Explainer: ICBC’s Money-Saving Measures Ruled “Unconstitutional”

A recent B.C. Supreme Court ruling has T-boned both ICBC’s efforts to recover losses and the B.C. NDP’s auto insurance reform

ICBC Autoplan Insurance broker located in North Vancouver. (Kristen Frier)

Back in February, B.C. Attorney General David Eby set caps on the number of experts and expert reports allowed in auto insurance lawsuits. However, Chief Justice Christopher Hinkson ruled this to be unconstitutional because, according to his ruling, “it violated the exclusive powers of a court to control its own processes.”

The provincial government’s decision to set a cap on the number of experts and reports was set to save ICBC some serious money, and the immediate effect of the Supreme Court ruling is an approximated $400 million financial blow to ICBC.

Eby set this cap of one expert report — including those on medical conditions and lost wages — to fast-track insurance claims valued at under $100,000, and up to three in all other cases, in order to recover ICBC’s $2.5 billion in losses over the last two years. These losses are mostly due to a rising trend in insurance claims and legal costs.

On top of the expert report cap, the NDP’s insurance reform has taken several other money-saving measures, including a cap of $5,500 for minor injury claims as well as the elimination of the safe driver’s insurance discount for motorists licensed outside of B.C.

And while out-of-province drivers can apply for B.C. licenses which honour their safe driving, according to the Vancouver Sun, their savings are offset by the “new resident” surcharge of 15 per cent, lowering to 5 per cent after three years. This accounts for statistics showing higher rates of collisions with drivers new to our province.

However, ICBC is not only cutting costs where motorists and insurance claim plaintiffs are concerned. The organization is also “reducing staffing” and “other costs” to the point where it’s climbing out of deficits and stabilizing its operations, Eby said on Oct. 29.

Eby continued to deny that salaries above $150,000 per year have increased, stating instead that every category above $100,000 has been cut by 10 per cent and every category above $150,000 has been cut by at least 30 per cent.

Tom Fletcher of Black Press Media writes that corporation documents show that the only growing number of high salary jobs at ICBC from 2018–2019 are in the $75,000–$100,000 range, while every category above that has decreased by as much as 38 per cent.

The court challenge was originally brought by B.C. driver Gregory Crowder, who was left with traumatic brain injuries and other medical problems after being rear ended by a tractor trailer in 2017. Crowder alleged the limit on medical reports “would have made it impossible to fully outline the scope of his injuries and the lifetime of future medical care he requires.”

That’s when B.C.’s Trial Association, a group of personal injury lawyers opposed to  the government’s ICBC reform, stepped in to accuse them of “legal overreach.” This was followed by the Supreme Court’s ruling.