The Alberta Court of Appeal recently reviewed the provisions of the Workers’ Compensation Act (the “Act”) that enable the Workers Compensation Board (“WCB”) to be subrogated to a right of a claim against a party not covered by the Act when the WCB has paid out benefits to a party who is covered by the Act.
In the case in question, the defendant was the owner of a vehicle and had taken his vehicle in to a repair shop to have its brakes repaired. A mechanic employee of the repair shop took the defendant’s 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, and thus he claimed benefits from the WCB. Both the mechanic driver and the repair shop were immune from any lawsuit arising from the accident by operation of the Act. There was no question that but for the 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 WCB benefits and thus the 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 owner the benefits it had paid to the plaintiff. As noted, an action against the repair shop and the mechanic was barred by operation of the Act. The defendant was the only involved party who was not protected by the Act. The plaintiff’s action against the owner was based on the provisions of the Traffic Safety Act that imposed vicarious liability on the owner of a vehicle. It was undisputed that the owner was vicariously liable for the plaintiff’s loss under the Traffic Safety Act.
In these circumstances, the 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 she could only find the defendant liable for the portion of the plaintiff’s loss occasion by the defendant’s fault, not for any loss that was contributed to by the repair shop’s fault. The trial 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. The effect of this decision was that the plaintiff/WCB had no ability to recover from any of the parties because the only parties who were liable were immune from suit.
The plaintiff appealed. The Court of Appeal confirmed that pursuant to the Act, defendants who are not protected from suit should not be held liable for the portion of loss caused by an employer or worker who is protected from suit. The repair shop’s notional vicarious liability constituted fault under the Act and thus the court had to apportion the plaintiff’s loss between the repair shop and the owner. The Court of Appeal confirmed that the effect of the Act is that liability of the owner is several, not joint nor 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 Act and the Traffic Safety Act.
Therefore, in the end, in what was essentially a contest between the WCB and the automobile insurer, the insurer came out ahead.