Law Times

PAGE 12 FOCUS September 15, 2008 • Law times All eyes on round two for Morrow v. Zhang A BY JULIUS MELNITZER For Law Times peal in Morrow v. Zhang, a case that dealt a devastating blow to the insurance industry. Earlier this year, Associate Chief Justice Neil Wittmann of the Court of Queen's Bench ruled that provin- cial legislation imposing a $4,000 cap on damages for pain and suf- fering arising from minor injuries offends the Charter of Rights by discriminating against soft-tissue accident victims. "I have found that soft-tissue in- t press time, the Alberta Court of Appeal was scheduled to hear the ap- to justice by allowing the as- sessment of their injuries on an individual basis," he says. If the Alberta Court of Appeal was a "pressing and substantial objective" for the government. "In sum, I find that it was upholds Wittmann, the decision could buttress pending chal- lenges in New Brunswick and British Columbia and prompt challenges in other provinces. "Each province has their own version of the cap but there are certain similarities throughout, and the Alberta decision could well have an impact else- where," says Alan D'Silva, of Stikeman Elliott LLP's Toron- to office, who represents State Farm on the appeal. Fred Kozak of Reynolds jury victims are subjected to preju- dice and are stereotyped on the ba- sis of the type of injury from which they suffer," Wittmann wrote. Following the judgment, both the provincial government and State Farm, the insurer involved in the case, applied for stays, but Wittmann turned them down. The industry has long touted reasonable for the Crown to perceive that an insurance crisis existed or was imminent and that mandatory automobile in- surance was becoming inacces- sible to many Albertans at the time that the insurance reforms were implemented," he wrote. The objective of the cap, then, Mirth Richards & Farmer LLP in Edmonton, who, with col- leagues Matt Woodley and Jeremy Taitinger, successfully represented the plaintiffs in Morrow, says that legislation in the Maritimes is most at risk. "The caps in the Maritimes the cap and similar measures as essential to preserving affordable premiums for Canadian drivers. "The insurance industry be- was to reduce insurance premi- ums. Evidence at trial indicated that the $4,000 cap reduced overall settlements 15.5 per cent while reducing minor injury set- tlements by 44.3 per cent. But these costs were not 'Our position is that people who suf- fer from minor injuries are not a group covered by the discrimination provisions, because the group is not one with immutable or permanent characteristics nor a historically disad- vantaged group,' says Alan D'Silva. lieves that the cap maintained limits on the cost of minor inju- ries and allowed the industry to provide affordable and competi- tive auto insurance," says Rick Davison of Parlee McLaws LLP's Calgary office, who, with col- league David Rolf, represented the Insurance Bureau of Canada, which intervened in the case. But Tom Achtymichuk, of the Alberta branch of the Ca- nadian Bar Association has a different perspective. "This judgment is a victory for all Albertans and Canadians because it restores people's access are constitutionally suspect," he says. "But the Ontario legisla- tion, which imposes a $30,000 deductible on plaintiffs, may be safe from attack on grounds of discrimination because arguably it treats every victim similarly regard- less of the type of injury suffered. That's something within the legis- lative purview of the province." Which is not to say that the Ontario legislation is safe from attack on other grounds. Meanwhile, the Ontario Trial Lawyers Assocation tells Law Times' Kelly Harris, in our front page story, that a legal opinion they received suggests the Ontario rules may also be unconstitutional. "I have a number of ways of going at an across-the-board de- ductible, but I'm not going to play my hand now," Kozak says. In any event, the difficulty with Alberta's Minor Injury Reg- ulation was that it did not apply equally to all minor injuries. "People with injuries far less significant than victims with soft- tissue injuries were not affected by the cap," Kozak notes. "The cap, for example, wouldn't apply to someone who broke a finger or suffered a minor laceration or burn. In the end, the cap was de- signed to perpetuate the idea that whiplash sufferers and other soft tissue victims weren't really suf- fering, and that notion is both wrong and discriminatory." Still, Wittmann acknowledged that rising general damages were "a legitimate cause for concern" and that maintaining affordable mandatory automobile premiums It's no secret, privacy law is creating some confusion, with big consequences. Get the clarification you need to comply with … Privacy Law in the Private Sector: An Annotation of the Legislation in Canada Jeffrey A. Kaufman Current contributors: Sara A. Levine, J. Alexis Kerr, Karl Delwaide and Antoine Aylwin Past contributors: Priscilla Platt, Lise Hendlisz, Daphne Intrator and Karine Joizil " … this is a book that will make life easier for anyone involved in the subject of privacy law in the private sector." The Honourable Horace Krever, This indispensable guide provides text and cross-referencing for current federal and provincial statutes and regulations that address private sector privacy, together with annotations, commentaries and case law references and summaries that clarify the law. Inside you'll find federal privacy legislation (PIPEDA), and provincial legislation for British Columbia, Alberta and Quebec, as well as privacy legislation in respect of personal health information for Ontario. It also includes highlights setting out commentary on the most current issues of interest in privacy. This regularly updated service: within the current health policy and legislative climate www.canadalawbook.ca KAUFMAN_Privacy Law in the Private Sector (LT 1-4x3).indd 1 www.lawtimesnews.com 9/10/08 1:57:32 PM Subscriptions.indd 1 9/11/08 3:29:27 PM former Justice of the Ontario Court of Appeal It's what's inside that counts! We have it all! Subscribe today on-line at www.lawtimesnews.com Your best choice for reaching Ontario's legal market the only factor contributing to premium increases. "This is evidenced by the fact that although claims costs had been rising for some time, the insurance industry contin- ued to be profitable," Witt- mann wrote. lieved was a reasonable return on equity of 12.5 per cent, the evidence showed that the sector's profits had been increasing even before the imposition of the cap. "These profits continued to While the IBC sought the cap to achieve what they be- was necessary, I must focus on whether the Crown could have pursued its purpose of making mandatory automobile insurance premiums more affordable with- out discriminating or in a man- ner that minimized the discrimi- nation," Wittmann wrote. Here, the government had failed to demonstrate that the cap was a reasonable alternative. "In other words, the MIR 'plain- ly overshoots the mark' in terms of the interference it entails in rela- tion to the rights of the claimant group," Wittmann wrote. The appropriate remedy was nullification of the MIR. D'Silva says that the main thrust of State Farm's argument on appeal is that s. 15 does not apply. "Our position is that people who suffer from minor injuries are not a group covered by the dis- crimination provisions, because the group is not one with immu- table or permanent characteristics nor a historically disadvantaged group," he says. D'Silva also points out that in- dividuals with injuries that affect their life skills and ability to func- tion are not subject to the cap. "Put another way, the group increase in the years following the imposition of the cap to the point where some of the compa- nies had returns in excess of 33 per cent," Kozak says. While the government was entitled to choose from among a range of reasonable options to deal with the insurance crisis, the choice of a cap placed the burden of doing so primarily on the shoul- ders of minor injury victims. "In assessing whether the MIR impairs the [equality] rights of the claimant group no more than that might qualify under s. 15 is not limited in damages under the Alberta scheme," he says. State Farm also maintains that the courts should not interfere with the cap, because it represents part of a bargain following extensive consultation between the govern- ment and the insurance industry. "In fact, [former Alberta pre- mier] Ralph Klein ran for election while this legislation was being phased in, and his platform in- cluded a pledge that the legislation would reduce premiums, which in fact it did," D'Silva says. LT

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