Canadian Underwriter

Appeal Court green-lights key feature of B.C.’s no-fault auto reform

May 12, 2022   by David Gambrill

Gavel and remote control from car on table.

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A central pillar of the B.C. government’s auto insurance reform — that the province’s Civil Rules Tribunal (CRT) has exclusive jurisdiction to determine minor injuries below $50,000, and not the courts — has been found constitutional by the B.C. Appeal Court.

The Trial Lawyers Association of British Columbia won a lower court ruling that said the CRT’s exclusive jurisdiction over determining minor injuries unconstitutionally usurped the power of the superior courts, hence denying access to justice. Or, to put it another way, B.C.’s auto insurance reforms limit claimants’ tort rights to pursue minor injury determinations in court.

But the Appeal Court overturned this lower court decision. It found the lower court judge erred in determining the CRT jurisdiction denied claimants access to justice.

Essentially, the Appeal Court ruled the constitution allows provinces to explore alternative routes to access to justice. In coming to this conclusion, the court’s 2-1 majority cited a dissenting Supreme Court of Canada  decision in which the Chief Justice discussed the importance of not interfering “with the ability of the provinces and territories to experiment with new forms of access to civil justice.”

In Trial Lawyers Association of British Columbia v. British Columbia (Attorney General), released Thursday, the B.C. Appeal Court decision is extensive and nuanced. It essentially starts with a July 2017 EY report to the government that pointed out a flaw in the government’s auto insurance system.

In that report, EY estimated that under B.C.’s automobile insurance system as it then existed, if the public insurer, Insurance Corporation of B.C. were to cover its costs, by 2019 the average driver in British Columbia would see their premium increase by more than 30% compared to 2017.

“A breakdown of ICBC’s operating expenses for its basic insurance product in policy year 2016 showed that ICBC was spending more on legal costs (24%) than on minor injuries (20%) or on non-minor injuries (17%),” the Appeal Court noted in its decision. “The report noted that British Columbia was the only province that was still using an unmodified ‘litigation-based,’ ‘adversarial model’ in which not-at-fault drivers sued at-fault drivers.”

The EY report suggested the need to fix this, and so the B.C. government announced a reform of the auto insurance product in 2020, saying it would be “removing lawyers and legal costs from the system,” with few exceptions, in a bid to reduce public auto insurance rates by 20% (or $400 per driver). As a major part of the reform, it ordered that the CRT, not the courts, would have exclusive jurisdiction to determine minor injuries.

“The need for ‘experimentation’ — for innovation — in access to civil justice for victims of minor injuries suffered in motor vehicle accidents in British Columbia is self-evident in light of the EY Report,” the Appeal Court noted in the majority ruling. “That report makes clear that the existing system of compensating for minor personal injuries in tort is threatening the viability of the public insurer, ICBC, and equally the actual compensation recovered by the victims of these minor injuries.

“In this latter regard, ‘In B.C. today, claimants receive less than 60% of their premium as benefits, with the remainder going to scheme costs including legal costs and disbursements. Best-in-class schemes around the world return approximately 80% of premiums as benefits to claimants,’” the court cites the report as saying. “In light of the EY Report, one can only conclude that there were serious issues facing British Columbia with the tort regime in place before the legislative action before the court was taken.”

The trial lawyers claimed taking away the claimants rights to sue in court over minor injuries was an access to justice issue. They argued, and the lower court  agreed, the government’s auto reforms unconstitutionally took power away from superior courts and conferred it upon inferior courts (such as administrative tribunals like the CRT), which have different rules for judicial appeal.

But the Appeal Court found the right to challenge CRT rulings over minor injuries still lay with the superior courts.

“In respect of many claims coming within the ‘minor injury’ category, the grant of jurisdiction [to CRT] will, practically, be exclusive,” the court ruled. “But there is a ‘safety valve’ in favour of the Supreme Court of British Columbia where, as described, that court determines it is not in the interests of justice and fairness for the tribunal to make the determination.

“This allows the [B.C.] Supreme Court to retain jurisdiction over the rebuttal of the monetary presumption and to retain jurisdiction over the ultimate determination of liability and damages.”

Appeal Court Justice Elizabeth Bennett wrote a dissenting opinion.

“I do not agree with [the court’s] conclusion that the core jurisdiction of the court has not been impermissibly infringed,” she found, siding with the trial lawyers. “In my view, the transfer of the jurisdiction at issue to the CRT has dealt a deep blow to the jurisdiction of the superior court.”


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