Provincial governments across Canada are constantly looking for ways to reduce auto insurance rates. To do this, they have tried public and private insurance regimes, changed coverage and benefits, or instituted tribunals to streamline legal systems. British Columbia’s latest changes could tempt other provinces to significantly reduce injured plaintiffs’ access to justice.
In 2020, BC’s NDP government introduced Bill 11, the Attorney General Statutes (Vehicle Insurance) Amendment Act, 2020. This establishes new mandatory Basic Vehicle Damage coverage, as the province moves to a no-fault auto insurance system. In tandem, Section 115 of the Insurance (Vehicle) Act was passed into law. Changes come into effect in May 2021.
The Insurance Corporation of British Columbia (ICBC) is a crown corporation that provides basic auto insurance to all drivers in BC. The reforms are intended to reduce ICBC’s claims burden and the cost of defending tort claims. ICBC estimated that the change to no-fault would save $1.5 billion in legal fees, saying these saving would be put toward rate cuts, more benefits, and faster claims processing.
Most MVA victims will be prohibited from suing for financial compensation, unless they are involved in an accident with an at-fault driver convicted of prescribed criminal offences (such as driving while intoxicated), or if the vehicle’s manufacturer, or a repair facility, is found to have done faulty work.
In part, Section 115 says:
(a) a person has no right of action and must not commence or maintain proceedings respecting bodily injury caused by a vehicle arising out of an accident, and
(b) no action or proceeding may be commenced or maintained respecting bodily injury caused by a vehicle arising out of an accident.
BC’s new system would essentially eliminate the role of personal injury lawyers. Trial Lawyers of British Columbia states that no-fault insurance is “a deliberate taking away of the right of British Columbians to receive fair access to the courts and a fair settlement to those injured on our roads.”
In Canadian Underwriter, Tony Vecchio, a partner with law firm Slater Vecchio, says, “If you get injured, there is going to be no fault with respect to consequences.” He believes that denying accident victims the right to sue removes their access to justice. “The no-fault system is essentially a system in which, ‘We will tell you it’s so, and therefore it’s so, and that’s the end of it.’ So, it’s an egregious system.”
The new system would pay no compensation for pain and suffering from minor injuries. Peter Unruh of Kane Shannon Weiler LLP points out, “Care needs, such as housekeeping assistance, therapy costs, and counselling, will be dispensed on a ‘pay as you go’ basis by ICBC adjusters.” He adds that the new system “has largely been directed at obtaining cost savings by removing those involved in accidents from access to our courts (and to lawyers by implication).”
Accident benefits claimants can take complaints or disputes to the Civil Resolution Tribunal, the province’s ombudsperson, or ICBC’s new Fairness Office.
The new insurance model, called “Enhanced Care”, is supposed to reduce insurance rates by 20 percent, an average of $400 annually per driver. First-party care and treatment benefits will go up to $7.5 million. Under the former system, coverage provided up to $300,000 in accident benefits, and income replacement was up to 75% of gross income to a maximum of $740 a week. Under the new system, income replacement would be 90% of net income up to $1,200 a week, with options to buy higher limits.
Several public opinion polls show that most BC residents are unaware of these changes.
The changes have created some conflict between the government and the private auto insurance industry. The Insurance Bureau of Canada (IBC) claims that Basic Vehicle Damage coverage, being mandatory and available only through ICBC, limits competition in BC further and eliminates other affordable options. IBC maintains that drivers in BC have paid more for insurance than anywhere else in Canada because of ICBC’s monopoly. To allow more consumer choice, IBC recommended several amendments to Bill 11, which would make the system more like Quebec’s no-fault system, where the government insurer provides injury coverage while vehicle damage coverages are provided by private insurers.
In response, Attorney General David Eby noted the private insurance industry continues to advocate for additional products to be pulled out of ICBC’s basic insurance and moved into the optional auto insurance market. He criticized private insurers for pushing for privatization without considering whether the move would translate into savings for consumers. “I understand that, they’re private insurers, but what I don’t understand is why they’re advocating for that when they can’t deliver affordable private insurance in Ontario, in Alberta or frankly in British Columbia if their own numbers are to be believed.”