Ontario’s new “Fair Auto Insurance Plan” will leave accident victims without an advocate and at the mercy of insurance companies, say personal injury lawyers.
The government is aiming to deliver lower insurance premiums by allowing insurance companies to “bully” accident victims, says Darcy Merkur, a partner at Thomson Rogers in Toronto.
“It’s a smart thing for the government to do. It’s just totally unfair to accident victims. In so much as they care about helping accident victims, it’s horrific,” says Merkur. “The recommendations were all about letting the insurance company get away with cheap mistreatment of accident victims, all with the purpose of saving the public auto insurance premiums, but to the total detriment of accident victims.”
On Dec. 5 the Ontario government announced it plans to “reduce costs in the system by changing the emphasis from cash payouts to ensuring appropriate care for victims.”
Some personal injury lawyers say this shows an intention to eliminate cash settlements between automobile accident victims and insurance companies, which would eliminate the incentive to take on automobile accident insurance claims.
The government’s recommendations follow a report by David Marshall called the “Fair Benefits Fairly Delivered: A Review of the Auto Insurance System in Ontario.” Marshall is former president and CEO of the Workplace Safety and Insurance Board.
In the report Marshall writes: “There should be no cash settlements in the accident benefits portion of the Ontario auto insurance system for those benefits specified in the legislation as being for medical and rehabilitation care.”
The new plan is an effort to earn votes before the June provincial election, says Darryl Singer of Singer Barristers Professional Corp. in Markham, Ont.
“I think this is really an election ploy to say, ‘Hey Ontario, we’re going to bring down your auto insurance premiums,’” he says. “You’re paying the highest premiums in the country, on average and we’re going to bring those down and here’s how we’re going to do it.”
Legal Feeds contacted the Ministry of Finance for comment but did not receive a reply by time of posting.
Singer says that in instances in which insurance companies deny treatment to people injured in an accident, under the current system the injured person can get a lawyer to fight for the claim, who often settles with the insurance company for a cash payout — a percentage of which goes to the lawyer for their services. Singer says the insurance companies prefer providing treatment over providing a cash payment equal to what the treatment costs because victims often do not use all the treatment they are awarded.
Taking away cash payments takes the lawyer away from the accident victim, leaving them with no one to fight the insurance companies if they then deny the treatment, says Singer.
“If you come to me on an accident benefit matter and say, ‘My insurance company has denied my treatment and I’ve got lots of ongoing injuries and I need this treatment,’ I can fight for you because if I ultimately get your case settled with a cash payout I get to take a percentage of that and I earn a fee,” Singer says. “If you come in the door and say, ‘I have to fight to get treatment but there’s no cash payout and I don’t have any money to pay you,’ well, then how do I get paid?”
The government’s plan also includes “creating independent examination centres to provide assessments of more serious auto collision injuries, to help resolve and reduce diagnosis disputes, and to reduce system costs and inefficiencies stemming from disputes.”
Merkur says these independent examination centres are the same as the designated assessment centre system that used to operate in the province. Instead of accident victims seeing their family doctor or their specialist, they will have an assessment from someone assigned through this system, which Merkur says will not be “thorough, comprehensive or well-reasoned.”
Singer says that the DAC system was a failure.
“If you go back and look at the designated assessment centres of the past, they were dismantled. We know this doesn’t work,” he says.