Auto caps re-instated in Alberta

The Alberta Court of Appeal overturned a prior provincial court decision to remove caps on payouts for soft-tissue injuries incurred through automobile accidents.The appeal court decision came down last Friday June 12, 2009 and prompted the provincial government to announce that the cap on minor injuries—such as whiplash and strains—is once again in effect.The original cap amount, of $4,000, was originally introduced in the Minor Injury Regulation (MIR) in 2004.

Cap Increase with New Decision
With this recent court challenge and decision, this cap is now raised to $4,504, to account for inflation, explains Alberta Justice Minister Alison Redford. The MIR does not cap compensation for medical expenses and lost wages.

The insurance industry is hailing the Alberta Court of Appeal’s decision to uphold the minor injury regulation (MIR) as a victory.

However, uncertainty continues to be prevalent as many industry pundits wonder whether or not this recent decision will be appealed to Canada’s highest court—the Supreme Court of Canada. Randy Bundus, vice president, general counsel and corporate secretary of the Insurance Bureau of Canada (IBC) stated, on Friday: “There’s always uncertainty about whether or not it will go to the Supreme Court of Canada.” Bundus is hopeful, however, that the trial lawyers behind the Alberta cap challenge will “do the right thing for drivers of Alberta and not appeal, because all an appeal does is add uncertainty for awhile longer and the rate board will set its annual adjustment with that uncertainty in mind.”

Public Disappointment for Lawyers
On Friday June 12, 2009, the Canadian Bar Association (CBA) issued a statement voicing its disappointment with the decision. “A compensation cap denies the right of Albertans to access justice,” said Tom Achtymichuk, of the CBA’s Alberta branch. “We strongly believe that it is every Albertan’s right to access the justice system to determine fair compensation for their injuries.”

The CBA statement does not address the issue of seeking leave to appeal the decision to the Supreme Court of Canada—a decision that is ultimately left up to the respondents in the initial case, Pari Morrow and Brea Pedersen.

Morrow and Pederson originally filed their case on the basis of discrimination. In February 2008, an Alberta Court of Queen’s Bench judge decided for Morrow and Pederson, deciding that the government’s payout cap was unconstitutional because it discriminated against specific victims of vehicle accidents.

Last week’s Alberta Court of Appeal overturned the Court of Queen’s Bench decision with a unanimous decision and declaration that the provincial cap and legislation is not discriminatory.

Recent Decision Decries No Discrimination
Writing for a panel of three judges, Alberta Court of Appeal Justice Patricia Rowbotham observed that the trial judge in the lower court, Alberta Court of Queen’s Bench Justice Neil Wittmann, focused his analysis exclusively on one part of Alberta’s 2004 legislation, the Minor Injury Regulation (MIR), which introduced the cap. That focus was too narrow, Rowbotham ruled.

“The trial judge erred in failing to realize the insurance reforms as a complete package,” she wrote. “I conclude that his determination that individuals suffering minor soft tissue injuries are subject to stereotyping are subject to deference. However, I find that he erred in concluding that the insurance reforms as a whole perpetuate the stereotype.”

Rowbotham continues by writing, “The MIR, when considered with the entire scheme of insurance reforms, does not infringe section 7 or 15 of the Charter… While the legislation does make a distinction on the basis of disability, it is not discriminatory. The legislation, as a whole, responds to the needs and circumstances of those suffering minor soft-tissue injuries.”

Chance of An Appeal
Edmonton lawyer Fred Kozak represents Morrow and Pederson—the two women who suffered soft-tissue injuries, in separate auto accidents.

The women are “disappointed but absolutely committed to establishing what they think will be a much fairer approach to people who are innocently injured,” stated Kozak after Friday’s decision.

“They see this as a fight about fairness, not about money,” said Kozak. “Nobody would embark on this expensive endeavour thinking that somehow it was worth it financially.”

While a decision won’t be made to seek leave to appeal the ruling to the Supreme Court of Canada until there’s a chance to analyze the judgment, Kozak is almost certain the case will carry on.

“Because they’ve embarked on this litigation to establish fairness, not money … I’m confident that they’ll give us instructions to seek leave,” he said.

Peari Morrow suffered soft tissue injuries to her neck and upper back in October 2004 when her vehicle was struck on the passenger side while she was driving through a green light at a Calgary intersection.

The other woman, Brea Pedersen, suffered soft tissue injuries to her neck, shoulders, back and wrists when her vehicle was rear-ended in Edmonton in March 2005.

Originally published in Canadian Insurance Business Magazine in June 2009