British Columbia’s auto-insurance regime is changing to a no-fault system, one that almost completely takes lawyers and lawsuits out of the personal-injury equation in an effort to save money.
The changes could be implemented as soon as next spring, ICBC announced on Thursday.
The program, called Enhanced Care Coverage, is slated to take effect in May of 2021. Legislation is expected to be introduced in Victoria by March.
According to ICBC figures, the change in the system will save B.C. drivers an average of $400 per year. Such insurance systems place strict limitations on when a person can sue following a crash.
ICBC expects that to result in 20 per cent savings, which they say will be reflected in lower premiums.“
You shouldn’t need a lawyer to access the benefits you’ve paid for,” Attorney General David Eby said.
“By removing expensive lawyers and legal fees from the system, we are making ICBC work for British Columbians again with more affordable insurance rates and much better coverage, so anyone injured in a crash gets the care they need.”
Similar no-fault systems are in place in Manitoba and Saskatchewan.
Under the proposed Enhanced Care Coverage regime, injured parties could sue only when the at-fault driver was convicted of a criminal driving offence stemming from the crash or in the case of a third party — such as an automaker or repair shop — that demonstrated negligence resulting in injuries.
In taking legal action off the table, ICBC sets dollar-figure amounts for compensation for when B.C. residents are injured in a crash — figures that had previously been settled by lawyers or calculated by a judge following a trial.
Legislation will increase maximum care and treatment benefits for people injured in a crash to $7.5 million — or more in some cases for catastrophic injuries that require long-term care. The current cap is about $300,000, with many areas of care determined through legal disputes.
According to ICBC, Enhanced Care Coverage will include care and treatment benefits up to 24 times higher than what exists today and wage-loss coverage 60 per cent higher than current rates, as well as new benefits including money for caregivers and others impacted by a person’s injuries.
Premier John Horgan said fault still matters for drivers involved in crashes in B.C.
You can’t run into someone without consequences,” he said. “Your rates will go up. If you’re found criminally negligent or criminally responsible, you can be sued.”
The legislation will create an ICBC fairness officer and people can also appeal to the B.C. Ombudsperson if they dispute a decision from the civil resolution tribunal.
The Trial Lawyers Association of B.C. is not happy with the move, calling it “alarming” and warning it will put injured and vulnerable British Columbians at risk.
"This government is doubling down on its failed policy to take away the legal rights of British Columbians while protecting ICBC management who have gotten us into this mess,” association president John Rice said.
Kamloops lawyer Dan McNamee, who has a personal-injury practice, said he is worried the move will result in injured parties being under-compensated.
“It’s a very big change in terms of your rights,” he said. “Not a lot of people are injured and affected, but those who are, they will be very affected.”
McNamee said the removal of court action from the automobile insurance system will put injured people at a disadvantage while dealing with ICBC.
“Most importantly, they’re removing the big stick at the end in negotiations, where if ICBC doesn’t agree you can take them to trial,” he said. “In no-fault, you don’t have that option. So often, ICBC does not want to pay what’s fair until you pin them down with that threat of going to trial. Until then, they’re not willing to play ball.
“I personally like ICBC as an idea, the government-run system. The problem is that they’re removing the nuclear option of going to trial. Now, you’re just going to be operating inside this monster corporation through the entire process. You have to really trust ICBC if you want a system like that.”
ICBC calculates that with the April 2019 move of minor cases to a civil resolution tribunal, and capping “pain and suffering” payments at $5,500, the corporation expects to save about $1 billion this year.
But even with the cap, pain and suffering claims are still expected to total $940 million in 2022 without the changes to be implemented this year.
ICBC currently has 90,000 outstanding claims in the court-based model and the corporation expects it will take five years or more to settle those.
Eby said he expects obstacles, but hopes Enhanced Care Coverage will result in trust being rebuilt between British Columbians and ICBC.
“I think the biggest challenge is going to be peoples’ lack of trust in ICBC,” he said. “As I said, the history of the system that ICBC has been working in has been one that has been both to limit benefits and provide benefits to injured people. That contradictory role has really undermined public trust.”
Kamloops-South Thompson MLA Todd Stone, who was minister in charge of ICBC under the previous B.C. Liberal government, said the no-fault insurance announcement further erodes the credibility of the NDP.
“They consistently promised they’d never introduce no-fault insurance,” he said. “Here they are today breaking that promise.”
Stone believes the debate will be a major issue when B.C. voters head to the polls, with the next provincial election slated to take place in October of 2021.
“This will be a huge election issue,” he said, noting his government nixed the idea of no-fault on more than one occasion while in power.
“It was brought forward by ICBC multiple times,” he said. “Upon thorough review, our government ruled it out.”
Stone said he expects the no-fault issue to be a big topic of discussion when MLAs return to Victoria next week, with the throne speech set for Tuesday.