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

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It is curious that the maintenance of access to an impartial tribunalwas recognized for pecuniary losses arising from minor injuries,while eliminating the means of getting there for the non-pecuniarylosses. Claimants electing not to follow the new medical protocols asprescribed by regulation, would be deemed to have sustained a minorinjury, with the resulting legislated restriction on compensation fornon-pecuniary loss to a maximum of $4,000.The Canadian Bar Association had commissioned, prior to thelegislation, an independent study performed by Deloitte & Toucheto determine whether upward pressure on premiums was driven bythe increase in bodily injury payouts. In a report dated September16, 2003, based upon Insurance Bureau of Canada data, the authorsconcluded that, adjusted for inflation, claims costs had in fact beenfalling on a per vehicle basis since 1999.system provides. Moreover, a fair analysis of all of the evidenceindicates that any perceived benefits to business from its tortreform initiatives will be largely, if not totally, illusory.Daniel J. Capra “An Accident and a Dream:Problems with the Latest Attack on the Civil JusticeSystem” 20 Pace L.Rev. 339, 340 (2000)The legal profession, on both sides of the Bar, should increase itsefforts to educate right-thinking members of society in positionsof authority to understand why the tort system is the best modelfor loss allocation, and to reject the calls for quick fixes. And judgesand politicians should be encouraged to recognize that our legalinstitutions are not perfect, but need respect for opposing viewpointsto remain in balance.The Deloitte & Touche report was withdrawn from public scrutinyunder pressure from the Toronto partnership of Deloitte & Touche,concerned about the loss of fee revenue from insurance company clientsof the firm. The Canadian Bar Association complained to the Instituteof Chartered Accountants of Alberta. In hearings held in Edmonton inJune of 2006, the Institute exonerated the Edmonton authors of thestudy, but disciplined the Central Canada partnership of Deloitte &Touche for having “acted in conflict of interest in compromising theinterest of a client in favour of the perceived interests of other clients,self-interest, or both.” The firm was fined $40,000.The insurance industry has continued to report record profits. For theyear 2004, those profits were reported in Thompson’s Daily InsuranceNews Service on March 16, 2005 to be $4.2 billion in Canada aftertaxes. This was before the effects of the reforms in Alberta and theMaritime Provinces came into being.The impact on the practising Bar has been widespread, and as mightbe expected, largely negative. The effect of the reforms has been torelegate “minor injury” trauma victims to a trivialized status. Noexplanation has ever been offered on why non-pecuniary damageswere arbitrarily reduced in all minor injury cases to a set figure of$4,000, other than to justify “premium stabilization”. A constitutionalchallenge is before the courts, based on S.15 of the Canadian Charterof Rights and Freedoms.In commenting upon the report of a New York business groupadvocating tort restrictions, Professor Daniel Capra stated:The Public Policy Institute’s case for tort reform is not basedon fact. It is simply another part of the onslaught on publicopinion, generated by tort reformers, to create a mindset thatthe tort system is out of control. The attack looks at the costsof the tort system, but not its benefits. It is a carefully craftedattack, ostensibly looking at what is good for society, but onclose analysis focusing only on corporate financial benefits tobusiness. The attack of tort reformers favors cost savings overquality and emphasizes the corporate bottom line over safety.Any arguable savings to business caused by the tort reformsposed by PPI will not benefit society in the long run. Suchchanges would simply shift the cost of the current system toother places, such as a system of social insurance, withoutgiving nearly the same benefits to victims that the currentEd MontagueCampbell Froh May & Rice LLP. Richmond, British ColumbiaIn contrast to the no-fault juggernaut that has significantlyeroded the rights of innocent accident victims in the AtlanticProvinces, and more recently in Alberta over the past few years,British Columbia consumers have managed to retain the right to fullcompensation for personal injuries caused by the negligence of others,with no soft tissue caps or thresholds, while maintaining insurancepremiums among the lowest in Canada for comparable coverage.This has been accomplished under the public auto insurance schemeestablished by the provincial government in 1973 with the creation ofthe Insurance Corporation of British Columbia (ICBC), a provincialcrown corporation which provides universal auto insurance to B.C.drivers. ICBC is a virtual monopoly, in that B.C. drivers are requiredto buy their base auto insurance policy (Autoplan) from ICBC, and canonly purchase optional and additional coverage from outside privateinsurers. The basic Autoplan policy provides a minimum of $200,000third party liability coverage, a healthy component of no-fault accidentbenefits (including up to $150,000 in medical and rehabilitationbenefits and up to $300/week in total disability benefits), a minimumof $1,000,000 in underinsured motorist protection (UMP), and a22 The Society Record
maximum of $200,000 in uninsured/hit-and-run coverage. MostB.C. drivers supplement their basic Autoplan coverage by purchasingincreased third party liability coverage (most have at least $1 millionthird party coverage) and collision coverage (to cover repair coststo their own vehicle when the collision is their fault). The optionalcoverage can be purchased either from ICBC or private insurers.“... there are no compellinggrounds to justify changes tothe B.C. system that woulderode victims rights throughcaps, thresholds, or otherno-fault models.”There have been a numberof initiatives over the yearsto introduce no-fault autoinsurance into B.C., the mostrecent of which was in 1996-97, when the B.C. governmentof the day, in conjunction withICBC, pushed hard for a changeto a full or modified no-faultscheme, ostensibly in the interestof keeping increasing claimscosts and premiums down. Thegovernment was ultimately influenced to abandon its no-fault plans,largely due to public pressure from various sectors, spearheaded bythe Coalition Against No-Fault in B.C., a broad-based consumersinterest coalition which grew from a small core of 5 organizations toover 200 groups at the height of the no-fault campaign in 1996-97.The B.C. government instead decided to refocus its efforts on trafficsafety and road improvement measures, including such things as agraduated licensing program for new drivers of all ages, rather thanimplement sweeping changes to the insurance system.Despite the incessant “sky is falling” rhetoric from auto insurers whoargue that the tort system is unsustainable, and that curbs on victimcompensation in some form of no-fault auto insurance are necessaryto keep claims costs down and premiums affordable, the B.C.experience has proven that affordable comprehensive auto insurancecan be provided without depriving accident victims of the right tofull compensation under the tortsystem, and while still allowing for ahealthy profit margin to the insuranceprovider (ICBC’s posted profits forthe past 3 years have averaged inexcess of $200 million/year).On a visit to British Columbia atthe request of the Coalition AgainstNo-Fault in B.C. in December 1996,noted U.S. consumer advocate, RalphNader, described ICBC as “one of thegreat auto insurance innovations inNorth America”, and one that should not be tampered with. Giventhe strong financial performance of ICBC within the tort system,there are no compelling grounds to justify changes to the B.C. systemthat would erode victims rights through caps, thresholds, or otherno-fault models. Accordingly, while we remain vigilant of the nofaultphoenix which seems to arise periodically from the ashes everyfew years, we are hopeful that the current system in B.C. will not betampered with for the foreseeable future.CAs do so much more.Sometimes even great teams need more skill and more ability. That’s what you get with Chartered Accountants. CAs bringsuperior financial expertise, strategic thinking, business insight and leadership to become an integral part of the team.Give your team an edge. The CA advantage.To learn more about the Institute of Chartered Accountants of Nova Scotia visit www.CAadvantage.caOctober 2006 23
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SR Vol 24 No 5, October 2006 - Nova Scotia Barristers' Society

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