Newfoundland auto changes not likely to include tort reform

There is little chance that Newfoundland will follow through on its proposal to limit tort claims as a means to reducing the cost of auto insurance in that province, after a recent study revealed opposition to the plan.
Tort reform is just one of 51 changes proposed by Minister of Government Services and Lands Walter Noel, and the only one to receive opposition, he says. “There appears to be broad public support for implementation of most of the proposals. However, there is strong opposition to the option of restricting compensation for less serious injuries, which appears to be the most promising way of keeping insurance rates lower than they would otherwise be.”
The department received 810 comments on the tort proposal, 728 or which were in opposition to restricting compensation. Noel notes that very few comments were received on the other proposals, which include such things as mandatory accident benefits coverage, increased penalties for uninsured drivers and installing a public representative at insurance rate hearings held by the Public Utilities Board.
A February public opinion poll conducted by the government shows 58% would prefer to maintain the current conditions for compensation, even if it would mean there would not be lower liability insurance premiums, while 34% said they would prefer to limit compensation. An earlier survey had shown that 63% wanted to limit claims, and 31% wanted the status quo.
Noel notes that 70% of Canadians live with restricted systems, and such restrictions (limiting non-economic claims only to those suffering serious or permanent injury and raising deductibles to $15,000) would reduce liability premiums by 35%. “However, whether the savings justify accepting restrictions on compensation is a legitimate question. As I have said many times, government will not consider adopting such a system unless people want it.”
That said, Noel said that many of the responses showed a lack of understanding of the proposal. He blames this on such groups as the Coalition Against No-Fault Insurance, and claims the proposal does not represent a no-fault plan. “While the paper has stimulated much good debate, it is unfortunate that some parties deliberately cloud some of the extremely important issues. The misleading information is probably largely responsible for the fact that we actually received 241 comments specifically directed towards no-fault, with 235 of those respondents disagreeing with a proposal which was never made.”
According to Noel, the Coalition gave out false or misleading information, such as that insurance costs in the province were $308 per capita. This does not take into account that there are fewer drivers among the population and fewer high-cost commercial policies, he contends. The government calculates average policy costs are $720, the highest in the country.
But he also said that insurers are responsible for rising claims costs. “While the [insurance] industry claims to be doing the best it can, it has to do more. There is too much evidence of unnecessary payments being made,” he says.
The department is holding a town hall meeting on automobile insurance reform on March 12 and Minister Noel has invited all Atlantic ministers responsible for insurance to meet in St. John’s on March 22 to discuss the issues.