Meeting with MPP Stan Cho to Discuss Auto Reform

Written by Jessica Golosky, Lawyer   In light of the recent Auto Insurance Reform changes in Ontario, Gluckstein Lawyer’s Charles Gluckstein in collaboration with OTLA had the opportunity to meet with MPP Stan Cho to discuss these changes and how they affect our community and Ontario residents. Out of concern for our community and several of the announced changes, we entered the meeting with several recommendations for the reform which would most benefit citizens in our area.   What were the key issues of discussion? Care, Not Cash An important topic of discussion included the Ford Government’s Care, Not Cash default, which would require insurers by default to pay for the cost of medical, rehabilitation and attendant care.  It would also require insurers to offer consumers the option of purchasing a benefit that would allow them to negotiate a cash settlement.  Under this plan, insurers would not be permitted to negotiate a cash settlement with a claimant, except in certain circumstances, including:

• The claimant has suffered catastrophic injuries;
• The claim is for costs that are unrelated to medical, rehabilitation and attendant care benefits, such as property damage claims or income-related benefits;
• The policyholder purchased an optional benefit permitting the negotiation of a cash settlement; or
• Extenuating circumstances requiring an exception, such as if the claimant moves out of the country.

Although the Care, Not Cash default is meant to benefit claimants by encouraging faster treatment and care, discouraging fraud, and reducing overall accident benefit claims costs, Charles and MPP Cho discussed some of the challenges with this proposed system.  In particular, they discussed the lack of safeguards for injured accident victims if this plan goes through. Restricting the ability for claimants to settle their claims may ultimately render it more difficult for accident victims to retain counsel to advocate for them.  Lawyers who work on motor vehicle accident cases typically work on a contingency fee basis, which helps accident victims afford legal services.  Without the ability to negotiate cash settlements, the government’s Cash, Not Care plan effectively creates an access to justice issue; the plan removes lawyers’ incentives to represent accident victims if they cannot afford to pay out-of-pocket for their services, which may ultimately lead to poor outcomes for claimants. Costs at the LAT Another important topic of discussion surrounded the issue of costs at the License Appeal Tribunal (“LAT”).  Under the current accident benefits system, disputes between the insurer and claimant can be independently adjudicated by the LAT, which replaced the previous system of arbitrations at the Financial Services Commission of Ontario (FSCO).  The traditional approach in litigation is that the unsuccessful party is responsible for paying the legal costs of the successful party.  This principle applied to accident benefits disputes that went to FSCO. Under the new LAT rules, legal costs are almost never awarded, save for situations where one party has acted unreasonably, frivolously, vexatious or in bad faith.  Even in these cases, the awards have been nominal.  This has created a system where applicants are either forced to pay the costs for LAT disbursements and legal fees out of their own pockets or out of the LAT recovery (if any). The current LAT system, combined with the potential for the Care, Not Cash plan, creates additional and significant barriers to representation and adequate treatment for accident victims. Statutory Deductible Charles also advocated against the statutory deductible in his discussions with MPP Cho, which represents yet another barrier for accident victims when it comes to receiving compensation. Under our current tort system, section 267.5(5) of the Insurance Act, R.S.O. 1990, c. I.8 dictates that injuries suffered in a motor vehicle accident must be significantly severe (either a permanent serious disfigurement or a permanent serious impairment of an important physical, mental or psychological function) to merit compensation in a lawsuit.  This was introduced into our system to prevent “minor” claims from clogging the justice system, however, in some cases, the deductible acts as a harsh penalty for accident victims. The deductible in 2019 is $38,818.97; this means that an accident victim’s general damages (also known as pain and suffering) must amount to a figure in excess of the deductible for the individual to see any compensation under that head of damages. Driver Care Plan In terms of a positive change, Charles and MPP Cho discussed the Driver Care Plan, which is meant to revamp the claims process for accident victims by increasing and improving their access to treatment and care.  Notably, this plan includes a return to the default benefit limit of $2 million for catastrophic injuries, with an option for drivers to reduce their catastrophic coverage below the limit to a minimum of $1 million. Prior to 2016, the default benefit limit for catastrophically injured accident victims was $2 million, which broke down into $1 million for medical and rehabilitation benefits and $1 million for attendant care benefits.  This system was changed in 2016 to a combined limit of $1 million for medical/rehabilitation and attendant care benefits. This change back to the $2 million limit represents a significant benefit for accident victims with catastrophic injuries, increasing their access to and funding for important treatments, therapies and care that they require.  Further, this change to the combined limit of $2 million will provide flexibility for catastrophic claimants to customize how they use their benefit limits to suit their needs.   Why do these conversations matter? Improving our city, and country as a whole, takes the active involvement of all of us in any capacity we can offer. From voting to writing to local MPs, we all have a role to play and a say in how our government can best support and represent our values as a community. In regards to more complex issues, such as Auto Insurance Reform, members with unique insights and expertise in the matter can offer additional perspectives that are especially helpful for protecting the integrity and safety of those most likely to need any given service or support. We would like to thank MPP Cho for taking the time to meet with us recently, and also thank the team at OTLA who provided key and necessary insights for these discussions to be effective.   Our full-circle care promise to you. At Gluckstein, our top priority is advocating for our clients in the most respectful ways possible, assisting in any way we can to help those who have suffered traumatic accidents to recover with dignity and respect. This is part of our full-circle care promise to all those who walk through our doors. It is our honour to advocate on behalf of our community to the best of our abilities, so that those who are in future traumatic incidents are protected and covered in every way they deserve when they need it most. If you or a loved one have suffered a personal injury of any kind and would like to discuss your options moving forward, please do not hesitate to reach out for a free consultation. We will address any concerns you may have, and offer our plan for next steps to get you the resources you need to recover.