Law allows the judge to send most of the money to charities, according to B.C. Supreme Court ruling
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ICBC has agreed to pay nearly $13 million to settle two class-action lawsuits that alleged it has been illegally driving up premiums since 1973.
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But millions of insured drivers who paid what was estimated as an additional $1 billion in premiums over the decades will get nothing. Instead, the money will go to charities.
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During a two-day hearing last month to settle the two lawsuits, ICBC settled one for $12.2 million on behalf of all drivers who have paid for ICBC insurance over the past 53 years, and the second for $700,000 on behalf of 275 people whose accident benefits fell short of what they were entitled to, according to a B.C. Supreme Court judgment.
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Justice Ward Branch called the settlement “fair and reasonable” and said it ends “this long and difficult fight” that began in 2020. A trial had been set to start in September.
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The judge noted plaintiffs’ lawyers said the premiums claim could top out at $300 million, but put their chance at success at five per cent, or about $15 million. If ICBC successfully argued to limit the time period covered, the lawyers said the payout could drop to about $5 million, he wrote.
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“Given these risks, $12.2 million is fair and reasonable,” Branch said.
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He said the class-action lawsuit faced “extreme risk” after B.C. passed a law last year designed to “immunize” ICBC from the lawsuit’s argument that the insurer’s payments to B.C. Medical Services Plan amounted to an unconstitutional tax.
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“The only arguments left available were extremely novel” and ICBC was likely to apply to have the class-action lawsuits thrown out, he said.
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“I say without reservation that (the plaintiffs’ lawyers) did an excellent job extracting anything from (ICBC), let alone the $12.2 million obtained,” he wrote.
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But $12.2 million divided by the estimated class of 5.6 million drivers, or every insured adult in B.C., works out on average to $2 each, he said.
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At a cost of $5 to cut a cheque, or $1.50 for an e-transfer, the settlement was wiped out even before the lawyers were paid.
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Where payment in any legal case is impossible or impractical, the judge can instead direct funds to a charity that benefits the class.
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The plaintiffs suggested eight charities, but the judge ruled only two were directly tied to the class, Mothers Against Drunk Drivers and Parachute, a charity that works to prevent injuries. They each will get 50 per cent of the charities’ share.
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The second settlement is for accident victims, with each victim awarded 100 per cent of their claim plus $1,000 each for general damages and interest. Branch also viewed this as “clearly fair and reasonable.” The law firm’s website says that settlement totals almost $700,000.
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If all those class members can’t be reached, half of the remaining amounts will go to ICBC’s community grants programs and half to the Law Foundation of B.C., both of which aim to support access to justice.
