Recent ICBC Changes
We have all been hearing in the news, and from politicians and representatives of ICBC, that the Corporation is in a financial mess. I have been a personal injury lawyer practicing at Nixon Wenger LLP for over 27 years, including for many AIM members. This is not the first time ICBC and the government have made such claims. The current rhetoric says ICBC is in financial ruin, that claims costs are killing the corporation bottom line etc. It always seems to be the injured people from motor vehicle accidents that get blamed for the financial issues that the corporation complains about. It is always the same story in the over 27 years I have practiced; its easy to blame the people that get hurt because insurance companies in Canada spend millions of dollars in ad/propaganda campaigns trying to convince us all that people that have motor vehicle accident claims really “aren’t hurt”.
The latest from ICBC represents the same theme. Blame the average person that gets hurt by the negligence of another driver. Even though we all pay for the insurance coverage to ensure that a person is properly compensated if we are negligent and cause injury and loss. It always seems to be the fault of injured people and the lawyers that the corporation is losing money and has to raise premiums. We don’t see ICBC taking responsibility for mismanagement of claims and inefficient business practices.
Starting April 1, 2019 ICBC will have an injury cap system in place, along with a host of changes to limit recovery by people injured in motor vehicle accidents. The government and ICBC justify the changes saying the focus will be on helping people get better by increasing no fault medical benefits. But what will be in place is a more bureaucratic system with more forms and limitations on coverage; more like a workers compensation system. These changes in effect reduce the third party liability coverage we pay for, but does ICBC tell us that it is going to lower the third party liability component of your insurance premiums (by far the largest portion of your insurance costs)? No, of course not. ICBC also isn’t telling us that only a tiny fraction of all claims on an annual basis will ever come close to using up the notional increase in health and medical benefits that they now offer up to try and smooth the effects of an injury cap system. And of course ICBC isn’t telling us that it helped create a big financial loss in 2018 to justify drastic change to a cap system by re-reserving claims (all behind closed doors) so that the risk side of the claims went up creating the prospect of greater financial loss. Smoke and mirrors.
We all need to understand that ICBC actually made a profit for many years when it had a local, adjuster driven claims management model. However this changed in part because respective governments, both NDP and Liberal, took the profits and spent that money to look better in the public’s eyes. In addition, ICBC has been downloaded many governmental type costs with respect to vehicle licencing etc, and in effect has become a secondary form of taxation for the citizens of British Columbia. Neither political party that ends up in power wants to discuss those types of issues because they both want the dollars to still flow from ICBC so that they can spend it on their own agendas. All the while the average person pays increasing insurance rates and gets blamed for the financial performance of the corporation.
The blame game continues as the Minister responsible for ICBC, David Eby, recently unilaterally made changes to the Supreme Court Rules and use of experts on the basis that injury claims in the courts and the costs associated with it had to be managed better so that it cost ICBC less money. There was no consideration for how ICBC created the extra costs by its hardnosed conduct with claimants, and there was no consideration of the impact on the system as a whole and the rights of injured people. There was little or no consultation with even the parties in the system, either lawyers or judges. Around the same time a representative of ICBC was telling the public that it wasn’t in financial ruin and that in essence the complaints of ICBC as a “dumpster fire” is just politics. So what is going on?
It’s what I alluded to at the outset of this article. The average citizen in British Columbia who unfortunately suffers an accident due to the fault of another person gets blamed for being injured and it being too costly for them to be fairly compensated. ICBC doesn’t ever complain about the hundreds of thousands of claims they have settled well below what is even remotely fair compensation based on the applicable law. ICBC never mentions the various times they have changed their claims management policies, like they have recently, to supposedly “get tough” which directly results in significant extra costs, and in many cases significant wasted costs. Ask any lawyer working in the Okanagan that does personal injury work and he/she will tell you of many examples where ICBC refused what was a reasonable offer on a claim and consistent with the law of the land, yet they were forced to go to trial and ended up getting more than was even asked for in the first place. ICBC never seems to take responsibility for those instances, and of course never mentions them to the public or to the politicians that do their bidding to change rules and change legislation to make it easier for them to deny or limit claims.
Now with the above said, I have worked for many years with good people inside of ICBC (for example, many claims adjusters) that know what they’re doing, are good at their jobs and they do their best to treat claimants fairly. When we had local claims centres, with local adjusters who looked you in the eye and understood how you were injured and how it impacted your life, I believe claimants were treated more fairly. It doesn’t mean that they just handed over a bunch of money to every claimant, but it was a lot fairer. For the last many years ICBC changed to a centralized authority system and the local claim centres and local adjusters were no longer trusted to do the job they were hired to do. This more than anything is what has caused the Corporation to incur substantially greater claims costs. On top of that the experienced claim adjusters working for ICBC have been leaving en masse.
I saw a recent survey, from both sides of the political spectrum, which noted that over 80% of British Columbians want ICBC sold off and auto insurance privatized. Some say that is the only way the system can really be fixed because people are tired of all the politics being played with ICBC as a Crown Corporation and average citizens being blamed for its financial woes. Having competition in auto insurance seems to make sense to a lot of people and it certainly could mean better, more efficient claims management and more choice for British Columbians in terms of auto insurance. The only way we can make this happen is by telling our MLA’s and the politicians around us, whoever is prepared to listen, that we want ICBC privatized and that we won’t put up with this anymore.
Finally, we have to call the politicians and the insurance companies like ICBC out on their blaming the people that get hurt. We all need to ask ourselves, why do we even buy insurance in the first place and why should we keep paying these high rates just to get told that the benefits of it keep getting narrowed and limited so that a Crown Corporation can supposedly save itself from losing money due to its own practices. It’s a political shell game and we need to say enough’s enough.
Michael Yawney, Q.C. is a senior litigation partner at Nixon Wenger LLP, the North Okanagan’s largest law firm. He has been a member of the Association for Injured Motorcyclists (AIM) for many years, on the Board of Governors for the Trial Lawyers Association of British Columbia, is a member of the Canadian Bar Association and has represented many personal injury clients. The opinions expressed herein are the opinions of the writer and are based solely on his views and experience over the many years he has practiced personal injury law in British Columbia.