No-Fault Insurance: What it Means for BC Drivers

The Ministry of the Attorney General announced today that effective May 1, 2021, British Columbia’s motor vehicle insurance system will change to a “care-based” model, more commonly known as “no-fault insurance.” Amendments will also be made to the province’s Evidence Act. These changes come in the wake of the Province’s attempts to address the increasing cost of motor vehicle litigation through a minor injury cap and limits on the use of expert reports in motor vehicle and other personal injury litigation.

In deciding to move to a no-fault system, the government is taking aim at lawyers and legal costs, saying that by removing “the majority of legal fees and other costs associated with the current litigation-based system,” ICBC will save $1.5 billion in the new system’s first calendar year. The Province says these savings will be passed on to ICBC customers in the form of reduced premiums and increased benefits. They anticipate a 20% reduction in premiums and say that medical benefits and payments for lost wages will be increased. Compensation for pain and suffering will be eliminated for “minor injuries” but will remain available for “major injuries”, although subject to ICBC caps.

Although this new model makes the minor injury cap moot, the Civil Resolutions Tribunal (the “CRT”) will continue to have jurisdiction to decide whether an injury is “minor” or “major” and with general damages for minor injuries eliminated, this distinction takes on greater significance under the new scheme. Payments for pain and suffering for “major” injuries are expected to take the same form as they do in other no-fault provinces, where compensation is based on the type of injury. This is a significant change from the current system which aims to compensate a plaintiff for the specific impact of the injury on the individual.

Drivers will have access to the Courts in cases where the driver that caused the injury is convicted of intoxication, dangerous driving or other criminal negligence, or to judicially review CRT decisions.

Also announced today are changes to the Evidence Act. This is the Province’s second attempt to limit the use of expert reports in personal injury matters as an additional measure to cut costs by reducing recoverable disbursements and the length of trials. Rule 11-8 was added to the Supreme Court Civil Rules on February 11, 2019 and limited the number of expert reports which could be used at the trial of a motor vehicle accident claim and a party’s ability to recover for the cost of expert reports. However before it could take effect, the British Columbia Supreme Court struck it down, finding it unconstitutional.

What this means for BC Drivers

According to the Province, drivers should not need a lawyer to get the insurance benefits for which they have paid. This new system, they say, focuses on the injured party and getting them the help their doctor recommends. Opponents such as the Canadian Bar Association – British Columbia and the Trial Lawyers of BC say that no-fault insurance removes an injured person’s right to be fairly compensated and disproportionately affects victims and their families.

It is likely that reality will be somewhere in the middle. However, all stakeholders will have a better idea of what to expect when the legislation is introduced during the spring session.

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