Victim impact of the decline of accident benefits
By AdvocateDaily.com Staff
In the first in a two-part series, Toronto personal injury lawyer Jennifer Hoffman explores how accident benefits in Ontario are being eroded.
Hoffman, founder of Hoffman Law P.C., says Ontarians have been sold a false bill of goods as the provincial government crusades to cut auto insurance premiums.
What many consumers don’t realize until they try to make a claim is that the price of lower premiums is lower benefits, she explains.
“Plaintiffs are very disadvantaged in the accident benefits arena compared to insurance companies,” she says. “Over the past eight years, there have been such drastic cuts to what plaintiffs can access that it feels like we’re headed towards the end of accident benefits — they will soon be obsolete.”
And to top it all, a recent report by David Marshall, the former CEO of the Workplace Safety and Insurance Board, revealed that Ontario remains the Canadian leader for insurance premiums, with an average annual cost of about $1,500 per vehicle, more than 50 per cent higher than the national average of $930.
Marshall’s withering report described Ontario’s auto insurance system as “one of the least effective in the country.”
“That’s the kicker: even with all these cuts, we still pay the most,” Hoffman says.
When it was introduced in the 1990s, she says Ontario’s no-fault accident benefits system was meant to provide a way for everyone to access benefits, including income replacement and medical rehabilitation for the acute stages of an injury post-accident, from their own insurers.
But, she says, Ontario’s provincial government began chipping away at the system in earnest in 2010, when injured victims were denied entitlement to housekeeping and caregiving benefits under most insurance policies.
“Drivers have the option of adding entitlement to these benefits for a little higher premium, but many insurers don’t even inform consumers about them,” Hoffman says.
The 2010 reforms also marked the introduction of the Minor Injury Guideline (MIG), which limited medical rehabilitation benefits for most non-catastrophic injuries to $3,500.
“Before that, non-catastrophic plaintiffs were allotted potentially as much as $100,000 if it was needed,” Hoffman explains. “Now, even if you can prove your injury is not minor, the treatment is capped at $50,000 unless you’re catastrophically injured.”
Then, in 2016, amendments to the Statutory Accident Benefits Schedule (SABS) enacted a series of cuts, including one that halved the combined limit for attendant care and medical rehabilitation services available for catastrophically injured victims to $1 million from the previous $2-million limit.
“These are people with the very worst injuries — quadriplegics and people with serious brain injuries — and their benefits were cut in half,” Hoffman says. “It’s very concerning because if you’re a 25-year-old who is bedridden after an accident, $1 million is not going to go very far. Maybe a few years at most if you need round-the-clock care.
“But the cut in benefits is not the only change we’ve seen in the system that has become anti-plaintiff,” she adds.
As part of the 2016 changes, all disputes under the SABS were diverted from the Financial Services Commission of Ontario, where they were subject to mandatory mediation, and into arbitration at the Licence Appeal Tribunal, while claimants also lost their right to sue in court over accident benefits.
“The idea was to streamline the process and shorten wait times, which sounds like a great idea,” Hoffman says. “But when you look at what has actually happened in the last two years, it plaintiffs are at a disadvantage."
Statistics from Licence Appeal Tribunal (LAT) decisions show more than half of the disputes are settled in favour of the insurers, she says, particularly when the injuries involve chronic pain or whiplash types of injuries.
In addition, victorious claimants are generally not entitled to costs unless they can demonstrate egregious behaviour on the part of the insurer.
“That’s a very high threshold to meet, which leads to further access-to-justice issues,” Hoffman says.
Stay tuned for part two in the series where Hoffman will review challenges to the tort system.