The Alberta Court of Appeal recently reviewed the provisions of the Workers' Compensation Act that enable the Workers Compensation Board (WCB) to be subrogated to the right of a claim against a party not covered by the Workers' Compensation Act when the WCB has paid out benefits to a party that is covered by the Workers' Compensation Act.

Facts

In McIver v McIntyre (2018 ABCA 151 (CanLII)) the defendant was the owner of a vehicle, which he had taken to a repair shop to have its brakes repaired. A mechanic employee of the repair shop took the vehicle for a test drive with the shop's authority and the defendant's consent. During the test drive, the vehicle collided with the plaintiff's vehicle and the plaintiff sustained injuries.

There was no dispute that the mechanic's negligence caused the accident. The plaintiff was also operating his vehicle in the course and scope of his employment at the time of the accident; therefore, he claimed benefits from the WCB. Under the Workers' Compensation Act, both the mechanic driver and the repair shop were immune from any suit arising from the accident. There was no question that but for the Workers' Compensation Act, the repair shop – as the mechanic's employer – was vicariously liable for the plaintiff's loss at common law.

The WCB accepted the plaintiff's claim for benefits and thus the Workers' Compensation Act vested the plaintiff's action in the WCB. The WCB commenced an action in the plaintiff's name, seeking to recover from the defendant the benefits that it had paid to the plaintiff. As noted, action against the repair shop and the mechanic was barred by operation of the Workers' Compensation Act – the defendant was the only involved party who was not protected by the Workers' Compensation Act.

The plaintiff's action was based on the Traffic Safety Act, which imposes vicarious liability on the owner of a vehicle. Under the Traffic Safety Act, it was undisputed that the owner was vicariously liable for the plaintiff's loss.

First-instance decision

In these circumstances, the Workers' Compensation Act limits liability to a non-WCB covered defendant to only "that portion of the damage or loss occasioned by the defendant's own fault or negligence". The trial judge held that the defendant was liable only for the portion of the plaintiff's loss occasioned by the defendant's fault, not for any loss that was contributed to by the repair shop. The judge then found that the repair shop had the power to supervise the driver while the vehicle owner did not and thus apportioned 100% of the plaintiff's loss to the repair shop. As such, the plaintiff and the WCB had no ability to recover from any of the parties because the only liable parties were immune from suit.

The plaintiff appealed the decision.

Court of Appeal decision

The Court of Appeal confirmed that pursuant to the Workers' Compensation Act, defendants that are not protected from suit should not be held liable for the portion of loss caused by an employer or worker that is protected from suit. The repair shop's notional vicarious liability constituted fault under the Workers' Compensation Act; therefore, the court had to apportion the plaintiff's loss between the repair shop and the owner. The court confirmed that the effect of the Workers' Compensation Act is that the liability of the owner is several, not joint or joint and several. The court affirmed the trial judge's finding that the repair shop was 100% notionally liable for the plaintiff's loss, confirming that this was consistent with both the purpose of the Workers' Compensation Act and the Traffic Safety Act.

Therefore, in what was essentially a contest between the WCB and the automobile insurer, the insurer came out on top.(1)

For further information on this topic please contact Cristina Wendel at Dentons by telephone (+1 780 423 7100) or email (cristina.wendel@dentons.com). The Dentons website can be accessed at www.dentons.com.

Endnotes

(1) For more information please see www.occupationalhealthandsafetylaw.com.

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