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Maia Tomljanovic

Bill 41 Introduced as Alberta Considers New Auto Insurance Regime

Bill 41, the Insurance (Enhancing Driver Affordability and Care) Amendment Act, was introduced by the Alberta government last week to bring reforms to the auto insurance industry in the province. The proposed changes are being presented to Albertans as a way to contain costs, stabilize premiums and increase medical benefits.

According to Finance Minister Travis Toews, Bill 41 is an interim measure as the Government proceeds with further public engagement specific to the recommendations made by the appointed Automobile Insurance Advisory Committee. The Committee’s report recommends a significant overhaul of the current motor vehicle insurance regime, including adopting a no-fault regime.

Bill 41: Insurance Amendment Act, 2020

If successfully passed, Bill 41 will broaden the definition of a “minor injury” to include not only sprains, strains and whiplash but any clinically associated sequelae of the sprain, strain or whiplash injury, whether physical or psychological in nature, that is caused by the accident. Regardless of the type of injury, in order for it to fall under the definition of a “minor injury”, it must not result in a serious impairment. The question of what constitutes a serious impairment has been addressed by the Alberta Courts.

Bill 41 will also increase specific limits available to those injured in a motor vehicle accident under no-fault accident benefits. This includes increased caps on specific modalities of treatment, increased weekly disability benefit, coverage for medical equipment and access to more health professionals. No changes were proposed to the overarching $50,000 limit on medical benefits under the Regulation.

Bill 41 also proposes to put a cap on the number of damages experts that can be used in litigation. It is proposed that for claims under $100,000 only one expert be permitted and for claims above $100,000 there will be a maximum of three experts.

The new Bill also proposes:

§ A change to the rate and start date for prejudgment interest on non-pecuniary damages. Specifically, interest will only accrue from the earlier of the date the claim is served and the date the insurer is provided notice of the claim. The interest rate will be changed from 4% per year to the applicable prescribed interest rate.

§ A pay-per-kilometer policy option.

§ Direct compensation for property damage in cases involving two insured vehicles.

The Automobile Insurance Advisory Committee’s Recommendations

Alberta currently operates under a tort-based system where individuals can sue the at-fault driver and/or owner for damages for pain and suffering and other losses caused by injuries sustained in a motor vehicle accident. These claims are defended by the at-fault party’s insurer.

No-fault automobile insurance, which currently operates in other provinces including Ontario and is the subject of a constitutional challenge in British Columbia, allows damages to be paid to anyone injured in a motor vehicle accident, regardless of fault. It strips individuals injured through the negligence of a third party to seek damages in civil court.

A 536-page report, publicized last week by the Automobile Insurance Advisory Committee (“Committee”), revealed that the escalating auto insurance premiums in Alberta are the result of injury settlements and litigation costs. The Committee concluded that victims of auto collisions would be better off under a no-fault system where their claims are settled by an independent traffic injury regulator.

Province To Seek Public Input Before Making Final Decision

The lengthy report was released to allow for feedback from the public before a final decision is made, which is anticipated to take place halfway through 2021. Finance Minister Travis Toews has not as of yet decided how to proceed with the Committee’s recommendations to implement no-fault insurance and plans to appoint a panel to lead public consultations based on the Committee’s latest report.

FAIR Alberta, an advocacy group comprised of lawyers, medical professionals and consumers, does not support the recommendations made by the Committee or a move towards no-fault insurance in Alberta. In a statement released on Friday, the organization said:

No-fault insurance doesn’t reduce premiums; it leads to higher costs, fewer protections for consumers, and no accountability for bad drivers or insurance companies. That’s no solution, that’s an even bigger problem.

FAIR argues that individuals should be allowed to seek compensation for their damages, including pain and suffering through the courts, if they choose to do so. A no-fault regime does not take into account each individual’s unique circumstances when providing injury awards. The question also remains how a no-fault regime, which would be compensating both the at-fault and innocent parties involved in a motor vehicle accident, could do so at a lower cost without significantly reducing the individual compensation available.

This article was originally published by The Lawyer’s Daily, part of LexisNexis Canada Inc.

Choosing a personal injury lawyer to represent you or a loved one after being injured in a car accident is not a decision to be taken lightly.  As a firm of lawyers who specialize in personal injury law and medical malpractice, the experienced lawyers at Cuming & Gillespie Lawyers have a strong reputation in the community and the legal profession.

At Cuming & Gillespie Lawyers, we strive to provide our clients with excellent legal services, and we offer a free consultation.  Our personal injury lawyers are happy to answer any questions you may have regarding hiring a lawyer for your personal injury or medical malpractice case.  Please contact our office at 403-571-0555 or online.


What Recourse will Victims Have if No-Fault Auto Insurance Comes to Alberta?

Generally speaking, no-fault insurance means that if a person has been injured in a motor vehicle accident or their vehicle has been damaged, no matter who is at fault, that person’s insurance company will pay for their losses. Any injuries or damages with respect to the other driver involved in the accident will be covered by the other driver’s insurance company.

Based upon the experience of no-fault insurance in the United States and other provinces in Canada, no-fault insurance regimes do not necessarily reduce premiums. In fact, this type of auto insurance system often leads to higher costs, fewer protections for consumers and a lack of accountability for bad drivers and insurance companies.

Under a no-fault system, administrators, physicians, treatment providers and experts hired by the insurance company will make all of the decisions with respect to the injured party, including:

  • Whether he/she is capable of returning to work;
  • The cost of future care;
  • The duration of his/her disability;
  • The severity of the injury; and
  • The compensation stemming from all of the above factors.

Those who are injured will deal directly with their insurance company, without any legal advice or support. Innocent victims will have no right to sue for damages, such as lost income, in court. A “benefits schedule,” a chart outlining a dollar amount for each type of injury, will determine how much an impairment is worth.

In terms of income loss, a no-fault system does not take into account an individual’s personal situation and future prospects. It simply provides compensation based upon the position the victim was in and the income he/she was making at the time of the accident.

Consider a medical student injured in a motor vehicle accident as a result of another driver’s negligence who is left permanently unemployable by the injuries sustained. The income replacement benefits they receive would be based on their earnings as a student with no consideration for the income they would have achieved upon completion of medical school.

B.C. and No-Fault Automobile Insurance

In February, British Columbia’s government announced that, in an effort to reduce public auto insurance rates by 20 per cent, it would be moving to a no-fault auto insurance system effective May 1, 2021 (if the proposed legislation passes).

Under the proposed no-fault system, litigation will only be possible if an injured driver is involved in a collision with an individual who is charged with a criminal offence or if a manufacturer or repair facility has performed faulty work on a vehicle.

Compensation for pain and suffering for minor injuries will be eliminated and categories for major injuries will be set out for pain and suffering with a specified maximum amount.

British Columbia’s trial lawyers are expected to challenge this initiative and argue that a no-fault regime will reward bad drivers and remove innocent victims’ rights to receive access to the courts and a fair settlement.

What Challenges Lie Ahead for Drivers in Alberta?

If the Alberta government implements changes to auto insurance in the form of a no-fault insurance system, it will likely benefit auto insurance companies at the expense of the rights of Albertans.

A no-fault system takes away an individual’s right to sue. The no-fault regime itself decides what compensation an innocent victim of a motor vehicle accident should receive. This removes the due process that occurs through litigation with effective representation.

Insurance companies attempt to justify increases in insurance premiums due to increased payouts to injured Albertans. However, in reality, over the last three years the overall compensation for bodily injury claims has dropped, while insurance company premiums and profits have continued to rise, according to a 2020 report conducted by actuary Craig Allen.

Albertans have spoken and their response to no-fault auto insurance is clear. In a poll conducted by FAIR Alberta and Nanos Research released in June, 61 percent of Albertans prefer the current fault-based system providing accountability for bad drivers and allowing injured victims the right to sue for fair damages to compensate for their injuries.

Those surveyed were found to put more trust in the courts to provide an impartial and fair compensation assessment following an accident compared to insurance companies, which stand to benefit when compensation is minimized.

This article was originally published by The Lawyer’s Daily, part of LexisNexis Canada Inc.

Choosing a personal injury lawyer to represent you or a loved one after being injured in a car accident is not a decision to be taken lightly.  As a firm of lawyers who specialize in personal injury law and medical malpractice, the experienced lawyers at Cuming & Gillespie Lawyers have a strong reputation in the community and the legal profession.

At Cuming & Gillespie Lawyers, we strive to provide our clients with excellent legal services, and we offer a free consultation.  Our personal injury lawyers are happy to answer any questions you may have regarding hiring a lawyer for your personal injury or medical malpractice case.  Please contact our office at 403-571-0555 or online.


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