The Telegram says 'yes' to piece on no-fault insurance

Last week I published a blog pointing out that among the other ways in which outgoing Premier Danny Williams has given Newfoundlanders and Labradorians pride in their independence, was the fact that he said ‘no' to no-fault insurance.  The Telegram newspaper picked up on the blog and gave me a call for an interview.  I am pleased that the Telegram ran the following piece in their Saturday edition, because it should never be forgotten that the insurance companies will seize any opportunity to argue for measures that cut back on the rights of injury victims.  Danny Williams resisted this lobby several years ago, but a new government may not be as smart and as determined.  As an American politician once said, "no person is safe while the legislature is in session!"

 

Williams praised for saying ‘no' to no-fault insurance

St. John's lawyer credits former premier for not caving in to pressure

By Deana Stokes Sullivan

The Telegram

Saturday, December 4, 2010

 

When Danny Williams announced his decision to step down as premier and retire from politics, it prompted many of his supporters to recount some of the positive things he achieved during his tenure.

Besides leading the province towards greater economic independence and fighting to defend the resource rights of Newfoundlanders, says St. John's lawyer Ches Crosbie, Williams also deserves praise for resisting pressure from insurance companies to reform automobile insurance and apply thresholds to injury claims.

"He's given us a pride in our own independence and our ability to make our own future," Crosbie said Thursday.  And, it wasn't a small thing, he said, for Williams to resist pressure from those big companies, while the governments of Alberta, New Brunswick, Nova Scotia and Prince Edward Island in the 2002-04 period, "caved in to insurance industry propaganda and adopted threshold, no-fault auto insurance."

Crosbie said threshold, no-fault insurance excludes large numbers of accident and injury victims from compensation for pain and suffering on the theory that reduced costs are passed on to consumers through lower premiums.  He said the victims affected are often people with soft tissue injuries and, in some cases, fractures, but they can't make claims.

"The industry was trying to get all the Atlantic provinces to follow that same pattern, and that's what we didn't follow here," Crosbie said.  "Although there were some changes made, there were relatively minor changes."

A $2,500 deductible was applied to injury claims in this province, he said, but in the "grand scheme of things that's not terribly significant when you compare it to thresholds that limit claims".  Newfoundland and British Columbia are the only provinces that still have vigorous tort-based or fault-based compensation systems, Crosbie said.

There's also "pure no-fault insurance", which is similar to workers' compensation, he said, where fault doesn't come into it at all, but the no-fault, threshold systems make it difficult to make a claim.

Crosbie said provinces that went with these no-fault, threshold systems have found the insurance companies haven't passed on the savings to the consumers. 

"The truth is, it doesn't happen," he said.  "The insurance companies take any savings for themselves."

Crosbie said lawyer Barry Mason is quoted in Lawyer's Weekly saying the industry in Nova Scotia made an extra $250 million from 2003-07 as a result of threshold, no-fault changes that were enacted in that province.

"Now, the government there is backtracking on that.  They're not going all the way back to the way things were, but they're making significant changes to pull some of the teeth of the no-fault system that was put in place," Crosbie said.

"Danny was an astute enough politician, and had enough guts, to take a calculated risk that public opinion was with him if he said ‘no' to no-fault, and he did," Crosbie comments in a blog on his law firm's website, www.chescrosbie.com.

Williams officially left office Friday, with Kathy Dunderdale being sworn in as the new premier. 

Crosbie said it's always possible that insurance companies will lobby the province again for legislative changes, but these things tend to move in cycles and the last push for change occurred after the 2001 terrorist attacks in the United States.

"If you go back to September 2001, that caused a big tightening in insurance markets around the world, and that filtered down to all manner of insurance - and typically the industry uses a market tightening cycle to argue that too many people are claiming bogus injuries and ... to propagandize in favour of measures that cut back on the rights of injury victims," Crosbie said.