ICBC legislation could solve financial crisis, says minister

B.C.’s attorney general says caps on minor injury claims and a push to an out-of-court dispute resolution could save the Insurance Corp. of B.C. from its financial crisis, though legislation he proposed Monday offered only a vague roadmap for achieving such a goal. David Eby said the legislation, if passed, would set a $5,500 cap on pain and suffering claims for B.C. motorists in minor crashes. It would redirect insurance disputes worth less than $50,000 away from expensive courtroom time and into a civil dispute resolution process. “We hope and are advised this legislation might get ICBC back into the black, which means the savings are in the neighbourhood of $1 billion,” said Eby. ICBC is expecting a loss of $1.3 billion once all the figures are in for the fiscal year that ended March 31. It blamed rising legal costs and accident claims. “The savings of getting the processes of minor injuries out of B.C. Supreme Court and into the civil resolution tribunal are so big that we can actually increase benefits that haven’t been increased in 25 years.” ICBC has a monopoly on basic automobile insurance in B.C. The government has warned that, unless there are reforms, motorists could face rate hikes of more than $400 to keep ICBC afloat. British Columbia was the last province in Canada with a purely litigation-based model, where drivers not at fault in a crash sue the at-fault driver for economic loss and suffering. Eby said the new savings estimate are possible because ICBC has been “refining the definition of minor injury” since the cap was first announced in February. But his legislation contained no concrete definition of minor injury, instead leaving the linchpin of the proposed law to regulations to be set by cabinet later. Much of the bill is similarly hollow, giving cabinet vast powers to set, change and otherwise redefine what constitutes a “minor injury” and the level of the cap as time goes on. “The intent of these regulation-making powers is to ensure the statute can remain up to date in terms of costs and changing scenarios that might take place,” said Eby. “We recognize other jurisdictions have changed their caps, for example, over time to reflect increased need to respond to the realities on the ground.” Advocates said Eby has already altered the government plan since proposing it in February, in an attempt to save money, by expanding what is considered a “minor injury” that falls under the cap and outside the courtroom. “The new legal definition will include things like sprains, strains, mild whiplash, cuts and bruises, anxiety and stress from a crash,” read a Feb. 6 government media release. “It does not include broken bones, brain injuries (concussions) or other more serious impairments.” Monday’s press release listed “abrasions, contusions, lacerations, sprains and strains, pain syndrome, psychological and psychiatric conditions or an injury in a prescribed class of injury, even if chronic” adding that the terms “will be further defined in regulation over the coming months.” The changes since Febru- ary are concerning because they have widened what is considered a minor injury and therefore subject to the cap, said John Rice, a Vancouver injury trial lawyer who represents the Trial Lawyers Association of B.C. He said the legislation “represents one of the most significant attacks on the legal rights of British Columbians in our province’s history.” “The proposed legislation goes much further than what was previously announced by Eby in February in making victims pay for reckless and distracted drivers,” he said. “Instead, ICBC and the NDP government want to cap even more injuries that British Columbians suffer because of someone else’s negligence.” Rice said the proposed legislation is “a form of no-fault insurance” and the promise to increase medical benefits is simply a cynical ploy to justify stripping away the right to sue. “If this legislation is passed as envisioned, it will have severe consequences for British Columbians. The only winners after today’s announcements are insurance companies like ICBC and reckless drivers.” Eby acknowledged the changes are a major shift. “We recognize there will be unhappiness on the part of many lawyers who engage in personal injury practice,” said Eby. “We’re not excited about this shift, this is a necessary shift, we have to do this. ICBC is in financial crisis.” Louise Craig, a Vancouver physiotherapist and spokesperson for group Rights Over Arbitrary Decisions (ROAD) for British Columbians, said it’s good that government keeps talking about increasing medical benefits for those involved in a crash, but the loose definition of minor injury in Monday’s bill remains concerning. “I think they are expanding it so that minor injuries encompass the vast majority of injuries that occur, and making the exception say a fractured bone or spinal cord injury,” said Craig. Monday’s legislation was also silent on reforms Eby floated in March that would change the way drivers accumulate no-penalty crashes and the time it requires to reclaim discount rates after an accident. The government had held public consultation on its proposals, including that drivers at fault in a crash would no longer be eligible to recover their full 43 per cent discount on basic auto insurance after three years of crash-free driving. Instead, it would take 10 years. Expanded health benefits to crash victims, such as doubling the amount for care and recovery, as well as expanding the overall lifetime medical care and recovery limits to $300,000 retroactive to Jan. 1 will also be set by cabinet regulation in the future. “These are huge changes for British Columbia, these are huge changes for ICBC,” said Eby. “We want to make sure we have the flexibility to respond as we roll things out.” Source: Vancouver Sun