September 27, 2004 by Canadian Underwriter
The Newfoundland government has selected a trial lawyer to act as consumer advocate in its hearings on insurance issues before the Public Utilities Board (PUB).
Tom Johnson, a partner in O’Dea Earle Law Offices, will speak on behalf of consumers at the hearings, which commence October 4. First the PUB will hold a “benchmark hearing” an auto insurance, followed by a review of auto, homeowners, commercial and marine insurance.
The benchmark hearings are an annual event to set minimum and maximum rates for auto insurance, but this year’s will deviate somewhat as the process by which the PUB sets these rates will also be under the microscope.
As for the broader review of insurance issues, a government release notes, “the PUB will be directed to identify options for reducing auto insurance costs and to look at a range of automobile insurance issues, such as the use of a cap or deductible on pain and suffering claims and elimination of rating based on age, gender or marital status. The review, which will include a public hearing process, will also examine solutions to the availability and affordability issues surrounding homeowner, commercial (property and liability) and marine insurance.”
The appointment of a trial lawyer to speak at the hearings has raised the eyebrows of local risk manager representative Craig Rowe. In a letter, Rowe, who is president of the Newfoundland & Labrador chapter of RIMS Canada, says, “A quick scan of the Yellow Pages shows that his [Johnson’s] law firm specializes in accident and injury litigation. In case it isn’t abundantly clear to everyone, a very big part of the problem with insurance premiums is the cost to settle injury claims of people that are represented by accident and injury law firms.” Rowe says the consumer advocate should be unbiased, with no apparent conflict of interest.
Rowe has publicly stated the need for reform of the Newfoundland auto system changes made under the recently enacted Bill-30 have caused several insurers to leave the province, citing the lack of reforms to curb claims costs. Rowe says the reforms which have worked in other provinces, notably a cap on awards for “pain and suffering” in minor injury cases, run counter to the interests of trial lawyers.