Pain and suffering cap will restrict rights of the injured

Pain and suffering cap will restrict rights of the injured


VICTORIA — Allowing people to sue for pain and suffering in car accidents has been viewed as a fundamental principle in British Columbia, but that changed Tuesday when the government joined Canada’s other provinces in limiting payouts to some crash victims because of a financial crisis at the public insurance corporation.

Attorney General David Eby said a payment cap of $5,500 for pain and suffering on minor injury claims is a necessary component of the NDP government’s plan to bring back financial stability to the Insurance Corporation of British Columbia (ICBC), which faces a projected net loss of $1.3 billion this year.

The changes will save up to $1 billion annually, Eby estimated.

Eby would not comment directly on the possibility of further premium hikes this year. “It’s going to take some time to turn around the problems with ICBC,” Eby said at a news conference. “I acknowledge there is no silver bullet that will solve things immediately in terms of a problem that’s been building for years, unaddressed.”

Eby said the limit on minor injury claims would not take effect until April 2019 as part of legislation to be introduced by the government.

Without the NDP’s plan, Eby said drivers could face average increases in their premiums of $400 or more a year.

The cost of minor injury claims is placing the largest strain on insurance rates, Eby said, with payouts hitting a record $2.7 billion in 2016, an increase of 80 per cent since 2009. Eby said payouts for minor injury claims have increased by 265 per cent since 2000.

“B.C. is the last province in Canada to take this kind of action,” said Eby.

He said the legislation will propose a definition for minor injury that would include sprains, strains, mild whiplash, cuts, bruises and anxiety and stress after a crash. It will not include broken bones and brain injuries, including concussions, or other more serious impairments.

Eby said the average claim for minor injuries is just over $30,000, with pain and suffering payouts averaging $16,500.

A new tribunal will be introduced by April 1, 2019, to resolve injury claim disputes within 60 and 90 days, he said. The current time for an average legal claim handled through the corporation is 30 months.

He said the government will double the medical care and recovery cost allowance available to accident victims to $300,000, regardless of fault. Eby said the change, which is the first increase in 25 years, is retroactive to Jan. 1, 2018.

In an interview, Easy Legal Finance Inc. president and CEO Larry Herscu says the introduction of an injury cap for pain and suffering is one of the most important legislative changes to be introduced in 44 years in B.C. and will have serious implications for citizens who become involved in crashes.

“Caps are not new and exist in many jurisdictions in Canada and the United States,” he says. “However, they have been proven not to be effective in stabilizing insurance rates. In fact, Ontario, despite having caps, has the highest insurance rates in Canada.”

Herscu, whose settlement loan firm provides litigation funding for Canadians with pending personal injury claims, says a cap essentially means “restricting the rights of those injured.”

“Injury caps remove B.C. plaintiffs’ rights to have their losses determined by a judge,” he says.

“Instead of making bad drivers pay more for their insurance, injury caps make victims pay for bad drivers by capping their claims instead.”

Furthermore, the injury will hit lower income individuals, Herscu says.

“The injury cap will particularly affect individuals with lower income as challenging a claim would cost more,” he says.

Liberal Leader Andrew Wilkinson said Eby’s proposals do not lower premiums for drivers or improve compensation for accident victims.

“The option is, of course, to have a wholesale re-examination of ICBC,” he said. “It’s time to re-examine the whole thing.”

The corporation is a state-run model created 44 years ago by the NDP, Wilkinson said.

Eby said he will announce a program to review insurance rates based on driver records within weeks. He did not say when motorists can expect changes.

“The system is disconnected from driver behaviour,” he said. “We want to fix that. We want to reconnect driver behaviour with the rates they pay.”

© 2018 The Canadian Press

Contact Info


TD Canada Trust Tower
161 Bay Street, 27th Floor
P.O. Box 508
Toronto, Ontario M5J 2S1


Weekdays: 9:00 AM – 5:00 PM MST
Weekends: Closed

Scroll to Top