A few years ago, we asked Ontario lawyers about the increasing difficulty of practising personal injury law, given the province’s changes to automobile insurance. Recent changes by the British Columbia and Alberta governments are creating similar problems for plaintiff personal injury lawyers in Western Canada.
We interviewed Marc Spivak, a partner at Devry Smith Frank LLP in Toronto, for our last article. The trends he identified then have continued, in auto insurers’ favour. At that time statutory accident benefits had been halved from $100,000 to $50,000; attendant care decreased from $72,000 to $36,000; Minor Injury Guidelines restricted most medical and rehabilitation claims to $3,500; and “incurred expenses” for recovery were introduced.
He points out that since then, catastrophic med/rehab and attendant care has been halved (from $2 million to $1 million) on every CAT claim, and MVA claim deductibles for pain and suffering have gone from a fixed $30,000 to an inflation-adjusted $39,754.31 in 2021. Prejudgment interest (originally fixed at 5% to encourage quicker resolution of MVA claims) has been removed, and the Ontario Court of Appeal (in Cobb v. Long Estate, 2017 ONCA 717 and in El-Khodr v. Lackie, 2017 ONCA 716) ruled that these changes can be applied retrospectively. The Insurance Act indicates that section 128(2) of the Courts of Justice Act does not apply to motor vehicle accidents, lowering damages from every MVA claim in Ontario.
In BC, all motorists get basic coverage from the Insurance Commission of British Columbia (ICBC), the government insurer. The government overhauled the system in 2019; one of the stated goals was to reduce motor vehicle accident (MVA) litigation. The primary change affecting lawyers is a new compensation cap for non-pecuniary damages in minor injury claims, currently set at $5,627. The definition of “minor injury” is quite broad and captures most accident claims. This amount is so low that lawyers cannot afford to take these cases on contingency, and injured plaintiffs cannot afford a lawyer taking most of such a low amount via hourly fees. Further changes are expected, possibly including a full no-fault system in the coming years.
A personal injury lawyer in Victoria told us, “The result has been a drastic drop in the number of total new files. The files I am carrying tend to involve catastrophic injuries which will likely result in higher reward to the firm. Lawyers and firms that previously only dabbled in MVA personal injury law have stopped as now the only lucrative cases are the more complex, expensive, catastrophic injury cases which many smaller or non-specialized firms do not have the resources to carry.” He has also noticed that, due to auto insurance changes, many personal injury firms are expanding into estate litigation practice. “Estate litigation clients appreciate lawyers working on a contingency fee basis. Personal injury lawyers have the risk tolerance and experience to do so, so it is a natural transition.”
Lorenzo Oss-Cech of Hutchinson Oss-Cech Marlatt says, “The practice is not becoming more difficult, it is just shrinking due to a large part of it (MVA claims) evaporating once no-fault is introduced in British Columbia.” Asked about the outlook for law firms, he says, “We are a full-service law firm with a very diverse practice, so we are not looking to change course but rather expand other areas of our practice. Certainly, firms who specialize in personal injury claims, and specifically motor vehicle accidents, will have to rethink their model.”
The Alberta government commissioned a report in 2020 that looked at auto insurance across Canada and in other countries. The report recommends that Alberta change to a no-fault regime, under which victims would be able to claim only from their own insurance company for property damage and treatment, and they would not be allowed to pursue any pain and suffering damages. Public consultations are planned to get input about moving to a no-fault regime.
As of November 2020, Bill 41, the Insurance (Enhancing Driver Affordability and Care) Amendment Act, broadens the definition of a “minor injury” to include a sprain, strain, or whiplash-associated disorder injury “caused by the accident that does not result in serious impairment,” whether physical or psychological in nature. For minor injury, the maximum claim for pain and suffering is $5,296. If the injuries are not minor (such as chronic pain, concussions, TMJ, PTSD, disc injuries, or broken bones) the plaintiff may be able to claim higher damages.
For five decades, Bill Horwitz of Edmonton has practiced law in several countries. “The insurance lobby is powerful and rich”, he says. “They have convinced the powers that be that a system like Manitoba’s is the way to go. The fox is guarding the henhouse.” Asked about alternatives to practicing MVA plaintiff law, he says, “Thank goodness I have a Slip & Fall practice.”
Plaintiff lawyers in all three provinces claim the changes in their province unjustly limit victims’ rights to restitution. Marc Spivak calls the trend in Ontario, “An erosion of victims’ rights.” Kevin Gourlay, a personal injury lawyer at Murphy Battista LLP and President of the Trial Lawyers Association of British Columbia, told Canadian Lawyer: “We’re concerned about the ability of severely injured British Columbians to actually access this support that they need.” In a CBC News interview, Jackie Halpern, president of the Alberta Civil Trial Lawyers Association and a partner at McLeod Law in Calgary, argued that people should have a right to seek compensation for pain and suffering through the courts; she said a no-fault system does not take people’s individual circumstances into account when deciding on injury awards.