Wednesday, 14 September 2011

Health Care Cost Recovery Act

The first decade of the 21st century has witnesses a host of intrusive legislation in British Columbia and elsewhere in Canada. On April 1, 2009 the Health Cost Recovery Act became law in British Columbia. In a type of apology for the legislation the B.C. government made a point of saying that it was the last province in the country to introduce this type of legislation.
A claim for health care services must be added to every statement of claim wherein there is a claim "against a person alleged to be a wrongdoer for damages arising from or related to ... personal injury or death". This is not a claim for damages that might have been previously incurred (or to be incurred) by the litigant but instead is a claim for public costs. These ‘public costs" would not in the past have been included in a damage award because they are not costs of the claimant. Effectively the legislation hijacks the plaintiffs litigation process in order to benefit a third-party, namely, the government.

Health care services is very broadly defined; it includes benefits as defined in the Hospital Insurance Act and the Medicare Protection Act, payments made by the government under the Continuing Care Act, expenditures made under the Emergency and Health Services Act and finally leaving no stone uncovered than any other act or thing , including, without limitation, the provision of any health care treatment, aid, assistance or service or any drug, device or similar matter associated with personal injury ... for which a payment or expenditure is or may be made, whether directly or through one or more agents or intermediaries, by the government in respect of a beneficiary and that is designated by regulation ..." These expenditures in Ontario (similar leg.) even include homemaking services such as house cleaning, laundry, banking, shopping and preparing meals, personal support or attendant care, long term accommodation in nursing homes and community support service such as meals and transportation.

That is only the start of this sweeping legislation. The government must be served with a copy of the writ and statement of claim within 21 days after commencing a legal proceeding (Section 4). The legal proceeding must not be discontinued or dismissed by consent unless the consent of the minister is filed with the court (Section 5). At least 21 days before a beneficiary or his or her legal representative enters into any settlement relating to the personal-injury, the beneficiary or legal representative must give notice to the Minister in the prescribed form and in accordance with the regulations. (Section 12). The claim against a person alleged to be a wrongdoer can not be settled unless the person who would be liable to make payments under the proposed settlement gives to the Minister notice of the proposed terms of settlement and the Minister consents in writing to the proposed settlement (Section 13). The court can not set aside, dismiss or strike out a health care services claim unless the court is satisfied that the government has been given a reasonable opportunity to appear and make representations (Section 5).

The court cannot even make an order disposing of a legal proceeding unless it is satisfied that the government has been given both the written notice required under section 4 and the written notice of the application for the order of the final disposition (Section 5). The government has the right to intervene in the litigation or step in and take over the healthcare services claim portion of the proceeding (Section 6).

There are some notable exceptions to the application of the Act. It does not apply to injury claims brought against wrongdoers having basic coverage under the Insurance (Vehicle) Act. Claims against auto policies other than ICBCs basic coverage likely will be affected. The act also does not apply to Workers Compensation claims and claims arising as a result of tobacco related wrongs which are covered under the Tobacco Damages and Health Care Cost Recovery Act.
How intrusive is the legislation. The type of actions that are affected by this legislation are listed in an Ontario brochure (describing similar legislation) as follows: slips and falls, boating, air and rail accidents, product liability or manufacturing defects, medical malpractice or professional negligence, dog bites, municipal liability, assaults, some motor vehicle accidents, class actions. 

The type of actions that might be affected by the Ontario or B.C. legislation could potentially be very broad if the legislation is aggressively administered.   Most unjust dismissal actions include a claim for aggravated damages. It is the same with other breach of contract or negligent misstatement claims. Often the pleadings assert that the plaintiff has suffered mental injuries. A mental injury is a personal injury. A health care claim!
What about family law claims?  Certainly a divorce proceeding which alleges mental or physical cruelty as a ground for divorce has a personal injury claim.
Some people might argue that the legislation will only be used where the claim is clearly for damages for a personal injury where there was also a public cost for treating that injury. It is also true that some public health care costs arising from personal injuries have been recovered in the past from insurers.  The legislation however has few qualifications and as a matter of caution lawyers will invariably add a claim for health care services whenever there is a possibility that the Act is applicable. The fact that any subsequent settlement must be approved by the government (even a Small Claims trip and fall proceeding) means that there is now a far-reaching bureaucratic intervention in the litigation process.
While the legislation clearly burdens the litigation process and add costs for plaintiffs and defendants alike, will it have a justifiable public benefit. So far the evidence is not very strong on that point. A few extra million recovered but at what cost. There is a whole new government department now dealing with personal injury claims. It is unlikely that the legislation could survive a rigorous cost-benefit analysis.

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