British Columbia

Pain and suffering, the right to sue, cheaper insurance? What ICBC's changes could mean for you

ICBC announced its "enhance care" system set to roll out in 2021 will cut most lawyers out of the system and reduce the average annual premium by $400.

Government says changes set to roll out in 2021 will reduce the average annual premium by $400

Significant changes are coming to ICBC in 2021 which the government claims will save the system and the corporation hundreds of millions of dollars. (David Horemans/CBC)

In a move aimed at dousing what the minister once dubbed a financial dumpster fire at ICBC, the B.C. government has announced the provincial auto insurer will be moving to an "enhanced care" model in 2021, similar to what is commonly referred to as no-fault insurance.

The province claims the change will save British Columbians an average of $400 a year on premiums, while redirecting hundreds of millions of dollars spent in legal costs to benefit those injured in crashes.

Sauder School of Business Associate Professor Werner Antweiler joined host Stephen Quinn on The Early Edition Thursday morning to answer questions about the coming changes.

What will be different under the new system?

There are some profound differences. Currently when somebody is not at fault in a crash they can sue the at-fault party for damages, including benefits for pain and suffering.

That is an adversarial process — it's slow, it's very costly and it involves a lot of lawyers. And at the end, you get a payment that is very difficult to ascertain, because there's no single measure that tells you this is the right amount for pain and suffering.

There are some norms that are established by the courts, and these numbers have gone up and up and up. They have quadrupled in 15 years.

The new system is essentially a care-based model like workers' compensation. It's the same idea: looking after the needs of the individual to make sure they can get back to work and get healthy again.

If there is long term impairment, there are different measures in place including income replacement as well as a lump sum payment.

The changes announced for ICBC will increase how much compensation goes to those who suffer long-term injuries in car crashes, according to the government. (Stéphane Grégoire/Radio-Canada)

In addition, the current system involves a lot of legal wrangling whereas the new system would likely do away with most of the lawsuits.

What about people who are injured and rightly owed compensation?

The idea that pain and suffering awards completely go away is not quite true. Those awards are getting shifted from the people who have minor, temporary injuries to people who really need it most — those with long term or permanent impairments.

That is essentially the logic of the changes.

Trial lawyers have said if ICBC settled claims fairly in the first place, people wouldn't have to go to lawyers and wouldn't have to sue to get a fair settlement.

Well, of course, [the lawyers] would say that because what is fair in their minds is getting exactly what they ask for. That, of course, is something that ICBC has to push against, because they are speaking for all of us who pay insurance premiums. 

What is fair is really hard to ascertain because pain and suffering has no single measure. It's very much an issue that is not easily defined because it's decided at the point right after the accident and it doesn't look forward. 

So, current settlements must be speculative, and the courts have been erring on the side of caution.They'd rather give the plaintiffs a little more than what they asked for simply because they don't want to have them to unnecessarily suffer somewhere down the road.

Will people still be able to sue? 

Yes. Under the new system, there is going to be a process to resolve disputes, first through internal ICBC channels and an ombudsperson, and then the civil resolution tribunals. 

Will my insurance be cheaper?

Yes, absolutely. I think the math really adds up here, because, currently, about a billion dollars is spent on the legal costs and that is basically money taken away from the people who need it to get better. 

So, if you actually redirect that money from process to treatment of the injured, that can do a lot of good. Currently, the system has to be stingy, because so much money is wasted on the inefficient legal process.

Will life-altering injuries like brain and spinal cord injuries be compensated fairly?

Yes. The new system actually has a very generous system in place for those who are suffering permanent impairments. They will still be entitled up to $250,000 in a lump sum for the pain and suffering component. But everything they need to get better will be actually be improved.

They will have access to various types of extended care benefits assistance, even recreational assistance. All these are included in the extended care package, so that those people who suffered [long term] impairments will get the help they need for life, not just what is determined at the point of a court settlement.

This interview aired on The Early Edition on Feb. 7 and has been edited for clarity and structure. 

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