- False Witness Costs Defendants Over $200,000
- July 15, 2013 | Author: Steve M. Vorbrodt
- Law Firm: Singleton Urquhart LLP - Vancouver Office
In a recent case, ICBC v. Panag, the British Columbia Supreme Court found a couple, who had conspired to put forward a false witness to a motor vehicle collision, liable to pay $217,183 plus legal costs to the Insurance Corporation of British Columbia. This case confirms the ability of insurers to recover money from fraudulent insureds under the legislative framework governing motor vehicle insurance in B.C.
The incident at the root of the case is straightforward. In May 2006, Mrs. Panag ignored a stop sign and was involved in a collision at an intersection. The other vehicle was driven by Mrs. Dhanda who had a green light at the time, a fact that was confirmed by an independent witness. Several days later, however, Mrs. Panag reported to ICBC that she had stopped at the stop sign and that the light had been red for Mrs. Dhanda. In support of her story, she told ICBC that her husband's friend, Mr. Grewal, had witnessed the collision.
ICBC contacted Mr. Grewal, who initially confirmed Mrs. Panag's false version of events. Several months later, however, Mr. Grewal admitted to ICBC that he had not witnessed the collision and that Mr. Panag had asked him to be a witness.
ICBC concluded that Mrs. Panag was completely liable for the collision and denied the Panags' insurance coverage pursuant to Section 19(1) of the Insurance (Motor Vehicle) Act (Act). This section entitles the insurer to forfeit coverage on the basis of an insured committing a fraud or making wilfully false statements about a claim.
Mrs. Dhanda had been seriously injured in the crash and sued the Panags for damages arising from her injuries. ICBC settled Mrs. Dhanda's personal injury claim. In a separate action, heard at the same time as ICBC's claim against them, the Panags sued ICBC for a declaration of coverage.
ICBC's claim for recovery against the Panags was based on the torts of deceit, civil fraud and conspiracy as well as the principles of unjust enrichment. In addition, pursuant to Section 21 of the Act, ICBC made a claim to recover amounts paid Mrs. Dhanda that it would not otherwise have been liable to pay.
Following a trial, the Court awarded ICBC $188,723, representing payments made to the Panags, Mrs. Dhanda, and others. In addition, the Court awarded $8,460 in prejudgment interest and $10,000 in punitive damages against each of the Panags plus legal costs. In awarding punitive damages, the Court noted that the Panags maintained their false story throughout the trial, a stance that constituted reprehensible conduct meriting further condemnation.
The motivation for the Panags' fraudulent scheme appeared to be an attempt to save a $300 deductible and $501 in increased insurance premiums over seven years, plus whatever might have been gained from a potential personal injury claim. Given that the risk of attempting the fraud would seem to have far outweighed the potential benefit, the Court noted that, "Rationality is seldom the partner of deception . . . ."