An Ontario Liberal government bill designed to reduce costs for the auto insurance industry entered public hearings on Wednesday.
Supporting the bill were groups such as the Insurance Bureau of Canada, the main lobby group for the auto insurance industry, as well as insurer heavy weights such as Aviva Canada.
Opposing the bill were groups representing accident victims such as the Ontario Trial Lawyers Association and the Fair Association of Victims for Accident Insurance Reform (FAIR). These and other groups argued passionately that a number of the changes in the bill would benefit insurers at the expense of accident victims.
Votes on amendments will take place in committee next Monday.
The most controversial elements of the bill involve two provisions:
Removing the right to sue an insurance company over disputed Accident Benefits (no-fault benefits) after mediation has failed;
Reducing the interest rate insurance companies have to pay on delayed awards to accident victims.
During committee, the Ontario Trial Lawyers Association (OTLA), representing personal injury lawyers, argued that removing the right to sue disputed claims will lead to extra costs and inefficiencies in the system. Ontario New Democrats have also taken this position as have a number of accident victims groups, including FAIR.
Currently, following a failed mediation in a dispute over Accident Benefits with an auto insurance company, an injured person has the option of choosing between bringing a case to court or going to an arbitrator in the government’s dispute resolution system.
Bill 15 would remove the option of taking insurance disputes to a court to be heard.
At committee, the Trial Lawyers (OTLA), FAIR and the NDP all argued that taking away the right to go to court is unfair – particularly for injured people who have both Accident Benefits claims against their own auto insurance companies and court claims against at-fault drivers.
On the second controversial issue, accident victims’ groups argued that reducing the delayed award interest rate to 1.3% – from the current 5%) – will be an incentive for unscrupulous insurers to defraud accident victims out of timely benefits.
These groups argued that the infamous “deny, delay, and dispute” tactics of the auto insurance industry leave many victims waiting 5 years or more to get their rightful award. They further argued that reducing the interest rate insures pay on delayed awards makes it harder for victims to hold insurers accountable – that Bill 15 will reward those insurers that regularly delay or fail to pay legitimate claims.
According to the accident victims’ group FAIR, “reduced interest payable on Accident Benefits won’t benefit insurers who are properly handling their claims and paying what they owe, but it will incentivize those insurers who deliberately delay claims and it will reward those with more shady business practices.”
The bill also proposes changes to the auto insurance dispute resolution system.
The government and industry’s argument is that changes need to be made to Ontario’s auto insurance dispute resolution system in the hope that a streamlined system would help injured Ontario drivers settle disputed claims faster. The bill moves the current dispute-resolution system for auto insurance claims to the Ministry of the Attorney General from the Financial Services Commission of Ontraio (FSCO), where it would be administered by the existing Licence Appeal Tribunal.
However, accident victims’ groups expressed concern that experienced mediators and arbitrators would be lost in the transfer and would be replaced by adjudicators with little or no experience with auto insurance. The NDP also expressed this concern.
Finally, the legislation would regulate the towing and vehicle storage industries with a focus on consumer protection from questionable practices in the towing industry.
The towing truck provisions would require tow truck operators and vehicle storage providers to:
Have permission from a consumer or someone acting on behalf of the consumer before charging for towing and storage services;
Publicly post prices and other information, such as the tow truck operator’s name and contact information;
Accept credit card payments from consumers (to move away from “cash only” practices);
Provide an itemized invoice listing the services provided and the total cost; and
Give the Province the authority to reduce the current 60-day period that a vehicle can be stored after an accident, accruing charges, without notice to the car owner.
Currently, the auto towing industry is unregulated beyond a patchwork of inconsistent municipal by-laws. Most groups agreed that some uniform provincial government oversight would be a positive move and would reign in some of the “rogue” tow truck operators and vehicle storage companies that are defrauding accident victims.
While the towing truck provisions are, on balance, positive, the accident victims’ groups had the stronger arguments at committee on Bill 15’s key provisions.
Reducing the prejudgement interest insurers pay will likely encourage insurers to turn down even more claims. If there are no punitive measures to discourage delaying accident victims’ claims, insurers will take that money owed to accident victims and invest it while victims go without supports or treatment and have to pay interest on money they borrow. Even more debt will be incurred by accident victims in order to survive and to hire expensive lawyers to get what they paid for and are entitled to.
Taking away accident victims’ access to the courts on disputed “no-fault” claims is also a mistake.
To force injured people to hire lawyers twice and bring in expert witnesses such as doctors for two separate hearings on the same issues, makes no economic sense and will cause unnecessary financial hardship for accident victims.
While some provisions of Bill 15 are positive, it remains a deeply flawed bill.
Groups such as the Ontario Trial Lawyers Association and the NDP have put forward practical solutions to the bill’s flaws that should be supported by the government majority when the committee votes on amendments Monday, November 17.
After failing to honour their promise to reduce auto insurance premiums by 15%, Ontario Liberals should not be bringing in another bill that increases insurance industry profits.
Ontario’s 8 million drivers deserve a fair break – not another piece of legislation that favours insurance industry profits over accident victims!
Ontario auto insurance bill deeply flawed