Claims for speculative business losses in personal injury claims.

This is an issue that arises somewhat of often in my practice. Can an injured party make a claim for a small business that they have not actually started yet. This issue was dealt with in this recent Supreme Court of British Columbia case:

http://www.courts.gov.bc.ca/jdb-txt/sc/17/06/2017BCSC0644.htm

The plaintiff in this case was a 59 year old woman who had hoped to start her own cosmetics business. She had been injured in a motor  vehicle accident and was claiming that these injuries were preventing her from running a successful multi-million dollar cosmetics business.

The plaintiff in this action had taken a number of steps towards starting their business, including:

  1. Incorporating their business;
  2. Acquiring stock;
  3. Labeling and branding her stock;
  4. Getting approval for sale from Health Canada; and
  5. Applying for trademarks.

Approximately 2 years prior to their injury the plaintiff held a private seminar, where she successfully sold various beauty products. Her stated goal was to hire a team of salespeople to sell her products via future private seminars.  The judge, unfortunately for the plaintiff, found various deficiencies in the plaintiff’s claim, including that:  her goal of having seminars with a sales team was vague; the plaintiff’s evidence about market conditions was inadequate; the plaintiff’s previous lack of success with this business should be taken into consideration;  the plaintiff had not devouted full time hours to her business prior to her injury; and the plaintiff, although partially, was not totally disabled from running her business as a result of her injuries.

As a result, the plaintiff was not given an award for past nor future loss of earnings for her proposed business. She was, however, given an award of $100,000 for loss of her “entrepreneurial spirit”. This amount was considerably less than the several million dollar claim that the plaintiff was advancing for loss of profits from her proposed cosmetics business.

This case illustrates the difficulty that many plaintiffs will face when making a claim for income losses, particularly when there is a high degree of uncertainty concerning their potential earnings.

Another ICBC rate hike coming?

http://www.cbc.ca/news/canada/british-columbia/icbc-wants-to-hike-basic-rates-1.3735758

ICBC is asking or a 4.9% increase in premiums. Last year rates were raised 5.5%. ICBC is citing a rising number of claims and increased legal costs as the reason for this hike.

As a lawyer, with an admittedly biased opinion on the matter, my position has always been that claims and legal costs are related to ICBC’s own behaviour and desire to litigate files. In other words, if ICBC were to make better offers earlier, lawyers would settle files earlier and people would be less likely to hire lawyers in the first place. ICBC in an attempt to drive down settlements has been making lower offers. Unintended effects of that policy were an increase in lawyer retention rates and litigation expenses.

ICBC has also cited increasing vehicle repair costs as another reason for the proposed rate hike:

http://www.icbc.com/autoplan/costs/Pages/rate-pressures.aspx

Although, total number of motor vehicle accidents may be increasing, the rate per capita should not be. As the population of British Columbia grows, you would expect there to be more accidents in proportion with population growth. However, the costs of repairing vehicles and added injury claims due to population growth should be offset by proportionally more people paying insurance to ICBC. This does not seem to be the case, which suggests that the shortfalls may be the result of ICBC’s own operation.

Courts decide that whiplash injury worth $1,190,562.70

http://www.courts.gov.bc.ca/jdb-txt/sc/16/14/2016BCSC1486.htm#_Toc458696781

This case involved a plaintiff that was injured in two separate motor vehicle accidents, in which he’d suffered whiplash type injuries. Complicating factors here included the plaintiff’s pre-existing degenerative changes to his neck. At the time of trial, the plaintiff was 40, but he was in his mid 30s at the time of the motor vehicle accidents in question.

Following these motor vehicle accidents, the plaintiff’s injuries progressed to the point that his hands shook and his legs felt weak. His symptoms were relieved by surgery, but never totally disappeared.

Prior to these motor vehicle accidents, the plaintiff had been an active person who regularly participated in demanding activities, like rock climbing. He did have some pre-existing neck pain, but it was not of a disabling nature. Before these accidents, the plaintiff was also employed as a tax auditor for the Canada Revenue Agency. His job involved a mixed role of office work and visiting the homes and offices of those under audit. His job required some physical activity, such as carrying file boxes. He was also often expected to work in small and awkward spaces provided by those he was auditing.

After the accident, and despite having surgery, the plaintiff was unable to return to his previous hobby activities. He had returned to work but in a limited capacity and part-time capacity.

Of special note in this case was an opinion from a medical expert stating that the plaintiff’s pre-existing neck conditions had pre-exposed him to a worse injury from whiplash in a motor vehicle collision:

 On cross-examination, Dr. Wong agreed that an individual with cervical spondylosis is more susceptible to injury due to whiplash. Whiplash causes hyperflexion and hyperextension of the neck which can disrupt the muscles and ligaments supporting the spinal column. Whiplash can also accelerate degenerative disc disorder by damaging and weakening the outer part of a disc and making it susceptible to herniation and bulge. Nerves can become pinched or irritated as a result.

This case, once again, illustrates the profound effect a whiplash injury can have on a person and the importance of getting proper legal advice.

How much is whiplash worth: Judge states that she must “exercise caution” during whiplash case.

http://www.canlii.org/en/bc/bcsc/doc/2016/2016bcsc1138/2016bcsc1138.pdf

In the above noted case, a plaintiff was awarded considerably less than she had claimed for a whiplash injury. The judge, in deciding how much this whiplash case was worth, stated that she would have to “exercise caution” in assessing this claim. This injury, like in many whiplash claims, was not objective. As I’ve stated in previous posts, an objective injury is an injury that is physically observable in some way. Examples of objective injuries are visible cuts and bruises or x-rays showing broken bones. Although you can dispute how the plaintiff got those injuries; you cannot dispute that they exist. Soft tissue injuries, which are common in whiplash events, on the other hand, are not usually observable and you can dispute that they actually exist.

In coming to their final decision, judges will typically put more weight on the credibility of the plaintiff in cases without objective injuries. In this particular case, the judge cited problems with the plaintiff’s credibility, as she had given inconsistent statements. Additionally, the judge also found an adverse inference against the plaintiff, as the plaintiff had not called their family doctor to provide evidence.

This case illustrates many of the common pitfalls in whiplash claims.

Injured party awarded $177,177.63 for “whiplash associated disorder”.

http://www.courts.gov.bc.ca/jdb-txt/sc/16/11/2016BCSC1162.htm

After suffering injuries in a motor vehicle accident, over 5 years ago, a plaintiff was awarded $177,177.63 in damages. An orthopaedic expert she hired diagnosed her with a “whiplash associated disorder” and stated that although she was likely to see improvement in her condition, her injuries may never fully resolve.

This case was complicated by a few issues and required competent and experienced counsel to effectively resolve. The plaintiff in this case had a medical history that included some pre-existing neck and back pain. The plaintiff had also actually increased her working hours after the accident. Despite this, the plaintiff was still able to secure a sizeable award, not only for non-pecuniary damages (AKA pain and suffering) but also for loss of future earnings. The judge relied on evidence from the plaintiff’s experts – including both orthopaedic surgeons and functional capacity experts hired by the plaintiff – to come to the conclusion that there was a “real and substantial possibility” that the plaintiff was likely to lose income in the future.

This case once again illustrates how whiplash injuries can escalate into injuries that can have a profound affect on the life of an injured party. This case also illustrates the difficulty in judging the worth of a whiplash case and the importance of hiring proper representation.

Whiplash: what kind of compensation are you entitled to?

As per this recent example, awards for whiplash injuries can be very high:

http://www.canlii.org/en/bc/bcsc/doc/2016/2016bcsc1122/2016bcsc1122.pdf

The plaintiff in this action was awarded over $500,000. She retained a very knowledgeable expert in Physical Medicine and Rehabilitation, Dr. Heather Finlayson. Dr. Finlayson, in her medical report, stated that whiplash injuries involve “rapid movements of the head and neck forwards and backwards and/or side-to-side and can cause “high-velocity stretch of muscles and their attachments, such that the muscles go into painful spasm“. Whiplash type injuries can lead to various chronic injuries – in this case, myofascial pain syndrome.

What this case illustrates is that, when assessing damages, it is not necessarily the mechanism of the injury that is important but the effect on the injured party. In other words, no two whiplash cases are the same and every case must be assessed on its individual merits. For example, two people involved in the same accident might both suffer whiplash-type injuries. One person may heal very quickly and the injury may have relatively little impact on their lives. As a result, the award for their damages is likely to be relatively low. Another person might suffer far more long term and disabling injuries, resulting in severe limitations to their professional and personal lives. They would likely be entitled to a relatively high award.

Soft tissue injuries develop into chronic pain disorder and severe psychological injury: plaintiff awarded $984,167 in damages.

http://www.courts.gov.bc.ca/jdb-txt/sc/16/06/2016BCSC0692.htm

Of note in this case was not only the large overall award, but the relatively large award for pain and suffering (AKA non-pecuniary damages) of $170,000. This award acknowledges the severe affect chronic pain syndromes and psychological injury can have on a plaintiff’s life. The judge in this case noted the plaintiff’s inability to participate and enjoy social and community activities. The plaintiff in this case, prior to her motor vehicle collision, had been relatively active and also engaged in community events such as attending at local religious institutions and socializing with friends. The injuries the plaintiff sustained in this collision, severely affected her ability to participate in these activities.

It should also be noted that in order to receive such a large award, the plaintiff had to meet a heavy evidential burden. The evidence in this case included expert testimony from a physiatrist, an anaesthesiologist, a psychiatrist, a psychologist, the plaintiff’s family doctor, an occupational therapist, and an economist. Hiring such a large array of experts is not uncommon in cases involving severe psychological injuries. These injuries, unlike more easily observable orthopaedic injuries, often result in far more credibility issues. Hiring experts to confirm a plaintiff’s injuries is an excellent way to shore up a plaintiff’s credibility. A good personal injury lawyer will not only help you select proper medical experts but will help you fund retaining them.

This case also, once again, illustrates the importance of not settling too early. Had this plaintiff settled early on with ICBC, the full extent of her psychological injuries may not have been known and a fair settlement would not have been reached.