Participation rate is still a significant issue, but the wage gap is narrowing. 154

Offset deduction with lost homemaking capacity 154

Even unwaged work can represent a loss of earning capacity 154

So, might start w/ lower participation rates and get a lower number, but might increase the number to account for the fact that, but for the accident, a π might have worked in the home without a wage but enhancing the economic welfare of the home. 154

Compensating Household Services: 154

[see Fobel and McIntyre] 154

Issue: how do you measure lost homemaking capacity, then? 154

Household services are made up of: (1) direct labour and (2) managerial functions 154

So, can be broken up into different functions. For things that have market wage rates, compare with those – e.g. cost of childcare, gardener etc. 154

Courts haven’t used a lot of evidence to value the managerial side of homemaking, likely because there isn’t really a labour market for that. Unless you’re super rich, maybe? 154

Past loss 154

Where there has been an actual expenditure: special damages based on actual cost. 154

Where no expenditure and work left undone or done inefficiently: compensated on loss of amenity basis  based on hypothetical cost [per Fobel] 154

Where work was done by others: in trust awards. 154

Future loss 154

Where services will be replaced: full cost included as cost of care 154

Where services may not be replaced: impairment compensated based on replacement cost per Fobel. 154

Issues: 154

1. What counts as work? 155

Not all expenditure of energy counts as work 155

2. Wage rates are low 155

So much of household work is performed on an unwaged basis that it makes the market rates low for that work 155

If all homemakers got wages for that work, labour costs for household work would increase substantially. 155

One idea to address this: 155

Can use the individuals’ evidence of what they value labour at 155

The value of household labour is related to the opportunities lost or given up. 155

For example, say you’re a practicing lawyer and you take two years off to raise children. The value of childcare to you is your lawyer’s salary for those two years. 155

But… that really promotes inequality since it’s valuing the same work differently for different people. 155

Compensating Unwaged Work (or Underemployment) 155

Charitable and Religious Organizations 155

Turenne 155

Facts: Teacher, but member of religious order, vow of poverty so she didn’t take any wage for teaching. Accident, ∆ claimed no damages b/c no lost wages. 155

Held: Compensated in the full amount someone else would have earned in that circumstance 155

She was working as a teacher, compensate her accordingly. 155

Voluntary choice to deploy earning capacity in a way that she didn’t earn anything. 155

Step 1: Assessment of Need 155

Not a legal question 155

Ensure sufficient expertise surrounding π to assess injuries, consequences, prognosis, and build around that an understanding of medical/rehabilitation needs 155

The most important categories of need are: 155

Medical treatment 155

Rehabilitation  physiotherapy, pain mgmt, etc. 155

Ongoing daily care  attendants 155

Transportation 155

Prosthetics, drug costs 155

Physical arrangements and special equipment  wheelchairs, vehicles 155

General living support 155

Step 2: Determination of Standard by Which Needs should be Met 156

Mitigation 156

Obligation to mitigate when injured – either by seeking alternate employment, or by seeking treatments. 156

Issue: if π doesn’t seek treatments, or stops at some point, is ∆ responsible? 156

But see Andrews: there is no duty to mitigate associated with the standard of compensation – only a duty to be reasonable. 156

There is no duty to accept less than the appropriate amount of compensation  that’s not mitigation. 156

Note: Dickson J said it wrong in Andrews: he said there is no duty to mitigate in a personal injury case, but really there is – just not in relation to the standard of care you’re entitled to. 156

There is a general duty to mitigate, which applies to the level of need [Janiak] 156

If there is good evidence that a treatment will resolve the injury, you can’t ignore that option then seek damages instead. 156

Test of Reasonable Expenditure 156

Would a reasonable person of ample means make the expenditure on themselves? 156

That’s about as detailed as the question gets – not a lot of refining. 156

A π is not entitled to unlimited expenditures just because it’s someone else’s money, but ≠ limited by personal circumstances/impecuniosity. 156

The test is the level of expenditure that a reasonable person with some budget constraint (but a big budget) would spend on themselves. 156

General Notes on Determination of Standard 156

Consideration of Social Cost? 156

Relevant only in choosing between acceptable alternatives 156

Level of care 156

Expectation of ordinary level of family care only 156

Home care fully funded where preferred and appropriate [Andrews, Bystedt], but sometimes institutional care is preferable 156

This will depend on the level/duration of family support, the need for multidisciplinary care, the expected benefits of socialization, etc. [See Krangle] 156

Step 3: Project Need and Standard into Future 156

Consider life expectancy (post-accident) 156

Contingencies re Needs and Levels 156

Recall, these can be positive and negative on the award amount 156

Frequent mistake: deducting for early death. 156

Avoid double deduction re duration/lifespan [Andrews para 50] 157

Early death is already factored into the actuarial tables used to calculate average lifespan for that condition. 157

Contingencies basically guarantee either over- or under-compensation [Andrews para 51] 157

20% is the conventional deduction [see e.g. Andrews]. 157

This often results in under-compensation  if you’ve really done a detailed analysis of the factors, why would you need an additional deduction for presumed contingencies? 157

Contingencies can be individualized based on evidence 157

Can use contingencies where there is a need to evaluate chances of a future event occurring that would merit additional compensation  probabilities and possibilities can be factored into contingency format [see e.g. Schrump v. Koot; Janiak] 157

Courts will factor in a possible future event at the rate of probability  it affects damages, but discounted by probability that it won’t happen. So, for something with 25% likelihood, give 25% compensation. 157

Step 4: Deductions and Adjustments 157

Avoiding duplication with future earnings [Andrews para 53-55] 157

Collateral benefits [see below] 157

Family care: 157

Presumption against conscription  we don’t want to calculate the award so as to force a family to care for the injured party 157

But: voluntary family care (over and above the norm) will be compensated [Bystedt para 164 & 181]  in a constructive trist. 157

Tax issues: 157

Ignored in Andrews [para 84-85] 157

The original idea: don’t worry about it  can be expensive to figure out tax consequences, and they aren’t likely to be high because of medical costs etc. 157

But now, we think the deduction for health care costs won’t be enough, so the award will be too low. 157

So, a gross-up, per Watkins v. Olafson [1989, SCC] 157

See relation to periodic payments 157

Structured settlements 157

Note: the income from a lump sum damages award is subject to taxation, but the lump sum itself is not (ITA exemption for damages awards) 158

Guardianship and management fees 158

Mitigation 158

Janiak is the leading case on this. 158

Most mitigation cases involve a π faced with some possible medical procedures that have some chance but are not guaranteed to solve the problem, and π chooses not to proceed with the treatment. 158

Janiak set out an objective standard of reasonableness: 158

Objective Test: Assessing What a Reasonable Person Would Do 158

(1) Medical Opinion – what are the professionals saying? 158

How unanimous? How good is the medical science backing up the recommended course of treatment? Are doctors/specialists divided on the question? 158

In Janiak, everyone seems to have agreed on a 70% chance of significant (even 100%) improvement 158

Note, this is the chance of success, as opposed to the risks of surgery 158

(2) Risk-benefit analysis 158

The medical treatment itself might be dangerous 158

So, is the promised benefit worth the risk? 158

In Janiak, it was just ordinary surgery, so there were those risks but no additional, and the benefit to be gained and the chance of success were high. 158

But see Bougoin. 158

Thin Skull Situations 158

What if π reluctance to undergo treatment stems from a genuine psychological condition/fear of the treatment? 158

Courts have imported the traditional tort thin skull rule into this area, to carve out an exception to the mitigation principle. 158

But it’s still very narrow. 158

General rule: ∆ must take π as found, and if as a result of a pre-existing psychological disability, π is unable or unwilling to pursue a course of treatment, that is an excuse and there will be no obligation to mitigate. 158

Two requirements to bring a π within the exception: 158

(1) Condition must be pre-existing 158

Has to be medically established 158

(2) Condition must be pathological 158

(i.e. an illness) 159

Can’t just call your family in to say you’ve always been afraid of hospitals, e.g. 159

It was noted in class that there may not have been any cases that have come within this exception yet. 159

It’s not clear how religious beliefs would play into this test 159

≠ illness, so not within the test, but maybe a sub-category test or something like that will be created. 159

Note: if ∆ caused the reluctance, it’s not a thin skull issue, it’s a foreseeability issue. 159

If it’s foreseeable that the tort would cause the lack of mitigation…∆ will be responsible. 159

Issue: if partner cares for injured party in the home, should the person still get compensation for the costs of nursing? 159

If no loss suffered, there is a windfall. 159

But, we balance this windfall concern with a concern against subsidizing ∆s for benefits from collateral sources. 159

In principle, the rule is that collateral benefits are deducted. 159

But in reality, there are so many exceptions that the principle is almost reversed. 159

Collateral source benefits are now only deducted in fairly unusual circumstances. 159

Categories of Collateral Benefits: 159

1. Voluntary Family Care 159

Recall: can’t conscript family members [Andrews] 159

But, some level of ‘normal’ care may be expected [Bystedt para 181] 159

Avoid the windfall problem through in-trust awards 159

i.e. hold that part of the award in trust for the person doing the caregiving 159

ON has gone further: family members in personal injury cases get their own direct cause of action for their caregiving 159

2. Charity 159

Probably the earliest exception to the deductibility rule 159

Courts have long held that charitable contributions aren’t taken into account 159

E.g. if neighbours bring you food; mutual assistance from community groups, etc. 159

Rationale: courts don’t want to disincentivize voluntary charitable providers of assistance 159

3. Private Insurance 159

It is now well-established that privately purchased insurance is not deductible. 160

π is entitled to a windfall due to their individual prudence. [see Bradburn] 160

Cunningham v. Wheeler goes through the insurance exception 160

4. Employment-Based Benefits 160

Can Bradburn be extended into the private insurance sphere? 160

Employment-based benefits deducted if not paid for. [Ratych v. Bloomer (1990, SCC)] 160

But see Cunningham, which came to the opposite conclusion 160

Gratuitous coverage from employer does tend to be deducted 160

Doesn’t fit private insurance model  haven’t paid for it, because haven’t bought it. 160

But, it often fits the charity model, so it may be safe anyway. 160

More difficult: when employee has a contractual entitlement to the benefit 160

Paid sick leave  so, no income loss 160

Disability payments  where problem is more long term, but same effect 160

Direct payment [Miller, Shanks] 160

Indirect payment  total compensation theory [Cunningham] 160

Idea: π did pay for the benefit – maybe not explicitly, but they bargained for it. 160

Where there is evidence that the sick leave or other relevant policy was explicitly bargained for, and there are wage tradeoffs in exchange, you will get to keep it. Because it’s like private insurance at that point. 160

We discussed in class the distinction between collective bargaining Ks (where everything is explicitly bargained for) and individual employment Ks. 160

What you would do: bring employer into court and ask whether they budgeted the disability benefit as part of their total employment costs. They will almost certainly say yes. 160

The need for evidence in these cases has been gradually diluted: 160

Courts get less concerned about hearing evidence, because it’s just common sense. Benefits are part of an employee’s total compensation package. 160

Sick leave is also exempted from the collateral benefit rule  you pay for sick leave. 160

Most Ks provide for a certain amount of sick leave, and employee has to designate a day as a sick day – it’s like a bank account. 160

If π is injured as a result of auto accident but suffers no income loss because they used sick leave, the court still won’t deduct from the award, because π has spent their sick leave on the recovery from the accident. 160

Similar to private insurance – chose to buy the protection by spending sick days here. 160

5. Public Benefits 160

Probably the only place where the collateral benefit rule still applies, fairly strongly. 160

(a) Social Welfare 160

MB v. BC [SCC] 161

Facts: assault resulting in income loss, which was offset by social welfare benefits. 161

Held: social welfare benefits are taken into account, award reduced accordingly. 161

Reasons 161

Not paid for, and don’t fit the charity exemption 161

Note rationale: deducting it won’t discourage government from providing social welfare. 161

This applies to other statutory benefits as well. 161

(b) Publicly Funded Care Programs 161

At least, those where entitlement is independent of income [see e.g. Krangle] 161

If program is on limited budget and therefore entitlement is discretionary (i.e. distributed by an administrator who decides on basis of need), then courts won’t deduct it. 161

Charge ∆ with that cost, so π won’t be on the public program. 161

Courts apply a contingency where public care programs are deducted: always a risk that government might change the program, so we add a contingency for that. 161

If there’s any evidence that the program you will benefit from is at risk, then the court may deduct it all and then add back in a contingency for the chance that it will disappear. 161

(c) Health Care Costs 161

Subrogated. 161

Note: ICBC claims are exempt for efficiency (government against government lawsuits are pointless) 161

(d) Employment Insurance – Repayment 161

Also subrogated. 161

See EI Act s. 45 161

Subrogation 161

When the other provider of assistance has claims against ∆ through the injured person. 161

A lot of the problems described above are now dealt with through subrogation. 161

How Does it Work? 161

(1) By contract in private insurance 161

Note: most of tort law is just insurance companies fighting each other 161

(2) By operation of law 161

Implied Ks, equity  courts find ways to make the outcome they want happen 161

(3) By statute 161

E.g. Health Care Costs Recovery Act (2009) 161

Public insurer has claim for any costs associated with an injury resulting from a tort 161

Note: gives provincial health minister a subrogated right of recovery in relation to medical expenditures in personal injury accidents 162

Except in automobile accidents  ICBC is the government too, so this would only serve to increase transaction costs. 162

Provisions: 162

"health care services" means 162

(a) benefits as defined in the Hospital Insurance Act, 162

(b) benefits as defined in the Medicare Protection Act, 162

(b.1) benefits as defined in the Pharmaceutical Services Act, 162

(c) payments made by the government under the Continuing Care Act, 162

(d) expenditures, made directly or through one or more agents or intermediate bodies, by the government for emergency health services provided in respect of a beneficiary under the Emergency and Health Services Act, and 162

(e) any other act or thing, including, without limitation, the provision of any health care treatment, aid, assistance or service or any drug, device or similar matter associated with personal injury, 162

(i) for which a payment or expenditure is or may be made, whether directly or through one or more agents or intermediaries, by the government in respect of a beneficiary, and 162

(ii) that is designated by regulation under section 25 (2) (b) [regulations]; 162

Beneficiary's right to recover 162

2 (1) If, as a direct or indirect result of the negligence or wrongful act or omission of a wrongdoer, a beneficiary suffers a personal injury for which the beneficiary receives or could reasonably be expected to receive one or more health care services, the beneficiary may, subject to sections 6 [government may intervene in proceeding or assume conduct of claim] and 20 (2) and (3) [payments to the government], recover from the wrongdoer 162

(a) the past cost of health care services, and 162

(b) the future cost of health care services. 162

(2) Subsection (1) applies whether or not the personal injury was caused in whole or in part by the wrongdoer. 162

(3) For the purposes of subsection (1) but subject to section 20 (2) and (3) [payments to the government], payment or expenditure by the government, whether directly or through one or more agents or intermediaries, under any of the Acts referred to in the definition of "health care services" or under any other government plan or scheme of insurance for past and future costs referred to in subsection (1) must not be construed to affect the right of the beneficiary to recover those costs in the same manner as if those costs are paid or payable by the beneficiary. 163

(4) The past and future costs referred to in subsection (1) may be recovered as damages, compensatory damages or otherwise. 163

Obligation to claim 163

3 (1) If, in his or her own name or as a member of a class of persons under the Class Proceedings Act, a beneficiary referred to in section 2 (1) [beneficiary's right to recover] of this Act or his or her personal or other legal representative commences a legal proceeding against a person alleged to be the wrongdoer for damages arising from or related to the beneficiary's personal injury or death, the beneficiary or his or her personal or other legal representative must include a health care services claim in that legal proceeding. 163

Government has subrogated right 163

7  (1) The government is subrogated to any right of the beneficiary referred to in section 2 [beneficiary's right to recover] to recover the past and future costs of health care services under that section. 163

(2) For the purposes of subsection (1), the government may commence legal proceedings, in its own name or in the name of the beneficiary, for recovery of those past and future costs of health care services. 163

(3) If a legal proceeding is commenced under section 3 (1) [obligation to claim] after the commencement of a legal proceeding referred to in subsection (2) of this section, the 2 legal proceedings are, unless the court orders otherwise, to be consolidated. 163

Government has independent right to recover 163

8  (1) Despite section 2 [beneficiary's right to recover] and independent of its subrogated right under section 7 [government has subrogated right], if, as a direct or indirect result of the negligence or wrongful act or omission of a wrongdoer, a beneficiary suffers a personal injury for which the beneficiary receives or could reasonably be expected to receive one or more health care services, the government may recover from the wrongdoer 164

(a) the past cost of health care services, and 164

(b) the future cost of health care services. 164

24 (1) Subject to this section, this Act applies in relation to any personal injury suffered by a beneficiary, whether before or after this subsection comes into force. 164

(3) This Act does not apply in relation to health care services that are provided or are to be provided to a beneficiary in relation to 164

(a) personal injury or death arising out of a wrongdoer's use or operation of a motor vehicle if the wrongdoer has, when the injury is caused, coverage under the plan, as those terms are defined in the Insurance (Vehicle) Act, 164

(b) personal injury or death arising out of a tobacco related wrong as defined in the Tobacco Damages and Health Care Costs Recovery Act, or 164

(c) personal injury or death arising out of and in the course of the beneficiary's employment if compensation is paid or payable by the Workers' Compensation Board out of the accident fund continued under the Workers Compensation Act. 164

Insurance (Vehicle) Act s. 84: 164

84  (1) On making a payment of benefits or insurance money or assuming liability for payment of benefits or insurance money, an insurer 164

(a) is subrogated to and is deemed to be the assignee of all rights of recovery against any other person liable in respect of the loss, damage, bodily injury or death of a person to whom, on whose behalf or in respect of whom the payment of benefits or insurance money is made or to be made, and 164

(b) may bring action in the name of the insured or in its own name to enforce the rights referred to in paragraph (a). 164

(3) If the interest of the insured referred to in subsection (1) is limited to loss of or damage to a vehicle or loss of its use, the insurer has conduct of the action. 164

(4) If the insured's interest is not one described in subsection (3), and the insured and the insurer cannot agree as to 165

(a) the lawyers to be instructed to bring the action in the name of the insured, 165

(b) the conduct of the action or matters pertaining to it, 165

(c) an offer of settlement or its apportionment, whether an action has been commenced or not, 165

(d) acceptance of money paid into court or its apportionment, 165

(e) apportionment of costs, or 165

(f) commencement or continuance of an appeal, 165

either party may apply to the court for determination of the matters in question, and the court must make the order it considers reasonable having regard to the interests of both parties. 165

Employment Insurance Act, s. 45 165

Structured Settlements as an Alternative to the Lump Sum 165

Development: 165

Watkins v. Olafson [1989, SCC] 165

Insurance (Vehicle) Act 165

Advantages and disadvantages 165

Guaranteed income (avoid fluctuations) 165

Avoid dissipation 165

No need for tax gross-up on care costs 165

Income sheltered from tax 165

The income from a structured settlement ≠ taxable. 165

This is a big advantage – amount that can be saved, and the savings can be shared between π and ∆. 165

No (or lesser) need for a management fee 165

Still based on prediction 165

You don’t get to the structured settlement amount without making some predictions, so it’s still uncertain 165

Inflexible & lack of control 165

Usually can’t be reopened, but could do it in some circumstances 165

πs often dislike structured settlements because they lose control. 165

See Chesher v. Monahan 165

Mechanics 165

CL: arise in one of two ways: 165

(1) Negotiated settlement 165

(2) Through court order 165

Only under the Insurance (Vehicle) Act­  so only for MVAs 165

All other cases: only through negotiated agreement. 165

Rules per Chesher v. Monahan: 165

Triggering consideration 165

“Best interests” 166

Onus on π to rebut 166

Note factors in Chesher, and ways to improve: 166

Guarantees 166

Higher rates 166

Occasional lump sums 166

Under the BC Insurance (Vehicle) Act, any award over $100,000 for a Motor Vehicle Accident comes as a structured settlement: 166

Structured judgments 166

99  (1) The court must order that an award for pecuniary damages in a vehicle action be paid periodically, on the terms the court considers just, 166

(a) if the award for pecuniary damages is, after section 83 has been applied, at least $100 000 and the court considers it to be in the best interests of the plaintiff, or 166

(b) if 166

(i)  the plaintiff requests that an amount be included in the award to compensate for income tax payable on income from investment of the award, and 166

(ii)  the court considers that the order, that the award be paid periodically, is not contrary to the best interests of the plaintiff. 166

(2) Despite subsection (1), the court must not make an order under this section 166

(a) if one or more of the parties in respect of whom the order would be made satisfies the court that those parties do not have sufficient means to fund the order, or 166

(b) if the court is satisfied that an order to pay the award periodically would have the effect of preventing the plaintiff or another person from obtaining full recovery for damages arising out of the accident. 166

(3) If the court does not make an order for periodic payments under this section, it may make an award for damages that includes an amount to offset liability for income tax on income from investment of the award. 166