Don't cut lawyers out of accident benefits system

Removing lawyers from the accident benefits system would be bad for injured victims, says Ottawa personal injury lawyer Najma Rashid.

In his recent report on the state of the auto insurance in Ontario, David Marshall, the former CEO of the Workplace Safety and Insurance Board, called the proliferation of lawyers in the accident benefits system a sign of its failure and said his ideal version would have virtually no room for them.

“Handling of an accident benefits claim in a no-fault system ought to be straightforward. There should be very little, if any reason to have to hire a lawyer,” Marshall wrote.

But Rashid, a partner with Howard Yegendorf & Associates,  the report goes “a little too far in attacking the legal profession and contingency fee agreements.

“He’s recommending you take lawyers out of the picture, but I don’t think it’s fair to expect someone with a serious injury to open up the legislation and figure out for themselves what their rights are,” she says. “It’s a heavily regulated and very complex area, and everyone has a right to legal representation.”

Marshall’s withering report called the province’s regime “one of the least effective in the country” after finding that the average Ontarian paid an annual insurance premium of nearly $1,500 per vehicle. That’s more than 50 per cent higher than the national average of $930.

He expressed frustration that while the fatality and accident levels on Ontario’s roads have fallen consistently, the cost of claims has continued to go up. The system “is filled with disputes and inefficiencies, and a very high percentage of premiums are being used to pay experts and lawyers and not going directly to injured persons,” he wrote.

Marshall’s report identifies a central flaw in the system that allows its key participants to “work at cross purposes.”

To fix it, he suggests setting up a new arm’s-length, proactive regulator that would overhaul the current rules to make them more straightforward to understand and apply. The body would also be handed responsibility for monitoring the use and cost of legal representation in the system, an idea that worries Rashid.

“We’ve already got a mechanism for reviewing fees. If clients are unhappy with a lawyer’s bill, they can apply to have the bill assessed under the Solicitors Act,” she says. “There are reams of case law on what’s a fair amount to charge.”

Marshall calls for a new system for the compensation of catastrophically injured claimants that would move away from cash settlements, which he said were being “drained by having to pay legal fees,” and in any case fail to “adequately meet” their needs.

In addition, he said the new regulator should create programs of care for most common injuries to reduce disputes over treatments, and as part of a broader “care not cash” approach that would shift “the focus to the needs of the patient rather than the amount of the settlement.”

But Rashid questions whether the “already overburdened” health system would be able to absorb the extra work of setting up hospital-based assessment centres, and says the plan could dilute the quality of care received by individual accident victims. In addition, she says the absence of appeal rights concerns her.

“It sounds like the U.S. model of health-maintenance organizations, where the insurance companies get to make health-care decisions,” Rashid says. “What will happen is that each person will be slotted into the mandated treatment protocol that matches their injuries, without taking into account the fact that every person and every injury is different.”