B.C. to cap insurance claims
Measure for minor auto accidents under fire for punishing victims
— The B.C. government will cap pain and suffering claims for minor injuries in automobile accidents at $5,500, a contentious change to the province’s monopoly auto insurance structure that some lawyers, health care advocates and rehabilitation businesses say could penalize victims who need help after a crash.
Attorney General David Eby said Tuesday the reforms are designed to salvage the worsening financial crisis at the Insurance Corp. of B.C. by placing a limit on what a person in a minor auto accident can receive in compensation for pain and suffering, while at the same time raising the medical benefits they separately receive to improve overall care.
But the decision brought criticism from the Trial Lawyers Association of B.C. and a coalition of 50 health care providers that includes physiotherapists and pain management clinics called ROAD B.C.
“They are making the victim the problem by capping this,” said Louise Craig, a Vancouver physiotherapist and spokesperson for group Rights Over Arbitrary Decisions (ROAD) for British Columbians.
“It doesn’t make sense. The problem is not that person who is injured, the problem is the person who caused the car accident. I was surprised the focus was on taking the rights away on the person injured, without a lot of information on how they will address distracted driving, crashes and the causes.”
Craig said the government should first be moving to address the rising number of crashes and injury claims through road safety initiatives and crackdowns on high-risk behaviour like distracted driving. Eby said those broader changes are coming, with a consultation starting this spring to create a new structure of insurance premiums for those with bad driving histories, as well as a move to activate existing red-light intersection cameras to detect speeders.
“It will take years to get ICBC back under control,” said Eby. “Where we’re headed is to (make) rates affordable for British Columbians. Where we’re headed is to make sure the corporation is finally sustainable. That is the aim of reforms today.”
The $5,500 cap on pain and suffering for minor injuries will be indexed to inflation. But ICBC said a person can still sue an at-fault driver for additional compensation or financial losses, for example to get extra money for lost wages.
British Columbia is the last province in Canada with a purely litigation-based insurance model, where drivers not at fault in a crash sue the at-fault driver for economic loss and suffering.
The $5,500 minor injury cap is slightly higher than Alberta’s $5,020 threshold, but lower than New Brunswick, Nova Scotia, P.E.I. and Newfoundland. Quebec and Manitoba have full no-fault insurance, which prevents lawsuits. Saskatchewan has a dual system, with a $5,000 cap on the tort option.
The changes come into effect April 1, 2019, and are expected to save ICBC $1 billion a year. Accidents and claims that occur before then will remain under the current system, without a cap.
Trial Lawyers Association of B.C. CEO Shawn Mitchell said: “Today’s ill-advised policy announcement by government throws the rights of British Columbians on the ICBC dumpster fire.”
Canadian Bar Association B.C. branch president Bill Veenstra added, “The answer to ICBC’s current financial woes is not to place the burden on the shoulders of innocent victims.”
Minor injuries include mild whiplash, aches and sprains, cuts and bruises and anxiety. But if those injuries persist beyond 12 months and have a significant impact on work or school, they are no longer considered minor or under the cap. Broken bones or concussions are automatically considered major injuries.
Doctors will be allowed to determine if injuries are considered minor, not ICBC. However, if there is a dispute, ICBC will use a new independent dispute resolution process that mirrors a new civil resolution tribunal used to settle strata disputes.
This will reduce “out of control legal costs,” said Eby, that have risen 265 per cent since 2000.
The independent dispute resolution process is modelled after a Civil Dispute Resolution tribunal currently in place in B.C., that mainly handles small-scale issues like strata disputes.
“I have very little confidence that a tribunal that administers condo decisions about whether people have to pay condo fees are going to be equipped to make decisions that a Supreme Court judge struggles with,” said Craig. “It’s going to make it more of a mess than it already is.”
The Crown auto insurer is on track to lose $1.3 billion in the fiscal year ending March 31, as it faces a spike in claims, settlements and legal costs.