Lawyers’ groups express concerns over B.C.’s auto insurance reforms

  • February 13, 2018

By Ian Burns for The Lawyer's Daily

The B.C. government has announced major steps to help the Insurance Corporation of British Columbia (ICBC) get out of financial crisis, but a number of organizations representing the legal community have expressed concerns the reforms to the provincially owned auto insurer may do unintended harm to victims of motor vehicle accidents.

Provincial Attorney General David Eby revealed the provisions Feb. 6, which include a limit of $5,500 on pain and suffering for minor injury claims and the doubling of the overall medical care and recovery cost allowance to $300,000.

“ICBC was created to provide affordable insurance to all B.C. drivers, but years of reckless decisions by the previous government have thrown the corporation into financial chaos,” Eby said. “Today we start making the tough decisions that will stem ICBC’s losses, keep insurance affordable and provide enhanced care for people injured in automobile accidents. We’re going to make ICBC work for people again.”

The changes come amid revelations of the provincial insurer’s monetary woes, with ICBC projecting a 2017-18 net loss of $1.3 billion. The government said B.C. drivers could face premium increases averaging $400 or more if no action is taken.

Under the new system, disputes over certain motor vehicle injury claims, including the classification of an injury, will be adjudicated by B.C.’s Civil Resolution Tribunal, an independent body that already adjudicates small claims disputes in the province. The government is requiring ICBC to “develop a clear, legal definition of what constitutes a minor injury in British Columbia,” which would include things like sprains, strains and minor whiplash, but would exclude broken bones, concussions or more serious impairments.

“We’re putting ICBC’s priority back where it should be — providing fair, affordable rates for British Columbians, and giving drivers peace of mind with appropriate care if they are in a collision,” Eby said.

But the changes were not applauded by all. The Canadian Bar Association, B.C. Branch (CBABC), while recognizing ICBC’s financial situation needed to be addressed, said the changes “do not adequately protect the rights and well-being of victims of motor vehicle accidents,” specifically pointing to the limitation on pain and suffering claims for minor injuries.

“The unintended consequences of implementing a cap will deprive many British Columbians of the compensation they deserve,” said CBABC president Bill Veenstra. “Caps decrease the accountability of unsafe drivers, the cost of which is then borne by the victim who was not at fault. The answer to ICBC’s current financial woes is not to place the burden on the shoulders of innocent victims.”

Veenstra’s concerns about caps were echoed by Ron Nairne of GN Law, a personal injury lawyer who also serves as co-chair of the Trial Lawyers Association of B.C.’s ICBC committee.

“[Caps] shift the financial burden from bad drivers onto innocent victims, who don’t get full compensation. So they’re the ones who are bearing the cost of this $1 billion the government wants to save,” he said. “What we have advocated for the past two years is to make bad drivers pay.”

This could include a surcharge for people who cause accidents and premium increases that are larger than those that currently occur, said Nairne.

“And let’s stop accidents right from the get-go,” he said. “The amount of distracted driving is huge and that needs to be tackled. There’s a host of issues that could be addressed on traffic safety that would bring down the accident rate and therefore save money.”

Drivers will also be given an option to purchase additional coverage for a higher limit in pain and suffering compensation. The limit will be set at $75,000 and will cost approximately $1,300 a year, on top of the cost of their basic and other optional insurance.

But Nairne called this provision “illusory,” because people with minor injuries are not likely going to get $75,000 in non-pecuniary damages.

“So what’s the point of this coverage?” he said. “But if they’re saying all non-pecuniary damage claims are in their view minor, then we would have a major issue with that because we could pull out endless examples of folks that have very serious problems who were awarded $50,000 or $60,000 in non-pecuniary loss.”

Nairne also expressed concerns with the civil tribunal proposal because the body currently doesn’t allow for legal representation, although Eby has pledged to address that. But he said what he hopes happens first is to ensure an independent auditor looks into the books to try to get to the bottom of ICBC’s reported losses.

“We simply don’t have faith in the numbers. Something is going on,” he said. “We’ve done our own analysis that suggests [the financial situation] is quite different from what is being presented by ICBC. But we don’t have full access to ICBC’s books and you need someone with far more expertise than we have to go in and do that review.” 

This article was originally published in The Lawyer's Daily