Province may appeal insurance ruling
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The Stelmach government is considering appealing a court ruling that struck down a cap on auto insurance payouts for pain and suffering in soft-tissue injury claims, commonly related to whiplash.
“The government regime did not survive the test in this decision,” Justice Minister Ron Stevens said Saturday, “but we do have the ability to appeal and we will consider whether or not we do appeal.”
Stevens said if the decision is made to appeal, the government would ask the court to immediately impose a stay on the ruling until the appeal is heard.
In the ruling, Justice Neil Wittmann found that the government’s Minor Injury Regulation (MIR) discriminated against a specific group of injured Albertans by limiting their ability to recover damages in court.
“In my view, the MIR sacrifices the dignity of minor injury victims at the altar of reducing insurance premiums,” Wittmann wrote, adding that the law demeaned accident victims “because it suggests that their pain is worth less than that of other injury sufferers.”
The 2004 insurance reforms imposed a $4,000 cap on soft-tissue-injury claims and created a government-prescribed treatment for soft-tissue injuries.
Edmonton MLA Rick Miller, the Liberal insurance critic, said Saturday his party would consider a public insurance system if elected.
“Public insurance would certainly be on the table although we would also look at all the options,” Miller said. “We would undertake a complete and comprehensive review of the insurance system immediately upon election rather than wait until 2011 as the Tories are proposing.”
NDP Leader Brian Mason said the court decision highlights the need for a public insurance system.
In Calgary on Saturday, Wildrose Alliance Leader Paul Hinman called the old law “draconian,” and welcomed the court decision.
“It’s awesome we’re getting our rights restored here in Alberta,” he said.
Edmonton lawyer Fred Kozak led the team of lawyers, which included Matt Woodley and Jeremy Taitinger, that scored the legal victory on behalf of accident victims over the government.
“The MIR discriminated against innocent injured victims by purposely taking money away from them to subsidize other drivers,” Kozak said. “That is something that we as a society do not condone and that is made clear in the ruling, especially when the group from whom the money is being taken has traditionally suffered from stereotyping and prejudice.”
The ruling takes effect immediately and some in the insurance industry have already suggested that it may result in increased premiums. Kozak doubts that will happen.
Premium increases have to be approved by an independent provincial board and one of the main factors the board considers is insurance profits.
“Insurance companies in Alberta have always been profitable and their profitability has been increasing dramatically since 2002,” Kozak said.
Thousands of accident-injury lawsuits had been held in abeyance awaiting the outcome of the lawsuit, which took more than a year to work through the courts. It is expected that a class-action lawsuit will be filed on behalf of thousands of injured drivers who accepted the $4,000 cap.
Edmonton lawyer Ken Kolthammer said he has heard from more than a dozen people who were told by insurance adjusters that they should simply settle for the $4,000.
“They also encouraged them not to consult a lawyer because they were told that if they did, they would simply be wasting a chunk of the $4,000,” he said.
“Insurance companies should have been telling people there was a lawsuit under way that could result in the cap being struck down so that they could make an informed decision about whether they wished to settle,” he said.
Charles Rusnell, The Edmonton Journal; with files from The Calgary Herald
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