As we reported in June 2015, pending changes to the standard benefits that auto insurers must offer means significant reductions in motorists’ accident benefits. This continues a government push since 2010 to reduce premiums by 15%. (Premiums did fall by 7% to 10% but seem unlikely to decrease beyond this.)

Personal injury lawyers who represent plaintiffs see a range of issues unfolding:

  • Lower dollar amounts for victims at settlement/arbitration/judgement
  • Significantly lower benefits for victims in At-Fault cases
  • Higher retroactive deductible and monetary threshold means fewer third-party cases which will likely reduce the number of accident benefit claims advanced
  • Shrinking pool of claims means fewer claimable accidents
  • Insurers may drag out the process, having less incentive to settle quickly because of reduced prejudgment interest, increasing deductible and monetary threshold
  • Insurers will take more cases to trial.
  • Lawyers are competing for fewer claims with less recoveries

Andrew King, QC of London, Ontario has practiced personal injury law since 1970. “Plaintiffs have had their rights restricted since the Peterson government brought in a threshold on claims for pain and suffering in 1990. Subsequent governments have kept diluting plaintiff rights.”

Marc Spivak of Toronto is a partner at Devry Smith Frank. He feels lawyers will lose time and money with cases under $100,000 and cannot consider smaller cases any more. He is also concerned that access to justice is compromised. “Insurers have been given every advantage by the government to pay less to victims that need the money so that insurers can increase their already significant profits.” In thousands of personal injury cases he has handled, only two clients had the optional insurance benefits. “Brokers won’t push that extra cost in order to sell the product, and insurers take advantage of consumer ignorance.”

In short: There is considerably less money for accident victims and therefore less money for their lawyers too (who work on a contingency basis, collecting a percentage of the award). The possibility of longer legal processes combined with legislated lower benefits could discourage plaintiffs from proceeding and discourage their seeking legal assistance.