Health care is the biggest annual expenditure for the British Columbia government. In 2010, the BC government spent 40% of the provincial budget ($16.15 billion dollars) on health care.

The Health Care Costs Recovery Act, S.B.C. 2008, c. 27 (HCCRA) came into effect on April 1, 2009. It potentially applies to all cases of personal injury including motor vehicle accidents where the defendant has no third party coverage and claims involving health care costs for drivers of out of province vehicles. Every personal injury lawyer needs a sound understanding of the HCCRA, how the subrogated claim may affect the course of their own client’s claim and how to deal effectively with the Ministry of Health.

The purpose of the HCCRA is to shift the burden of the cost of health care incurred to treat and care for those persons injured through the negligence of others from the tax-payer to the party who caused the injury. The Act permits the Ministry of Health to recover the costs of providing treating services arising from injury or death of a “beneficiary”, defined as a person enrolled in the Provincial Medical Service Plan (MSP). The injury or death must arise directly or indirectly from the conduct of a “wrongdoer” (s.1).

Where a wrongdoer is held liable in whole or in part for the injuries suffered by the beneficiary he is obliged to reimburse the Ministry for the associated health care costs. This wording suggests that the wrongdoer may be liable to repay treatment costs associated with an aggravation of a pre-existing condition from which the beneficiary suffered.

On most occasions it will be an insurer who pays this additional subrogated claim. In bringing into effect this recoupment mechanism BC has brought itself into line with any other provinces across Canada.

The HCCRA does not apply to injury claims brought against wrongdoers who have coverage under the Insurance (Vehicle) Act, R.S.B.C. 1996, c. 231 which includes ICBC and private excess insurers who have paid into an aggregate fund towards the costs of health care arising from motor vehicle accidents. Neither does it apply to personal injury/death from tobacco use nor injuries paid or payable by WCB.

Similarly claims against hospitals, nurses and other employees of a health authority, more properly pled simply against the health authority, are also exempt.

Successful claims against physicians are subject to the provision. As a medical malpractice lawyer I very much welcome this legislation in shifting the burden from the tax-payer to the Canadian Medical Protective Association, where appropriate. This is despite the fact that the existence of the Ministry’s claim can prove an additional challenge especially for complex cases where the subrogated claim alone may be in excess of $500,000.

What Health Care Costs are Covered?

It is clearly the intention of the Act to claw back essentially all BC government funded costs of health care, not just hospital costs. These services include:

a) benefits defined in the Hospital Insurance Act, R.S.B.C. 1996, c.204 (hospitalization costs);

b) benefits defined in the Medicare Protection Act, R.S.B.C. 1996, c. 286 (medically required services such as doctors’ visits and laboratory tests);

c) payments under the Continuing Care Act, R.S.B.C. 1996, c. 70 (acute care facilities);

d) expenditures under the Emergency and Health Services Act (EMS and ambulance); and

e) any other health care related expenses including OT, physiotherapy, speech therapy, family and social services, specialized residential services, dieticians, nursing etc.

The Ministry’s Rights of Action

In BC the Ministry of Health has three separate rights of action, including:

i) the right to intervene in ongoing proceedings brought by an injured plaintiff and to assume conduct of the health care costs portion of the claim (s.6);

ii) the right to bring a subrogated action in its own name or the name of the injured party (s.7); and

iii) an independent right of action (s.8).

Providing the Ministry with an independent right of action to claim for the health care costs has circumvented the usual common law principles associated with subrogated claims. As discussed In Committee of Gordon Semenoff v. Kokan (1991)ii and Minet v. Kossler (2007)iii the common law principles of indemnity and subrogation provide that unless a plaintiff is under an obligation to pay for the costs of health care services, no right to recover this sum from the defendant exists. By way of the HCCRA the Ministry is given a statutory right to recovery these costs.

The time limit for the Ministry to commence its own action is extended to take account of the potential delay in the Ministry being notified. S.8 (5) extends the limitation to potentially 6 months after the ministry receives notice of the claim from either the beneficiary or the insurer.

The HCCRA applies retroactively to health care costs incurred prior to the Act coming into force. However, there are limits and in the (almost) five years since the introduction of this Act there has been case law which has tested these boundaries.

Minister’s Certificates

A seemingly draconian provision with the HCCRA is s.16 pertaining to the nature of authority of the
Minister’s Certificate.

16 (1) A certificate

(e.i.1.a) purporting to have been issued by or on behalf of the minister for the purposes of

(e.i.1.a.i) a health care services claim, or

(e.i.1.a.ii) recovery under section 13 (15) [settlement of claims], and

(e.i.1.b) setting out the health care services that have been received by a beneficiary or class of beneficiaries and the health care services that a beneficiary or class of beneficiaries will likely receive in the future for personal injuries suffered as a result of the negligence or wrongful act or omission by a wrongdoer,

Is proof of those health care services. (e.i.2) A certificate
(e.i.2.a) purporting to have been issued by or on behalf of the minister for the purposes of

(e.i.2.a.i) a health care services claims, or

(e.i.2.a.ii) recovery under section 13 (5) [settlement of claims], and

(e.i.2.b) setting out the past cost of health care services, the future cost of health care services, or both, attributable to personal injury suffered by a beneficiary or a class of beneficiaries,

Is conclusive proof of the past costs of health care services, the future cost of health care services, or both, as the case may be. [my emphasis]

On the face of it one may interpret this as providing the Ministry with a fait accompli card. This is the extent of the government’s claim, because we say so. In fact this is not the case as was considered by Mr. Justice Ehrcke in Christina Marie MacEachern, by her committee, William James MacEahern v. Rennie et al (2009)iv

[26] Section 16 (2) is worded differently. Under s.16 (2), the Minister may file a certificate setting out the past costs of health care services and that certificate is “conclusive proof of the past cost of health care services and that certificate is “conclusive proof of the past costs of health care services …”

[27] The word “conclusive” is used only in the second of the two subsections. Clearly the legislature intended there to be a significant difference between them. Section 16 (1) creates a rebuttable presumption, while the presumption in s.16 (2) is irrebuttable. This interpretation is supported by s.24 of the Interpretation Act, R.S.B.C. 1996 c. 238 which provides:

24. If an enactment provided that a document is evidence or proof of a fact, unless the context indicates that the document is conclusive evidence, the document is admissible in evidence in any proceeding, and the fact is deemed to be established in the absence of any evidence to the contrary.

It should be noted that the Ministry typically provides a “printout” of health care costs claimed to be attributable to the act of negligence. In my experience, some dialogue between counsel and the Ministry normally takes place once a printout has been received by the plaintiff ’s counsel. The Ministry may ask for the advice of plaintiff counsel as to the plaintiff ’s course of recovery, likely future care needs and the impact on any pre-existing conditions. In my view, it is not the role of a lawyer, plaintiff or otherwise, to advise the Ministry of medical issues. The reality however is that the lawyer with conduct of the tort action will be much more familiar with the details of the claim, especially in complex cases involving pre-existing injuries where some future care would have be required irrespective of the alleged negligence. If the Ministry’s initial assessments of the costs of care attributable to the negligence are off beam it is essential for your client to assist in rectifying this assessment; the sooner the better. The Ministry should be requested to set out the methods of providing a net present value of the cost of future care claim. It should also be noted that the printout is not a certificate, of any description. On the understanding of Mr. Justice Ehrcke it is only the cost of the item of health care claimed which is beyond question, nothing else. The past receipt of and future need for certain items of health care directly attributable to the alleged negligence maybe challenged, if appropriate.

Notification Requirements

Proceedings which are commenced prior to the HCCRA coming into force on April 1, 2009 do not require amendment for the inclusion of the Ministry’s claim. However, if the action is settled after April 1, 2009 the requirements of s.13 [Settlement of Claims] are applicable.vvi

If a claim is settled without proceedings being issued then there is no notice to give under s.4 [Requirement to Notify Government of Claim] within the 21 days but s.13 still applies.

Policy Limits and Terms of Settlement

The HCCRA s.18 is a provision which grants priority payments to the plaintiff who has received the health care (‘the beneficiary”) over payment to the government. Where the beneficiary’s damages are sufficiently high to jeopardize the defendant’s insurance policy limits the insurer may be permitted to settle at policy limits without requiring the Ministry and the beneficiary to agree to an allocation.

S.18 (3) provides that If the Ministry’s claim settles first and the beneficiary subsequently obtains judgment and “the minister believes” that the beneficiary will not receive the full amount to which the beneficiary is entitles (presumably due to policy limits or lack of assets of the wrongdoer) the minister may pay to the beneficiary a sum of money up to the amount of the payment received by the government.

To Act for the Ministry of Health, or Not?

In my view there is a clear conflict of interest in acting for the Ministry. Quite simply, the interests of your client, the plaintiff, will not always align with those of the Ministry. A lawyer should never knowingly place themselves in a position of conflict.

I have spoken with many lawyers around BC on this issue and not everyone is in agreement. However, I suggest that my experience of handling large Ministry claims on the back of medical malpractice cases may demonstrate, more often than not, the inherent conflict. In smaller PI claims, where liability may not be so problematic and where the value of the claim (tort and subrogated) is not so high I expect it is relatively painless to proceed down the road of litigation and not really become aware of the conflict. A settlement is reached, the Ministry’s claim is modest and it is happy to collect the modest sum with the least of effort. The lawyer is happy collecting 15% for not doing much additional work and everyone walks away happy. I simplify for illustrative purposes only. There can be thorny issues with very modest claims also.

On the much larger claims (say, $5m and $800,000 respectively) everyone is much more anxious. The
Ministry appears to take more interest and wants to maximize its claim (and so it should, its tax payers’

money). The defendant’s insurers are already staring at a $5m claim and balk at the idea of another
$800,000. As plaintiff ’s counsel in that situation any money paid to the Ministry is potentially that much less to my client. Of course, they are separate and distinct claims but that is not how the insurer sees it. It is just one big “reserve” for the totality of the file. In this situation, as I am typically in, I want to minimize the HCCRA claim. I may be in discussions with defence counsel on this point. I cannot possibly do this if I also represent the Ministry.

The question then becomes does the convenience of representing the Ministry on more straight forward and less contentious claims, where the conflict is less apparent, justify the conflict situation? In my view it cannot. You are either conflicted out, or you are not.

If you remain rooted in the camp that takes the approach of representing the Ministry one would assume you wish to be paid for your services. The HCCRA sets the fee at 15% of the recovery for the Ministry. This is non-negotiable. On completion of the Ministry’s claim the Ministry pays the retained law firm the 15% fee. It is distinct and separate from the fee received from the plaintiff under the CFA signed with that client. Given the conflict, previously identified, I would urge the lawyer to at the very least notify the plaintiff of their proposed agreement to act for the Ministry and indicate clearly that you will receive a fee for doing so based on the value of the settlement of the Ministry’s claim.

My practice is to always advise my client of the nature of the Ministry’s claim, its value and how I anticipate it will be dealt with. I also confirm that whilst I am not acting for the Ministry (because my undivided loyalty is with the plaintiff) I will take reasonable steps to facilitate settlement often above and beyond those statutory obligations to co-operate. In this way my client’s expectations are better managed and the client does not hear about the separate claim for the first time at mediation. They are also on notice that there is an issue which may potentially hold up receipt of their settlement monies and that I will be working hard to minimize that risk.

If The Ministry Is Not My Client – How Much Assistance Should I Give To The Ministry?

Section 11 sets out the beneficiary’s duty to co-operate. It states:

11 (1) A beneficiary and his or her personal or other legal representative must co- operate fully with the minister and the government and their agents and legal counsel in the government’s recovery of past and future costs of health care services under this Act in respect of that beneficiary.

Section 11(2) (a) sets out, without limitations, the form which this co-operation my take. It includes production of records and information that relates to the nature and extent of the beneficiary’s injury, treatment, current condition, prognosis, rehabilitation status, the cause, original and circumstances of the injury and health care services that have been received or may be received. This information is to be supplied “at the request of the minister and as often as the minister considers necessary.”

No mention is made of reimbursement of the costs of production of these records and documents

Further Section 11(2) (b) sets out:

(b) at the request and expense of the minister and as often as the minister considers necessary, do one or more of the following:

(i) allow a health care practitioner selected by the minister to examine the beneficiary;

(ii) allow any evaluation required by the minister to be performed by a person selected by the minister;

(iii) obtain and provide to the minister a certificate or report, in any form required by the minister, of an attending health care practitioner as to one or more of the following as may be requested by the minister:

(A) The nature and extent of the beneficiary’s injury;

(B) The treatment, current condition and prognosis of the injury;

(C) Any other aspect of the beneficiary’s injury or rehabilitation,

Section 11 (2) (c), (d) and (e) add additional boiler plating to this requirement to co-operate.

The manner in which the HCCRA is drafted leaves no doubt that the legislature has opened every door to the ministry to obtain relevant information necessary to evaluate, calculate and collect on its claim. Given the purpose of the HCCRA this should not be a surprise. However, the extent of the broad terms such as “allow any evaluation required by the minister to be performed by a person selected by the minister” seems excessive and potentially intrusive upon the plaintiff.

In my experience the Ministry has sought to rely on reports (MLR and IME) generated by the plaintiff in the tort action rather than incurring the expense of commissioning its own reports. However the fact that the Ministry has this power is another reason to focus on your plaintiff client. What if the tort action settles leaving the ministry’s claim outstanding? Your client may now be subject to a battery of new assessments for the HCCRA claim; swearing of affidavits; giving oral evidence etc. While I believe this is unlikely to happen at this time, this is a new area of law which is developing and being defined potentially with every lawyer contact with the Ministry and certainly each decision reached in our courts.

Your responsibility to your client is to maximize their tort claim and bring it to a conclusion as soon reasonably practicable. A few choice additional questions in the letter of instruction to the right experts will very likely facilitate settlement of both the tort and the Ministry’s claims. This is entirely in alignment with your client’s interests.

Can you settle without Ministry approval?

Section 13 (1) states:

13 (1) A claim against a person alleged to be the wrongdoer for damages arising from or relating to a beneficiary’s person injury or death must not be settled unless

(a) The person who would be liable to make payment under the proposed settlement gives to the minister notice of the proposed terms of settlement, in the prescribed form and in accordance with the regulation, it any, under section 25 (2) (d) [regulations] and

(b) The minister consent in writing to the proposed settlement.[my emphasis]

These are very harsh and apparently unambiguous terms. However, the reality may be somewhat less harsh. Certainly no all-inclusive offer can be accepted. In fact all-inclusive offers should be declined and the defendant requested to reframe their offer, excluding the HCCRA claim, even where you have chosen to act for the Ministry. The Ministry’s claim is entirely dependent on the success of the tort action, unless a separate action has been commenced. Even with a separate action the Ministry will not be entitled to recovery the health care costs until negligence of the wrongdoer has been established (although this does not prevent an insurer seeking an early settlement in the knowledge liability is going to be established). The terms of settlement of the tort claim generally must be known first. For example, if the tort action is settled at 75 cents on the dollar for serious issues on causation, likewise the Ministry’s claim should be similarly discounted.

In my view there may be acceptable circumstances in which the plaintiff counsel may settle the terms of the tort action so long as the life or value of the HCCRA claim is not jeopardized . I understand from my discussions with counsel around BC that this is a controversial view and certainly contrary to the face of the Act. However, I have taken this stance previously with the support of the court. The settlement for my client was $4.6m with a hefty HCCRA claim the value of which was still being negotiated at the time I swiftly brought it before the court for approval. My client was under a disability and at the court approval hearing I brought s.13 [Settlement of Claims] to the attention of the court. No consent in writing from the minister was obtained. Mr. Justice Groves statedvii:

[1] …. The parties have reached a settlement which is before the court for approval today. The issue of substance is the provisions of the Health Care Costs Recovery Act, S.B.C. 2008, c.27, a piece of provincial legislation passed in 2008, and how this affects the parties’ agreed settlement. I am satisfied that the language in the proposed order meets the reasonable needs of those who may be attempting recovery under the Health Care Costs Recovery Act.

[2] ….

[3] The Health Care Costs Recovery Act appears to have as its purpose a way for the province to indemnify itself against what it defines as wrongdoers in the Act, persons

who are responsible or who cause or contribute to the personal injury or death of an injury person, or whose acts or omissions cause some injury. It is apparently a valid piece of legislation which allows a subrogated claim by the Ministry of Health.

[4] The issue before me is how the provinces’ ability to seek recovery is protected when a settlement between someone who is injured and the tort-feasor persons, in this case doctors who have agreed they were negligent in their action.

[5] A major wrench would be thrown into the settlement process if every piece of litigation had to be settled in its completeness before persons who were injured could recover from those who were responsible in tort. In other words, if resolution of claims under the Health Care Costs Recovery Act had to be settled as part of litigation between injured party and a tort-feasor, litigation would be unduly delayed.

[6] Clearly claims under the Health Care Costs Recovery Act are probably claims which cannot really be successful litigated until there is a settlement of a tort action because then liability is determined.

[7] Counsel for the defendants, who are not here, agrees that there is no way around this and agrees that the language proposed in the order is appropriate language.

[8] I am satisfied with the language in this proposed order, which I will say for the record is as follows:

Upon payment of the settlement funds, the action against the defendants, save the Health Care Recovery Costs Act claim, be dismissed as if tried on the merit

Is a reasonable and appropriate language.

This is precisely how the common law is made and the workings of the Act will be molded. If consent is requested and the minister unreasonably withholds his consent to the terms of the settlement I have confidence in our judiciary that a pragmatic approach will be taken and the release for the tort action (preserving the HCCRA claim) will be considered. While it is common ground that a proper approach to statutory interpretation is that the words of the act are to be read in their context and in the ordinary sense giving effect to the object of the act and the intention of Parliament:

“It is also common ground that in interpreting legislation, the court should bear in mind that the legislature does not intend to produce absurd consequences.”viii

I suggest the Ministry being placed in a position to prevent the plaintiff receiving the compensation in the tort action would be absurd, especially in the face of s.18 [priority of beneficiary’s payments].

The reality may be that this decision will subsequently be found to be incorrect. However, when we act solely for the plaintiff we are free as lawyers to test the boundaries of this new law.

Out of Province Considerations

When dealing with clients who have been injured in BC but, often due to their injuries, have left BC to return to their home province for the support of their family it is essential to review what provisions may exist in the home province – or indeed all other provinces in which the client may have sought health care. I represented a client whose claim recently concluded in which it was necessary to consider making a subrogated claim for health care costs not just in BC but also Manitoba and Ontario. Be aware that there are differing procedural requirements between the provinces, not to mention differing attitudes prevailing among the staff administering the regimes. While the BC regime focuses on ultimately grinding the defendant for failures to collect the health care costs, other regimes such as Alberta may fiercely penalize the plaintiff.

Practice Tips

• If in doubt, notify the Ministry to ensure your client’s obligations are met;

• Consider asking an extra question or two in the medico-legal reports to the appropriate experts to directly address the Ministry’s claim;

• Remember to consider the HCCRA in Family Compensation Act claims for health care which may have been received prior to death (such as ambulance, ER and hospitalization etc.).

• Do not act for the Ministry; this is a clear conflict of interest with the client;

• If you chose to do so, notwithstanding the conflict, ensure you place the plaintiff on notice of your intentions and confirm the terms of the retainer in writing with the Ministry;

• You may agree terms of settlement your client’s tort claim – sign release (which expressly excludes the HCCRA claim) but do not sign a CDO (without a court order and excluding the HCCRA claim). Alternatively consider entering into a promise not to sue covenant, rather than a release.

• When a committee is involved the court may approve (or not) the proposed terms of settlement of the tort action, irrespective of the outstanding HCCRA claim.

• Consider whether your client may have received health care in other provinces.

If you file the CDO the BC Ministry’s claim crystallizes as a debt against the person liable to make payment under the terms of the settlement. This will likely be an insurer.

Conclusion

The HCCRA recoupment mechanism is an important tool to redistribute the cost of health care from the tax-payer to the wrongdoer. However the Act is severely drafted and in my view there is room for interpretation and pragmatic decision making by the judiciary to ensure all parties’ interests are protected while minimizing impediments to settlement. The power granted to the ministry by virtue of this Act is great. Co-operating with the ministry is not only demanded under the legislation but will most likely to be in our client’s best interest. However, that will not always be the case. It is the role of plaintiff ’s counsel to ensure our client’s claim is not stalled or held hostage by the ministry.

Angela Price-Stephens is an Associate Counsel at Pushor Mitchel LLP with a practice restricted to medical malpractice. Angela is offering a Seminar to further explore the workings of the HCCRA and practice tips on dealing with the Ministry of Health. The Seminar is offered in-house free of charge and provides 2 CPD points, one of which counts towards the professional ethics requirement for 2014. Please contact her office to express your interest.

i 2011 British Columbia Financial & Economic Review, 71st Edition, April 2010 – March 2011. BC Ministry of Finance. July
2011. 72 pp. https://www.fin.gov.bc.ca/tbs/F&Ereview11.pdf (retrieved on-line January 20, 2014). ii CanLII 532 (BCAC) 1991
iii 2007 YKSC 30 CanLII

iv 2009 BCSC 625 MacEachern v. Rennie

v Translink v. British Columbia, 2013 BCSC 1602 CanLII

vi British Columbia v. Opel, 2013 BCSC 1604 CanLII

vii This case was settled with a confidentiality clause hence no names are mentioned. A copy of the decision is available from my office upon request on condition that the parties’ names are not published.

viii Rizzo v. Rizzo Shoes Ltd 1998 CanLII 837 (SCC)

Angela Price-Stephens
Pushor Mitchell LLC
Contact No: 250-869-1124
Toll Free : 1-800-558-1155
https://medicalmalpracticebc.com

Medical Malpractice BC

Angela Price-Stephens

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