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Marshall Report misses the point: Mahabir

The Marshall Report on Ontario’s auto insurance system misses the mark, says Toronto personal injury lawyer Jessica B. Mahabir.

David Marshall, the former CEO of the Workplace Safety and Insurance Board, delivered a withering assessment of the province’s regime after he was appointed by the government to study it.

Finding the average Ontario driver paid an annual insurance premium of nearly $1,500 per vehicle, more than 50 per cent higher than the national average of $930, Marshall described Ontario’s auto insurance system as “one of the least effective in the country.”

“I don’t disagree that the system needs an overhaul. Ontario drivers pay more than anyone else, but despite that, accident victims get less and less in terms of benefits,” Mahabir, a lawyer at Derfel Injury Lawyers, tells “Where I part with him is when he suggests lawyers’ fees are part of the problem.”

Marshall expressed frustration that while the fatality and accident levels on Ontario’s roads have fallen consistently, the cost of claims has continued to go up. The system “is filled with disputes and inefficiencies, and a very high percentage of premiums are being used to pay experts and lawyers and not going directly to injured persons,” he wrote.

“Marshall misses the point by failing to discuss the importance of access to justice and the reasons why so many accident victims feel the need to hire a lawyer in the first place,” Mahabir says. “One of the major reasons is that regulations and legislation surrounding the accident benefits system are completely unintelligible to the average person. That creates an inherent power imbalance between injured victims and deep-pocketed insurance companies.”

“It doesn’t make sense for a vulnerable injured person to try to do it all on their own, so they come to a lawyer to help them get the benefits they need to move on with their lives,” she adds. 

Marshall’s report identifies a central flaw in the system that allows its key participants to “work at cross purposes.” 

To fix it, he suggests setting up a new arm's-length, proactive regulator that would overhaul the current rules to make them more straightforward to understand and apply.

Marshall calls for a new system for the compensation of catastrophically injured claimants that would move away from cash settlements, which he said were being “drained by having to pay legal fees” and in any case fail to “adequately meet” their needs.

In addition, he said the new regulator should create programs of care for most common injuries to reduce disputes over treatments, and as part of a broader “care not cash” approach that will shift “the focus to the needs of the patient rather than the amount of the settlement.”

Marshall also said contingency fees for lawyers need more transparency and called for looser regulation and price controls to allow insurers to compete more freely in the marketplace. 

The report added that further reductions to benefits would not be a solution to the problems in Ontario, and rejected the idea that the province should switch to the public-sector delivery approach used in other provinces, including British Columbia and Manitoba.

“I think Marshall is right that benefits don’t need to be cut any further,” says Mahabir, pointing out that the last set of reductions are barely a year old.

In June last year, amendments to the Statutory Accident Benefits Schedule 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 old $2-million limit.

“’I think Marshall misses the mark because he doesn’t acknowledge that this accident benefits system was created as a consumer protection device to get people access to rehabilitation and income replacement benefits they need following an accident, rather than forcing them to resort to a lengthy lawsuit to see any recovery,” Mahabir says. “It treats the system as if it’s a favour being done for people by insurance companies when really it’s there for the benefit of injured people.”

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