The effect of BC Ferries settlement agreements on apportionment of liability and damages at trial

May 5, 2020 | Stefanie Gladders, Fareeha Qaiser

A recent case from the British Columbia Supreme Court dealt with the procedure for apportionment of losses after a BC Ferries Settlement had been reached between some of the defendants.

In Conarroe v Tallack, the claim arose out of two motor vehicle accidents. The first occurred in 2015 when the plaintiff, Conarroe, was injured as a result of a collision with Tallack (the “2015 Accident”). In relation to the 2015 Accident, Tallack, the Province of British Columbia (the “Province”), and JPW Road & Bridge Inc. (“JPW”) were named defendants. The second motor vehicle accident arose in 2018 (the “2018 Accident”) and involved defendants Xiao, Sun and Solution Financial Inc. (the “Xiao Defendants”).

Prior to trial, Conarroe settled with the Province and JPW by way of a BC Ferries type settlement agreement and the entry of consent dismissal orders.

After a lengthy trial, damages were awarded as follows, totalling $1,047,212:

Indivisible Damages

Non-Pecuniary Damages: $180,000

Future Earning Capacity: $550,000

Cost of Future Care: $36,000

Subtotal: $766,000

Divisible Damages

Past Wage Loss: $265,862

Special Damages: $15,350

Subtotal: $281,212

Total: $1,047,212

Apportionment

In assessing the fault and blameworthiness attributed to the defendants’ respective actions, the court looked at the extent to which each party departed from the standard of care owed in the circumstances. The court found both accidents were the result of a momentary lapse of judgement by the other drivers, but found Tallack’s to be less blameworthy than most.

Accordingly, the court concluded that the indivisible damages of $766,000 would be apportioned 40% to Tallack and 60% to the Xiao Defendants.

With regards to the divisible damages, Tallack was found solely responsible for the losses incurred between the 2015 Accident and the 2018 Accident. The court found these amounts to be $135,430 of the past wage loss and $2,843 of the special cost awards.

BC Ferries

In a BC Ferries Agreement (named for the 1995 BC Court of Appeal case British Columbia Ferry Corp v T & N plc, the plaintiff accepts settlement funds from the settling defendant(s) in full satisfaction of the claim against them. The plaintiff then discontinues the action against the settling defendant(s) and gives a covenant not to sue, as well as agreeing to sever joint and several liability among the settling and non-settling defendants. This leaves the plaintiff entitled to recover against the non-settling defendants only the portion of damages attributable to the fault apportioned to those defendants by the trial judge.

Upon a determination of liability, the court accepted written submissions from the parties in regards to the effect the BC Ferries settlement had on the joint and several liability of the remaining defendants. The court found that the liability remains joint between the remaining defendants; however, the undisclosed amount of that settlement must be deducted from the plaintiff’s damages award. The fact that negligence claims against the Province and JPW were dismissed by consent order does not change the requirement to deduct from the plaintiff’s damages award the settlement funds received.

Since the settlement funds were paid in relation to the 2015 Accident involving Tallack, the court directed the settlement funds first be deducted from the divisible injuries of past loss of earning and special damages owed by Tallack. If the settlement funds exceed this amount, they were to be deducted from the remaining global damages amount prior to apportionment.

Conclusion

Though the amount of the BC Ferries settlement remained undisclosed, where apportionment was required for the remaining defendants, the settlement amounts were still required to contribute toward apportioned liability and global damages.

This decision highlights the importance of the non-settling defendants to be cognizant of the BC Ferries settlement and argue deductibility of such settlement amounts from the plaintiff’s ultimate damages awarded at trial prior to paying the remaining balance.

Disclaimer

This blog sets out a variety of materials relating to the law to be used for educational and non-commercial purposes only; the author(s) of this blog do not intend the blog to be a source of legal advice. Please retain and seek the advice of a lawyer and use your own good judgement before choosing to act on any information included in the blog. If you choose to rely on the materials, you do so entirely at your own risk.