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Media Releases 2009

June 16, 2009

Insurance Bureau of Canada calls on personal injury lawyers to end the uncertainty for Alberta drivers: Don’t appeal cap decision

Edmonton, AB – June 16, 2009 – The insurance industry today called on Alberta’s personal injury lawyers to do the right thing for Alberta consumers and abandon their drive to remove government legislation that brought stability and affordability to the auto insurance system in the province.

Jim Rivait, Vice-President, Alberta and the North, Insurance Bureau of Canada (IBC) said: “In response to the recent Court of Appeal of Alberta decision upholding the cap on pain and suffering pay-outs, IBC is removing its call for a 40.2% increase in auto premiums at this week’s Automobile Insurance Rate Board hearings. This is the right thing to do for the drivers of this province.”

He added: “Now, the ongoing affordability of auto insurance in Alberta is largely in the hands of personal injury lawyers as they deliberate on whether to appeal this decision to the Supreme Court of Canada – a process that would take years. Let’s hope, for the sake of Albertans, they abandon this challenge now, and spare them an extended period of uncertainty.”

The Court of Appeal of Alberta issued its highly anticipated decision on Morrow v. Zhang last Friday. The unanimous decision confirmed the validity of the province’s $4,504 cap on pain and suffering awards for minor, non-permanent injuries. The 2004 legislation that implemented the cap also raised the limit for no-fault medical rehabilitation services from $10,000 to $50,000, and brought in diagnostic and treatment protocols for sprain and strain injuries.

The Appeal Court decision dismissed the argument that the cap is discriminatory, and said, “the legislation, as a whole, responds to the needs and circumstances of those suffering minor soft tissue injuries.”

In addition, the decision stated that “the nature of the interest affected here is not of ‘fundamental’ societal or constitutional importance.”

Insurance Bureau of Canada is the national industry association representing Canada’s private home, car and business insurers.  Its member companies represent nearly 95% of the property and casualty (P&C) insurance market in Canada. The P&C insurance industry employs over 110,000 Canadians, pays more than $6 billion in taxes to the federal, provincial and municipal governments, and has a total premium base of $38 billion.  

To view news releases and information, visit the media section of IBC’s website at www.ibc.ca.

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For more information contact: Suzanne Hughes (416-723-3474) or James Geuzebroek (416-362-2031 ext. 4364)