McGuinty’s Early Christmas Gift to Auto Insurance Companies

After Finance Minister Dwight Duncan stood up in the Ontario Legislature last Monday and publicly wrung his hands at the mountain of motor vehicle accident claims in the province, he did what any clear thinking and sincere politician in his shoes would do to deal with rising auto insurance premiums – give more money to the insurance companies.

The proposed changes to the Province's automobile insurance regulations, due to come into effect next summer, would see the maximum allowable medical and rehabilitation coverage drop from $100,000 (in non-catastrophic cases) to $50,000.

The changes would also remove an injured person's right to obtain an assessment from their own doctor if they disagree with the findings of the insurance company's health provider.

But he didn’t announce that for the same money the average consumer would get less in accident benefits. He talked about “choice.” And everybody knows it’s good to have choices.

He added that drivers could still purchase $100,000 or even $1-million in non-catastrophic medical and rehabilitation benefits if they chose after the proposed changes come into effect. Motorists will also get options on the level of insurance coverage they want for attendant care, housekeeping and death and funeral expenses.

The recent proposals for auto insurance reform are simply the latest salvo in a decades-long erosion of the rights of motor vehicle accident victims.

In 1990 the government introduced legislation that only permitted compensation for pain and suffering in cases where it could be shown that injuries sustained had become “serious and permanent.” In 1996, the government of the day thought that insurance companies should be awarded a $15,000.00 deductible if pain and suffering claims met the “serious and permanent” threshold. That deductible was increased to $30,000.00 in 2003.

These unconscionable changes to the auto insurance landscape have given Ontario the reputation of being the toughest jurisdiction in North America for accident victims.

What is clear is that motor vehicle accident victims, their advocates and supporters have nowhere near the power or influence the insurance industry has. And as long as that imbalance remains, the insurers can always count on government to do their bidding.

- Stephen Ellis, Toronto

Stephen Ellis is a Toronto, Ontario lawyer

Visit our Toronto Law Firm website: www.wiselaw.net

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Trial Lawyers' Association President: Ontario Motor Vehicle Insurance Law Unconstitutional

Richard Halpern, President of the Ontario Trial Lawyers’ Association says the “verbal threshold” provisions of section 267.5(5) of Ontario's Insurance Act contravene Canada's Charter of Rights and Freedoms.

Under the legislation, damages awards in personal injury claims arising from motor vehicle accidents are subject to a deductible of $30,000.00, unless the damages awarded exceed $100,000.00.

Commenting in Law Times on a recent Alberta Queens Bench decision, striking the Province's $4,000 damages cap on soft tissue injuries from motor vehicle accidents and holding that the cap violated s. 15(1) of the Charter, Halpern said:

Our positions is, if the Alberta cap is unconstitutional, then there are provisions in the Insurance Act in Ontario that are unconstitutional under the same reasoning...

It discriminates on the basis of age, disability . . . retired people, children, the unemployed, and the disabled,” says Halpern.“If there is a need to control claims costs for the industry — keep premiums affordable — this is not the way to do it...

The Charter challenge, having a retroactive affect as it does, means that the industry really has brought this upon [itself] by promoting changes while ignoring the rights of accident victims.

- Garry J. Wise, Toronto

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Go-Kart not an Automobile

In a decision released on December 5th 2007, the Ontario Court of Appeal has ruled that a go-kart operated on a private track is not an “automobile” within the meaning of the standard Ontario automobile insurance contract.

Denis Potvin was injured while driving a go-kart on a track owned and operated by the Pineland Amusements Ltd. He lost control of his go-kart after colliding with a go-kart driven by his father, Roland Potvin. Denis suffered injuries and sued Pineland and his father for damages related to the injuries.

Roland made a third party claim against his automobile insurer, Kingsway General Insurance Company, alleging Kingsway had a duty to defend and indemnify him pursuant to the insurance policy. Kingsway defended the third party claim on the basis that the automobile insurance policy did not cover the go-kart.

Kingsway brought a motion seeking determination, prior to trial, whether the automobile insurance issued to Roland covered damages for injuries from the go-kart accident.

The question before the motion judge was whether a go-kart is a vehicle that requires to be insured under a motor vehicle liability policy pursuant to the provisions of Compulsory Automobile Insurance Act. Section 2 of this Act prohibits the operation of a motor vehicle on a highway unless the motor vehicle is insured under a contract of automobile insurance.

The motion judge held as under:

"It cannot be disputed that a go-kart is a motor vehicle, which is capable of being operated on a highway. The question of whether it is lawful to do so is irrelevant. If operated on a highway, being a motor vehicle, a go-kart would require insurance under s. 2(1) of the CAIA. Therefore, it is an automobile in my opinion."

The Appeal Court disagreed with the motion judge’s conclusion and held as under:

"….. the motion judge erred in basing his conclusion on the possibility that a go-kart could conceptually be driven on a highway. This particular go-kart was operated not on a highway, but on a private go-kart track. The question whether the go-kart would require motor vehicle insurance if it were illegally driven on a highway did not arise. The proper question was whether it required motor vehicle insurance at the time and in the circumstances of the accident. It did not, and therefore was not an “automobile” within the scope of Roland’s automobile insurance policy.

For full text see: Adams v. Pineland Amusements Ltd

- Shashi K. Raina, Toronto

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