New caps on how ICBC and plaintiffs can use medical experts in court cases come into effect immediately.
VICTORIA – The B.C. government will cap the amount of expert reports allowed in court cases for automobile injury claims in an attempt to save the beleaguered Crown public auto insurer money as it teeters on the brink of insolvency.
Attorney General David Eby said effectively immediately the Insurance Corporation of B.C. and plaintiff lawyers in court cases will only be allowed to use one expert and report each for fast-track claims valued less than $100,000, and up to three experts and reports each for all other claims.
The cap will also apply to existing court cases for automobile injuries in which experts and reports have yet to be actually produced.
“The benefits of the adversarial system are what we’re trying to preserve,” said Eby. “What we’re trying to address are the excesses of the system that don’t advance any interests. It doesn’t advance any interest to have six-plus experts on a claim.”
The change will save an estimated $400 million a year, said Eby.
That will be on top of an estimate $1 billion in savings to come after April 1 when pain and suffering claims on minor injury cases will be capped at $5,000, he said. Those caps will address roughly 80 per cent of all ICBC claims cases, with the crackdown on expert reports targeting the remaining 20 per cent of cases, said Eby.
The change is intended to address $1.18 billion in losses ICBC announced last week projected for the remaining fiscal year ending March 31.
Eby said there’s an average of six experts retained by lawyers (on injury cases in excess of $100,000 within three months of trial), compared to an average of two by ICBC.
However, Eby also acknowledged some criticism should lie with ICBC for in 2017 being caught using some medical experts on a pre-approved list who were producing prejudicial reports against claimants. That sparked a government review of ICBC’s pre-approved medical experts.
“ICBC and the plaintiff are operating in a very broken system,” he said.
LISTEN: This week on the In The House podcast, Rob Shaw and guest Vaughn Palmer discuss a busy time in B.C. politics, including the final count of the Nanaimo byelection, the auditor general’s look at B.C. Hydro deferral accounts, the legislature being placed under Freedom of Information legislation, and other stories of the week.
Eby said the hope is that the changes will encourage ICBC and plaintiffs to co-operate on joint medical experts. But he also said the changes will require buy-in by judges, who still have the discretionary authority to allow for expert reports beyond government’s cap whenever they feel it is necessary.
ICBC continues to suffer steep financial losses due to rising claims and litigation costs. If the estimates hold for the current fiscal year, ending March 31, it will mean ICBC lost almost $2.5 billion over two years.
ICBC’s deficits pose a real risk to the annual provincial budget, Finance Minister Carole James has said. The next budget is set to be tabled Feb. 19, and Eby said ICBC’s three-year projected financial situation will be released at that point.
Eby has ruled out allowing ICBC to increase its current rate hike application, which sits at 6.3 per cent for this spring. He also said ICBC will not receive a government bail-out.
Eby pointed to almost $14 billion in claims reserves as the first backstop of ICBC’s finances. From there it has capital assets to sell as well, he said.
ICBC’s latest quarterly financial update, released last week, pegged the corporation’s “minimum capital test” – a benchmark of an insurance company’s cash on hand to pay out all of its claims in an emergency – at -17 per cent. It’s the first time ICBC’s reserves have dipped that low. In 2014, the minimum capital test was 193 per cent.