Here are the most common questions asked about ICBC No Fault Insurance.
ICBC no fault FAQ's
On February 6, 2020, the B.C. Government announced its intention to implement a new insurance model that is commonly referred to as either “care-based” or “no fault” insurance.
No fault means that if you are injured in a car collision by a reckless driver, that driver is entitled to the same schedule of benefits as you.
A no fault system also means that seriously injured individuals will potentially have a lifelong relationship with ICBC. Rather than having their case resolved with a fair settlement that allows the individual to decide what care they need and when, a no fault system requires the individual (or their family) to go back to ICBC week-after-week, month-after-month, year-after-year, providing evidence that ICBC will alone decide if it is sufficient to get their next treatment or wage loss benefit.
If the insurance adjuster refuses to pay for needed care or wage loss benefits for example, alleging you have a “pre-existing condition”, you are left with no meaningful recourse to challenge that decision through an independent judge or jury. Instead, you are obliged to appeal to the ICBC fairness commissioner, through the Civil Resolution Tribunal (“CRT”), or an ombudsman, all staffed and appointed by the government and ultimately making decisions about the conduct of the government they work for.
No fault schemes result in less damages being paid to those injured on our roads. For example, no damages are paid for pain and suffering and loss of enjoyment of life. With no fault, individuals don’t receive damages paid once as a lump sum so they can move on with their lives. Instead, compensation is rationed at the control and direction of an ICBC adjuster.
For the purpose of compensating for injuries, “no fault” insurance ignores who causes a collision and treats “fault” as irrelevant. If there is a collision involving a vehicle causing injury, ICBC, as the insurance monopoly in British Columbia, has total control over everything including if, when, how much, and for how long an injured party gets coverage for their treatment and benefits.
Some studies do show that collision and fatality rates are increased in no fault insurance jurisdictions. At-fault drivers are entitled to not just the same compensation as injured parties, the only deterrent to bad driving behavior may be increased premiums. The injured party has no right to sue the negligent driver for damages and there is no liability insurance to pay the injured party any damages.
The government’s “no fault” promise that victims can still sue “criminally convicted” motorists like drunk drivers is misleading.
In British Columbia, most collisions are caused by careless driving, not criminal conduct.
It is only in the rarest of circumstances that a motorist is charged and convicted for a criminal driving offense, most such charges are plead down to traffic offenses or discharged after good behavior.
Most importantly, even if the at-fault driver is criminally convicted with a driving offense, there is no insurance to pay the victim damages. Meaning, personal lawsuits against convicted wrongdoers would take years and costs tens of thousands of dollars in legal fees to prosecute. Worse, most judgments against personal defendants are “empty”, because wrongdoers simply declare bankruptcy or have no assets or money to pay any damages. The result in approximately 99% of cases is that the injured party is left with only no fault benefits.
If ICBC offers you an unfair settlement, you have no right to sue for damages in court and have an independent judge or jury decide what is fair. Through Canada’s constitution, courts are independent from the government. Instead, the proposed no fault insurance scheme forces you to appeal to entities that are hired and fired by the government, like the ICBC “ fairness commissioner”, the “Civil Resolution Tribunal” (CRT) or an “ombudsman”.
In no fault, you must apply for benefits, and you are not awarded one-time lump sum damages. This means that only people who can afford to pay a lawyer by the hour will have legal representation to challenge ICBC decisions, which will result in two-tier justice, one system for the wealthy and one for everyone else. The overwhelming majority of British Columbians will be forced to deal with ICBC on their own for weeks, months, years, or indefinitely, depending on how serious their injuries are.
British Columbians and their doctors and other caregivers already have lots of experience with no fault insurance through their interactions with WorkSafeBC and some other disability insurers. Like WorkSafeBC, under no fault auto insurance, individuals who are in need of care will be forced into a potentially lifelong relationship with ICBC.
Many or most of the individuals who have long-term injuries are not in a position to advocate for themselves. Individuals struggling with physical and psychological injuries will be largely on their own. The government itself says that 700,000 of us don’t even have a regular family doctor in our corner.
Compared to vehicle occupants, pedestrians, cyclists and motorcyclists are the most vulnerable users on our roads and they often suffer more severe injuries, harms and losses when they are involved in collisions. No fault affords no special protections for vulnerable road users. Cyclists, pedestrians and motorcyclists are disproportionately impacted by the shortcomings of no fault because they are more likely to suffer serious injuries than vehicle occupants.
- Vulnerable British Columbians. Any British Columbian with a pre-existing disability is at risk for discrimination on the basis that ICBC could deny wage loss or treatment on the allegation that the collision did not “cause” or make worse physical or mental health injuries. Under our current system the law protects the vulnerable and makes the at-fault driver pay damages for all the harms and losses they cause, even if the harms and losses are unique or more severe for a vulnerable British Columbian with a pre-existing disability.
- The unemployed. Unemployed British Columbians will not be entitled to any wage loss benefits unless the individual can prove that they would have had employment but for the collision (for example, by showing that they were about to start a new job or had a promise of employment). Otherwise, someone unemployed at the time of a collision will be treated as though they would have been unemployed forever.
- People who are not participating in the labour force—including parents of young children. If the person was not in the labour force at the time of the collision (not working and not looking for work), they will not be entitled to wage-loss benefits. There are many reasons one might not be participating in the labour force at a given time, but still have the intention to return to the labour force in the future (parenting, extended vacation, nonpermanent disability, et cetera). People who are not participating in the labour force will not be entitled to a wage loss under the new ICBC scheme.
- Students. If you are injured while you are still young and/or a student, you will not have reached anywhere close to your full earnings potential. These individuals will have their future income benefits based on their existing earnings history which may be very minimal. Future benefits, if any, will be based on “average” earnings within the province and not take into account the earnings potential of the individual.
- Young people. Wage-loss benefits for these people will be based on their earnings at the time of the collision. As a person gains experience their wages increase. Young people will be locked in to a wage-loss benefit that is sure to under-represent their earning capacity and potential.
- Part-time workers (including parents or guardians of young children). Again, there are many reasons a person might choose to work part-time at any given time in their career, but fully intend to return to full-time work in the future.
- High earners. The new scheme will only compensate for wage loss up to about $93,000 per year. Those who earn more than this amount will be under-compensated.
- Women and minorities. Women and minorities experience a discrimination-based wage gap. In 2018, women earned 13.3 percent less per hour than men. Under the current system compensation for wage loss takes into account historical and current discrimination. However, the wage benefit under the new ICBC scheme will be based on this existing discrimination.
The Yukon, Alberta, Ontario, New Brunswick, Nova Scotia, Prince Edward Island and Newfoundland do not have no fault insurance. All of these provinces have private insurance companies that compete against each other for customers. All of these provinces have restrictions or “caps” on compensation for less serious injuries but you can still sue at-fault drivers for damages and if you think the insurance company is treating you unfairly, you can sue in court and have your case decided by the court. None of these provinces force you to appeal to a non-arm’s length tribunal that is hired and fired by the government.
While Quebec has private insurers, it also has a no fault insurance scheme which is unique in Canada because of its system of civil justice, unlike the rest of Canada’s common law jurisdictions.
The only other no fault jurisdictions in Canada are Saskatchewan and Manitoba, both of which, like B.C., have government-run monopolized auto-insurers with no insurance market competition. However, in Saskatchewan, individuals are given the choice to buy their own insurance to recover full damages for all their harms and losses. In B.C., no fault insurance is mandatory for everyone with no choice option.
From David Benning, an economist’s perspective, financial justification for this seismic policy shift is questionable. Thousands of jobs may be lost with no fault auto insurance, just as BC struggles to emerge from the COVID-19 pandemic.
The NDP government has relied on the most dire economic forecasts at ICBC to help manufacture a crisis necessitating no fault insurance. There is no “dumpster fire”. ICBC is a statutory crown monopoly with about $20 billion in assets. The government says ICBC has lost money in the last few years. Before that, ICBC was a cash cow earning hundreds of millions in profit through ICBC’s optional insurance program. Moreover, just last year, the Attorney General promised that the so-called “minor” injury caps were going to restore ICBC’s finances and save some $1.3 billion. What happened to those forecasted savings? As of November 2019, ICBC was on track to lose about $50 million. British Columbians should be uncomfortable that government’s answer to the alleged ICBC dumpster fire is to build a much bigger and more powerful dumpster with no fault auto insurance.
For the government, one of the biggest selling points for moving to a no fault insurance scheme appears to be the elimination of fees paid to lawyers which the government says are some $860 million a year. Side-stepped in that pitch is that plaintiff lawyers only recover contingency fees out of damages paid to those injured on BC roads and that without contingency agreements, only wealthy people could afford to pay lawyers to fight ICBC.
More importantly, lawyers don’t work alone. The actual job losses will be among paralegals, legal assistants, and administrative staff, plus court reporters, mediation service providers, court registry staff, process servers, claims investigators and other ancillary legal services. Given the nature of the litigation process, personal injury law tends to hire more support staff, with 3-4 staff per lawyer. If personal injury lawyers are eliminated, decide to move away, downsize into another area, or start a different business, thousands of support roles will be lost in those offices.
The 2016 census indicates that about 23,500 people work in BC law offices. About 9,300 are lawyers and 14,200 more are support staff. Support staff are predominantly women – about 90%. Statistics from the Law Society show 2,461 lawyers were practicing motor vehicle litigation.
When the full weight of no fault is enacted and felt across BC, somewhere between 4,000 and 10,000 people may find themselves out of work, the overwhelming majority of them being women in legal support services. With average full-time earnings of about $65,000, these are above average paying jobs. Even more work as legal assistants, with average full-time salaries of around $55,000. These are good paying jobs at risk and not easily replaced.
Following the implementation of no fault, there will be significant losses of private sector jobs in the short-term. In the long-term, many of these lost private sector jobs may transition to public sector jobs as ICBC itself becomes a far bigger bureaucracy. Much of the savings may prove short-lived.
FAQ’s from www.notonofault.com
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