ICBC's strategy of waiting out a catastrophic injury claim amounted to "self-induced wilful blindness," a B.C. court has found.
In a decision released April 1, 2026, Justice Caldwell of the Supreme Court of British Columbia ruled that the public auto insurer breached its duty of good faith to an insured driver — at both the basic and "utmost good faith" levels - after it chose to delay investigation and settlement for years following a devastating collision.
The case goes back to January 15, 2015, when Seng Dick Lau ran a red light in Vancouver and struck Dennis George Cole, a 62-year-old earning roughly $200,000 a year. Cole suffered catastrophic injuries: traumatic brain injury, permanent blindness, and right-side paralysis. A neurosurgeon's report confirmed within months that the injuries were devastating, life altering and lifelong.
Lau carried $2,000,000 in third-party liability coverage with ICBC. Under the insurance contract, ICBC held exclusive conduct and control of the defence, including the authority to appoint counsel and make decisions on Lau's behalf.
By June 2015, ICBC-appointed defence counsel had already advised the insurer that the claim was "likely to exceed the policy limits." Yet when Cole's lawyer extended a settlement offer at policy limits that November, open for 30 days, no one on Lau's side responded, counter-offered, or asked for more time. The offer expired unanswered.
The court found that ICBC and its appointed counsel adopted a "wait and see" approach — one that carried no financial downside for ICBC, whose liability was capped at the policy limit, but left Lau exposed to unlimited personal liability. Neither ICBC nor its counsel conducted any independent investigation into liability or damages for over two years.
The claim went to trial in late September 2017. A jury awarded Cole $4,073,850.51, finding Lau 100% at fault. After ICBC paid the $2,000,000 policy limit, Lau was left personally responsible for roughly $2,073,000.
Lau filed his lawsuit on September 9, 2019, naming ICBC and both lawyers as defendants. The court found all three breached their duties to Lau. It could not conclude, however, that those breaches directly caused his loss. Instead, applying what is known as the loss of chance doctrine, Justice Caldwell estimated Lau lost a 15% chance of reaching a settlement that could have spared him some or all of his financial exposure - resulting in damages of $326,758.70.
The claims against ICBC and the appointed defence counsel were ultimately dismissed as statute-barred under the Limitation Act. Only the independent counsel, Andrew Epstein, was held liable. The court also ruled that 15% of Lau's ongoing bankruptcy expenses would be recoverable once finalized.
The message for insurers and claims teams is hard to miss: when damages look likely to exceed policy limits, sitting on a settlement offer and hoping for the best is not a defensible strategy — and courts will not treat it as one.
