Letting Go of Lawyers: ICBC overhaul could see rates drop by 20 percent

Victoria, British Columbia — British Columbia’s provincial NDP government has announced plans to overhaul the province’s vehicle insurance system, which could see skyrocketing auto insurance premiums drop as much as 20 percent, as the province cuts lawyers out of the court and claims process.

B.C. Premier John Horgan announced the new legislation on Thursday. The province claims that Insurance Corporation of B.C. (ICBC) premiums will drop as much as 20 percent⁠—about $400 per driver, per year⁠—as the insurer introduces a system designed to redirect hundreds of millions of dollars spent in legal costs each year to directly benefit B.C. residents injured in car collisions.

If the legislation is made into law, new rates would take effect on May 1, 2021⁠—ICBC has promised that rates will not change this April. 

The new legislation also states that maximum care and treatment benefits for anyone injured in an accident could increase to at least $7.5 million from the current $300,000 limit⁠, with the benefits available to any B.C. driver without hiring a lawyer. 

The legislation would require ICBC by law to assist every person who makes a claim and to ensure they receive all the care and benefits to which they are entitled.

Under the existing system, people who are not at fault for accidents can pursue additional benefits through the courts. The new care and recovery benefits plan would be available to anyone hurt in a crash, regardless of who was at fault.

Further, the legislation also states that B.C. drivers may sue anyone who is convicted of a criminal offence in relation to an accident, as well as car manufacturers and makers of auto parts.

Since the NDP government came into provincial power, B.C. Attorney General David Eby has targeted rising legal costs as a source of the problem. The government says legal fees amounted to $700 million in the current fiscal year and are projected to rise to nearly $1 billion by 2022. 

“You shouldn’t need a lawyer to access the benefits you’ve paid for,” Eby said in a news release. “By removing expensive lawyers and legal fees from the system, we are making ICBC work for British Columbians again with more affordable insurance rates and much better coverage, so anyone injured in a crash gets the care they need.”

Though Eby did not use the words ‘no-fault’ during his Thursday speech, the Trial Lawyers Association of B.C. (TLABC) has declared that the province’s NDP government is indeed introducing a no-fault insurance scheme.

ICBC expected significant pushback from the TLABC, which has since released a statement.

“We are deeply disappointed and concerned that our public insurer is at grave risk of creating increasingly higher costs for insurance, unduly burdening our most vulnerable citizens,” said the organization. “The rights of British Columbians, especially those who have been injured and are vulnerable, are at grave risk with today’s announcement.”

Last October, the province attempted to save money in a similar way⁠—by limiting the number of expert reports allowed in auto insurance lawsuits. The plan was deemed unconstitutional, forcing the government to find other ways of cutting costs.

The new plan will bring the Pacific province in line with provincial insurance schemes like Manitoba Public Insurance and Saskatchewan Government Insurance⁠—and, according to B.C., the savings to lawyer payouts will eventually make ICBC premiums some of the lowest in the country.

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