The British Columbia government recently decided to cap pain and suffering damages for minor injuries stemming from motor vehicle accidents at $5,500. This decision has been met with staunch criticism from lawyers, health care professionals, and rehabilitation businesses.

The Changes

The auto insurance industry in B.C. is very different from the one in Alberta. There is a provincial insurance structure, which means that everyone gets his or her car insurance through the Insurance Corporation of British Columbia (ICBC). The ICBC has recently been facing a financial crisis, which Attorney General David Eby said these changes are designed to provide some relief from. There were also additional changes; including an increase in the medical benefits that injured individuals can receive to improve overall care.

B.C. is the last province in Canada that has a purely litigation-based insurance model. This means that when someone gets into a car accident, they can sue the at-fault driver directly. In Alberta, personal injury claims go through the insurance company of the driver. For example: if Bob was the driver when his vehicle rear-ended Linda’s vehicle, and Linda was injured during the accident, Linda’s lawyer would work with Bob’s insurance company to come to a settlement. If no settlement is reached, then Linda could start a claim in court against Bob and the insurer. In B.C., Linda would be suing Bob directly. For minor injury claims, they go through the ICBC. For lost wages or additional costs, Linda could sue Bob.

Minor injuries include injuries such as whiplash, aches and sprains, cuts, bruises, and anxiety. Where these injuries persist beyond 12 months after the accident, or if they have a significant impact on the individual’s ability to work or go to school, then they are no longer considered minor and will not fall under the cap. If there is a dispute, the ICBC will use a new independent resolution process to reduce “out of control legal costs.”

These changes will not take effect until April 1^st, 2019, but are expected to save the ICBC approximately $1 billion per year. Any accidents that occur before this date will not be subject to the cap. This move, according to the government, is meant to ensure that insurance rates remain affordable.

Implications

When you make a claim for damages, there are multiple forms of damages you can request. Typically, loss of income and pain and suffering damages are common. Even though there is now a cap on the pain and suffering damages for minor injuries, it does not limit how much you can claim under other types of damages.

The Trial Lawyers Association of B.C. and a coalition of 50 health care providers have criticized this decision by the B.C. government. They believe this punishes the person who was injured, rather than the person who caused the accidents. They also criticize the government for making this the first step to curb accident claims, rather than improve the safety of the roads. The government says those changes are coming, but criticism remains. The Canadian Bar Association B.C. branch president also spoke out against the changes.

There are also concerns about the model of dispute resolution. Many believe that the adjudicators in this new model will not be properly equipped to resolve issues like these, especially since judges themselves can have difficulties coming to a decision that is fair.

Application to Alberta Drivers

In Alberta, we have a cap of $5,080.00 for pain and suffering damages for minor injuries in 2018 after adjusting for inflation.  This cap was put in place to reduce costs for insurers and also prevent hikes in the insurance premiums for Albertans. This change came about due to heavy lobbying by insurance companies. However, since this cap came into effect in 2004, insurance companies have seen huge profits and insurance premiums continue to rise. Advocates have been calling for a review of the system but that has not happened yet.

As with B.C., injured drivers in Alberta are not limited to claiming only pain and suffering damages (also known as general damages).  They can still claim special damages, which is loss of income, cost of treatment, cost of future care, etc. There is no cap on these damages because they are quantifiable: they have a price tag. It is easier to determine how much money you lost from not being able to work, or how much your medical treatment cost.

These types of changes are meant to ease the burden on insured. The greater the payouts, the more likely premiums and rates will go up. Ultimately, that affects the bottom line of insured people, not just the insurers. The system is not perfect, and may at times unfairly burden the injured party, there are other avenues to collect damages for the injuries one has sustained.

If you have been injured in a motor vehicle accident, you may want to consider pursuing a claim for damages. The personal injury lawyers at HMC Lawyers have the experience and compassion to get you the fairest settlement for the injuries you have sustained. Our lawyers have years of success inside and outside the courtroom, negotiating or arguing fair settlements for our clients. To speak to one of our lawyers, call 1-800-480-3534 or contact us online. We represent injured clients in Calgary and throughout Alberta.