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Extended Medical and so-called ‘Double Dipping’

Today’s case is from back in 2008, and provides an excellent snapshot of the law regarding collateral benefits and recovery in personal injury cases.  In Napoleone v Sharma (2008 BCSC 1746), the Court grappled with the issue of special damages for a woman who stopped working after a rear-ender collision that left her with headaches and pain throughout her back, neck, shoulders, and hands.  The quantum for all other heads of damages had been decided in reasons released a few weeks earlier, but Justice Bruce had asked for written submissions regarding whether the plaintiff should be entitled to recover the gross or net amount of her special damages.

A net recovery would allow the plaintiff to recover only what she had paid out-of-pocket for the treatments, whereas a gross recovery would allow her  to recover the whole cost of the treatment.  While an award of gross costs might seem like ‘double-dipping,’ the law generally treats paying into an insurance plan like saving up.  When you access an extended medical provider that you’ve paid into, you’re using a benefit you’ve already paid for, not coming into free money.  In the  case at bar, the plaintiff’s husband had access to extended medical through his work, but there was no evidence of how he came to be covered or whether he had paid into it.  The extended medical provider paid 80% of the plaintiff’s physiotherapy and massage therapy costs.  In this case, the absence of evidence regarding how the plan was paid for proved fatal to the plaintiff’s claim for gross costs:

[7]                The general rule in an action for damages arising out of negligence is that the plaintiff is only entitled to be restored to the position she would have been in had the accident not occurred. The plaintiff is awarded damages for her actual loss and no more: Cunningham at para. 5 per McLachlin J. (dissenting in part)

[8]                The law has recognized a limited exception to the rule against double recovery which is referred to as the “private insurance” exception. In Cunningham at para. 75 Mr. Justice Cory, speaking for the majority, adopts the following passage from Bradburn v. Great Western Rail Co., [1874-80] All E.R. 195 as accurately describing the underlying rationale for the exception:

… I think that there would be no justice or principle in setting off an amount which the plaintiff has entitled himself to under a contract of insurance, such as any prudent man would make on the principle of, as the expression is, “laying away for a rainy day”. He pays the premiums upon a contract which, if he meets with an accident, entitles him to receive a sum of money. It is not because he meets with the accident, but because he made a contract with, and paid premiums to, the insurance company, for that express purpose, that he gets the money from them. …and I think that it ought not, upon any principle of justice, to be deducted from the amount of damages proved to have been sustained by him through the negligence of the defendant.

[9]                Whether the plaintiff has paid for private insurance or has obtained these benefits through an employment contract, the exception will apply. It is also irrelevant that it is the plaintiff’s husband who secured these benefits. See, Brennan at para. 182-3. However, the onus rests with the plaintiff to prove he or she has paid for the provision of insurance benefits in some fashion. As Cory J. says in Cunningham at para. 94:

In my view, Ratych v. Bloomer, supra, simply placed an evidentiary burden upon plaintiffs to establish that they had paid for the provision of disability benefits. I think the manner of payment may be found, for example, in evidence pertaining to the provisions of a collective bargaining agreement just as clearly as in a direct payroll deduction.

[10]            There is no evidence before the court as to what, if any, consideration passed between Mr. Napoleone and his employer in respect of the extended health benefits. There is no evidence of whether Mr. Napoleone pays all or a portion of the insurance cost or whether it was negotiated as a part of a collective bargaining scheme. The only evidence before the court is that the plan was secured through Mr. Napoleone’s employer and it covers 80% of Mrs. Napoleone’s health related expenses.

[11]            Without an evidentiary foundation to support the claim, I am unable to apply the private insurance exception to the case at hand. As Cory J. says at para. 93 of Cunningham, it is only when this evidentiary requirement is met that the court may be satisfied the plaintiff has shown the prudence and corresponding deprivation that underlies the exception and permits double recovery.

[12]            For these reasons, I must dismiss Ms. Napoleone’s claim for the gross cost of the special expenses.