In the most recent session of the British Columbia Legislature, the Health Minister introduced Bill 22: the Health Care Costs Recovery Act; it has passed two readings and is now in Committee stage where it will be examined in greater detail prior to last reading. Assuming the Bill passes third reading and receives Royal Assent, it will become law. In its current form, Bill 22 applies to a person injured ("injured person" or "beneficiary") by the actions of a "wrongdoer", defined as someone whose negligent acts contribute to a beneficiary’s injury or death. A beneficiary is never a wrongdoer, even if they are contributorily negligent. The proposed law will not apply to persons injured at work (who are covered by Workers Compensation), to injuries arising from a motor vehicle accident caused by an ICBC-insured wrongdoer, or an injury caused by tobacco use.
The Bill will allow the Ministry of Health to recover expenses paid in providing the beneficiary with health care relating to injuries caused by the wrongdoer. The government would either join a lawsuit started by a beneficiary or start its own independent lawsuit. While this may appear to be a novel legal power, B.C. already has similar legislation for the recovery of costs associated with tobacco under the Tobacco Damages and Health Costs Recovery Act, which came into force July 6, 2000. In fact, British Columbia is not the first province to enact this type of legislation: Alberta, Saskatchewan, Manitoba, Ontario and Prince Edward Island (as well as Yukon) have similar health care cost recovery legislation.
With this Bill, the government will attempt to recoup tax dollars spent treating citizens who have been injured by the actions of other British Columbians. In the past, a "gentlemen’s agreement" between the Ministry and insurance companies existed; under this arrangement, insurers agree to repay the government for an insured’s health costs but its legal strength is questionable. In addition, the informal process presents difficulties for those involved since there is no set time-frame for the government to request payment. Consequently, the Ministry’s demand may come long after the tort claim is settled; insurers can be in a difficult position as they may not have reserved for such payments and the government runs a risk of not being compensated.
The major question arising from Bill 22 is what type of power the government receives and what obligations are placed on British Columbians. As presently written, the Bill imposes duties on the wrongdoer, the wrongdoer’s insurer, and the beneficiary while providing power to the government. It allows recovery of both past and future health care costs. Under the Bill’s provisions, beneficiaries have several obligations, including:
- incorporating claims for health-care cost recovery in their court actions and so notifying the Ministry
- maintaining a lawsuit until they have informed the government they intend to discontinue it
- providing the Ministry with an opportunity to attend the hearing before discontinuing an action
- cooperating with the government and providing it with information regarding the extent and nature of their injuries and treatment
- not settling any claim without first giving the government 21-days’ notice—irrespective of whether they have started a lawsuit—and receiving written consent from the government to a settlement.
For their part, insurance companies must notify the government of any potential wrongdoing by their insureds even if no legal action has been commenced. Whenever insured parties report that they may have been negligent and caused injury to another, insurers must notify the government. This requirement allows the government time to start an independent action, if necessary.
The Bill does provide some protection for the beneficiary. If the wrongdoer is unable to properly compensate both the government and the beneficiary, the beneficiary’s compensation is given priority. Furthermore, the Ministry must compensate the beneficiary for any costs incurred to comply with the government’s portion of the claim. In addition, since the Bill specifically excludes a beneficiary from the category of wrongdoer, it seems the government has made a policy decision not to pursue any costs that a beneficiary may have directly caused.
How does Bill 22 compare to other provinces’ health-care costs recovery initiatives? A feature-by-feature comparison reveals the following:
- Manitoba and Prince Edward Island do not give priority to the beneficiary when there are insufficient settlement funds to cover both the individual and government claims. For example, if the beneficiary is entitled to $100,000 and the government $50,000 and the wrongdoer can only pay $100,000, the beneficiary will receive $67,000 (two-thirds) and the government will receive $33,000 (one-third).In British Columbia, the beneficiary would receive the entire $100,000.
- Saskatchewan and Prince Edward Island do not provide the government with an independent cause of action—to the contrary, they have a subrogated right. Consequently, the government must bring an action in the name of the beneficiary.
- In Ontario, Prince Edward Island and Yukon, the statutes provide that no settlement entered into by a beneficiary is binding on the government’s right to recover costs, unless the government has provided written consent to the settlement. This is a less onerous provision on the beneficiary than in British Columbia, Saskatchewan and Manitoba, all of which require written consent by their governments prior to entering into a settlement, regardless of whether legal proceedings have been commenced.
While Bill 22’s ultimate wording is still uncertain, it is likely that some form of cost recovery right will be bestowed on the Ministry of Health. The unknown is the precise extent of the governmental powers and the obligations imposed on beneficiaries and insurers. It is conceivable that these will change before the Bill becomes law.