July 24, 2024

Some provinces have switched to a “no-fault” system from the traditional fault-based auto insurance, while others, including Alberta and British Columbia, are set to do this soon.

It has not been made clear to drivers that the no-fault law restricts their right to be heard by a court and reduces the amount of compensation they will receive in the event of an accident.

In medieval England, the right to have grievances settled by an independent party emerged when courts that had previously only heard criminal cases agreed also to adjudicate disputes among ordinary citizens.

Unknown author. A painting depicting a medieval trial in England. (The British Library Board),

Most of these disputes involved complaints about trespassing. However, cases of personal injury, such as horses knocking pedestrians down or dogs biting neighbors, were also heard.

Over time, the court decisions relating to these disputes have evolved into a body of precedents, also known as common law. At the turn of the 20th Century, there were two main principles that governed the law in relation to personal injury.

With few exceptions, the defendant can only be held responsible for damages caused by a complainant if they were negligent, that is, when he was at fault. In this case, the defendant had to compensate the injured person for his losses.

The second part of compensation is to return the victim to his position had the injury never occurred. For example, if a pedestrian was knocked over by a horse and missed a whole week of work, the injured party could be required to pay damages equivalent to the week’s wages.

Insurance: the dawn of a new era

It seemed natural that when the automobile was invented, it would also apply to injuries caused by car accidents — the drivers at fault were required to compensate the innocent victims.

It became apparent that many drivers who were negligent would not be able to pay for the damages due to the severe injuries that could result from automobile accidents. As a result, legislators in all states required that drivers carry auto insurance.

The critics noted that the system did not help those drivers at fault in an accident or those involved in accidents where no one was to blame, and so no one could be sued.

Auto insurance is required by law because of the potential harm caused by car accidents. (Pixabay)

According to the Report of Fundamental Reform of Alberta Automobile Insurance, approximately 33 percent of Albertans injured in car accidents do not receive compensation.

In Alberta and B.C., where the situation is very similar, there has been a demand for no-fault coverage. This means that each party will get benefits from their own insurance company regardless of who was at fault. B.C.’s no-fault insurance system goes into effect on May 1,.

Alberta’s report shows that no-fault proposals are quickly thwarted by reality.

How can the increase in claims be covered without raising the average auto insurance premium? The proposed no-fault system in B.C. Alberta and B.C. offer two solutions.

Reducing benefits

They recommend that the compensation paid to each injured person be reduced. For example, the Alberta proposal would reduce average compensation by 30%.

To maintain premiums, increased benefits for at-fault motorists will be paid by reducing payments to innocent victims.

The Lions Gate Bridge is the entry point for Vancouver, B.C. The Canadian Press/Darryl Dyck

It is not surprising that victims who are used to receiving compensation to return them to a position similar to what they had before the accident would appeal against these decisions. It’s also likely that the common law courts will be sympathetic to such appeals, since it was these courts who first developed rules for determining compensation.

What would be the result? The result?

The second recommendation of the supporters of no-fault is to restrict the right of accident victim to appeal in the courts. Alberta’s proposal suggests that injured parties who are not satisfied should have to appeal to an insurance company-controlled panel, which will act as judge and jury.

Insurance companies will save money?

British Columbia and Alberta both claim that insurers can save money by not having to defend themselves in court. Alberta’s report, however, suggests that these savings will likely be less than 3% of the cost of insurance.

No-fault systems, to increase benefits for negligent drivers, reduce the benefits available to victims and deny their access to courts when they feel that compensation is unfair.

If the goal is to compensate negligent drivers, it is possible to make a less radical change in the insurance system. Encourage insurance companies to include no-fault clauses in their policies, which pay benefits to clients who are found at fault in an accident.

The most classic example of this is the “no-fault” system. The cafe reduces your serving size, but does not allow you to complain.

 

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