Law Times

April 20, 2015

The premier weekly newspaper for the legal profession in Ontario

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he rancour among personal injury lawyers and the insur- ance industry continues to heat up with both sides trading accusations over who's responsible for high insurance pre- miums in Ontario. Earlier this month, a study commissioned by the Ontario Trial Lawyers Association suggested Ontarians had overpaid for auto insur- ance by about $3.1 billion between 2001 and 2013. The Insurance Bureau of Canada, meanwhile, accused lawyers of being behind the high costs, argu- ing they received $500 million from injury claimants out of their insurance settlements in 2013. "If the lobbyists and well-heeled lawyers want to know who is driving up insurance costs, they need to take a look in the mirror," says Ralph Palumbo, the insurance bureau's Ontario vice president. "Personal injury lawyers and their sky-high fees are putting justice out of reach for too many Ontarians. Perhaps it is time that lawyers also reduce their fees to further reduce costs to consumers." The study released by the lawyers' association, however, found "pre- miums have been too high, and consumers in Ontario have been paying too much for auto insurance." The researchers, Fred Lazar and Eli Pris- man of York University's Schulich School of Business, found the profit cap imposed by Financial Services Commission of Ontario for insur- ance companies is excessive. In 2014, the commission capped the return on premiums at six per cent, which is equivalent to about a 12-per-cent return on equity, according to the researchers. "The six per cent return on premium benchmark is out of line with current financial market realities," the authors wrote. The researchers, who had previously done work for FSCO, said they had recommended a gradual reduction of the profit cap to a 5.6-per-cent return on equity, which is the equivalent of a 1.8-per-cent return on premiums. "Auto insurance companies in Ontario have had a relatively free ride during the past 20 years. Since the [returns on equity] permitted by FSCO Must counsel let accused testify even if they disagree? BY YAMRI TADDESE Law Times o criminal lawyers have a duty to let clients tes- tify in their own defence even if they disagree? An Ontario Court judge took a strong position on the issue recently when he ordered a mistrial in the case of a man convicted of fraud over concerns his lawyer had pre- vented him from testifying in his own defence. Ontario Court Justice Philip Downes admitted it was "most re- grettable" that a trial that had eaten up 17 days of court time and saw victims of fraud come to court to testify now amounted to nothing but found a mistrial was the "only fair and proper remedy" in the case. Doulat Khan, who raised his concerns after the court had con- victed him but before sentencing, told counsel "time and again" that he wanted to take the stand but his counsel prevented him, according to Downes. "When one remembers that the decisions left to the exclu- sive sphere of the client in a criminal trial are few and far between, it is not surprising that the court would find that a breach of one of those decision-making obligations is suf- ficient, standing alone, to warrant a remedy," wrote Downes in R. v. Khan. The trial counsel, whom Downes didn't name in the ruling, called it "a tactical legal decision" not to call Khan to the stand. She said she knew he wanted to tes- tify but felt he wouldn't do well in cross-examination. She also sug- gested Khan was inconsistent in his position on whether to testify. Criminal lawyer Brian Heller says while it's a lawyer's duty to pro- vide advice, it's ultimately a client's decision whether to accept it. "At the end of the day, it's the cli- ent's decision," says Heller. "It's not the lawyer's decision. The lawyer can only provide the best advice that he or she can to the cli- ent but I can tell you that from my perspective, if a client is insistent on testifying, I would not prevent the client from doing so." Instead, Heller says he'd have the client sign a document noting what the advice had been and con- firming the decision to take the stand nevertheless. CANADIAN LAWYERS AND JUDGES MOST INFLUENTIAL TOP THE Who do you think deserves to be included in Canadian Lawyer's 25 MOST INFLUENTIAL LAWYERS IN CANADA in the justice and the legal profession? NOMINATIONS OPEN APRIL 20TH – MAY 5TH Visit WWW.CANADIANLAWYERMAG.COM/SURVEYS for the details Top25_LT_Apr20_15.indd 1 2015-04-14 8:19 AM Auto insurance rancour heats up Lawyers, industry trade accusations over who's to blame for high costs BY YAMRI TADDESE Law Times SOLICITOR BENCHERS Lawyers seek change at Convocation P9 FOCUS ON Class Actions P10 Prof. Fred Lazar has written a report saying the profit benchmarks for insurance companies are too high after previously doing work on the issue for the Financial Services Commission of Ontario. Photo: Robin Kuniski See Mistrial, page 5 'At the end of the day, it's the client's decision,' says Brian Heller. PM #40762529 TORONTO | BARRIE | HAMILTON | KITCHENER 1-866-685-3311 | cLeish Orlando_LT_Jan_20_14.indd 1 14-01-15 3:15 PM $5.00 • Vol. 26, No. 13 April 20, 2015 Follow LAW TIMES on L AW TIMES T D since 2001 exceeded the [returns] we estimated for the auto insurance industry, it is conceivable that premi- ums have been too high and as a result, consumers in Ontario have paid too much for auto insurance. The possible over-payments range as high as $685 million, with total over-payments of approximately $3.1 billion between 2001 and 2013." Steve Rastin, president of the trial lawyers association, says the findings surprised him. "I think we all believed the industry was overcharg- ing for coverage, but I was surprised at the magnitude consumers are being overcharged by," says Rastin, who argues the government should now "do the right thing" and reduce the profit caps for insurance companies. The association would also like the auditor general See Call, page 5 HAMALENGWA'S PERSPECTIVE Overbillings unintentional, says lawyer P3

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