Of a No-Fault System
Earlier this year, the Insurance Corporation of British Columbia (“ICBC”) proposed a hike in insurance rates in response to increased costs and decreased earnings. As expected, this announcement aroused discussion about the merits of implementing a no-fault system in British Columbia. Now, before we consider an overhaul of our current scheme, careful consideration needs to be given to the potentially harmful effects of a no-fault system.
There are a number of no-fault schemes throughout North America ranging in their restrictiveness on a victim’s right to sue. The arguments in favour of a no-fault system are usually for faster access to treatment and overall cost savings.
Pursuant to Part 7 of the Insurance (Vehicle) Act Regulations, British Columbians have access to No-Fault Accident Benefits (Part 7 Benefits) for reasonable medical expenses up to $150,000 and disability benefits up to $300 per week for employed persons. Under this system, an injured victim still has the option to pursue a tort claim for economic and non-economic losses that are not covered or that exceed the benefits payable under Part 7 Benefits. As a result, our current system allows quick access to funding. Access to funding is unlikely to be improved in any significant way by a more restrictive system.
Significant savings through a no-fault system can only be realized by limiting or denying compensation. Under a no-fault system, injured victims run the risk of being denied full compensation for their injuries. The tort system aims to place an injured plaintiff in the original position he or she would be in absent the defendant’s negligence (see Athey v. Leonati,  3.S.C.R 458). Canadian courts recognize the importance of considering the individual situation of the plaintiff when awarding damages and the extent to which money can provide solace. A no-fault system will do away with individual considerations and award accident benefits based on what is often referred to as a “meat chart.” For example, high income earners are unlikely to receive full compensation for their economic losses because they earn more than the average person.
Whether we care to admit it or not, there is an inherent bias against plaintiffs. The argument in favour of a no-fault system is often accompanied by discussions about the need to crack down on fraudulent claims. The vast majority of plaintiffs seek legal counsel as a last resort. This decision is often made after experiencing pressure to settle a claim without a full appreciation of the injuries. The court system is already equipped to deal with fraudulent claims given that the burden of proof is on a plaintiff to prove loss.
A no-fault system will leave vulnerable individuals at the mercy of a claims adjuster to determine funding and compensation. It is often the case that those who are most in need of these resources are those individuals who are not able to navigate the web of paperwork and administrative process on their own.
A no fault system will undoubtedly erode an innocent victim’s right to pursue justice. We have reached a good balance under our current system. Injured victims are able to receive funding and treatment while still maintaining their entitlement to further assessment in court. Careful consideration needs to be given to determine whether the benefits of a no-fault system truly outweigh the potentially devastating and irreversible effects.
Raman Dasanjh is a lawyer with KazLaw Injury Lawyers. Outside of law, Raman enjoys travelling, cooking and exploring the city.