour were angry and disrespectful towards plaintiff’s counsel to a degree I have rarely seen in a witness”. The adjuster insisted that the hospital records for Mrs. Arsenovski were based only on her suggestions to medical staff rather than on an actual diagnosis by a doctor or nurse despite the fact that, by his own admittance, he had not spoken to hospital personnel and was also unable to decipher the handwritten medical notes.
The judge found the second witness, Mr. Bodin, to be rehearsed and cagey on key points of the case. Mr. Bodin’s notes and emails, which were created while he was handling the plaintiff’s files, appeared to be prejudicial and at trial, he appeared to attempt to distance himself from these documents, and this reflected poorly on his credibility.
Justice Griffin had particularly serious concerns with the evidence provided by Mr. Gould. There were several inaccuracies in the RTCC, one of which was Mr. Gould’s claim that Mrs. Arsenovski falsely stated to the ICBC that her husband was knocked into her when struck by the car, thereby knocking her down. In fact, nowhere in Mrs. Arsenovski’s signed Statement to the ICBC, did she make this claim; she instead maintained that she did not know how she fell. During cross-examination, Mr. Gould admitted that he was unaware of any record in which the plaintiff told anyone at the ICBC that she’d been knocked down by her husband when he was hit by the car.
Another significant inaccuracy in the RTCC was Mr. Gould’s claim that the plaintiff was trying to defraud the ICBC by initiating a false bodily injury claim. The plaintiff never made a bodily injury or tort claim; she requested assistance with the hospital costs only. The judge also challenged Mr. Gould’s assertion in the RTCC that the plaintiff made a false statement about being injured, as medical evidence proved, to the contrary, that the plaintiff had sustained injury. Further, Mr. Gould’s accusation was made without investigating the plaintiff’s medical reports.
Justice Griffin noted that contrary to the rules of submitting an RTCC, one of which requires a lack of bias, Mr. Gould did not act as a neutral fact-finder. He instead acted as an “advocate with a bias all designed to strengthen the impression he was trying to create”, and that impression was that the plaintiff was not involved in an accident, never injured and was trying to defraud the ICBC.
On the matter of whether Mr. Gould had reasonable and probable grounds to initiate a prosecution against Mrs. Arsenovski, the judge referenced the decision in Proulx v. Quebec, where the court ruled that the charges against the appellant were “based on fragments of tenuous, unreliable and likely inadmissible evidence”. The ruling also noted that the charges were “grounded in mere suspicion and hypotheses”. Justice Griffin believed both statements applied to the ICBC’s case against Mrs. Arsenovski.
The judge did not perceive anything in Mrs. Arsenovski’s statement to the ICBC that could give rise to an objectively reasonable cause for charging her with making a false statement. Therefore, she concluded that there was an absence of reasonable and probable grounds for initiating the charge against Mrs. Arsenovski.
On the issue of malice, Justice Griffin also sided with the plaintiff. She noted that Mr. Gould never assessed the evidence objectively but only with the intent to support his theory that Mrs. Arsenovski was trying to defraud the ICBC. Mr. Gould also misstated much of his evidence, particularly several witness statements, which he wrote in such a way as to create the false impression that Mrs. Arsenovski was standing on the curb when her husband was hit and therefore could not have fallen or been injured in any way.
Mr. Gould contacted both the Ministry of Health and Canada Immigration, prior to the start of the criminal case, and encouraged the Ministry of Health to pursue their own investigation and fraud charges against Mrs. Arsenovski for alleged abuse of the medical system, calling Mrs. Arsenovski’s hospital stay and treatment, bogus. Justice Griffin criticized these actions, particularly since they were done before Mrs. Arsenovski had been found guilty of any wrongdoing and before Mr. Gould had undertaken any investigation into her medical condition. In his email to Canada Immigration, Mr. Gould reported that the couple were involved in medical fraud and under investigation for insurance fraud. Justice Griffin found these actions to be extremely malicious, particularly as there was no evidence that this level of reporting to other institutions was the norm and when Mrs. Arsenovski had not been found guilty of any criminal wrong-doing. Justice Griffin concluded that Mr. Gould’s conduct amounted to a perversion and abuse of his position, such that malice had been proven.
The court awarded Mrs. Arsenovski $350,000 in punitive damages against ICBC. She was also awarded $30,000 for emotional distress and $7,225.34 for legal fees incurred in her defence of the former criminal charge; these latter damages were joint and several against ICBC and Mr. Gould.
In response to the above decision and in a separate action, the defendants applied for a stay of execution of the damages award pending a future appeal of this case. The appellants argued that the trial judge erroneously concluded that Mr. Gould acted with malice and did not have reasonable and probable grounds to assert that the plaintiff made false statements. The appellants also argued that the trial judge erred in awarding punitive damages that were both disproportionate and inconsistent with case law. Justice Bennett found that the opposing sides in this case both have arguable points, and the appellants may suffer irreparable harm if a stay is refused and a large part of the $350,000 damages is already spent and no longer recoverable, in the event that a lesser amount of damages is awarded on appeal. On this basis, the judge granted the appellants a partial stay with respect to only the punitive damages portion of the award.
As the purpose of automobile insurance, home insurance and other forms of insurance is to provide security against unexpected loss, we tend to assume that insurance payments will be made available when we need and deserve coverage. Unfortunately, this is all-too-often not the case. Insurers are profit-motivated, and sometimes dispute legitimate claims and place significant financial hardship on injured persons. The Court’s strong condemnation of inappropriate conduct by the insurer in this case has potential implications for both public and private insurers. Further, the arguments made in this case have clear applicability in the right Ontario case.
The Arsenovski case dealt with a provincial government insurer and although we expect government bodies to deal fairly with claimants, they are not very different from private insurers. As in Arsenovski, claims adjusters, insurance agents and even physicians employed by insurers are commonly biased in favour of their employer and are more likely to doubt a claim of injury. This means that insurers, whether private or public, are generally unwilling to indemnify a claimant or pay deserved damages to injured persons unless they have a strong claim.
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