The Future of ICBC
To understand the future of ICBC, it is important to understand the role of ICBC and history of ICBC claims in BC.
When we buy car insurance, we are paying for two types of policies: first-party and third-party. First-party insurance is for when our vehicle gets stolen, burnt in a fire, or damaged from an accident that is our own fault. When we make a first-party claim, we are making it against our own insurance policy. Third-party insurance is to protect us from claims of another person (a third party) when we have negligently operated our vehicle and caused material damage to another vehicle or personal injury to the occupants of that other vehicle. While we have the right to purchase first-party insurance from private insurance companies who compete with ICBC, we must, by law, purchase third-party liability insurance only from ICBC.
Prior to April 2019, a person injured in a motor vehicle accident that occurred here in British Columbia had the right to sue the responsible vehicle owner and driver for all personal injury damages arising from that accident, including “pain and suffering” damages, past loss of income and future loss of earning capacity. We call this type of claim a “tort” claim, and money paid out to settle that claim came from the third-party liability part of the at-fault driver’s policy. The objective of a tort claim system is to restore and compensate the injured party through monetary damages. Under our tort claim system, pain and suffering damages had been capped by the Supreme Court of Canada in 1978 at $100,000, and then indexed for inflation such that currently, a catastrophic injury would max out at approximately $365,000. An injured person had two years from the date of the accident to sue the responsible owner/driver.
However, in February 2018 the government of British Columbia announced a “Minor Injury” scheme that dramatically reduced an injured person’s right to seek compensation for his or her injuries. The government claimed this would save money for British Columbians. This minor injury scheme came into effect April 1, 2019. Despite the fact that pain and suffering damages were already capped, this new scheme further capped pain and suffering, limiting damages to only $5,500 for minor injuries. The problem lay in the phrase “minor injuries,” the definition for which was and remains confusing and complex and riddled with exceptions. The end result is that even injuries that seriously impair a person from working for up to 12 months, for example, could be deemed “minor.” Moreover, the injured person lost the right to sue and seek compensation in front of a judge, but instead was redirected to the relatively new Civil Resolution Tribunal, a body that was previously tasked with hearing small claims disputes for less than $5,000 or strata disputes.
Then, on February 6, 2020, the government of British Columbia announced further changes to ICBC that would even further dramatically change how accident-injured British Columbians would be treated. In essence, the government announced a “no fault” system, similar to the system in place in Manitoba, where an injured person’s right to sue the at-fault driver for damages is eliminated entirely and replaced with a government program of accident benefits and care coverage. That is, if a person is injured in a motor vehicle accident in BC, he or she will no longer have the right to sue and make a civil claim for damages against the negligent driver at all, unless the accident involves a criminal offence. This represents a significant erosion of access to justice for the most vulnerable British Columbians. The provincial government has argued that the new system will save British Columbians money in the form of reduced insurance premiums. But the government does not talk about the significant loss of compensation to individuals who are disabled and disadvantaged as a result of an accident. We still don’t know the details and the full extent of the new no-fault system, as it has not been fully announced or rolled out in the form of regulations. BC’s no-fault system is set to take effect May 2021. The new system is essentially the last nail-in-the-coffin of the tort system.
Presently, we are midway through all this transition. For example, if you were injured in a motor vehicle accident that occurred in March 2019 you can still start a lawsuit and sue under the old tort system. If you were injured in a car accident in June 2019, you are left to toil and navigate the labyrinth of ICBC’s new “minor injury caps” system, which is itself a deterrent to make a claim. But if you are injured in a car accident that occurs after May of this year, even badly injured, you likely will not be able to make any claim for damages whatsoever and will instead be left with whatever benefits the government feels generous enough to provide you.
© Linley Welwood LLP. The contents of this article do not constitute legal advice. Readers should seek legal advice in relation to their own specific circumstances.