As many other provinces struggle to find a balance between injured plaintiffs’ rights and skyrocketing insurance rates, Alberta stands out as a model of compromise and success. The Alberta system—tort with a minor injury cap—is certainly not unique in this country.
What makes Alberta different, however, is the level of efficiency and cooperation we see between lawyers and insurers in the resolution of claims. Injury lawyers and insurance companies alike often complain about the cap, but the truth is, it’s instrumental in keeping insurance costs down and minor claims out of the courts—all while preserving the rights of injured plaintiffs to a full, fair, and individualized evaluation of their claim. Ultimately, this is good for clients, as it reduces time to resolution and the stress associated with trial. Not to mention, the cap frees up court resources for more serious claims or complex issues.
It turns out that the humble English tort system, honed by judges over time and across the Commonwealth, is superior to a great many legislative interventions and experiments foisted upon the people of our country. Though British Columbia was, until recently, the last pure tort system in the country, the intervention in that case was of nationalized auto insurance. The ICBC experiment has been a failure in terms of controlling costs: BC has the highest insurance rates in the country (measured either as a percentage of disposable income or overall), and the insurer has a deficit of over $1 billion. The solution proposed is, predictably, a minor injury cap, when it ought to have been the privatization of auto insurance either alone or in combination with the cap. Ontario, also no stranger to heavy-handed government regulation, is the second most expensive auto insurance jurisdiction in the country, and that appears to be a cause-and-effect relationship. No-fault jurisdictions across the country suffer issues of cost predictability as well as comparatively high rates, while drivers in cap-and-tort jurisdictions like Alberta, Nova Scotia, New Brunswick, and PEI enjoy lower rates.
The answer appears to be a combination of pure tort, free-market insurance, light legislative intervention, and judicial restraint—precisely what we have in Alberta. Outside of minor claims, the tort system is alive and well. Whether a claim is capped or not, plaintiffs have access to a host of no-fault accident benefits which insurers generally pay in good faith. A great variety of insurers and insurance products are available to the consumer, and the competition keeps rates low as a percentage of disposable income. Alberta judges have been fair to plaintiffs and insurers in application of the law, while maintaining the spirit and intention of it. It’s a cliché to say that the best outcome of a negotiation is when both parties are equally unhappy, but it certainly seems that injury lawyers and insurers have been equally unhappy with the cap in Alberta… and that may be a good thing.
Unfortunately, all good things come to an end, and the balance is about to be upset in favour of insurers. Imminent changes to the Minor Injury Regulation, made upon consultation with and at the direction of insurers, aim to bring temporomandibular joint (TMJ) injuries, psychiatric injuries, and chronic pain under the cap. It remains to be seen how the judiciary will react to and interpret changes in the law—but if history is any indication, it’s likely that Alberta judges will act sensibly, conservatively, and with restraint to maintain the right balance between plaintiffs’ rights and public policy interests.
If your client has been injured in Alberta, call on us. We’ve spent the last 42 years fighting for the injured, and we’ll go the distance for your referral. Visit www.litcorefer.ca for details.