STICKING TO HIS GUNS
Eby’s ICBC war heats up
Attorney General David Eby is refusing to back down as legal opposition grows to his plans to restrict access to the courts and change the rules of personal injury lawsuits to help ICBC’s finances.
Although he needs help from the legal profession to address the growing backlog of cases and a crisis caused by the pandemic, the NDP minister is sticking to his guns — blaming lawyers for the Crown firm’s balance-sheet “dumpster fire.”
He gave short shrift to a stinging submission from the Canadian Bar Association’s B.C. branch urging him to change tack instead of abandoning long-standing legal principles.
Eby dismissed as self-interested the political arm of the bar’s 66-page critique of his no-fault amendments to vehicle insurance and continued to blame lawyers for rates that are too high.
“The (bar association) has taken a position with these and its other recommendations to support a status-quo approach to auto insurance in B.C. — one that sees hundreds of millions in insurance premiums spent every year on legal costs,” Eby said.
“These costs continue to escalate, increasing premium costs for all British Columbians without improving benefits. While I respect the feedback of the (bar association), our government has been clear that we will not — and simply cannot — accept unaffordable insurance rates or benefit levels that leave people to live in poverty after they’re injured in a crash.”
The voluntary national association insisted Eby’s changes, which include moving personal injury claims out of court and into the jurisdiction of the online Civil Resolution Tribunal, were not in the public interest.
The Trial Lawyers Association of B.C., which represents about 1,500 barristers, including most of the personal injury practitioners, also has challenged the constitutionality of the amendments.
“Any limitation of the rights of an individual to recover damages in motor vehicle accident cases is contrary to the principles of the Canadian justice system,” the bar association’s submission maintained.
“The case for fundamental change, including statutory abrogation of the rights of injured British Columbians to full and fair compensation because of uncontrollable costs, has not been established.”
The envisioned reforms mean those injured will no longer have the right to compensation for damages based on an assessment of their unique circumstances and the impact of the motor vehicle accident on their life, the lawyers argued.
“The (bar association) opposes no-fault insurance, as it will reduce the rights of injured victims,” the submission stated.
“Any system of no-fault insurance results in discriminatory consequences and a dearth of accountability for at-fault drivers, with no demonstrable trade-off benefit in terms of cost savings over the long run.”
Despite the different insurance systems across the country, the association insisted there was no conclusive evidence no-fault
reforms result in a dramatic or sustained reduction in insurance costs over time.
“Similarly, there is no firm support for the conclusion that the proposed changes to the existing B.C. insurance system will result in long-term control of such costs, or that the automobile insurance system in B.C. needs to be substantially overhauled.”
Unswayed, Eby countered that victims and drivers soon will be better off.
“When Enhanced Care comes into effect in May 2021, B.C. drivers can expect to see their rates drop by an average of 20 per cent, or $400, and to have some of the best benefit levels in the country,” he said.
“We went with this model, in part, because it has proven to be a successful and effective model for other public insurers in Canada, including in Manitoba and Saskatchewan — which are providing some of the lowest and most stable insurance rates. We are committed to a new way of doing auto insurance that is less adversarial and gives people the benefits and care they need to recover from their injuries.”
He cited medical benefits that will go up from today’s limit of $300,000 to a maximum of at least $7.5 million, an income
replacement benefit that will be 60 per cent higher — up to $1,200 a week, with the option to purchase a higher limit, and a new permanent-impairment benefit providing up to $250,000 in compensation.
“By largely removing lawyers and legal fees from the system, we expect to see $1.5 billion in overall reduced costs, which will significantly reduce the cost of insurance for B.C. drivers while at the same time allowing for much improved care and recovery benefits.”
However, retired senior civil servant Richard McCandless, who continues to study and write about Crown corporations, suggested the attorney general is being optimistic.
The pandemic has fanned the firm’s financial fire and it is likely facing a significant operating loss and negative equity, he said in a recent commentary.
The prospect of continuing low interest rates will place a continuing strain on ICBC’s finances and could act “as a major headwind to any attempt by the provincial government to achieve its affordability objective through lower auto insurance rates.”
We went with this model, in part, because it has proven to be a successful and effective model for other public insurers.