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Conservative Party of BC calls for reforms to ICBC’s no-fault insurance

Public Safety Minister Mike Farnworth says John Rustad’s reform proposal will drive up costs
Conservative Party of BC Leader John Rustad has proposed reforms to ICBC’s no-fault insurance, but Public Safety Minister Mike Farnworth says Rustad’s reforms would drive up costs. (THE CANADIAN PRESS/Chad Hipolito)

Calls for reforms to ICBC by Conservative Party of BC Leader are getting the thumbs down from a government warning of higher insurance premiums.

John Rustad last week proposed reforms to ICBC’s no-fault insurance model called Enhanced Care, which has been in effect since May 1, 2021.

The system gives injured British Columbians the same access to what government calls enhanced accident benefits regardless of who bears responsibility. The previous system provided what government called in a 2021 background paper “modest treatment and recovery benefits, along with the ability to sue for additional compensation, but only if the injured person (was) not at-fault for a crash.”

Critics of the new system such as the non-profit Trial Lawyers Association of British Columbia say the new system denies most car accident victims the power to file personal injury claims unless courts had convicted at-fault drivers of criminal offenses such as drunk driving.

Critics have also argued the new system leaves victims at the mercy of ICBC and lamented a perceived lack of fairness in that the only significant consequence for at-fault drivers may consist of higher insurance premiums.

But the old system also drove up legal costs, a “key reason” why rates had been rising before the change, according to government, with British Columbians sometimes facing double-digit increases in their insurance premiums.

In 2019, the top seven personal injury firms alone received an estimated $100 million in contingency fees and during the two years before the new legislation, drivers had spent about $1 billion on insurance premiums directly going to lawyers in the form of contingency fees, according to the backgrounder.

While Rustad acknowledged that the previous system had driven up costs, he said reforms are nonetheless necessary when it comes to catastrophic injuries.

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“No-fault (insurance) is something that needs to be in place for soft-tissue injuries, It was driving up costs. It was 85 per cent of the expense challenge for ICBC. This needs to be in place still to protect ratepayers,” he said.

“However, when you have a serious injury, a life-altering injury, you should be able to fight for what you need. You shouldn’t just be accepting from a Crown corporation when they say, ‘this is what you get, because this is what our tables say.’”

Minister of Public Safety and Solicitor General Mike Farnworth, however, questioned Rustad’s proposal in reminding Rustad of his former connection to the BC Liberals, now BC United, under the leadership of Kevin Falcon.

“Our action to take exorbitant lawyer fees out of ICBC allowed us to reduce insurance costs for drivers by an average of $490 per year, provide over $500 in direct rebates on average, and freeze basic rates for two years (2023 and 2024),” Farnworth said.

“Both John Rustad and Kevin Falcon opposed those changes,” he added. “Cancelling Enhanced Care and going back to the old BC Liberal approach would cause rates to skyrocket along with legal fees for lawyers, just like under Rustad and Falcon before. That would be good for certain lawyers, but terrible for drivers.”

According to a government backgrounder, catastrophically injured British Columbian do not have to wait years for a costly court settlement that would likely fall short of their care needs, with lawyers clawing back up to 33 per cent.

Under the former model, the maximum care and recovery benefit which catastrophically injured persons could receive without going through a lengthy legal process, was up to $300,000, if they weren’t at fault. That amount would need to pay for all their care for the rest of their life.

Beyond receiving all the care benefits needed over a lifetime, anyone suffering catastrophic injuries will receive compensation for permanent impairment of up to approximately $288,144, along with any entitled income replacement benefits.

Income replacement benefits for eligible British Columbians are based on 90 per cent of their regular incomes, subject to a payment cap of $105,500 annual gross income as of April 1, 2022, with the ability to purchase to income insurance for individuals with incomes above the cap.

Enhanced Care is currently the subject of a constitutional challenge by Tim Schober, a Saanich senior left paralyzed after a car hit him while cycling in August 2021.


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Wolf Depner

About the Author: Wolf Depner

I joined the national team with Black Press Media in 2023 from the Peninsula News Review, where I had reported on Vancouver Island's Saanich Peninsula since 2019.
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