Critics are calling for Alberta to consider a public insurance option after the province reinstated a cap on compensation for soft-tissue injuries.

The cap on payouts for soft-tissue injuries, including whiplash, was removed in 2008 when a judge ruled it was unconstitutional because it discriminated against specific victims of vehicle accidents, but an Alberta Court of Appeal judge overturned the decision Friday.

The cap was put in place by the province in 2004 to keep rates affordable.

However, Alberta Liberal Leader David Swann said the ruling shows the province should have a public insurance option in addition to private insurance.

It's time for the Conservative government to do a full review of the industry, he said, and do a better job looking out for Albertans.

"These are businesses that are looking for opportunities and government is supposed to be acting in the interests of long-term public well-being and fairness, and constitutional rights should be forefront."

Swann said the cap does not give fair treatment to accident victims.

"It's probably fair to say that the industry is covering the majority with this cap. What it's not covering is the very severe, long-term, chronic ailments that come with some of these injuries," he said.

Cap keeps rates down at victims' expense: NDP

While the cap was increased to $4,500 from $4,000 to account for inflation, New Democrat Party Leader Brian Mason said he's not impressed.

"It's just an inflationary increase that they've allowed and, frankly, it really says that people who do suffer painful and debilitating injuries as a result of auto accidents don't have full recourse for their injuries," he said.

"That's a way of keeping rates down and profits up for the industry."

Mason said it's wrong to try to lower rates for drivers by restricting accident victims, and insisted a public system would be better.

However, the government said the legislation strikes a balance between keeping insurance costs down while still providing compensation for lost wages and medical expenses.