B.C.’s new no-fault vehicle insurance system will freeze compensation for a person’s salary to whatever they were earning at the time of their crash, eliminating the ability in most cases to get extra money for lost future wages.
The change, say personal-injury lawyers, will disproportionally affect younger people just starting their careers and earning relatively low salaries. They’ll no longer be able to argue in court that injuries they sustained in a car crash prevent them from getting a future promotion, advancing their careers and ultimately making more money.
“You are throwing a lot of people into a lifetime of destitution if they don’t get fair compensation for their injuries that have basically stymied their ability to work,” said Wes Mussio, managing partner at Mussio Goodman, one of the largest personal-injury firms in the province.
But B.C. Attorney General David Eby said it’s a necessary trade-off to address rising costs at the Insurance Corp. of B.C.
“Things like speculative future wages you hadn’t actually earned but thought you had a chance to earn, I think that’s become disconnected from what British Columbians thought insurance was for, and what they were willing to pay for,” said Eby.
ICBC paid $435 million in future wage losses in 2019, an increase of 88 per cent since 2015. The average payment was $104,562 last year, a rise of 30 per cent since 2016, according to the corporation.
Mussio said ICBC’s cost pressures are caused by its aggressive litigation approach and changes to settlement policies. Eby said the problem appears more prevalent in B.C. than other provinces, and reflects the unacceptably high legal costs facing ICBC.
Currently, B.C. courts routinely award “loss of earning capacity” to people injured in vehicle accidents that reflects someone being less capable of earning income in the future, less marketable to future employers, less valuable in the competitive labour market and less able to take advantage of future job opportunities that might otherwise have been available without the injuries.
Under B.C.’s new no-fault auto insurance system, to begin in May 2021, ICBC will pay someone about 90 per cent of what they were earning, up to $1,200 a week, if their injuries prevent them from working. But the amount will be linked to the job and wages at the time of the crash, with no future earning losses.
Mussio, who owns the Nanaimo Clippers junior hockey team, said if any of his players were injured in a bus crash, such as the Saskatchewan Humboldt Broncos team in 2018, they would receive minuscule wage coverage because they are young athletes in school and not yet earning their full potential.
Mussio also pointed to the example of a teenager in a summer job in the natural resource sector who loses a limb in an accident, and whose entire career is compromised without the ability to claim future wage losses. “He’s in that accident and because he didn’t have a stitch of income before his wage indemnity, his benefits are virtually nothing,” said Mussio.
Eby countered that the no-fault system will recognize students or people in job-training courses and set their wage compensation to account for what they would have earned had they completed their education. That includes medical and law students, students in a structured internship, and a career path mapped out with promotions as part of employment, he said. The no-fault system will also pay for missed tuition.
In the case of a catastrophic injury such as the loss of a limb, the new system will also pay up to $250,000 in permanent impairment benefits, which functions as a kind of replacement for pain and suffering awards currently won in court.
Eby acknowledged there will be legitimate cases “in a sort of grey category” where some people will be affected negatively by the change. But he said he’s counting on ICBC’s boosted fairness commissioner and the Ombudsperson to flag those cases and any unfair treatment going forward.
“The plan is not to leave anybody behind,” he said.
Eby also said it’s possible government could make changes to the no-fault system on the issue of future wage losses if he receives enough public feedback on the issue during public consultations.