As discussed on our website, many personal injury lawyers supplement their practice by acting for ICBC as well. The result is a potential conflict, and clients may be left wondering whether their lawyer avoided a fight out of fear of losing ICBC’s business on other files.
Wes Mussio was recently asked to expand on this issue in an article by Kamloops Matters:
All firms that take on ICBC defence work sign strategic alliance agreements – contracts worth up to millions of dollars each year that legally prevent them from alleging bad faith or from suing ICBC for punitive or exemplary damages, even in cases where they represent plaintiffs.
“If you’re a defence lawyer or have a lot of defence files at your firm, you’re not going to be … taking some really aggressive approaches against ICBC when ICBC is being unreasonable. So it does hand-tie you a bit,” said Wes Mussio, managing partner at Mussio Goodman, a Vancouver plaintiff-only personal injury firm.
“In all honesty that would be something that has to be disclosed, but I don’t think it is unless somebody asks.”
ICBC has a more than 40-year history of hiring external legal defence firms to assist with litigation. Since 1999, the insurer has held six procurements for legal services and currently has contracts with 72 firms across B.C. that assist with litigation at below-market rates.
The practices of some of the firms on the list are limited to ICBC defence work, but most also take on plaintiff-side work, and ICBC has confirmed that all law firms it works with, and every lawyer at those firms, have agreed not to advance claims for punitive, exemplary or bad-faith damages while under contract.
The Law Society of British Columbia (LSBC), the professional regulatory body for lawyers in B.C., has on a couple of occasions addressed whether an ICBC defence firm’s strategic alliance agreement with the insurer creates a conflict of interest in the firm’s plaintiff-side work.
In 2006, an LSBC bencher’s bulletin confirmed that lawyers working for ICBC must advise plaintiff clients of their relationship with ICBC, of the restrictions the lawyer is under and of the implications of those restrictions.
The recommendation to disclose the information is an ethical, not a legal, obligation. It doesn’t prevent lawyers from handling ICBC plaintiff files.
“I think there’s a problem there,” Mussio said, “because invariably if an adjuster takes a hard line on a file and denies a claim for simple benefits such as temporary total disability benefits, one of the strategies you can use as a plaintiff lawyer is to sue ICBC for bad faith or punitive damages, and the way the current rules are is you can’t do that if you have defence work in your firm.”