The Ontario Trial Lawyers Association says the devil is in the details of legislation designed to reduce auto insurance premiums and tackle fraud.
Victor Biro
/ Toronto star file photo
The Fighting Fraud and Reducing Automobile Rates Act passed Thursday
but the Ontario Trial Lawyers Association says the legislation removes a
motorist’s right to sue an insurance company for denying their claims.
The Ontario Trial
Lawyers Association says the devil is in the details of legislation
designed to reduce auto insurance premiums and tackle fraud.
The Fighting Fraud and
Reducing Automobile Rates Act passed Thursday but Steve Rastin,
president of the OTLA, noted there’s a clause buried in the legislation
that removes a motorist’s right to sue an insurance company for denying
their claims.
Bill 15 doesn’t actually mention an earlier 15 per cent reduction that was spelled out in the 2013 budget.
“We are profoundly
disappointed in the government for what they did today,” Rastin said,
noting the government has replaced the right to sue for denied claims
with a convoluted arbitration system that, he claims, will be both
costly and time consuming.
Rastin said while the
association supports most of what is included in the bill, it finds the
removal of the right to sue, and reducing the interest rates that
injured claimants get on their money from insurance companies — which is
kept in a reserve account — from 5 per cent to 1.3 per cent as
completely unacceptable.
“The legislation says
it’s all about fraud and fighting costs. There is a lot more in there
than that that’s been added to it. The legislation ends the right of an
accident victim to sue the insurance company in the courts for not
paying for benefits,” Rastin said.
Finance Minister Charles Sousa first promised the 15 per cent reduction
in August 2013 when the New Democrats made that a condition of
supporting the then-minority Liberal government’s budget earlier that
year.
As it turned out the
NDP voted against the bill Thursday for many of the reasons cited by the
trail lawyers, including the fact the reduction in premiums is taking
too long. From August 2013 to this August the premiums dropped by an
average of only 6 per cent.
Ralph Palumbo, vice-president, Ontario, Insurance Bureau of Canada, welcomed the legislation.
“Everyone — including
the insurance industry — is in agreement on one thing: auto insurance in
Ontario is far too expensive. We realize the financial hardship it can
create for vehicle owners, particularly young people and those in
northern and remote communities . . . now we have an opportunity to
begin fixing the system once and for all,” Palumbo said.
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