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May 11, 2018

CBABC Position on Proposed Automobile Insurance Reforms

Jennifer Brun

As the CBABC Executive Liaison to the Automobile Insurance Committee, I am writing to highlight the issues arising from our provincial government’s introduction of Bills 20 and 22.

By way of background, on April 23, 2018, the government introduced Bill 20 and Bill 22 to amend the Insurance (Vehicle) Act and the Civil Resolution Tribunal Act.  Together these Bills aim to impose a cap on the pain and suffering head of damages in motor vehicle accident claims, as well as to significantly expand the monetary jurisdiction and scope of the current Civil Resolution Tribunal.

Following that announcement, the CBABC began drafting two position papers that were published in response to the government’s proposed Bill 20 and Bill 22 on May 8, 2018.  These two most recent submissions can be found here: https://bit.ly/2K4tIPH .

The CBABC has over 7,000 members who practice law in many different areas, including personal injury and vehicle accident law.  THe CBABC Automobile Insurance Committee is made up of lawyers who represent both those injured in motor vehicle accidents and the insurer.  The Automobile Insurance Committee provides advice to the CBABC on matters arising in this area of law, and has assisted the CBABC in the development of the positions being taken.

It is the policy of the Canadian Bar Association that “the right of an individual to recover general damages from the wrongdoer in motor vehicle cases and to have such right adjudicated in the courts is one of the most vital hallmarks of the Canadian system of justice.”  In short, the CBABC position is that the case for fundamental changes including statutory abrogation of the rights of injured citizens to full and fair compensation, because of uncontrollable costs, has not been established.  What has been established, however, is that the number of accidents occurring each year has been steadily increasing.  The solution to that problem is to look at and deal head-on with the causes of those increases.

No-fault or injury cap types of compensation schemes result in a bureaucratization of justice with rights prescribed by legislation that, in most circumstances, reduce the level of compensation available for innocent accident victims.  The CBABC views the implementation of no-fault or cap types of compensation schemes as not being in the public interest.  Among other concerns, they eliminate the right of innocent accident victims to seek redress before an independent judiciary and, at the same time, relieve parties of responsibility for their negligent or willfully tortious conduct.  The CBABC continues to view any limitation of the rights of an individual to recover damages in motor vehicle accident cases to be contrary to the principles of the Canadian justice system and continues to oppose any such changes.

Further, depriving British Columbians of full compensation through the implementation of a system of caps will have the unintended but significant consequence of a disproportionately negative impact on those already most disadvantaged in our society.  In other provinces across Canada where such measures have been implemented, litigation has ballooned in the area of determining whether the cap applies and there is conflicting evidence as to whether or not litigation costs have in fact decreased.  A system such as is proposed complicates access to contingency fee agreements – which make litigation affordable for the majority.  The result will be that all but those members of society who are of substantial means will be challenged when it comes to contesting a decision by ICBC that the cap applies.

The Civil Resolution Tribunal (“CRT”) is an administrative tribunal in British Columbia that is presently granted jurisdiction by the provincial government over strata disputes and small claims disputes where less than $5,000 is at issue.  The CRT began to handle claims under $5,000 in June 2017.  It is a relatively new organization with very little experience in personal injury matters (that experience being limited to those claims under $5,000 that have come to it since June 2017).  In comparison, the Canadian judicial system, which has evolved over hundreds of years of practice and binding precedent, has extensive experience in assessing fair compensation for those injured in motor vehicle accidents.

Section 9 of the existing Civil Resolution Tribunal Act prohibits the CRT from hearing proceedings in which the government is a party.  That is because Tribunal members are civil servants, appointed by Cabinet, with limited tenure (2-5 years) and remuneration set by Cabinet.  Their independence from government is thus limited.  Bill 22 would repeal section 9 and replace it with provisions clearly giving the CRT jurisdiction over ICBC claims.  The inherent conflict in having the Tribunal decide proceedings involving a Crown agency closely connected to government is thus of the utmost concern.  That conflict is not resolved by Bill 22 – rather, the conflict is embraced as part of the strategy to reduce ICBC costs.  It is noteworthy that the same Ministry to which the CRT reports, and which appoints CRT adjudicators, is responsible for ICBC and accountable to the public for ICBC’s financial performance.  In light of the evidence that the government is working hard to reduce the amount ICBC spends on claims, the conflict of having civil servants of the Tribunal making decisions on monetary compensation to victims of motor vehicle accidents is arguably stronger than ever.

It is noteworthy as well that the proposed monetary threshold of $50,000 is substantially greater than the CRT’s current monetary jurisdiction, which is a mere $5,000 for small claims personal injury matters.  In contrast, Provincial Court judges in our province – who maintain their tenure to age 75 and operate as judicial officers independent of government – have only been granted monetary jurisdiction for decision making up to $35,000.

In these submissions, the CBABC advocates that the focus of change should be on improving road safety as the best means of controlling automobile insurance costs.

Other steps that should be taken include:

  1. The provincial government should adopt and implement the establishment of an independent rate setting agency to fix and monitor premiums to ensure premium adjustments are made on a timely basis. ICBC rates should be set in accordance with sound insurance and actuarial principles.
  2. The CBABC is prepared to work with ICBC to develop ways in which the legal profession can publicly endorse and promote safety programs and other initiatives to limit distracted and intoxicated driving.
  3. Consideration should be given to a change in the Supreme Court Civil Rules to include a schedule of fees limiting the amount that experts can charge for their independent medical examinations, consultations, and written reports tendered in personal injury cases, without leave of the court.
  4. Negligent or reckless drivers should be penalized. Our society is predicated on the notion that individuals will be held accountable for their errors and that victims will be entitled to recover their losses to the extent that they are not individually responsible for them.  This is fair and reasonable, and consistent with the notion that each of us should be encouraged to be responsible and careful.
  5. Drivers with records of dangerous driving behaviours such as impaired driving, excessive speeding, and distracted driving should pay higher premiums. Significant weight should also be placed on prior accidents and driving infractions, such as failing to stop.  Doing so will ensure that those motorists who are placing others at risk are paying a financial price for having done so.
  6. Drivers who operate safer vehicles should receive a subsidy to their premium. The CBABC supports measures being put in place to incentivize motorists and car companies to implement accident-avoiding technology, such as back up cameras and blind spot warning sensors, which decrease the likelihood of crashes.   This in turn will encourage safe driving and increase the safety of British Columbia roads.
  7. Drivers who operate luxury vehicles should pay more for their premium.
  8. All of British Columbia’s intersection safety cameras should be turned on 24 hours a day, seven days a week.
  9. The provincial government should proceed with an independent operational review of ICBC in order to identify opportunities for business reform. A key component of running ICBC as a business is transparency.  The ever-shifting numbers that are being reported on ICBC’s losses are concerning and reflect either mismanagement or a lack of transparency.  The losses that are being reported at ICBC are losses that in any other business would have resulted in significant questions being asked and quite likely a change in management.  The CBABC encourages the government to ensure that those tough questions are being asked.  We understand the current government is taking the position that the previous government was aware these losses were being projected and that this problem falls at their feet.  It is not that simple.
  10. The provincial government should cease taking dividends from ICBC to support general revenue of the provincial government. A key component to ICBC’s long term financial health and ultimately, its survival, is the implementation of measures that require ICBC to be run like a business rather than an arm of government.  Utilizing policy dollars for functions outside of traditional insurance will necessarily result in financial shortfalls for ICBC.  This needs to be addressed by either funding these functions through government financing or, at the very least, by returning any revenue generated by these functions to ICBC.

The CBABC remains committed to a system that allows for the independent determination of the actual loss suffered by persons injured in automobile collisions on an individual basis.  The CBABC position is that the only entity that can be trusted to ensure fairness in any dispute between an individual citizen and a public institution is an independent and accessible judicial system.

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