Statutory Accident Benefits, The License Appeal Tribunal and Access to Justice
Our civil justice system is based on the fundamental principle that the process of adjudication must be fair and just. However this process is an illusion unless it is accessible to those whose rights have been violated. Accessibility involves a number of considerations including that the process must be affordable and proportionate. Unfortunately, the continued deterioration in the statutory accident benefits available to car accident victims and changes to the dispute resolution process, have resulted in a significant erosion in the practical ability of an accident victim to pursue benefits which have been wrongfully denied.
Entitlement to medical/rehabilitation and attendant care benefits varies depending upon the classification of an accident victim’s injuries. In the case of a minor injury, an accident victim is limited to a maximum of $3,500.00. For non-catastrophic injuries the $100,000.00 and $72,000 maximum coverage available for medical/rehabilitation benefits and attendant care benefits were reduced on September 1, 2010, to $50,000.00 and $36,000.00 respectively and effective June 1, 2016, were further reduced to a combined amount of $65,000 and further limited to a five instead of a ten year period. In relation to accident victims who suffered catastrophic injuries, entitlement to medical/rehabilitation and attendant care benefits which were each capped at $1,000,000.00 over a lifetime were reduced in 2016 to a combined maximum of $1,000,000.00 for all medical, rehabilitation and attendant care benefits. Further the definition of catastrophic impairment has also been amended to reduce those who would otherwise qualify for the enhanced benefits.
While we can debate the appropriateness of this deterioration in the benefits otherwise available to accident victims, these reductions have the unfortunate side effect of eroding an accident victim’s ability to obtain affordable legal representation to pursue entitlements that have been improperly denied, especially when any medical, rehabilitation and attendant care benefits that are paid are generally paid to third party providers and do not provide monies from which legal fees and disbursements can be paid.
Since April 1, 2016, the Licence Appeal Tribunal (LAT) has had sole responsibility to resolve disputes between car accident victims and their insurers. The rules and procedures of the LAT, while providing a more streamlined process, also raise a number of access to justice concerns.
Of significance is the elimination of an accident victim’s entitlement to pursue, from their insurer, any costs they may incur in pursuing a wrongfully denied claim. Under the previous system, accident victims who successfully pursued entitlement to benefits were entitled to costs and this was considered integral to encouraging settlement and forcing litigants to properly assess a case. Unfortunately, under the LAT rules there is no discretion to award legal costs to a successful claimant unless it is established that the insurer acted “unreasonably, frivolously, vexatiously or in bad faith”, which is an extremely difficult hurdle to overcome.
Under the previous system, there was no cost to the accident victim to dispute an insurer’s denial of a claim. Unfortunately, under the LAT system, each dispute raised by an accident victim requires payment of a $100.00 application fee.
The fact that costs cannot be claimed even if successful, effectively means that an accident victim, is solely responsible for all legal costs that they incur. Although accident victims are entitled to pursue claims on their own without counsel, this is a foreboding task. The applicable insurance legislation and statutory accident benefit regulations, guidelines, bulletins and the regulations surrounding the dispute resolution process under the LAT extend for hundreds of pages, are often complex and are impacted by hundreds of decisions by judges and adjudicators. For an accident victim to pursue entitlement to accident benefits in the absence of legal counsel involves a “David versus Goliath” battle, where the insurer has all the advantages.
To establish entitlement to medical, rehabilitation and attendant care benefits often requires significant medical records and reports. These can cost thousands of dollars. The limited number of LAT decisions rendered to date, provide several examples of accident victims being unsuccessful in their claims because they failed to present sufficient documentary evidence and supporting medical opinions to counter the expert medical opinions which the insurers obtained from their medical specialists. The financial power imbalance between an accident victim and an insurer places the accident victim at a significant disadvantage which is heightened in circumstances where even if they incur the expense to obtain appropriate medical records and reports, and are successful, they are not entitled to any reimbursement for the cost of those records and reports, which can often exceed the amount in dispute.
An unfortunate side effect of reduced access to justice for accident victims is that insurers are less likely to be held to account for denying meritorious claims. Even if successfully challenged there is no significant consequence other than having to pay the benefit that was otherwise owed. Simply put the LAT system does not encourage insurers to settle or compromise. Instead they are emboldened to deny meritorious claims.
Although person injury lawyers do not shy away from representing accident victims against insurers who wrongfully deny claims, often the legal costs of pursuing a denied benefit, cannot be justified, especially where the specific benefit in dispute is limited in value. As such, except in circumstances where an accident victim has suffered a catastrophic injury or has a viable claim against another person who caused or contributed to the accident, an increasing number of lawyers are forced to turn away accident victims who genuinely need representation.
The rule of law demands effective access to justice. Where access to justice is effectively denied because the cost of pursuing it outweighs any justice that can be achieved, then the rule of law has been undermined, as has our civil justice system.
Reducing benefits to accident victims, imposing systemic roadblocks to an accident victims right to pursue a wrongfully denied claim, creating a system where insurers can deny valid claims with impunity, all in the cause of reducing premiums, may be good politics but it is not good government.