By Ian Burns for The Lawyer's Daily
The government of British Columbia has announced plans to transition to a no-fault automobile insurance system to deal with ballooning costs at the provincially-owned Insurance Corporation of British Columbia (ICBC), a move that has raised the ire of many in the provincial legal community.
The proposed new system, which will be implemented through amendments to the Insurance (Vehicle) Act and other statutes, creates a new maximum accident benefit amount of at least $7.5 million that all British Columbians will have access to in order to pay for lifetime care, with premiums being lowered by approximately 20 per cent, an average of $400 in savings per driver. The new “enhanced care” scheme will establish limits on recreational, travel and extended catastrophic benefits, as well as creating a caregivers’ weekly indemnity and benefits for injured students and minors.
Under enhanced care, people largely will not be able to sue an at-fault driver in a crash, except in cases where a driver is convicted of certain Criminal Code offences such as impaired driving. ICBC will be required by law to assist every person who makes a claim. Customers who still have complaints or disputes will be directed to the provincial Civil Resolution Tribunal (CRT), the B.C. ombudsperson or the ICBC fairness officer, which the government has not yet appointed.
“The current automobile insurance system in British Columbia simply doesn’t work,” said Attorney General David Eby at a Feb. 6. press conference outlining the changes. “We have an insurance system where too often people aren’t getting the care they need. We have a lawsuit-based system with lengthy court battles, where those who are injured have to hope their settlement, if they get one, will be enough to cover their care for the rest of their life. These are settlements that lawyers take one-third of, and administration costs take thousands more.”
The new system, which is similar to no-fault schemes in place in Saskatchewan and Manitoba, is expected to be in place by May 1, 2021, with the government forecasting it will save more than $1.5 billion in its first full year of operation. In addition, the provincial Evidence Act will be amended to place a limit on the maximum amount recoverable from an unsuccessful litigant to $3,000 for the cost of each expert report in personal injury cases, with total recoverable disbursements in motor vehicle personal injury cases being limited to five per cent of the judgment or settlement.
“There is no question in my mind that the consequences and outcomes for people injured in car crashes have become secondary to the litigation process in our current system,” said Eby. “Right now, if you are injured in a crash, the system pushes you to call your lawyer instead of your doctor. We need an insurance system that works for British Columbians and puts the recovery of those injured at the forefront.”
But the government’s moves were met with almost universal condemnation by the B.C. legal community. The Canadian Bar Association, B.C. Branch (CBABC) said it was “deeply disappointed,” adding no-fault insurance has been proven to reduce the rights of injured victims to have their claims assessed based on their individual circumstances.
“Our system of justice is built on fairness and the acceptance of responsibility for our actions,” said CBABC president Ken Armstrong. “An innocent victim of an accident has a right to expect that the person at fault for the accident take responsibility for it. In a no-fault insurance plan, no one but the victims and their families bear the consequences of that accident.”
People have a right to compensation that respects their personal situation, said Armstrong.
“A construction worker who is permanently disabled and cannot be on his feet for more than an hour at a time suffers a different loss than a sales representative with the same injury who can work sitting down,” he said. “No-fault insurance pays the same amount for the same injury, based on set guidelines — and not by how that injury impacts someone’s earning capacity and lifestyle. The plan also significantly reduces people’s access to justice by making it harder for them to receive legal advice and representation.”
Kevin Gourlay, first vice-president of the Trial Lawyers Association of British Columbia (TLABC), said the government’s move is a “fundamental betrayal of the promise the B.C. NDP made in the 2017 election to not bring in no-fault insurance.”
“It is going to leave injury victims dependent on an insurance company to decide what their needs are and how to get them back to good health, and they will have basically little to no recourse if they are being told they are fine, even if their doctors are saying otherwise,” he said. “So, it really is the most vulnerable, those people who aren’t able to advocate for themselves, who are going to be the most harmed by this.”
Scott Stanley, a personal injury lawyer with Murphy Battista LLP, noted a lot of lawyers aren’t pleased with the new system “but it remains to be seen how this will impact individual British Columbians, and ultimately that is what people should be concerned about.”
“I think historically people haven’t been able to put a lot of trust into the combination of government and insurance companies. But we will see how this plays out,” he said. “If people are perfectly content to trust an insurance company controlled completely by government and having no ability to challenge it in any way, then this may be a very good decision for them — but I am like most lawyers who are quite skeptical this will be a good thing for British Columbians.”
Gourlay agreed it is difficult to gauge what the total effect of the changes will be, because the government has not released full details of its plan.
“The devil is always going to be in the details,” he said. “They were touting in the media that they are going to be increasing the care available to $7.5 million, but that is really a meaningless number. Having access to those benefits doesn’t do you any good if you are being told by an adjuster that in the opinion of the insurance company we don’t think you need X, Y or Z, because the individual is not going to have any ability to fight that decision.”
There are usually high levels of discontent with compensation regimes that offer no choice or limited access to the courts, said Stanley.
“In theory you have all of this money available to you, but in reality you do not have the flexibility to just go out and buy the services you need because you have to get preapproval for everything. I think it is fundamentally inherent to British Columbians that they want choice, and anything that takes choice from them is probably not going to be too popular,” he said. “If you are a victim and you are not at fault for an accident, the worst thing that can happen to you is to be told this is all you get and you have no further choice. I think this is going to have a huge impact on the mentality of these victims.”
Since taking office in 2017, the B.C. government has introduced a number of measures to get expenses at ICBC under control, including expanding the scope of the CRT to handle certain claim disputes and a cap on pain and suffering payouts for minor injuries. However, in October 2019 B.C. Supreme Court Chief Justice Christopher Hinkson struck down as unconstitutional amendments to the court’s civil rules which limited the number of expert witnesses in insurance cases after a challenge by TLABC.
Gourlay said it was “totally premature” to comment on whether there would be a challenge of the government’s newest moves as the legislation hasn’t been introduced, but added if it is seen to be unconstitutional he would expect a challenge to go ahead.