Car Insurance and Car Accidents

Ontario Report on Auto Insurance Lacking

The Ontario government recently released a report authored by David Marshall, its advisor on auto insurance and the former head of the Workplace Safety Insurance Board entitled “Fairer Benefits Fairly Delivered, A Review of the Auto Insurance System in Ontario.” The report was intended to provide the government with advice on the development of initiatives to reduce claims cost and uncertainty in Ontario’s auto insurance system. Despite a series of legislative and regulatory changes, Ontario’s insurance compensation system for the victims of motor vehicle accidents remains a mess.

According to Marshall, Ontario has one of the lowest levels of auto accidents and fatalities in Canada and yet has the most expensive auto insurance premiums in the country. Both insurance premiums and insurance claims are increasing at unsustainable rates. The Marshall report states there are clear indications that accident victims are not receiving appropriate care and too much is spent by the parties paying for experts and lawyers to litigate disputes over accident benefits.
Unfortunately, the Marshall report’s recommendations will do very little to address the legitimate concerns of accident victims, motor vehicle insurers and the general public; the recommendations are unlikely to resolve the serious problems identified in the report.

The report is misguided when it seeks to place the blame on plaintiff lawyers and insurers. Marshall recommends eliminating the involvement of legal counsel in advising accident victims of their rights to statutory accident benefits and other compensation. These recommendations are premised on the naïve assumption that by eliminating the lawyers, injured accident victims can work with their insurance companies to fairly resolve disputes and receive the reasonable treatment they require.

The problems with the current system are not caused by not the lawyers or the insurance companies, but rather by the system itself. The current statutory accident benefit regime is far too complex and full of red tape resulting in unnecessary disputes and litigation. It would be unfair to deprive accident victims of the right to legal counsel to deal with the current minefield of complexity and uncertainty in the statutory accident benefit scheme.

While Marshall has identified the urgent need to revise and simplify the legislation and the current set of regulations and to focus on desired outcomes and less on the details of the process, there is a glaring lack of detail in how this should be done. Unless and until there are appropriate reforms to the statutory accident benefits scheme which will provide fair and readily accessible benefits to accident victims without complex and confusing rules, red tape or bureaucracy, the system will not function efficiently and effectively.

Marshall’s recommendations, if implemented, may cause insurance premiums to go down marginally in the short term. However, the amount of compensation paid to accident victims may diminish as well with little confidence that accident victims will receive the treatment they require. Marshall’s recommendations premised on eliminating the lawyers and experts may save costs but it will also deprive accident victims of access to justice in dealing with legitimate disputes regarding their entitlement to coverage and less treatment for their injuries.

The report also recommends the creation of Independent Examination Centres (IEC) to provide diagnosis and future treatment plans. History tells us these types of assessment centres are likely to fail. Have we not learned from previous experiences with Designated Assessment Centres (DACs)? While IEC findings are recommended in respect of accident benefits and afforded deference in tort claims, this will not eliminate all controversy. Elements of a WSIB model should not be incorporated into motor vehicle compensation. There will be significant costs associated with the development and maintenance of IECs. It is unlikely that the quality of care provided to accident victims will improve with the creation of IECs or that either accident victims or insurers will be satisfied with the fairness of the process.

Let’s hope the provincial government takes a pass on the Marshall Report recommendations. These recommendations will not work to fix the problems in the current system. Instead the province should consult with the stakeholders who understand the current system. The goal should be to design and implement a new fair and affordable accident benefits scheme. Any solution to the current crisis in automobile insurance must include a new simple streamlined statutory accident benefits system which allows an accident victim access to reasonably necessary and timely care and treatment at a cost that is affordable and sustainable.

Peter Kryworuk

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