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  • Mark McCourt - Founder of McCourt Law Offices

Sprains, Strains and Automobiles

"The province should drop all proposals to cap compensation... it should find other cost savings that can be more easily, and fairly, implemented." -- Danielle Smith


"the effect of no-fault insurance or of capping compensation is to reduce incentives for drivers to avoid accidents." -- Jack Mintz


"I think you all know that I've always felt the nine most terrifying words in the English language are: I'm from the Government, and I'm here to help." -- Ronald Reagan


As UCP MLAs take the summer not only to hit the BBQ circuit but also to mull over possible auto insurance reforms, they need to be cognizant of the fact that Albertans know this issue is not merely about the price of the product. Rights are paramount, and Albertans have made this point crystal clear in polling on the matter. Yet after passing a toothless regulation late last year allowing (but not actually requiring) the Auto Insurance Rate Board (AIRB) to order auto insurance companies to refund good Alberta drivers the hundreds of dollars on average they've overcharged each of us over the past four years, UCP Finance Minister Nate Horner is now asking insurance lobbyists for tips on how best to reduce premiums for good drivers (much as one would ask a fox for tips on how to guard a henhouse). Minister Horner apparently thinks that's the way to go, even though expert Alberta economist Jack Mintz has advised that limiting tort rights is not the answer and that a truly conservative government (as opposed to a tax-and-spend liberal one) would help reduce auto insurance rates by scrapping the insurance premium tax without further delay.


While caving to the insurers by switching from the current tort law system to no-fault insurance (with or without a bogus tort "option" like in Saskatchewan) would be politically suicidal, staggeringly unpopular, and would foreseeably lead to the next government evicting private auto insurers from Alberta in favour of a public insurance corporation, some (far from all) UCP politicians unfortunately appear open to that FAFO move (which should be completely out of the question), or to marginally less odious ideas such as transferring nearly all of the responsibility to pay non-pecuniary injury victim compensation from reckless drivers' insurance companies over to Alberta motorists willing and able to foot the hefty and undeserved bill for those compensatory benefits themselves. With Alberta currently considering changes to auto insurance, it is unquestionably an opportune time to look back to the development of the Minor Injury Regulation (MIR) by the Klein government two decades ago.


In 2003, an auto insurance industry pleading poverty while in fact raking in record high profits sent its well-connected lobbyists to the Alberta government’s Finance Department (led at the time by Minister Patricia Nelson) to beg for a law to shield the multinational, multibillion dollar industry from having to fairly compensate Albertans (mostly women and children) hurt by careless drivers for their pain and suffering. By mid-October of that year, the insurance lobby’s biased bureaucrat buddies in Minister Nelson’s department had crafted a scheme to cap at $4000 pain and suffering compensation for innocent car crash victims sustaining injuries less serious than those specified on a draft “meat chart”. The proposed non-capped injuries included death, quadriplegia, paraplegia, serious traumatic brain injury, limb amputation, internal organ injury, fracture to the spine or a weight-bearing bone, third degree burns, loss of one or more of the five senses, or any other physical injury likely to result in permanent disfigurement or permanent impairment of an important bodily function that substantially interferes with a person’s usual daily activities or regular employment.


On October 26, 2003, influential media personality Danielle Smith absolutely lambasted the Finance Minister's proposal in her column in the Calgary Herald, wisely concurring with influential injury lawyer Mark McCourt and calling the scheme "immoral." Wrote Ms. Smith, "If the government sticks with its list of exclusions (instead of narrowly defining what injuries are 'minor') it will simply be soft-pedalling a policy that rips away benefits from Alberta's 19,000 injury victims each year, in exchange for a tiny reduction in insurance premiums that Alberta's 2.1 million policyholders won't even notice." After observing that the scheme might well be an unconstitutional violation of Albertans' freedoms (disability discrimination contrary to section 15 of the Charter of Rights), she concluded, "The province can use whatever terminology it wants to try and sell this scheme, but it still stinks. If insurance reform is going to work for regular Albertans, preserving the rights and interests of victims must be the starting point." 


The very next day following the publication of Ms. Smith's newspaper column, the Finance Department's scurrilous scheme was defeated by PC caucus in a vote. Instead, a compensation cap was implemented effective October 1, 2004, covering minor sprains and strains that heal relatively quickly, ie. within about 12 weeks of a motor vehicle accident (MVA). Despite amendments to the Minor Injury Regulation by the Notley NDP in 2018 and the Kenney UCP in 2020, the compensation cap does not apply to Albertans left in chronic pain by reckless drivers. Innocent Alberta car crash victims suffering chronic pain (defined in both law and medicine as pain persisting more than 3 to 6 months post-accident) remain entitled to full and fair general damages compensation from negligent motorists' insurers. And indeed, consistent with Ms. Smith's commendable column, both the Alberta Court of Appeal and the Supreme Court of Canada have ruled unanimously that legislation discriminating against chronic pain sufferers would be an unconstitutional infringement of their freedoms and thus would be struck down, rendering said legislation of no force or effect. 


Fast forward to present day, and Danielle Smith is now Premier of Alberta. The average Albertan's annual auto insurance premium has increased from $1018 in 2002 to $1684 now, some 22 years later. Statistically this rise is significantly below the general inflation rate, but Finance department bureaucrats hooked on marketplace meddling tend not to let the facts get in the way of their attempts to bamboozle busy elected officials into believing that there's an urgent crisis requiring drastic government intervention. After all, insatiable insurance lobbyists are back for more gravy and Alberta Finance bureaucrats are always happy to oblige, despite auto insurance companies yet again raking in record high profits billions of dollars in excess of target benchmarks set by the AIRB. While the obvious and sensible way to reduce premiums for good drivers is for the UCP government to order the AIRB to reduce excessive insurer profits (a solution supported by an overwhelming majority of Albertans) rather than ripping rights away from innocent victims, the utter absence of any rate rebate over the first half of 2024 signals that sadly, perhaps the Finance Minister was just kidding when he passed that regulation just before Christmas last year.


Accordingly, in addition to common sense solutions suggested by our firm in January and February of this year to bring Albertans' premiums more in line with rates enjoyed by motorists in our neighbouring public insurance provinces (including British Columbia, the latest jurisdiction to turf MVA tort law in favour of a socialist no-fault regime), Premier Smith's UCP government is considering a suggestion by the insurance lobby to confiscate from ordinary Albertans the right to obtain from reckless drivers' insurers pain and suffering compensation for "minor, non-serious" injuries. Albertans who want compensation (up to the minor injury cap limit prescribed in the MIR) for such injuries would then have to purchase (at a higher premium, of course) those compensatory rights back from their own auto insurer. Obviously, while such a scheme would reduce rates for reckless drivers, good Alberta motorists would see their rates rise if they chose to "pay the ransom" to recover a degraded version of their misappropriated freedoms.   


But wait, the insurance lobby's modest proposal is even worse than it looks at first blush. You see, the devil is in the details: while this deceptively named "Enhancing Care & Expanding Choice" scheme claims that it would only rob Albertans of rights to "minor injury" compensation from at-fault drivers' insurers, it in fact is soft-pedalling a policy that would bar Albertans from suing negligent drivers for pain and suffering compensation unless the injury is specified on the insurance lobby's proposed meat chart which includes "loss of a body part, significant disfigurement or significant scarring, a displaced fracture of a weight-bearing bone, loss of a fetus, and permanent physical or psychological injury." As Premier Smith undoubtedly is well aware, this would be both immoral and unconstitutional.


If the Smith government chooses to favourably consider some variation of the insurance lobby's indecent proposal, it is crucial that the only non-pecuniary compensation confiscated from consumers is for injuries defined under the current Minor Injury Regulation. Policyholders would then be at liberty to purchase from their own auto insurers general damages compensation coverage for minor injuries (as presently defined in the MIR) suffered due to the fault of another motorist. While this would be an unfair, unnecessary, unpopular, unconservative and unAlbertan revictimization of innocent injured auto accident victims (in particular, the 80% of them who suffer minor injuries) so as to unjustly enrich bad drivers and the abusive corporations that insure them, at least it wouldn't be unconstitutional, given that Albertans left in chronic pain by careless drivers still would be able to recover full and fair compensation from at-fault drivers' insurers (or from the Motor Vehicle Accident Claims Fund if the at-fault motorist either was uninsured or was an unidentified, hit and run driver).


About the author of this blog post: Mark McCourt has practiced law in Alberta for 33 years, and founded Edmonton auto accident injury firm McCourt Law Offices in 1995 and the Accident Victims/Insurance Policyholders Advocate (AVIPA) in 2003. Prior to that, Mr. McCourt worked in ancient times (during the 1980s) in the Constitutional Law Section of the Alberta Attorney General's Department. 


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