BarTalk | February 1997

SPECIAL NO-FAULT INSURANCE ISSUE Newsletter of the Canadian Bar Association (BC Branch) February 1997

• Vol. 9 • No.1

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Bar takes No Fault Insurance battle to the people of B.C. Series of Town Hall meetings to be held throughout the province else must," she said. "The Bar has, therefore, Declaring that ICBC and the goverrunent have pushed through a" flawed" consultation process decided it will hold a series of Town Hall meetings throughout the province in order to on automobile insurance reform, the British Columbia Branch of the Canadian Bar ensure that all British Columbians have the Association has announced it will sponsor a opportunity to state their views on the changes being considered by goverrunent and ICBC." series of public meetings throughout the province to discuss this critical issue.

The first Town Hall The announcement came at a meeting was held ThursNow it's the Public's Turn President Emily Reid, Q.C. special news conference held by day, February 13, in Page 2 the Bar on Thursday, February 6, Karnloops. A schedule of A Flawed Processadditional meetings was shortly before the presentation of Wrong Conclusions still being drawn up as a CBA report to the Commission The CBA report to the BarTnik went to press . of Inquiry into automobile Allen Commission of Inquiry When communities and insurance, chaired by former On Automobile Insurance dates have been selected, deputy minister Douglas Allen.

Page 3 The CBA report was critical of the members of the Bar and Point CounterPoint residents will be notified. process of consultation on auto The CBA and the KPMG Report In its presentation to insurance reform and of the Page 4 the Allen Commission, the recently-released Volume II ofthe Speak out-NOW CBA report said the KPMG consultant's report on How you can get involved KPMG consultant's report automobile insurance in British Page 8 Columbia. A condensed version on auto insurance agrees of the full CBA report is printed in this issue of that changing the existing auto insurance system-eveniftotal No Faultis BarTnik.

At the news conference, CBA President Emily introduced-will not result in long-term control of insurance costs.

Reid said that the Bar was extremely unhappy The report also said that the only way to with the consultation process created by the modify cost trends on a long-term basis is to goverrunent and ICBC. "The govenunent has failed to listen to British change driver behavior through sweeping traffic safety initiatives like intersection photo radar, Columbians on this issue," she said. "The hearings have been held behind closed doors tougher licencing standards and stricter enforcement of all traffic safety laws. It was coand we think that's just not good enough," she said, adding that the issue is too important to be written and presented to the commission by left to a "backroom" process.

John Waddell, Q. C., Gregory Steele and Donald "If goverrunent won't lead the way, someone Yule. +

PRESIDENT'S MESSAGE

It's time for the public to speak out ICBC is WRONG-This is not just a lawyer's issue

EMILY REID, Q.C., CBA (BC Branch) President 1996/97

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fter weeks of exposure to lawyerbashing ads and frantic efforts on our part to meet this government's whirlwind time line for consultation on auto insurance reform, the CBA is taking its case to the public. People need to know that this is not just a lawyer's issue but a matter of vital concern to them.

The provincial government has not listened to us. Last fall, we submitted a comprehensive set of proposals to them to control auto insurance and legal costs. They were solid, workable suggestions for reform of the civil justice system and ICBC. Our proposals were based on recommendations contained within the CBA Task Force report on Civil Justice reform released last summer.

Reform of the civil justice system is a serious issue for the profession, the general public and the business community. One of the participants in the CBA Task Force, Mr. Justice Bruce Macdonald stated, in a recent BarTalk interview, thatif we can't reform our present system: " ... the civil justice system will disappear because people will move to other means of resolving disputes."

Lawyers are, therefore, motivated to change the system. The reforms we suggested could help to reduce much of the court and legal costs that ICBC and the government have complained so much about while still retaining the benefits of a tort system that guarantees people in British Columbia the right to access to justice.

By the time you read this, we will have presented our case to the Allen Commission of Inquiry on automobile insurance, a review team that conducted a number of private hearings with interested stakeholders in January and February. We considered not appearing before this commission because of the way the consultation process has been handled by the ICBC and provincial govermnent.

In the end, though, we decided that we should appear because we were informed that Mr. Allen is an honourable man and that his intentions in the review were honourable, in spite of the government and ICBC' s actions. At the same time, we decided on a strategy of holding Town Hall meetings throughout the province to make

sure that the public was informed about the seriousness of this issue. We also took our case to the media in a news conference held prior to our presentation to the Allen commission.

Throughout our efforts to make our case against No Fault insurance and for access to justice, I have been impressed by the time and energy that Branch volunteers have dedicated to this issue. All of us in the Bar are in their debt for the literally hundreds of hours of time they have spent on our effort.

John Waddell, Q.C., past-president of the CBA, took the CBA Task Force report proposals for reform and linked them with additional suggestions for ICBC reform. John has spent dozens of hours in meetings devoted to this issue.

Members of our Fair Automobile Insurance Committee have also devoted untold hours of their time. Thanks go to John Ankenman, Nicole Garson, Rob Gourlay, James Vanstone and Karl Warner. As well, I must single out Don Yule, a CBA President's Medal winner and chair of this committee, for special mention. I don't suppose anyone knows more about auto insurance in B.C. than Don. He is always there, whenever we need him, offering advice, help and encouragement.

Finally, very special thanks to Greg Steele, a member of the CBA executive and the Fair Automobile Insurance Committee, for the extraordinary time and effort he has devoted. As many of you know, Greg has travelled throughout the province during the past weeks, making our case known to the media and the Bar. Greg has been a powerful spokesperson for our position.

I would also like to acknowledge the massive effort that the Trial Lawyers Association of British Columbia has put into this issue. They have done a great deal to bring it to the forefront and establish credibility for lawyers and the current justice system.

Now it's time for the rest of us to put everything we can behind this effort to preserve access to justice for all British Columbians. Support our Town Hall meetings, write the Premier, your MLA, and anyone else that matters. Talk to friends, family and professional acquaintances. • Make your voices heard!

BarTalk Vol. 9 No. I

A Flawed Process-Wrong Conclusions Following is a condensed version of the CBA report that was presented to the Douglas Allen Commission of Inquiry into No Fault Auto Insurance tis the position of the Canadian Bar Association, B.C. Branch, that the KPMG Report, Volume I, does not provide conclusive evidence that automobile insurance in the Province of British Columbia needs to be substantially overhauled. The report does show that the cost of insurance has been increasing at a rate higher than the rate of inflation and argues that this is an unacceptable situation. However, the authors of the report also concede that changing the system will not address this trend.

What the report clearly demonstrates and what we also advocate is for the Province of British Columbia to get serious about accident prevention and to implement traffic initiatives that have been implemented in other jurisdictions and discussed in the KPMG Report. It is only through the implementation of such traffic safety initiatives that the trends in the cost of insurance will be reduced.

Although KPMG suggests that insurance product needs to be changed, the only justification provided for this recommendation is that the current system is unfair. To achieve fairness they argue that "minor" claims must be eliminated. Their proposals, however, and their definition of serious injury claims will result in the elimination of 94 per cent of claims.

Throughout the KPMG report, it is recommended that more money should be paid to the seriously injured. Under the products proposed by KPMG, the only seriously injured people who will receive more money are those people who cause accidents. The seriously injured-but innocent victims of traffic accidents-will not receive increased benefits but in many cases will receive less.

In response to the suggestion that no fault insurance schemes do not punish at fault drivers, KPMG notes that the criminal system does. However, we do not accept that the criminal justice system is the appropriate means of determining compensation for victims of motor vehicle accidents.

Government and all stakeholders have an abiding interest in ensuring fairness in the application of any automobile insurance scheme. The legal profession believes that the only entity that can be trusted to ensure fairness in any dispute between an individual citizen and a public institution is an independent and accessible judicial system.

THE PROCESS OF CONSULTATION The future of automobile insurance is one of the most significant issues in British Columbia. Everyone in this province--even those who never drive but may occasionally be passengers-should care about what happens to them or

their family members in the event of a automobile crash. The financial, psychological and emotional trauma of a accident can be catastrophic.The Canadian Bar Association also realizes that for many ordinary citizens, the payment of insurance premiums every year constitutes a significant economic hardship. We are, therefore, confronted with two distinct and separate challenges: to provide an automobile insurance system that adequately protects the rights of every British Columbian in the event of injury in a auto crash-and the need to provide a system that is AFFORDABLE, that does not price ordinary citizens out of their cars.To adequately explore all of the alternatives and possibilities that could help us to achieve both of these objectives would take time and the opportunity for much greater public debate.lt also requires a commitment to fair, unbiased debate of the issues involved.

We have been given little time and less opportunity for fair debate.

The Bar makes its submission under protest Because of these troubling issues, the CBA wishes to record its dissatisfaction with the process in which consultation regarding changes to the system of automobile insurance in the Province has been conducted to date .The CBAis committed to the orderly discussion of public and legal issues and to the improvement and reform of the law, where reform is appropriate.

We believe that this can best be accomplished by providing all interested parties with the opportunity to participate in full and informed discussion concerning the subject under debate. Only in the event of an emergency should such an orderly, necessary process be omitted or accelerated. Such an emergency does not exist at the present time with respect to automobile insurance in the province.

Report leaked to media to manipulate public opinion OnJanuary21, 1997, Volumellentitled, "AttheCrossroadsOptions and Choices" was released. From reports in the major newspapers and other media on the morning of January 21, 1997, it was obvious that detailed contents of the report had been deliberately leaked to the media the previous afternoon.

Although a media conference was announced for 10:30 a.m. on January 21, 1997, the CBA was not advised of this.

Upon learning of the meeting through other sources, representatives of the CBA attended the conference but were turned away. The CBA requested copies of the Report but were told that none were available. The CBA was only able to obtain a copy through sources in the media and were reliant Continued on Poge 6

February 1997: SPECIAL NO FAULT INSURANCE ISSUE

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Point- Co' The B.C. Branch of the Canadian Bar Association 1. THE COST OF AUTOMOBILE INSURANCE KPM G :The report claims the cost of automobile insurance in British Columbia is too high CBA: If the cost of automobile insurance is too high-and that's debatable-then logically and from a public policy point of view it is preferable to control costs by reducing the number and severity of accidents rather than by cutting the compensation available to innocent accident victims. Reducing accidents will reach the root of the problem, and also eliminate the pain, heartache and disability that accompany traffic injuries. Reducing the cost of automobile insurance by limiting compensation puts an unfair burden on innocent accident victims rather than on the people who cause accidents or society for failing to make driving safer.

2. CHANGES TO AUTO INSURANCE KPMG: The report agrees that changing the existing auto insurance system, even with total no-fault, will not result in long-term control of insurance costs. The report says: "The primary result of product reform (changing the auto insurance system) is to lower the level of costs at a particular point in time, rather than to control their future growth. This is because product reform cannot in itself directly attack many of the underlying causes of social inflation, i.e., the apparent shifts in societal behavior that are resulting in increasing claims costs." (KPMG, Volume I, p. 46) "The impact of personal injury product reform on overall cost trends is only about a 1% reduction-a direct consequence of the declining relative cost of personal injury claims." (KPMG, Volume I, p. 47) "Even product reform tightly administered is unlikely to have sufficient potential to bring trends into an acceptable range in the future." (KPMG, Volume II, p. VII-2) CBA: The focus of attention should, therefore, NOT be on product reform but on factors that will control cost trends on a sustained basis.

3. THE BEST WAY TO CUT COSTS KPMG: The report says the only way to modify cost trends on a long-term basis is to change driver behavior.

"Without (the effective implementation of road and traffic safety initiatives), the benefits of any type of product reform would be squandered in less than four years-as costs and premiums continue to race ahead of inflation."

(KPMG, Volume II, p. VII-20) The kinds of traffic safety initiatives necessary to modify driver behavior are itemized inKPMG, Volume I, at p. 50, and include mandatory recurrent testing of all drivers, intersection photo radar, tougher graduated licensing, and stricter enforcement of traffic safety laws.

CBA: The CBA agrees that the focus of change should be on improving road safety as the best means of controlling 4

auto insurance costs. This also cements, in the public consciousness, the direct relationship between the cost of insurance and car crashes.

4. VERBAL THRESHOLD KPMG: The report discusses a verbal threshold whereby only those with "serious and permanent" injuries would be allowed to sue for all their actual loss.

CBA: While this might appear to bar the door to justice against only those with minimal injuries, the threshold would, in fact, disallow the claims of more than 94 per cent of motor vehicle accident claimants based on claims closed in 1995 (KPMG, Volume I, p. 22, Ex. 11-8).

"Temporary" injuries as defined by ICBC, aren't just "whiplash" or "soft tissue" symptoms that last a couple of months; they may include fractures or other serious injuries where symptoms last for years. In describing the need for increasing the level of no-fault wage loss benefits under a threshold system, KPMG says that "many innocent persons will fall into this category because they will be seriously injured and still not exceed the threshold" (KPMG, Volume II, p. III-32).

5. THE LIABILITY SYSTEM UNDERPAYS THE SERIOUSLY INJURED KPMG: The report alleges that our current system underpays seriously injured claimants and suggests threshold or no-fault system will pay higher compensation to those who are seriously injured.

CBA: Under the present liability system, seriously injured and innocent victims receive full compensation on an individualized basis from the Courts. The only seriously injured victims who will be better off under no-fault are those who have caused their own injuries.

To say the present system under-compensates the seriously injured who cause accidents is just another way of stating that the liability system doesn't compensate drunk or reckless drivers.

6. SOCIAL INFLATION KPMG: The report blames rising bodily injury claims and costs on "social inflation".

CBA: "Social inflation" is a phenomenon of KPMG' sown creation. There is no scientific or empirical basis for it or data to support it. Its manifestations are "difficult to definitively describe" (KPMG, Volume I, p. 20), and come from "the B.C. experience and similar trends in other jurisdictions" without any further explanation.

One cause cited by the report is "a greater willingness by judges and juries to increase types and amounts of comp~n~at~on awards" and "awarding damages for new types of mJunes, including psychological injuries" (KPMG, Volume I, p.21). This is a direct and unwarranted criticism of judges and juries.

BarTalk Vol. 9 No. I

unterPoint Jersus the KPMG Report on Automobile Insurance The CBA position is that the Canadian judicial system has evolved over hundreds of years of practice and its judgments are infinitely preferable to the kind that would be made by the administrative body that a No Fault insurance system would need.

payer of benefits, after other collateral benefits had been exhausted, is that ICBC's ability "to manage the medical care, rehabilitation and disability of claimants and to promote their optimum recovery" would be limited. Moreover, it would be "very difficult to obtain complete data for controlling (our emphasis) or studying medical, therapy and disability costs and outcomes" (KPMG, Volume II, p.II-13).Again, at Volume II, p. II-38, KPMG states in summary that no-fault systems "illustrate yet again the need for strong administrative controls on personal injury benefits and an emphasis on early effective rehabilitation".

7. THE FACTS ON LAWYERS' FEES KPMG: The report does not state that lawyers took $223 million out of the system in 1995. As Ex. III-3 at KPMG report, Volume I, p. 34, plainly shows, the sum of $223 million paid in 1995 includes ALL sums paid to experts and consultants, as well as all expenses incurred by both plaintiffs' and defence counsel, including Court filing and hearing fees paid to the provincial government and the provincial sales tax on legal fees paid to the provincial government.

The money paid for external defence legal costs, including expenses, was $53 million, slightly more than ICBC paid for glass repair. KPMG acknowledges that there is no official data from which to determine accurately the amount paid to plaintiffs' counsel in fees. KPMG assumes that an average of 28% of bodily injury awards for claims represented by legal counsel is paid as contingency fees. No rational explanation for this assumption is provided.

CBA: In a major task force report released in 1996, the CBA acknowledged that the civil justice system in Canada is desperately in need of reform. At the present time, unnecessary delays and costs are preventing many people in Canada from seeking access to justice. The CBAhas, therefore, recommended a number of major changes to the civil justice system to improve the system and reduce costs. So far, the provincial government has not acted upon these recommendations.

9. DOES A NO-FAULT SYSTEM PENALIZE BAD DRIVERS? KPM G: KPMG proposes a category of" flagrant violators" (motorists who are criminally convicted of specified offences) who would be entitled to a reduced level of No Fault wage indemnity.

CBA: If a no-fault system is going to maintain the fault concept for the purpose of assessing higher premiums against bad drivers, then it is necessary to have a method of determining fault. One of the alleged savings of no-fault systems comes from not spending resources to determine fault. If fault must be determined for the purposes of assessing higher premiums, one either has a cheap and arbitrary system, e.g., an adjuster looks at a file in private and makes an irrevocable decision, or you have an independent administrative tribunal that listens to witnesses and hears submissions, with all the incumbent expense. Either system is inferior to the present judicial system.

8. "ICBC WANTS TO BE YOUR DOCTOR" KPMG: The report asserts that the liability system encourages prolonging disability to maximize compensation, whereas a no-fault system will focus on "wellness".

CBA: The fact is the liability system has the advantage that, once the claim is settled, it is settled once and for all, and there is no benefit to prolonged symptoms. A no-fault system, on the other hand, with its promise of significantly higher medical and rehabilitation benefits available over a lifetime, offers a tangible incentive to prolong symptoms indefinitely. ICBC's current practice is to try to close off no-fault claims as soon as possible, particularly once a tort claim is resolved, which is a legitimate position for an insurer to take. Enhanced medical and rehabilitation benefits merely heighten the conflict ICBC has between controlling claims costs and providing entitled benefits.

It is wise to be very skeptical about the "wellness" model.

KPMG states that one of the benefits of a no-fault system is that it permits" a tightly-managed administrative process" (KPMG, Volume II, p. II-10). KPMG points out that one of the disadvantages that would occur if ICBC became a second

10. NO MATTER WHAT SYSTEM IS ADOPTED, COST OF INSURANCE EXPECTED TO CLIMB KPMG:KPMG identifies the problem with auto insurance as being the rate of increase of the cost of insurance. At the same time, KPMG acknowledges that changing the product will not address this problem. KPMG includes estimates of the required premiums for six illustrative products for the years 1998 to 2000. The annual rate of increase for each of these products is the same. The choice of product, therefore, does nothing to attack the fundamental problem which KPMG has identified-that is, changing driver behavior.

CBA: Changing the product may produce a one-time decrease in the cost of insurance, although even this is questionable. That's because, in some jurisdictions where No Fault insurance has been imposed, the savings have not materialized. Even if ICBC were to achieve a one-time reduction in costs, the projected increase in insurance premiums over a three-year period would result in rates just as unacceptable three years from now as they are supposed to betoday. • John Waddell, Q.C., Gregory Steele, Donald Yule

February 1997: SPECIAL NO FAULT INSURANCE ISSUE

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A Flawed Process- Wrong Conclusions Continued from page 3

on that "unauthorized" copy to read the analysis and recommendations of the KPMG consultants.

Consultation process flawed The consultation process selected by the government and followed by the Commissioner is seriously flawed for three reasons. First, the time allowed for consultation is too short.

The KPMG report, Volume II, was released on January 21, 1997. The consultation process was scheduled to end January 31, 1997. It has been extended a week or so. The effective time for consultation is about two and one-half weeks.

Second, the Commissioner has not indicated any intention to hold public hearings Third, the Commissioner has elected to keep all submissions private, so that even a public corporation such as ICBC may, if it chooses, make a confidential submission, and no one will know what position it advocates, or have an opportunity to respond.

Bar to sponsor Town Hall meetings throughout the province Because we believe this consultation process to have been so fundamentally flawed, the members of the Bar in British Columbia will sponsor an open, unbiased series of Town Hall meetings at selected communities throughout this province during the next several weeks. We hope that these meetingsat which we will present our findings and invite others to discuss their own opinions-will provide some of the opportunity for fair public debate and understanding that the government and ICBC have so far denied the people ofBritish Columbia. They deserve at least this and a great deal more.

THENEEDFORPRODUCTREFORM CBA believes the current auto insurance system IS sustainable The CBA does not accept the proposition that the present insurance system is not sustainable, even with modifications.

The KPMG report principally justifies this conclusion based on certain trends identified in the cost of claims relating to bodily injury claims. KPMG warns that, if these trends continue, the system will end up unable to sustain itself.

These trends include: • The number of bodily injury claims have increased by 50 per cent over the past ten years; • The average cost of bodily injury claims per insured vehicle has almost doubled over the past ten years; • The number of bodily injury claims per insured vehicle has increased by 50 per cent over the last ten years; • The cost per bodily injury claim has increased by 30 per cent over the last ten years.

Trends have been wrongly interpreted While the CBA acknowledges that these trends exist, we take grave exception to how they are interpreted in the KPMG 6

report. It is to be noted that in all cases the trends relied upon

by KPMG are for a ten-year period and that most of the increase occurred in the opening years of that ten-year period.

In Volume II, pages VII-5 and VII-6, KPMG observe that comparing 1991 claims information and 1996 claims information, the following occurred: a) the growth in the number of bodily injury claims was quite modest and in line with the growth in the number of insured vehicles; b) small claims increased in average size; c) there was a significant growth in the number of large claims; d)non-economic damages experienced a slightly higher growth rate than overall; e) past wage loss experienced a somewhat higher growth rate than overall; f) future wage loss and future care had significantly higher growth rates than overall.

What this indicates is that over the last five years from 1991 to 1996, the driver of cost trends has not been a proliferation of so-called "minor" soft tissue injuries, nor higher awards for those kind of injuries; rather, it has been an increase in the number of large claims, and the cost of future care and future wage loss components of those claims. This is consistent with greater compensation for more seriously injured victims.

Access to Justice and Verbal Thresholds KPMG Volume II sets out six product options. Two options are total No Fault plans. Two options are "Threshold No Fault" plans. The threshold is a requirement for a "serious and permanent" injury before full tort rights are available.

KPMG state that such a threshold will eliminate claims variously described as "minor," or as "temporary" or as "whiplash or soft tissue" injury claims. The impression given is that such a threshold will only exclude minimal injuries.

True average value of "minor" and "temporary" claims is much higher than indicated Annexed to this submission is a copy of Exhibit II-8 from page 22 of KPMG report, Volume I. This table indicates that for claims closed during 1995, 94 per cent involved temporary injuries and the average cost per claimant was $6,400.

Subsequent to the release of KPMG report, Volume I, Ray Healey provided additional information to the CBA regarding these claims as follows: There were 9,344 such claims opened in 1995 and closed in the third quarter of 1995. Of these 3,978 were closed without any payment being made to the claimant. The highest single payment for a "temporary" injury during this period was $190,000.

There were 11,023 "temporary" claims opened in 1995 and closed in the fourth quarter of 1995. 4,509 claims were closed in that quarter without any payment to the claimant. 27 claims were closed in that quarter with payments exceeding $30,000 to the BarTalk Vol. 9 No. I

claimant. Two claims closed in that quarter combined totalled $208,000.

Although the facts set out in Exhibit 11-8 may be correct, the inference created is distinctly misleading. The inference is that there were a very large number of minor injury claims advanced and paid, and that the average payment to claimants with minor injuries was $6,400. The average cost per claimant is obviously reduced significantly by including as claimants those to whom no payment was made, presumably because their claim was either properly denied or never advanced.

The disclosure of the fact that a little under half of the claims opened during this period were closed with no payment being made leads to the question of what circumstances prompt the opening of a claim, and whether there is the artificial creation of an increase in the number of claims made.

It will also no doubt come as a shock to objective readers of the KPMG report to learn that the "temporary" "minor" injury claims that are alleged to plague the system include claims assessed at $190,000.

Is the present system unfair, as the report assumes?

In Volume 1, KPMG asserts that unfairness arises when people who are at fault for accidents find themselves with less compensation than those who are not at fault.

We do not accept this proposition. There are many instances in society where people who are injured as a result of their own fault are left to fall back on the social safety net that exists in our society. A person who injures himself through reckless skiing, a skydiving accident, or a misadventure while participating in a water sport has no right to seek compensation from another or from any insurance scheme other than what is provided through society generally, or which they have had the foresight to arrange on their own. If they have hurt themselves through their own carelessness, or voluntary risktaking, and failed to protect themselves by arranging alternate insurance coverage to provide compensation in such circumstances, they are left to the modest, but in many ways adequate, resources and support that our society makes available to them. Why should someone who injures himself through the careless operation of an automobile be any better off than the person who has injured himself through some other activity?

Bad drivers SHOULD be penalized For generations, North American society has been predicated on the notion that individuals will be held accountable for their errors and that victims will be entitled to recover their losses to the extent that they are not individually responsible for them. The general public understands and endorses this approach. It is by its nature fair and reasonable and is consistent with the notion that each of us should be encouraged to be responsible and careful.

Better drivers- not product reform-are the answer to rising costs What is clear from the KPMG Reports is that what has been February 1997: SPECIAL NO FAULT IN SURAN CE ISSUE

driving the costs of insurance are certain trends relating to the cost of claims. What is also clear from the KPMG Reports is that product reform will not affect these trends. What is needed is significant and effective traffic safety initiatives designed to modify driving behavior. These include things such as stricter enforcement of existing laws, more severe penalties, graduated licencing programs, etc. It is these changes, and only these changes, thatwillhave any long term significant effect on the cost of automobile insurance. Product reform will, in some cases, produce a one-time decrease in the cost of insurance but will do nothing to significantly affect the rate of increase in the cost of insurance. If the cost of insurance is too high now, product reform will achieve a temporary reduction but it will be too high again two or three years from now.

Reform of auto insurance does not always produce cost savings It must be remembered that the savings predicted in the KPMG Report may never be achieved. When insurance product reform was introduced in Ontario it was hoped that it would reduce the cost of insurance. It was not successful and although there have been repeated attempts to modify the product to achieve those savings, these have been unsuccessful. In Manitoba no fault insurance was similarly imposed, accompanied by promises of reduced insurance premiums. Notwithstanding this, the cost of insurance has continued to increase and the cost of claims in the last year rose at a phenomenal rate of 22 per cent. Saskatchewan introduced no fault insurance in 1995 and although premiums have been held constant, the accumulated deficit of the Saskatchewan government insurance corporation has increased by approximately 15 per cent.

Vancouver, B.C. $1,497.00 Montreal, Quebec $2,409.00 In the KPMG report, the cost of insurance in British Columbia is compared with the cost of insurance in Manitoba and Saskatchewan, which are described as No Fault jurisdictions and offered as examples of the cost-benefits of a No Fault system. However, KPMG does NOT disclose that the cost of automobile insurance has HISTORICALLY been lower in both provinces than it has in British Columbia. Nor does the report mention the fact that insurance premiums have not declined after the introduction of No Fault insurance.

Government should stop setting auto insurance premiums for political purposes The government should get out of the business of fixing automobile insurance premiums for purposes of political expediency. Insurance premiums should be altered according to proper insurance and actuarial principles. This recommendation is consistent with outside consultants' advice . previously given to ICBC. John Waddell, Q.C., Gregory Steele, Donald Yule

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BorTolk is published by the British Columbia Branch of the Canadian Bar Association, lOth Floor 845 Cambie Street Vancouver, BC V6B 5Tl TEL: (604) 687-3404 TOLL FREE: In BC, outside the Lower Mainland: 1-888-687-3404 FAX: (604) 669·9601 • BarTolk Editor: RY GLOVER DIRECTOR OF COMMUNICATIONS

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CIBC TRUST CORP. 665-1784 • Practice Tolk Editor: DAVID BILINSKY, Lakes, Straith & Bilinsky 984-3646 © Copyright the British Columbia Branch of the Canadian Bar Association-1996.

This publication is intended for information purposes only and the information contained herein should not be applied to specific fact circumstances without the advice of counsel.

The BC Branch of the Canadian Bar Association represents over 8,500 lawyers within British Columbia and is dedicated to improve and promote access to justice, to review legislation, initiate law reform measures and advance and improve the administration of justice. On behalf of the profession, the BC Branch works to improve and promote knowledge, skills, ethical standards and well-being of members of the legal profession and promotes the interests of its members.

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Speak up-NOW! It is critical that members of the Bar act quickly to tell the provincial government in no uncertain terms why No Fault auto insurance is not in the best interest of British Columbians.

Now is the time for lawyers to contact Premier Clark, his Ministers and rank and file NDPMLAs. Thanks to the effort of the Bar, public opposition toNoFaultisgrowing. However, we must build on the momentum that has developed to date.

While we can't hope to match ICBC in dollar spending-the corporation is wasting hundreds of thousands of dollars every month on ads which paint a false and misleading picture of the Bar and the state of auto insurance in our province- there are a number of low-cost but effective steps we can take to counter this barrage of propaganda. Here's what you can do: • Drop by or phone the local NDP constituency office and make your views known, if not to the MLA, then to his or her constituency

aide or assistant. Demand a response.

• Explain your position on No Fault to your clients by sending them a copy of the letter you sent to the government. Ask them to consider adding their voice to the campaign through a letter or phone call.

• Get the Bar's message out through the media. Call your local radio station if it has a talk show and send a letter to the editor of your local newspaper.

• If you belong to Rotary or some other service club, try to lineup a speaking opportunity for yourself or some other member of the Bar in your community in order to spell out the facts on No Fault.

All these steps may seem minor in nature.

But if every member of the Bar makes the time to get involved and play a part, we can deliver a message that the provincial government simply cannot ignore.

TELL THE NDP WHAT YOU THINK ABOUT NO FAULT INSURANCE Write Premier Glen Clark, Finance Minister Andrew Petter or Your local NDP MLA below c/o: The British Columbia Legislature, Parliament Buildings, Victoria BC V8V 1X4 Or Phone or Fax them at the indicated numbers (Area Code.250) NAME

ELECTORAL DISTRICT

VICTORIA OFFICE NO.

Boone, Ho n. Lois Bowbri ck, Graeme Brewin, G retchen Calendino, Pietro Cashore, Hon. John C lark, Hon. Glen Conroy, Ed Dosanjh, Hon. Ujjal Doyle, Jim Evans, Ho n. Corky Farnworth, Hon. Mike Giesbrec ht , Helmut Gillespie, Evelyn Goodacre, Bill Hammell , Hon. Sue Hartley,B ill Janssen, Gerard Kasper, Rick K wan, Jenny Lali , Harry Lovick, Hon. Dale MacPhail , Ho n. Joy McGregor, Ho n. Cathy Miller, Hon. Dan Orcherton, Steve Petter, Hon. Andrew Priddy, Hon. Penny Pu llinger, Ho n. Jan Ramsey, Ho n. Pau l Randa ll , Fred Robertson, G lenn Sawicki, Joan Sihota, Moe Smallwood, Joan Steve nson, Tim Streifel, Hon. Dennis Waddell , lan Walsh, Erda Zirnhelt, Hon. David

Prince George-Mount Robson New Westminster Victoria-Beacon Hill Burnaby North Coquitlam-Maillardv ille Va ncouve r-Kingsway Rossland-Trai l Vancouver-Kensington Columbia River-Revelstoke Nelson-Creston Port Coquitlam Skeena Comox Valley Bulkley Valley-Stikine Surrey-Green Timbers Map le Ridge-Pitt Meadows Albemi Malahat-Juan de Fuca Vancouver-Mount Pleasant Yale-Lillooet Nanaimo Vancouver-Hastings Kamloops Nort h Coast Victoria-Hillside Saani ch South Surrey-Newton Cowichan-Ladysmith Prince George Nort h Bumaby-Ed monds North Island Bumaby-Willingdon Esq uim alt-Metchosin Surrey-Whalley Vancouver-Burrard Mission-Kent Vancouver-Fraserview Kootenay Cariboo South

Office No. 387- 1978 Office No. 387-2324 Office No. 356-303 1 Office No. 387-2347 Office No. 387-0886 Office No. 387- 171 5 Office No. 356-3052 Office No. 387- 1866 Office No. 356-30 15 Office No. 387- 1023 Office No. 356- 1019 Office No. 356-3029 Office No. 387-2333 Office No. 387-23 12 Office No. 387- 1223 Office No. 356-3033 Office No. 387-0967 Office No. 387-0855 Office No. 387-2294 Office No. 356-30 17 Office No. 387-3952 Office No. 387-5394 Office No. 387-229 1 Office No. 356-7020 Office No. 387-2337 Office No. 387-375 1 Office No. 387-9699 Office No. 387- 1683 Office No. 387- 11 87 Office No. 356-3011 Office No. 387-2307 Office No. 356-9 172 Office No. 387- 1977 Office No. 356-9496 Office No. 387-2340 O ffi ce No. 387-3 180 Office No. 387-23 17 Office No. 387-2342 Office No. 387-6240

VICTORIA FAX NO. Fax Fax Fax Fax Fax Fax Fax Fax Fax Fax Fax Fax Fax Fax Fax Fax Fax Fax Fax Fax Fax Fax Fax Fax Fax Fax Fax Fax Fax Fax Fax Fax Fax Fax Fax Fax Fax Fax Fax

No. 356-2290 No. 356-7 156 No. 356-0596 No. 387-0827 No. 356-1 124 No. 38.7-0087 No. 387-0827 No. 387-6411 No. 387-0827 No. 387- 1522 No. 356-7 156 No. 387-0827 No. 356-7156 No. 387-0827 No. 387-43 12 No. 356-7156 No. 356-0596 No. 387-0827 No. 356-0596 No. 387-0827 No. 387-28 13 No. 387-3696 No. 387-0827 No. 356-5587 No. 387-0827 No. 387-5594 No. 387-9722 No. 387-4348 No. 387- 1356 No. 387-0827 No. 387-0827 No. 387-0827 No. 387-3200 No. 387-0827 No. 356-7 156 No. 387-5720 No. 356-7 156 No. 356-7 156 No. 387- 1040

BarTalk Vol. 9 No. I