Approximately 6 months ago, the British Columbia Court of Appeal released its decision in Felix v. Insurance Corporation of British Columbia, 2015 BCCA 394, which dealt directly with whether vehicle passengers are “insureds” under Part 6 of the Insurance (Vehicle) Regulations (“Regulations”) such that ICBC must cover them for negligently injuring vehicle occupants. The court unanimously held that passengers travelling in vehicles with an owner’s consent meet the definition. The decision has implications for ICBC, as well as drivers and vehicle occupants. It also leaves some lingering questions for the legal community.
The facts are tragic. The plaintiff and her boyfriend had attended a soccer tournament in Langley, B.C., where her boyfriend consumed alcohol and become intoxicated. They decided to leave after getting into an altercation. The plaintiff was driving her vehicle with her boyfriend in the passenger seat. As they were driving, her boyfriend intentionally grabbed the steering wheel causing the vehicle to crash. The plaintiff was seriously injured. The boyfriend was killed. The plaintiff obtained judgement against the former boyfriend’s estate for $791,950.00 as compensation for her injuries. She then sued ICBC to indemnify the estate and pay the judgement. She argued her boyfriend fell under the definition of an “insured” under her policy of third party liability coverage by having “used” the vehicle with her consent in the accident.
The current and former versions of Part 6 of the Insurance (Vehicle) Regulations (“Regulations”) define an “insured” to include individuals “using” an owner’s vehicle with their consent. ICBC is required to cover “insureds” who injure third parties through their use of the vehicle. The issues before the court came down to these:
(a) Does a passenger in a motor vehicle “use” the vehicle while travelling in it; and
(b) On the facts of this case, is there a causal relationship between the boyfriends “use”, and the plaintiff’s damages.
Passengers “use” travelling vehicles
At trial, the British Columbia Supreme Court found the word “use” could not be interpreted to include travelling passengers because the interpretation conflicted with another provision in Part 6 that already covers to passengers for injuring non-occupants of a vehicle. The court found the interpretation would render that provision a redundancy, contrary to the general rules of statutory interpretation. Accordingly, the court found passengers don’t “use” as the word is understood in the definition of an “insured”. Mr. Justice Saunders concluded his decision by expressing concerns with the result:
“it appears to have been the intention of the governor in counsel not to extend indemnity to vehicle passengers except those who may be found to have been operating a vehicle with consent, or, in the limited case of injury to a person who was not an occupant, to have been operating a part of the vehicle within the meaning of s.66 […] the consequences of this interpretation as regards designated drivers is one which some may find disturbing. If that consequence was unintended, that is a matter for consideration by the government”
The provincial Justice Minister, Suzanne Anton, and Transportation Minister, Todd Stone, indicated the provincial government considered clarifying the law after the ruling. However, our Court of Appeal overturned the trial decision on September 23, 2015, ordering ICBC to indemnify the estate and pay the plaintiff’s judgement.
The Court of Appeal started from the premise that the legislation must be interpreted in the context of a legislative scheme designed to provide “universal, compulsory insurance…and access to compensation for those who suffer losses” from motor vehicle accidents. The court must therefore perform a contextual and fact-specific analysis when interpreting the word “use”. Applying that analysis, the Court of Appeal found passengers in motor vehicles do “use” vehicles while being transported, and thereby meet the definition of an “insured” in Part 6 of the Regulations.
The Court of Appeal disagreed with the trial judge that interpreting “use” to include travelling passengers conflicted with provisions already covering them for injuries they cause to non-occupants. The court said:
“Section 66 [extension of indemnity to a passenger] was introduced before the 2001 amendment adding “use” to the definition of an insured […] the addition of “use” is clearly to add broader coverage in order to address a situation not covered by s.66, including coverage for a person who is an occupant of the vehicle […] in my view, the provisions are consistent and each may be given meaning"
In this case the boyfriend’s use caused the plaintiff’s injuries
The Court was very short on this issue, occupying only 4 paragraphs of the 51 paragraph decision. The court said passengers are only covered as insured’s where there is an unbroken chain of causation linking “conduct of the user as a user of a motor vehicle” to the occupant’s injuries. The court found the boyfriend’s act of grabbing of the wheel while using the vehicle caused the plaintiff’s injuries, and ICBC was therefore required to cover his liability.
The decision increases ICBC’s potential exposure for third party liability insurance under an owner’s certificate. By including travelling passengers as “insureds”, ICBC may now have to cover vehicle passengers for injuries they cause other occupants. The decision should be sigh of relief to designated drivers and other vehicle occupants concerned about having nowhere to turn for adequate compensation if seriously injured by a passenger's negligence. However, the decision leaves some lingering questions:
What passenger activities will count as “use”? In this case travelling in the vehicle from point A to point B was considered “use”, but the court left open the possibility that a passenger may “use” the vehicle for something other than travel. For example, could two passengers sitting in parked vehicles with the owner’s consent be insured for injuries they negligently cause each other inside the vehicle?
What injuries will be considered to “arise from the passenger's use”? The court required a causal link between the injuries and the conduct of the user “as a user of a motor vehicle”. That seems to require injuries be connected to the passenger's conduct constituting the “use”. In this case, the court appeared to say that travelling was the use, and grabbing the wheel was causally connected to the act of travelling (though that is not, entirely clear from the case). To use the trial judge’s words, grabbing the wheel was “intimately connected with [the boyfriend’s] position in the vehicle and his access to the wheel”, and is therefore not severable from his status as a passenger. Could ICBC be on the hook if a passenger in a stopped vehicle burns an occupant while attempting to use the vehicle’s cigarette lighter? Or spills hot coffee on the occupant in the process?
Although these questions will be worked out as cases make their way through the courts, for now this decision leaves ICBC with greater potential exposure on third party insurance under owner’s certificates, and designated divers and occupants with a measure of relief when carrying passengers.
The full decisions can be found here:
Felix v. Insurance Corporation of British Columbia, 2015 BCCA 394
Felix v. Insurance Corporation of British Columbia, 2014 BCSC 166