Tort Reform for the Better: Adding Liquidity to Dry Judgements

by Erik Magraken

I’ve written many times that the phrase tort ‘reform‘ is often used in association with efforts to strip the rights of injury claimants. Reform, however, is a neutral concept in and of itself. Reform simply means change and the change could be for better or worse. With this in mind I’d like to share a tort reform idea for the better which recently crossed my mind. In short the idea is to add a pool of liquidity to rectify the injustice of dry judgement.

The thought crossed my mind as I was reading reasons for judgement released this week by the BC Supreme Court, New Westminster Registry. In this week’s case (Saether v. Irvine) the Plaintiff was injured when the Defendant battered him. The consequences were “profound and catastrophic” causing a brain injury that “severely compromised (the plaintiff) in virtually all facets of his life“. Damages of $1,075,000 were assessed to cover the Plaintiff’s anticipated future care costs alone. Given the fact that this case involves an intentional tort it is a safe bet that this judgement will be uninsured and likely (at least partially) dry.

Reading this reminded me of a 2005 case (Chow v. Hiscock) where the Court expressly recognized the injustice of dry judgement facing a plaintiff left “in a permanent semi-vegatative state” following a “brutal, unprovoked assault“. The Plaintiff’s future care costs were anticipated to exceed $4,000,000. Madam Justice Koensberg made the following comments hoping the Plaintiff would some day be able to receive some of these funds from the uninsured defendants:

[40] Can I say that this is still a case where punitive damages should be awarded? If I were to award punitive damages, it would be purely symbolic. I have heard nothing which indicates that the magnitude of this award or even some small part of it is likely to be payable by any of these three young men. One can hope that they find a straight path to earn a significant amount of money or that one even wins the lottery, so that the earnings could be available to increase Mr. Johnson’s quality of life.

The law recognizes that those harmed through the fault of others are entitled to reasonable compensation. When it comes to negligently caused harm defendants are often insured and plaintiffs can collect their judgements.

In cases where Defendants hold inadequate insurance examples can be found where legislatures have intervened to ensure victims can collect on their judgments. For example, in BC, Section 20 of the Insurance (Vehicle) Act provides a pool of $200,000 of available compensation from ICBC for damages caused by uninsured motorists. A further example is the requirement for BC motorists to purchase a minimum of one million dollars of under-insured motorist protection coverage.

When plaintiffs suffer harm through intentional torts, however, there often is no insurance to protect the wrongdoer or compensate the victim. This is an unfair reality in Canadian law. Victims harmed through assault, battery, sexual molestation and other intentional acts are often faced with dry judgments. When they seek legal advice they are often turned away being told that litigation may not be worth the effort unless the Defendant has deep pockets

There is no justification I can think of making it fair for a car crash victim to be able to collect their judgement from a pool of money created by the government when the victims of crime are left with dry judgments.

The financial well being of a defendant has no bearing on a victim’s right to damages. If the government has seen fit to create a pool of funds for victims of motor vehicle collisions to collect from surely a similar system can be created to allow victims of intentional torts facing dry judgments. This is a rough idea. Thoughts and feedback are welcome from lawyers and non-lawyers alike.


  1. “If the government has seen fit to create a pool of funds for victims of motor vehicle collisions to collect from surely a similar system can be created to allow victims of intentional torts facing dry judgments.”

    Is physical or psychological injury a requirement?

    Does your scheme stop at the “bodily injury” torts or does it extend to the economic?

    Why should victims of torts have some priority over those injured in accidents that are nobody’s fault?

    Why should somebody get money because they were injured by Mr. Hyde and not in a fire caused by lightening bolt?

    What about all the innoncent people who lost money of fraudulent financial advice? Are you excluding them?

    Why should anybody suffer just because they didn’t have the fortune to be injured in a tort?

    Indeed, why did you simply not say that anybody who is injured, regardless of the circumstances, should be compensated out of gov’t fund – don’t call it Worker’s Compensation, call it Injury Relief. Any Canadian (as defined) injured in any way for any reeason is entitled to compensation of some amount.

    Feel free to set out exceptions and justify them (based on principle).

    (We can worry about the financing later.)

  2. Thanks for your comment, I appreciate the opposing point of you.

    I agree that in an ideal world no-one would suffer harm or if they did compensation would always be available. However, just because all who are harmed can’t be compensated does not mean that some should not be.

    You ask why “victims of torts have some priority over those injured in accidents that are nobody’s fault?“. The short answer is hundreds of years of jurisprudence. Let’s not forget two of the basic foundations of tort law: accountability and compensation. Victims of harm caused by the fault of others ought to be compensated and those who cause harm ought to be held accountable by paying for the harm.

    I don’t suggest expanding the scope of tort law (ie – compensation to victims struck by lightening, or compensation for pure ecenomic loss etc.) I simply suggest that those who the law says ought to be compensated actually be compensated.

    Why should a tort victim be left holding the bag seeking to realize on a dry judgement? Why should those harmed by an insured motorist be compensated when a rape victim whose life has been irreparably harmed receive an empty judgement?

    You conclude by suggesting this can’t be financed. It certainly can. You need not look any further than British Columbia. In BC collision victims harmed by uninsured, underinsured or insured drivers in breach of insurance can still realize on their tort judgements by access to funds created by statute. The ICBC (a crown corporation) then inherits the responsibility of seeking repayment from the accountable party (ie – the liable Defendant). Not able to be financed? ICBC operates to the tune of hundreds of millions in profit year after year in a pure tort jurisdiction with no legislative damage caps.

    The government sees fit to intervene when dead-beat parents don’t pay spousal support or child support (ie – the Family Maintenance Enforcement Program). Similar arrangements can be made to allow tort victims to realize on their awards while still ultimately holding the defendant responsible to pay back their debts.

    Yours truly,

    Erik Magraken

  3. “Victims of harm caused by the fault of others ought to be compensated and those who cause harm ought to be held accountable by paying for the harm.”

    “I don’t suggest expanding the scope of tort law (ie – compensation to victims struck by lightening, or compensation for pure economic loss etc.) I simply suggest that those who the law says ought to be compensated actually be compensated.”

    (my emphasis in each case)

    There’s a large universe of tort law where fault is not required for liability.

    There’s even a large universe actionable wrongs which aren’t fault based (including in tort.)

    In passing, do you include people held are held liable only on the basis of vicariously liability?

    In theory, we don’t yet have strict products liability like in the U.S. Would you exclude that, if we ever get there?

    There’s also a world of scholarship from people who think that fault is entirely the wrong basis for liability. We can start with the strict liability theorists. Then move to the law and economics theorists.

    If your view is that “that those who the law says ought to be compensated actually be compensated” you’ll need some basis in principle for limiting that principle to tort and fault.

    I’ll simply repeat my point a bit more obviously: if you’re going to argue for public funding of judgments not paid by the person held liable, you’ll need a sensible principle for limiting the scope of that fund. Tort and fault isn’t one, in my view. And for limiting the losses the fund will pay even the amounts the fund will pay.

    These principles exists. In New Zealand. This discussion isn’t new, even in Canada. There’s a Canadian connection there, Ontario as it happens. Terry Ison.

    I am well aware of the ICBC, thank you. (And New Zealand too.)

    Ultimately, it comes down to how much one believes society can afford and whatever other “ought” issue you think are relevant.

    The cap on general damages, by the way, might not be formally a “legislated” cap, but let’s concede:

    1. that there might well be limits on what the ICBC would insure if the judicial cap did not exist;

    2. there are losses to which the ICBC policy does not apply;

    3. the willingness to publicly fund might well vanish, even in BC, if we had US level awards;

    4. You could get very good arguments from many people about the adequacy of the ICBC program;

    5. You’d probably have a higher chance of pushing your program if you could successfully require the BC “bud” producers to tithe even 5% percent of their profits per year. But that won’t happen, I suspect.

    Final “in passings, for now” – will it be a principle of your system that this fund is the payment source of last resort, with the requirement that every person subject to the laws of the jurisdiction creating it carry liability insurance covering everything (except what?) To what limits? Will you permit the CMPA to fold its tent? What about hospital liability insurers. Why not?

    Who gets the subrogation work?

    Come to think of it, if I’ve paid into that fund, then can’t I argue (under current law, even in BC) that I’m a fund “insured” so can’t be sued by the fund for recompense? I guess the enabling legislation will have to deal with that, too.


  4. Thanks for your further comments David. Without steering this conversation off-topic I’ll agree that you raise a few valid points.

    BC’s uninsured and underinsured motorist programs do have limits on damages available. There are deductions and exclusions. They are funds of last resort. But they are available and they work. With reasonable parameters in place it can be done.

    The debate then shifts to whether it should be done. There is plenty of room for differing views at that stage. As with any political discussion there will disagreement. Thanks for raising the opposite point of view.

    Yours truly,


  5. Eric,

    You’ve missed, or you’re avoiding, my point. I wasn’t raising “the opposite point of view”.

    You made an “ought to” argument – what you’ve now described as the issue of “whether it should be done”. I asked you to provide some principled justification for

    1. the suggestion that people with no connection to the incident would be required to pay for it – that’s what using public funds is; and,

    2. distinguishing between victims of tort and other injured people who require compensation.

    You suggested the public purse should compensate some injured people who aren’t made whole by the person(s) who caused the injury. You dry the line so that only some are compensated. I asked you why.

    You haven’t answered those questions, beyond the statement that it’s a political issue discussion with differing views. That’s no answer at all, or it has nothing to do with any answer law provides.


  6. This discussion has also been developing on my blog where I have re-posted this article. The public purse would only be part of the equation. The governments role could be not only to create a fund to draw from but also the management of subrogation interests to ensure that ultimately the tortfeasor, not the public, become responsible for payment.

    For your benefit I repost some of the comments following this discussion on my blog:

    Daniel Says:
    November 10th, 2011 at 5:03 pm edit
    I’ve also thought this through on occasion. The fairest way to put this into play would be to create a fund plenished through victim surcharges assessed as part of sentencing in criminal courts, seized proceeds of crime and other earmarked fines levied by the province/feds for quasi criminal/criminal activity. I don’t think taxpayers should bear the burden at large. Minimizing moral hazards would also dictate an agency tasked with collections, which would be given statutory indemnity and subrogation powers to pursue the tortfeasor and their assets. I think it would be appropriate that such an agency be given particularly robust collections powers.

    Frankly, I thinks society at large would benefit from the efficiencies of making those responsible for anti-social and criminal conduct pay a larger fraction of the true costs of victimization.

    emagraken Says:
    November 10th, 2011 at 5:12 pm edit
    Thanks for your comments.

    I agree that a subrogation mechanism would need to be created with a goal of ultimately having the tortfeasors pay back the fund. The ICBC model with respect to uninsured/underinsured/breach of insurance claims is a good model. Plaintiff’s can be compensated and not worry about collections woes while tortfeasors are ultimately held to account.

    I appreciate your thoughts.


    As for why “only some are compensated” I’ve already addressed this. Fundamental tort law principles. The law compensates those who are wrongfully harmed. Those who cause the harm are held to account. The government can intervene to assist in bridging the gap between those that are harmed by insured tort-feasors vs. uninsured tort-feasors.

    You seem to fundamentally disagree that this “ought” to be a role of government. That is where you and I part company.

    Yours truly,


  7. “You seem to fundamentally disagree that this “ought” to be a role of government. That is where you and I part company.”

    No. I’ve suggested that you’ve provided no valid reason for limiting a scheme, under which people other than those who caused the loss compensate the victim, to what you’ve described as victims of tort.

    I’ve pointed out that the limits are normative, not “legal”. That’s all.

    We’re going round in circles.Time for both of us to get off the merry go round. This is hardly a new topic. The literature is vast.


  8. For starters, it is young people at the highest risk to become victimized. Second, these young people have no capital to live any meaningful life of dignity and respect. Third, the state is responsible for crime, period, and since crimes are against the state it is almost criminal to allow one out of a population to take the brunt and suffer lifetime of burden. If we had a choice to press charges against the perpetrator that’s one thing. If we refused to press charges what would society think? Would we be expected to assume this as a responsibility to keep other safe in society. I’m sorry but asking an innocent victim of a brutal assault to just buck up, take it like a man, you took one for society is just utter bull. If provinces can incorporate criminal injury compensation into our auto schemes then this is not asking for something new. Civil tort has proven to be ineffective for 70 years for injuries like this and if anyone knows that it should be the lawyers reading this blog. The problem is this: there has been a distinction between the middle class victim and the lower socio-economic class of victims. It is true that impaired drivers make up predominately white victims and white offenders. Everything else gets put upon the natives. So what and who are our auto schemes assuring viable compensation for. Auto schemes are welfare programs for the middle class period. The rest of the victims go to the inadequate universal scheme to suffer to the depths of hell and suffer the stigmatizing cruelty that goes with it. For god sakes, most of these victims are kids with a long long life (because medical technology has saved these people knowing they are going to struggle to look after themselves). We are going to sentence and I am telling you it is a sentence from hell to put an innocent victims on a 50 year welfare scheme.
    My son, a pretty little white boy, was brutalized by a middle class white gang. Not a clue who these people were! He was beaten beyond recognition and lay in a coma for 4 months. Where the hell was the judge ordering restitution for my son. My kid that was lined up to go into the RCMP and now can never have meaningful employment to look after himself. Does society have no compassion, or does it have to happen to your sons before people get it. Time to get out of the dark ages and quit making innocent people pay with their lives. If a drunk and an uninsured motorist can be covered then surely to god there should be no question in compensating these innocent victims of other crimes.
    In Saskatchewan, every victim in all scenarios of auto accidents gets full and enhanced indemnities in our province…. we reward criminals for killing and hurting people!