New auto insurance legislation restricts right to sue, critics say
The Ontario Trial Lawyers Association says the devil is in the details of legislation designed to reduce auto insurance premiums and tackle fraud.
Thestar.com
Nov. 20, 2014
By Richard J. Brennan
The Ontario Trial Lawyers Association says the devil is in the details of legislation designed to reduce auto insurance premiums and tackle fraud.
The Fighting Fraud and Reducing Automobile Rates Act passed Thursday but Steve Rastin, president of the OTLA, noted there’s a clause buried in the legislation that removes a motorist’s right to sue an insurance company for denying their claims.
Bill 15 doesn’t actually mention an earlier 15 per cent reduction that was spelled out in the 2013 budget.
“We are profoundly disappointed in the government for what they did today,” Rastin said, noting the government has replaced the right to sue for denied claims with a convoluted arbitration system that, he claims, will be both costly and time consuming.
Rastin said while the association supports most of what is included in the bill, it finds the removal of the right to sue, and reducing the interest rates that injured claimants get on their money from insurance companies - which is kept in a reserve account - from 5 per cent to 1.3 per cent as completely unacceptable.
“The legislation says it’s all about fraud and fighting costs. There is a lot more in there than that that’s been added to it. The legislation ends the right of an accident victim to sue the insurance company in the courts for not paying for benefits,” Rastin said.
Finance Minister Charles Sousa first promised the 15 per cent reduction in August 2013 when the New Democrats made that a condition of supporting the then-minority Liberal government’s budget earlier that year.
As it turned out the NDP voted against the bill Thursday for many of the reasons cited by the trail lawyers, including the fact the reduction in premiums is taking too long. From August 2013 to this August the premiums dropped by an average of only 6 per cent.
Ralph Palumbo, vice-president, Ontario, Insurance Bureau of Canada, welcomed the legislation.
“Everyone - including the insurance industry - is in agreement on one thing: auto insurance in Ontario is far too expensive. We realize the financial hardship it can create for vehicle owners, particularly young people and those in northern and remote communities...now we have an opportunity to begin fixing the system once and for all,” Palumbo said.
