Insurance advocate questions cap legislation

New Brunswick Telegraph-Journal
Friday, April 3, 2009
Page: A3
Section: News;News
Byline: Chris Morris Telegraph-Journal

New Brunswick's insurance watchdog says people with serious injuries are being denied adequate compensation because of the way provincial legislation is worded.

Ronald Godin, the Consumer Advocate for Insurance, said Thursday many people have called his office in disbelief after they were told the cap on so-called minor injuries includes such debilitating problems as broken bones.

"I do not call a broken pelvis a minor injury," Godin said, shortly after releasing his 2008 annual report.

"But by the definition of our legislation, unless it is very, very debilitating and prevents you from going about your everyday duties, it is deemed to be a minor injury. So you can be disabled for many months, you can have a partial impairment for many years, maybe even life, but according to the wording, this is deemed a minor injury."

Godin said he believes it was an error to stipulate that the $2,500 cap on insurance payouts applies to "minor injuries" from traffic accidents.

He said the intent of the legislation was to apply the cap to what are known as "soft-tissue" injuries, such as neck sprains.

"Our legislation looks at the impact of any injury, not the type of injury," Godin said.

"So whether it is a broken pelvis or a twisted tendon, if it's within the definition of the legislation, it's a minor injury."

The New Brunswick government introduced the $2,500 minor injury cap in 2003, limiting the right to sue for people injured in auto accidents.

According to the Insurance Bureau of Canada, the move triggered a drop in auto insurance premiums of almost 36 per cent. It says New Brunswickers now enjoy among the lowest rates in the country.

Justice and Consumer Affairs Minister T.J. Burke said the province is not going to change the legislation at this point.

Burke said a constitutional challenge of the New Brunswick legislation is making its way through the courts. He said the government will leave it to the courts to rule on the issue.

"Our number-one priority right now is the economy and we feel New Brunswickers are in a great position with respect to low premiums for auto insurance rates," he said.

"We've worked hard at ensuring that premiums stay down and that we have affordable rates for New Brunswickers. That is a priority for our department."

The insurance caps in Alberta and Nova Scotia both have been challenged.

Last year, Alberta's Court of Queen's Bench found that the province's insurance reforms violated the Canadian Charter of Rights and Freedoms by discriminating against accident victims with soft-tissue injuries.

The Alberta government has since appealed.

Nova Scotia's cap also faced a constitutional challenge, but withstood a case in which victims claimed the minor injury regulations were discriminatory.

Godin said there were almost 200 cases in New Brunswick courts contesting the validity of the provincial cap.

He said the plan is to whittle down that number to just two or three test cases to put on trial.

He said the challenge was supposed to be underway in 2008. He said he hopes it will be resolved this year.

"As a consumer advocate, I don't want premiums to go through the roof again as we saw in 2001 and 2002," Godin said.

"But it doesn't have to be all or nothing. We should compensate people with serious injuries adequately. But people with soft tissue injuries should accept that a cap is necessary to control the premiums. We can do this and still allow the industry to be healthy and profitable.

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