Bill 15, the Fighting Fraud and Reducing Automobile Insurance Rates Act, 2014 (the “Act”), received Royal Assent on November 20, 2014. This legislation really has nothing to do with Fighting Fraud and only further reduces the legal entitlement to innocent accident victims.
The Bill provides amendments to several acts, including the Highway Traffic Act, the Insurance Act, the Financial Services Commission of Ontario Act, 1997, the Licence Appeal Tribunal Act, 1999 and the Motor Vehicle Accident Claims Act. The provincial government is intending to reduce automobile insurance premiums by 15% and hopes that this legislation will enable the reduction in premiums. The problem is that numerous governments, including the last Liberal majority government, have cut accident victims rights to decrease premiums only to find out that the insurance companies do not intend to cut the premiums to consumers.
As a law firm that has been practising in the personal injury area for decades, it is disheartening to continue to see auto benefits and legal rights be taken away and yet see no reduction in premiums. We do not believe that there will be a reduction in premiums with this new legislation, just a further erosion of the public’s rights and remedies.
The public do not understand what they are losing when the government cuts benefits and rights. They only realize this once they are involved in an accident and their accident lawyer tells them that they are no longer entitled to benefits and rights.
The new legislation will affect accident victims as follows:
- Motor vehicle accident victims will no longer be able to commence a proceeding for accident benefits in the Ontario Superior Court of Justice;
- Arbitrations, which are currently held before the Financial Services Commission of Ontario, will be held before the Licence Appeal Tribunal; and
- Prejudgment interest rates for pain and suffering awards will be reduced from 5% to 1.3%.
The loss of the right to sue for accident benefits means that insurance companies will no longer be subject to a decision from judges after they have terminated benefits. Also, accident victims will not be entitled to appropriate costs to help pay legal fees and disbursements. Further, this loss of the right to sue will mean that an accident victim will have to file two proceedings, one in court and one at the Licence Appeal Tribunal, instead of one in a court of law. This will undoubtedly lead to inconsistent results as there will now be two decision makers.
Accident victims have also had their pockets picked. We have a system whereby those who are seriously injured are entitled to compensation for pain and suffering. In auto accidents, only those who have suffered a serious and permanent injury can sue for pain and suffering. That means that well over 90% of people injured in auto accidents do not have the right to sue for pain and suffering. This was implemented in the mid 1990’s when the insurance industry brought us the no fault system. In exchange for the loss of the right to sue accident victims were given no fault benefits. Since the 1990’s, these benefits have been severely scaled back, yet the rights of accident victims to sue for their injuries were never restored.
Now, to add further insult to injured people, the government is reducing the prejudgment interest rate on pain and suffering damages. This is taking money away from those who deserve it most; the most seriously injured victims. There is little doubt that the consumer will see any real reduction in auto premium as a direct result of the cuts set out in this legislation. Car accident victims have now been hurt again by our government and the insurance industry. When will we stop making the victim pay?
For more information, visit our motor vehicle accident lawyer section. If you have any questions, book a free consultation or call 1-855-446-7765 for immediate assistance.
