Pain and suffering, the right to sue, cheaper insurance? What ICBC’s changes could mean for you
In a move aimed at putting out what the minister once referred to as the ICBC financial dumpster fire, the British Columbia government has announced that the provincial auto insurer will switch to an “enhanced care” model in 2021, similarly what is commonly referred to as “No-“. Failure insurance.
The province claims the change will save British Columbians an average of $ 400 a year in premiums and divert hundreds of millions of dollars in legal costs in favor of those injured in accidents.
Werner Antweiler, Associate Professor at the Sauder School of Business, joined host Stephen Quinn at The Early Edition on Thursday morning to answer questions about the upcoming changes.
What will be different under the new system?
There are some profound differences. Currently, someone who is not at fault in a crash can sue the culpable party for damages, including the benefits for pain and suffering.
This is a controversial process – it’s slow, very costly, and there are a lot of lawyers involved. And in the end, you end up with a payment that is very difficult to determine as there is not a single measure that tells you that this is the right amount for pain and suffering.
There are some norms that are set by the courts and these numbers have kept increasing. They have quadrupled in 15 years.
The new system is essentially a care-based model, like employee compensation. It’s the same idea: looking after an individual’s needs to make sure they can get back to work and get better.
There are several measures for long-term depreciation, including income replacement and a lump sum.
The changes announced for ICBC will increase compensation for those who are long term injured in car accidents, according to the government. (Stéphane Grégoire / Radio Canada)
In addition, the current system is fraught with litigation, while the new system would likely remove most lawsuits.
What about people who are injured and rightly owe compensation?
The idea that marks of pain and suffering will completely disappear is not entirely correct. These awards are being shifted from people with minor, temporary injuries to people who really need them most – people with long-term or permanent disabilities.
That is essentially the logic of the changes.
Litigators have said that if ICBC were to process claims fairly in the first place, people would not have to go to lawyers and sue to get a fair solution.
Of course, [the lawyers] would say that because what is fair on their minds gets exactly what they ask for. That is, of course, something that ICBC must act against, because they speak for all of us who pay insurance premiums.
What is fair is really difficult to determine, as pain and suffering have no single measure. It is a problem that is not easy to define as it is decided immediately after the accident and does not look ahead.
So the current comparisons must be speculative, and the courts erred on the caution side. They’d rather give plaintiffs a little more than they asked for just because they don’t want them to suffer unnecessarily somewhere down the street.
Will people still be able to sue?
Yes. Under the new system, there will be a dispute resolution process, first through internal ICBC channels and an ombudsperson, then through the civil procedure courts.
Will my insurance be cheaper?
Yes absolutely. I think the math really adds up here because there is roughly a billion dollars being spent on legal bills right now, and that’s basically money that’s being taken away from the people who need it to get better.
So if you actually divert that money away from the process of treating the injured, it can do a lot of good. Right now the system must be stingy as so much money is wasted on the inefficient legal process.
Are life-changing injuries like brain and spinal cord injuries compensated fairly?
Yes. The new system actually has a very generous system for those who suffer from permanent impairment. You will still be eligible for a lump sum of up to $ 250,000 for the pain and suffering component. But everything they need to get better is actually being improved.
They have access to various types of advanced care services, including recreational aids. All of this is included in the extended care package for those affected [long term] Impairments get the help they need for life, not just what is determined at the time of a court settlement.
This interview was broadcast in the Early Edition on February 7th and edited for clarity and structure.