March 12, 2020

Bill 11, the Attorney General Statutes (Vehicle Insurance) Amendment Act, was introduced in the BC Legislature last week. Part 9 of Bill 11 creates the potential for a conflict of interest between lawyers and their clients. Specifically, the exclusion of any pre-litigation payment from the calculation of the amount recovered in an action for the purposes of contingency fee agreement creates the potential for a conflict between interest of lawyers and their clients.

Part 9 provides that ICBC may offer to make a pre-litigation payment to a person and actually make a payment in accordance with the offer. Such an offer may only be made if ICBC is satisfied that the person has not commenced an action against an insured or the corporation respecting the accident. The Bill provides that any pre-litigation payment must not, for the purposes of a contingent fee agreement, be considered to be an amount recovered in an action respecting an accident. While the Bill has yet not passed into law, as a government bill lawyers should assume that it will become law in due course. Part 9 of the Bill will come into force upon Royal Ascent.

Part 9 appears incidental to the “no fault” insurance scheme implemented by the majority of the provisions in Bill 11, as it will come into force considerably before the implementation of “no fault” generally. Part 9 directly affects the current relationship that exists between lawyers representing clients in motor vehicle matters.

In light of the effect of Part 9, the Law Society advises that a lawyer representing a client in respect of a motor vehicle matter should ensure that the client is properly advised regarding the consequences of accepting or rejecting a pre-litigation payment offer. A lawyer should also obtain the informed consent of the client, including advice about the pre-litigation payment scheme provided in Part 9, before initiating a motor vehicle action on behalf of that client.