Workers’ Compensation Considerations

In Personal Injury Actions

Workers’ Compensation Considerations

A worker in the province of British Columbia who is injured in the course of employment may elect to bring a tort action or claim compensation under the Workers Compensation Act (the Act). The Act is a product of what has been called the historic trade-off (Marine Services International Ltd. v. Ryan Estate2013 SCC 44) by which workers lost the right to sue their employers for work-related injuries, diseases, and deaths in exchange for no-fault compensation. Therefore, if the potential defendant is a worker or employer acting in the course of employment, section 10(1) of the Act bars any legal action and compensation under the Act is the worker’s only remedy. Thus, prospective plaintiffs should determine the status of the parties at an early stage.

Where a worker elects to claim compensation
Where a worker elects to claim compensation, the Board becomes subrogated to the rights of the worker by virtue of s. 10(6) of the Act and has the exclusive authority to pursue an action in the name of the worker or in the name of the Board or compromise the right of action. Once the Board receives settlement funds or trial proceeds, it deducts the Board’s claim costs, including an administration fee, and pays the balance, if any, to the worker. The Board has the exclusive jurisdiction to determine whether there is any excess left for distribution (Public Guardian and Trustee v. Workers’ Compensation Board2010 BCSC 1486).

Where a worker elects to sue in tort
A worker who elects to bring a tort action is not entitled to receive compensation under the Act unless the amount recovered at trial or by settlement with written authorization from the Board is less than the worker would have received under the Act. Section 10(5) requires that any out-of-court settlement has the written approval of the Board (see Decision No. 550 (1995), 11 W.C.R. 247). If a settlement is reached without the Board’s written approval, the worker may not be entitled to any benefits and the failure to ensure compliance with s. 10(5) could constitute professional negligence.

If the plaintiff is entitled to workers’ compensation benefits but pursues a tort claim, the Board will accept a provisional claim that satisfies the requirement to file within one year of the date of the accident (s. 55). The claim is simply recorded; no benefits are paid unless and until the requirements of s. 10(5) are met.

Under s. 82 of the Insurance (Vehicle) Regulation (B.C. Reg. 447/83) ICBC is only liable to pay Part 7 benefits to the extent the amount of any benefit payable exceeds the amount that would be payable to the insured under the Act (Coggins v. Insurance Corp. of British Columbia (1997), 151 D.L.R. (4th) 244 (B.C.C.A.)).

Determining the Status of the Parties
Section 2(1) of the Act creates a scheme of universal coverage, and gives the Board the discretion to grant exemptions. The Board’s board of directors has enacted policies which are binding on the Board and the Workers’ Compensation Appeal Tribunal (WCAT) (s. 99 and s. 250). Assessment Manual items AP1-1-4 and AP1-1-4 set out the guidelines for determining who is an employer or worker covered by the Act. The current exemptions granted by the Board are set out in AP1-2-1.

In British Columbia, WCAT has the exclusive jurisdiction to determine the status under the Act of parties to a personal injury lawsuit and to certify that determination to the court (s. 257).  The parties and the court are bound by WCAT’s determination and the court makes an order that gives effect to WCAT’s finding as to whether the Act provides a bar to the action (Smith v. Vancouver General Hospital (1981), 31 B.C.L.R. 358 (BCCA)).

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