Basic insurance premiums for drivers won’t increase in 2020, as the province announced ICBC will undergo a dramatic transformation that means severely limiting the ability of injured people to sue.
The government won’t call this a no-fault system, but the changes are in line with what are often referred to as “no-fault” systems in Manitoba and Saskatchewan. By removing the majority of existing legal fees from the system, the goal is to save ICBC $1.5 billion in the first year, and increase the amount of healthcare available to those injured in crashes, no matter who is at fault.
It will also essentially remove the role of personal lawyers from the system.
"The new model will ensure people get the care they need when they need it without having to hire a lawyer,” said Premier John Horgan at a news conference in Victoria announcing the change.
An injured person could still sue if the other driver is later convicted of certain Criminal Code convictions, or vehicle manufacturers for example. Those not happy with their ICBC benefits could go to the Civil Resolution Tribunal as a first step.
In terms of next steps, consultation happens this month, and legislation will be introduced during the spring session. If passed, regulations will be completed in the fall.
The new system would go into effect in May 2021. At that time, the government is promising an average of 20 per cent in savings – a reduction in annual premiums of about $400 on average. Those who pay more could be in line for more savings, but that will depend on driver history and other factors.
Lump sum payments will be replaced by expanded care benefits. Healthcare and other benefits will increase to a maximum of $7.5 million for those most seriously injured. Everyone will be eligible for expanded benefits, regardless of fault, and they can be accessed by a referral from a doctor or other designated medical professional. Payments would be made directly to providers by ICBC.
The government says wage-loss payments will increase from $740 a week to a proposed maximum of $1,200 a week. There will be new benefits for full-time students, caregivers and those working for a family business.
That’s because in recent years, accident and claims costs have spiked at the public insurer. In each of the last two years, it has lost more than $1 billion each. The attorney general insisted that recent reforms have made a difference, but said more drastic action was needed.
“Despite the success of our reforms to date to put out the dumpster fire, the burned out bin is sitting in front of a building that hasn't been renovated in 50 years,” said David Eby.
Pain and suffering does not continue for minor injuries. For more serious injuries, there are long-term benefits based on medical needs. The proposed maximum for permanent impairment compensation is $250,000.
The government insists if the changes weren’t made, under the current system drivers would face an average 35 per cent premium increase over the next five years, or $808.
Those who don’t agree with their claims can go to an independent Civil Resolution Tribunal, the Ombudsperson or a new fairness office.
In response to the changes, the Trial Lawyers Association of B.C. accused the government of breaking one of its election promises from the 2017 campaign and said members are "deeply disappointed" in the announcement.
"This move will reward bad drivers and will reduce the ability for injured and vulnerable British Columbians to receive a fair settlement when injured," association president John Rice said in a statement.
The Canadian Taxpayers Federation has been advocating for an end to what it calls the “ICBC monopoly,” and spokesperson Kris Sims told CTV News she would have liked to see options for drivers increased. One way to accomplish that, she said, was to make ICBC a co-op.
“While on the surface it sounds nice maybe to have some rate savings – maybe years from now, maybe – what they're really doing is rotating the flat tires on a car that's completely broken down,” she added.
The new changes would take effect May 1, 2021, months before the next scheduled provincial election.
“It's pretty cynical for the NDP to say rates have been jacked up already and now we're going to drop them down but not until the next election so this whole thing smells like a bit of a trap,” said Liberal Leader Andrew Wilkinson.