SR Vol 24 No 5, October 2006 - Nova Scotia Barristers' Society

The Lay of the LandThree lawyers from across the countyreport in on the state of automobile insurance in their home provinces.Ches CrosbieChes Crosbie Barristers, St. John’s, NewfoundlandLawyers are governed by a code of professional conductand by rules of court which require that fees shall befair and reasonable. But the business world operatesunder no comparable restraint. There are no excessive profits,and corporate profits are never high enough. So it is with theinsurance world.In the insurance world, the drive for unlimited profit expressesitself through the ideology that claims are out of control.Not only has the public grown more “claims conscious”,but juries have been affected by the virus, with the resultthat judgments are being rendered for larger and largeramounts. The number of awards in automobile accidentcases, personal accident actions and public liability cases hasalso steadily increased.This familiar refrain has a contemporary ring, but it comes from thecover of Canadian Insurance, February 28, 1939!Not so long ago, tort law suffered many infirmities. In a speechreprinted in the November 2003 edition of the Newsletter of theAtlantic Provinces Trial Lawyers Association, the Honourable R. RoyMcMurtry, Chief Justice of Ontario, recalled that when he was calledto the bar:…tort law was in bad shape. There were many rules andeconomic factors that made it very difficult for injuredpeople to succeed in litigation. Tort law also often favoreddefendants. For example, there was a guest passenger lawthat denied all recovery to gratuitous passengers againsttheir drivers. There was no compulsory auto insurance law.Damage awards were generally puny and there were manyimmunities. It was very difficult to get expert witnesses inmedical malpractice cases and harder to succeed. Limitationperiods were short and strictly enforced.In the last quarter of the twentieth century, a tort renewal occurred,and this renewal duly provoked a strong backlash from the insuranceindustry and a legislative attack on claimants’ rights. In AtlanticCanada, the attack peaked in the last five years.Many tort lawyers in other Atlantic Provinces look enviously atcomparatively modest infringements of auto injury claimant rightsimposed by the Newfoundland legislature in 2004. The chief of theserestrictions is a $2,500 deductible on all pain and suffering claims, lostwages recovered 100 per cent of net, collateral source compensationdeducted from the recovery, and minimum reduction of damages by25 per cent for failure to wear a seatbelt.Beginning in 2001, the insurance industry launched three successivecampaigns for auto tort rights restriction in Newfoundland. Thefirst two campaigns gained proponents among politicians, butfailed for lack of public support. The third campaign resulted in therestrictions above. The reason for these insurance industry failuresin Newfoundland was not that Newfoundland politicians weremore receptive to rights-based arguments or backroom lobbyingthan politicians elsewhere. The reason was that an effective coalitionagainst no-fault, composed of numerous organizations, includingAPTLA, waged successful campaigns for public support to preservetort rights, and the politicians smelled which way the votes lay. Thecoalition’s success in defending the civil justice system by shapingpublic opinion is illustrated in the conclusion of an editorial from theSt. John’s Telegram, Saturday, April 10, 2004:The only real way to cut insurance costs is to reduceaccidents. And we forget that at our peril.For the insurance industry, all awards are too high, and all access to20 The Society Record