By Canadian Press

B.C. government to squeeze lawyers, legal costs out of public auto insurance

Feb 8, 2020 | 1:27 PM

VANCOUVER — The British Columbia government is moving to curtail legal costs in the public auto insurance system by severely limiting the ability of injured people to sue at-fault drivers after a crash.

The announcement Thursday drew backlash from lawyers who argued it would put vulnerable residents at risk, while disability advocates and doctors voiced hope that benefits would increase.

Premier John Horgan called it a “pivotal moment” for the beleaguered Insurance Corporation of B.C., which has hemorrhaged $2.5 billion dollars over the past two years while premiums skyrocketed.

“People deserve lower rates. People deserve better care. They deserve to be treated fairly,” he told a news conference. “That’s what a renewed ICBC can present to the people of British Columbia today.”

Horgan said his government will introduce legislation in the coming weeks to require ICBC to assist every person who makes a claim and ensure they receive all the benefits and care they need.

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The move will mean people injured in a collision will no longer need to hire a lawyer and sue the at-fault driver, who is then defended by the insurance corporation, to access the maximum benefits, he said.

Horgan said the change will lower premiums by about 20 per cent or an average of $400 in annual savings per driver. It will increase maximum care and treatment benefits for injured people from $300,000 to at least $7.5 million, while eliminating pain and suffering payouts.

If the legislation is passed, it will take effect in May 2021.

Attorney General David Eby acknowledged that a challenge in the transition will be the lack of public trust in ICBC.

The previous system has required ICBC to attempt to limit benefits and litigate against injured drivers, while also being the company meant to provide supports to those same people, he said.

“The difference in legal direction is night and day. ICBC’s sole focus will be on helping British Columbians recover and get back to their daily lives,” he said.

Eby said people can still sue at-fault drivers if they are convicted of a criminal offence, such as impaired driving, and they can also sue a vehicle manufacturer if a defect contributed to the crash.

If a customer has a complaint about the auto insurer, they can turn to a recently announced ICBC fairness officer, the B.C. ombudsperson or the independent Civil Resolution Tribunal, which accepts claims of up to $5,000 in value. 

Customers can file for a judicial review of a Civil Resolution Tribunal decision in court and there may also be some limited scenarios where one could sue ICBC, the government said.

Eby has previously called the financial situation at the public auto insurer a “dumpster fire,” and his government expects the changes to free up more than $1.5 billion to lower rates by 2022.

The Opposition Liberals have called for more choice in the auto-insurance sector but Eby said the highest rate increases are happening in private markets including Alberta and Ontario.

Saskatchewan and Manitoba have similar public systems to the one B.C. is proposing and they have kept rate changes steady, near zero per cent, Eby said.

“In that comparison, B.C.’s rates look outrageous and our benefits miserly,” he said.

While some will describe this as a “no-fault” system, Eby insisted it was not because a driver who is responsible for a crash will still pay more for their insurance.

He said he anticipated legal challenges but was confident the legislation was constitutional, noting that Manitoba and Saskatchewan have successfully defended their systems in court.

The Trial Lawyers Association of B.C. called the announcement an “alarming move” that puts injured and vulnerable residents at risk.

“This government is doubling down on its failed policy to take away the legal rights of British Columbians,” said association president John Rice.

The Law Society of B.C. said it expects significant effects on compensation to victims and it will be closely monitoring the situation. 

Liberal Leader Andrew Wilkinson criticized the government for abolishing pain and suffering payouts.

“If you’re seriously injured in an accident the NDP will force you to deal with ICBC for the rest of your life, giving you no choice but to deal with the state-run monopoly,” he said in a statement.

Justina Loh, executive director of Disability Alliance B.C., said she was encouraged by the move and her organization will work closely with ICBC to ensure that injured people can access all the benefits and supports they need.

Under the new model, doctors and other medical professionals — not ICBC — will design care plans for injured people.

The province said it had already consulted with the medical community and would consult more widely before it introduces the legislation.

Dr. Kathleen Ross, president of the Doctors of BC, said in a statement that the new system will mean “major increases” in the level of medical care and supports for recovery.

“The new care-based model provides significantly better coverage for people injured in traffic accidents,” she said.  

This report by The Canadian Press was first published Feb. 6, 2020.

Laura Kane, The Canadian Press