Insurance companies and wrongful death claims

By Alan Shanoff ,Toronto Sun

First posted: Saturday, August 18, 2012 06:26 PM EDT


On the morning of July 31, 2006 the lives of Randall A. Palmer and Michelle Vokes intersected on Highway 6/21 in Owen Sound with fatal results. Palmer, driving without insurance, was speeding along the highway “significantly in excess of the posted speed limit of 50 kph,” running late for a date in traffic court. Vokes, nine months pregnant, was exiting a shopping plaza. Vokes and her unborn child died in the crash leaving behind two daughters aged 3 and 5, as well as her husband.

Husband and father, Bradley Vokes sued Palmer. The jury found Palmer entirely at fault for the collision and awarded $117,000 to the 5-year old, $135,000 to the 3-year old and $90,000 to the husband for loss of care, guidance and companionship of their mother and wife.

These paltry sums for the death of a parent and spouse are the result of our miserly laws which don’t allow for any compensation for grief, sorrow or mental anguish resulting from the death of a loved one. It doesn’t matter how much a grieving spouse, parent or child suffers.

Instead the law allows only for minimal compensation for what we clinically refer to as loss of care, guidance and companionship, in addition to actual financial losses.

Judges and juries are not permitted to award a sum to provide compensation for the loss of a loved one, and punitive damages are rare. They aren’t allowed to award compensation for the hurt suffered, nor the value of the life of the deceased family member.

This kind of makes sense, as no sum can truly compensate for the loss of a life and even attempting to place a dollar value on the loss of a life seems almost ridiculous. But providing no or small sums as financial compensation is even more ridiculous since awarding money is the only real remedy a court can provide.

The trifling sums notwithstanding, Vokes’ insurer — since Palmer had no insurance, Vokes’s insurance policy covered the claim under its uninsured driver coverage — ING Insurance Company (now Intact), appealed the jury verdict claiming Vokes was at fault for turning in front of Palmer’s vehicle and that the sums awarded for loss of care, guidance and companionship were excessive.

The Ontario Court of Appeal dismissed the insurer’s appeal late last month ruling it would have been difficult for Vokes to have detected Palmer’s excessive speed. Evidence at trial indicated Palmer was travelling at a rate of 120 kph in the 50 zone.

The Court of Appeal also ruled the amounts provided for loss of care, guidance and companionship, although high in accordance with past precedents, were not inordinately high.

According to the Vokes’ family lawyer, Adam R. Little of Oatley Vigmond, the awards to the children represent the highest awards ever produced in Ontario and reflect the “recognition that a child suffers a very real non-economic loss when they lose a parent.”

Past precedents establish an upper end of $125,000 to parents for the loss of a child with much smaller sums being awarded to children for the loss of a parent. Little sees the higher award to the Vokes’ children as a welcome development in the law.

Two things stand out in this case. First, why would the Vokes’ insurer appeal the jury verdict? What could they have expected to gain, other than perhaps a small reduction in the award? Why put the Vokes family though further anguish and legal expense?

The sums awarded by the jury weren’t extravagant.

And what about the at fault driver, Palmer? He was driving without insurance and was rightly convicted and fined for that offence. But he was never convicted of a criminal charge, let alone a lesser Highway Traffic Act careless driving charge.

The Court of Appeal decision should end the sad litigation.

No insurance company would have the temerity to attempt an appeal to the Supreme Court of Canada.

Toronto Sun – The most generous benefits in North America? Sorry, Ontario strikes out

By: Alan Shanoff, Toronto Sun

Late last month the Insurance Bureau of Canada launched a media campaign claiming Ontario has one of the most generous benefits packages in North America.

Coincidentally Ontario’s Minister of Finance, Dwight Duncan, issued a press release claiming Ontario’s accident benefits remain the most generous in Canada.

Is this true or is it a sleight of hand to divert our attention from the fact Ontario’s car insurance premiums are the highest in the country?
Let’s start by looking at the majority of accident victims, those who suffer minor injuries such as sprains, strains and minor to moderate whiplash.

According to the 2011 Annual Report of the Office of the Auditor General of Ontario (the AGO Report) approximately 60% of accident victims suffer minor injuries. If you suffer a minor injury as a result of a car accident in Ontario your generous entitlement for medical rehabilitation benefits is a maximum of $3,500.

That figure includes the cost of assessments, examinations and reports, meaning that the actual amount available for treatment will be much lower. That figure is supposed to cover treatment for dislocation of joints, partial tears of tendons, ligaments and muscles, contusions, abrasions, lacerations, whiplash not exhibiting neurological signs as well as any clinically associated conditions.

In no other province or territory are any car accident victims limited to such a paltry sum as $3,500 for medically necessary treatment. No other province provides a cap on so-called minor injuries.

Strike One against Ontario having the most generous benefits in Canada.

Alright, let’s move on to moderate to major, but not catastrophic injuries, the category in which about 39% of all accident victims fall under according to the AGO Report.

Your generous entitlement for medical rehabilitation benefits is a maximum of $50,000. Prior to September 2010 this figure was a more generous $100,000 — but it was reduced as part of the war against fraud. Yes, Ontarians may pay an extra premium to reinstate the $100,000 benefit, but very few have taken up that option. That’s not surprising since our premiums are the highest in the country without purchasing optional coverage.

Our $50,000 compares favourably to Nova Scotia, PEI, Nunavut and the NWT which each have a limit of $25,000 and equals the limit in Alberta and New Brunswick. But it falls short of the limits in British Columbia, Manitoba and Saskatchewan.

Strike Two against Ontario having the most generous benefits in Canada.

OK, what about the catastrophic injury category? This is the category in which only about 1% of all accident victims fall according to the AGO Report. Less than 1,000 Ontarians fall under this category each year.

Ontario’s medical rehabilitation limit for catastrophic injuries maxes out at $1,000,000. That may seem like a lot of money, and it is, but it is supposed to cover a wide range of sophisticated and expensive treatments and may not be adequate for some catastrophically injured victims. No other province provides a special limit for catastrophic injuries although Manitoba, Saskatchewan and Quebec provide medical rehabilitation benefits in excess of Ontario’s $1,000,000 when medically warranted.

But, Manitoba and Quebec have pure no fault systems and don’t allow negligence lawsuits to recover damages for pain and suffering or economic losses while Saskatchewan’s medical rehabilitation benefits are reduced for those who have elected to purchased a tort-based insurance policy rather than the standard no-fault based policy which excludes negligence actions.

While Ontario permits negligence lawsuits there is an automatic deductible for claims under $100,000 and no claims are permitted unless they satisfy a stringent threshold test.

Regrettably, Ontario seems poised to go down the road of “modernizing” — meaning making it harder to qualify and reducing the number of claimants — the definition of catastrophic impairment following the recommendations of an eight-member panel, two of whom have been consultants to the IBC and two of whom have received research grants from the insurance industry.

And regardless of the amount of the benefits, you can’t have a “generous” system if insurers delay and deny claims to the extent that tens of thousands of accident victims remain in lengthy queues to achieve either a mediation or arbitration of their entitlement to benefits.

Strike Three — you’re out.

Toronto Sun – The task of tackling fraud

The government’s Auto Insurance Anti-Fraud Task Force can’t determine how bad the problem is.

This shouldn’t come as a big surprise to Ontarians.

The two accounting firms hired, one by the Insurance Bureau of Canada, the other by the Ministry of Finance, can’t completely agree on the numbers either.

KPMG’s report, on behalf of the industry concluded “there is insufficient information to provide a precise and statistically based estimate of auto insurance fraud in Ontario.” But they did give a wide range on the cost of fraudulent claims “amounted to between $769 million and $1.56 billion.”

That tacked on another $116-236 onto the average premium.

Ernst & Young, brought in by the government to evaluate the report for their task force noted “KPMG’s report may significantly underestimate the extent of overall auto insurance fraud in Ontario because it does not specifically address premeditated fraud.”

It’s little wonder there is confusion.

One thing we do know for sure is Ontarians pay the highest insurance premiums in the country.

Even Ontario’s Auditor General Jim McCarter pointed out the glaring flaws in the system in his annual report in December. He noted between 2005 to 2010, the total cost of injury claims rose 150%.

During the same time frame, injury claims were up only 30%.

And the average cost of accident injury claims is five times higher than any other province.

This is unacceptable.

So too is the adversarial relationship between the insured and the insurance company. Too often the insured is stymied in trying to obtain the very benefits specified in the insurance policy. This results in the retaining of lawyers which results in lawsuits.

Yes there is fraud, too much in fact.

So why haven’t insurers done a better job in combating fraud? Why is the brunt of combating fraud placed on the backs of legitimately injured people? Questions that need answering, but won’t be by the task force.

That’s not part of their mandate.

But there are some encouraging recommendations so far.

And this is the time to get it right. If we don’t, the problem is going to get worse.