Alberta currently has a tort-based system where people can sue a responsible driver’s insurance company for pain and suffering caused by injuries sustained in a crash.
In a report released this week, the government-appointed Auto Insurance Advisory Committee concluded that damage settlements and litigation costs were driving the escalation in auto insurance premiums.
The committee argues that consumers and those injured in traffic accidents would be better served by a no-fault system in which complaints are settled by an independent traffic accident regulator.
Finance Minister Travis Toews has not decided whether the government will act on this key recommendation. He intends to appoint a special group to conduct public consultations on the report.
The insurance industry claims that it is losing money on auto insurance, that payments and costs are higher than what it makes in premiums.
Keith McLaughlin, spokesperson for Fair Alberta, a coalition of lawyers, medical professionals and injury rights activists, said insurance companies need to open their books and provide evidence to back up these claims.
Despite arguments to the contrary, McLaughlin said the insurance industry makes money, so it must have limits on how much profit it makes.
“When you have a private market, insurers deserve to make a profit,” he said. “But this profit must be transparent. It must be must be fair. ”
McLaughlin cites Ontario, which has the only private no-fault insurance system in Canada, as an example of how the system is failing drivers.
He said Ontario auto insurance premiums are among the highest in Canada, but drivers receive the lowest benefits.
Halpern said the majority of cases under Alberta’s current system are settled out of court. Nonetheless, she argued that people should have the right to seek compensation for pain and suffering in court if they so choose. She said a no-fault system does not take into account the individual circumstances of people when deciding on damages.
Halpern rejected a suggestion that his group oppose a no-fault insurance system because it would put injury lawyers out of work.
“I don’t know of a single personal injury lawyer who doesn’t really care about the rights of their clients, and I think they don’t at all,” she said. “It’s not about our jobs. These are civil rights.
As the Alberta government puts the report out for public consultation, Finance Minister Travis Toews is proposing interim measures to contain premium increases in a new bill he introduced for first reading on Thursday.
Bill 41, An Act to amend the Insurance Act (improving accessibility and care for drivers), will increase the number of minor injuries subject to a compensation limit of $ 5,300, which may include certain concussions resulting from whiplash in collisions with a vehicle.
Halpern is awaiting settlements that may provide further clarification, but said capping settlements for injuries such as concussions, chronic pain or PTSD could lead to more legal challenges and further obstruct the courts.