In a current TV commercial, an off-camera announcer quizzes a blond yuppie (Driver A) and a middleaged businessman (Driver B) about their car accident. Says Driver A: “It wasn’t my fault.” Says Driver B: “It wasn’t my fault.” That exchange occurs in one of a series of ads in a recent campaign by the Insurance Bureau of Canada (IBC), and it underscores a controversial issue: the IBC is pressing to gain support for nofault automobile insurance in Ontario, which the organization says would almost eliminate costly lawsuits and lower insurance premiums by as much as 15 per cent. But its plan has angered members of the legal profession, who charge that limiting the right to sue is not only unfair to accident victims but would violate the Charter of Rights and Freedoms.
The controversy has been building since November, 1986, when Premier David Peterson appointed Mr. Justice Coulter Osborne to study auto-insurance industry reform in response to skyrocketing increases in premium
rates. Since then, IBC members say that they have been feeling pressure to lower rates, which average about $550 a year. Said Serge LaPalme, the Cambridge, Ont.-based chairman of the IBC’s Ontario advisory committee: “There is unanimous industry agree-
Many accident victims are frequently tempted to sue in an attempt to collect damages above the original settlement
ment—we have to bring premiums down.”
Under the current system, auto insurance policies include car damages and minimal no-fault benefits that cover medical expenses and limit compensation for lost income to $140 a week, in some cases for life. LaPalme says that accident victims are frequently tempted to sue in an attempt
to collect damages above the original settlement—and it is those lawsuits that are driving up premiums. LaPalme also says that about 40 per cent of every dollar insurance companies pay out goes to the legal and investigative costs of a case. He added: “We have to stop this idea of suing everybody and the kitchen sink.” Instead, IBC members propose that victims, regardless of fault, be compensated by their respective insurance companies, which would provide unlimited medical and rehabilitation benefits as well as compensation for lost earnings up to $600 a week until age 65 if necessary.
Still, the IBC says that it does not favor so-called “pure” no-fault, a system that prohibits any lawsuits connected with auto accidents. In Quebec, the only province in Canada with pure no-fault, that system is being challenged: the parents of a 13-year-old Montreal girl killed in a traffic accident last June are suing the car’s driver and owner and the municipality where the accident occurred for $45,000. They are also seeking to strike down certain provisions of the Insurance Act that forbid them from such suits. Under the current law, they are eligible for only $9,000 compensation for the loss of their daughter.
Under what the IBC calls its “smart” ,
no-fault scheme, Ontario accident victims would still be allowed to sue, but that right would be limited to cases involving death or serious and permanent injury. For Ontario drivers, the no-fault issue involves a choice between the assurance of a quick but limited settlement in case of an accident—along with cheaper premiums—and the remote but tangible possibility of collecting large amounts of money through the courts. But, said LaPalme, “you have to trade a civil right for a human right. Today you aren’t at fault, but tomorrow you might be. At least you should have some protection.”
But many lawyers argue that the protection offered under no-fault is not enough. Said Toronto lawyer David Stein: “You could have an awful lot of people going through years of pain and suffering and getting peanuts.” Another Toronto lawyer says that he is more concerned about the ethical aspects of the issue. Said Bruce Thomas, spokesman for the insurance committee of the Canadian Bar Association’s Ontario branch: “A personal injury suit is not merely an economic concern. When you have a person who has been injured by someone else, in our judicial tradition that person has the right to seek redress from the court.” Indeed, Thomas says that he and his colleagues are not against a no-fault
scheme in principle, as long as it retains the right to litigation. The two systems, he claims, “can live in peaceful coexistence.”
In the provincially run partial nofault systems that operate in British Columbia, Saskatchewan and Manitoba,
lawsuits are still allowed. Recently in British Columbia, Burnaby resident William Stewart, who suffered permanent brain damage when the car he was driving was in collision with a transport truck, was awarded $2.36 million—probably the largest personal injury claim in
the province’s history. Still, according to Stewart’s Vancouver-based lawyer, James (J.J.) Camp, only a small percentage of bodily injury claims go to trial.
Camp added that British Columbia’s auto insurance system may be one of the best in Canada. “There are few major flaws,” he said. “It is like democracy— terribly imperfect, but all other systems are worse.” Indeed, when Mr. Justice Osborne submits his report in November, the key players in Ontario’s auto insurance controversy may have to settle for a similar compromise.
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