Law Times

Law Times • OcTOber 18, 2010 An online resource 1.800.263.3269 Focus On INSURANCE LAW Lawyers distressed over insurance reforms But silver lining for legal profession as clients need more advice BY JUDY VAN RHIJN For Law Times bilitation, and attendant-care limits; the removal of housekeeping and caregiver expenses; and the capping of assessment fees and treatment costs for minor in- juries. But with only a promise to keep premium increases in check, personal injury lawyers say an unfair playing fi eld is tilting even further away from the innocent and injured. As of Sept. 1, the reforms reduced T coverage for medical and rehabilita- tion limits in half to $50,000 from $100,000. Attendant-care coverage for non-catastrophic injuries is now $36,000, down from $72,000. House- keeping and caregiver expenses are gone unless the injuries are catastrophic. In addition, treatment costs for minor in- juries are now subject to a $3,500 cap, a cut from the previous $100,000. Not surprisingly, those who spend their days fi ghting for injured plaintiff s have plenty to say about the reforms. Lawrence Hatfi eld of Flaherty Sloan Hat- fi eld in Hamilton, Ont., quickly sums up the changes. "We're still paying the same amount of money but getting much less product," he says. "You can maintain the same coverage but you actually have to ask for it, and it costs more." Greg Monforton, an insurance law- yer in Windsor, Ont., compares the sit- uation to getting a cheap hamburger for the price of top-grade steak. "With each no-fault successive regime since 1990, the government of Ontario has in eff ect placed an armed guard at the courthouse door to keep out the majority of people injured in car accidents in Ontario, and the most recent changes arm the guard even further," he says, noting he believes the changes are discriminatory against those who can't aff ord optional cover- age and vulnerable people like children he latest round of automobile insurance reforms has intro- duced big cuts to medical, reha- and pedestrians. "Every time there's a new set of reforms, there's a winner and a loser. Th e winner is certainly not the Ontario public." Nevertheless, there's been little reac- tion to the reforms. Brian Goldfi nger of Goldfi nger Personal Injury Law is frus- trated by the apathy surrounding the issue. "If the government doubled the price of gasoline when there's no world war, no gas shortage, and no crisis, peo- ple would go berserk," he says. "If they did it just so the industry could protect its bottom line, people would be out- raged. But it's too late for outrage." Goldfi nger blames the lack of inter- est on the complexity and dullness of the laws on the subject. "Insurance law is so dense, so thick, and so complicat- ed that the changes don't even come in the Insurance Act anymore. Th ey come in schedules that are like acts in them- selves. Considering that every car driver must have car insurance, the Insurance Act should be understandable by every- one but it is ridiculously complicated. Drivers don't care as long as their premi- ums are lower, but there aren't even any reductions. No one appreciates what they've lost until they are injured." Th e changes, Goldfi nger notes, are signifi cant. "Before Sept. 1, 2010, ev- eryone, no matter what, had $100,00 for any medical or rehabilitation ex- penses that were reasonably necessary that were not covered by OHIP. Th at included physiotherapy, chiroprac- tic, psychology, neuropsychology. . . . It covers a lot. Now you're paying the same and getting half. It does not make sense. People don't have the money to fund their own rehabilitation. Th ey're going to be hurt." Hatfi eld is particularly frustrated since it was the insurance industry that asked for the current benefi ts regime, which stops people from suing for medical costs and instead makes them go through the insurer. "Now they're trying to dismantle it," he says. "As a them. "Th e insurance industry will say that you can opt in to get pre-Septem- ber 2010 benefi ts but you have to pay more for them," says Goldfi nger. In fact, all of the practitioners inter- viewed on the personal injury side of the issue say none of their clients bought the optional benefi ts. "Experience has shown that most people are not properly educat- ed by their brokers about optional ben- efi ts," says Monforton. "Only the wealthy and the well-informed will buy them, and few Canadians are both. People get a big package in the mail, but nobody reads it. Th ey just look for the pink slip." Consumers may expect such big loss- 'Every time there's a new set of reforms, there's a winner and a loser. The win- ner is certainly not the Ontario public,' says Greg Monforton. consumer, it's frustrating. As a lawyer, I realize what they're trying to do is reduce people's rights right off the bat when they're buying insurance." Another early stage where the changes will have a big impact is during assess- ment and diagnosis. "Prior to the chang- es, an individual could apply for funding to be assessed and that didn't reduce the total," says Brian Mathers, an insurance and casualty specialist who works with- in Greg Monforton and Partners. "Th e only test was if it was reasonably neces- sary. Now there is a limit of $2,000 per assessment, and it will come out of the lower amount of $50,000. So you're pay- ing for your own assessment." Monforton adds: "It's download- ing on to the innocent and injured the cost of diagnosing what's happened to them." But anyone searching for benefi ts to off set the losses won't necessarily fi nd es of coverage would lead to a reduction in premiums, but that's not the case, ac- cording to lawyers. "You won't see any decreases in the foreseeable future," says Mathers. "Many insurers have already received one if not two increases this year. Th e government has only prom- ised that they will be holding premium increases in check." Th e only good news for personal injury lawyers is that their clients will need them more than ever to work through the legal ambiguities and in- consistencies to get fair treatment and compensation. In the meantime, while lawyers repre- senting insurers declined to comment on the merits of the reforms, Tom Ozere of Borden Ladner Gervais LLP in Ottawa says they'll also mean signifi cant changes for practitioners on the tort side. "Th e amounts of off sets are being dramatically reduced. It will increase exposure in areas where there was previously no pretrial exposure, such as medical and rehabilita- tion expenses, housekeeping, and handy- man expenses because the accident ben- efi t insurers covered them before." Monforton, however, sees that sce- nario as a double-edged sword. "If you download more costs on to the tort sys- tem, this will give the insurance indus- try impetus to seek more reductions in the future." LT PAGE 9 Untitled-2 1 www.lawtimesnews.com 10/8/10 9:59:52 AM

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