Part 7 benefits under the Insurance (Motor Vehicle) Act and its Regulations are not compensation from a person whose acts have caused or are alleged to have caused disability.
Insurance law – Automobile insurance – No-fault coverage – Benefits – Underinsured motorist – Disability insurance – Damages – Disability benefits, deductibility
Brugger v. IWA – Forest Industry Long Term Disability Plan (Trustees of),  B.C.J. No. 2353, 2016 BCCA 445, British Columbia Court of Appeal, November 15, 2016, M.E. Saunders, H. Groberman and P.M. Willcock JJ.A.
The British Columbia Court of Appeal allowed an appeal from a summary trial. The dispute arose from the administration of a long-term disability plan. The insured was disabled in an automobile accident following which he received disability benefits from ICBC under Part 7, a settlement in satisfaction of his tort claim, and additional underinsured motorist protection benefits. Payments under the insured’s long term disability plan were conditional upon a reimbursement agreement in the event of an eventual settlement. The insurer had deducted the Part 7 benefits received by the insured.
The British Columbia Court of Appeal allowed the appeal on the basis that Part 7 benefits flow from a statutory scheme of universal compulsory insurance rather than compensation from a tortfeasor and therefore does not amount to “compensation from…a person whose acts have caused or are alleged to have caused the Disability” which was the operative term of the reimbursement agreement.
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