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Anticipated Changes in Automobile Legislation in Alberta

02-Nov-20

By the McLennan Ross Insurance & Risk Management Group

Last week, the Government of Alberta introduced the following:

  • Bill 41, the Insurance (Enhancing Driver Affordability and Care) Amendment Act, 2020 (“Bill 41”); and
  • Report by the Automobile Insurance Advisory Committee titled “Fundamental Reform of the Alberta Automobile Insurance Compensation System” (the “AIAC Report”).

At the same time, the Government of Alberta also passed Orders in Council in effect on November 1, 2020 to amend the Minor Injury Regulation, the Diagnostic and Treatment Protocols Regulation, and the Automobile Accident Insurance Benefits Regulation.

One of the key changes to the Minor Injury Regulation includes broadening the definition of a minor injury in an accident to a sprain, a strain, or a whiplash associated disorder (“WAD”) injury “caused by the accident that does not result in a serious impairment and includes, in respect of a sprain, strain or WAD injury that occurs on or after November 1, 2020, any clinically associated sequelae of sprain, strain, or WAD injury, whether physical or psychological in nature, caused by the accident that do not result in a serious impairment”.

With this broadened definition, there is certainly the argument that the Minor Injury Regulation WAD can include chronic pain, TMJ symptoms, and concussions.

After months of consultations with Albertans and stake-holders, the AIAC Report proposes a pure ‘no fault’ system where an injured party is no longer permitted to bring a tort action against the at-fault party. Instead, the injured party’s right of action rests solely against their insurer to recover damages. 

While the Government proceeds with ongoing consultations on the prospect of implementing a pure no fault scheme, Bill 41 proposed the following changes as to how actions arising from motor vehicle accidents will proceed through the Courts in Alberta:

  • Limit the number of experts that can be used in automobile injury litigation for injury claims.
  • Move towards a “Direct Compensation Property Damage” scheme, where insurers will process the costs of automobile repair directly in any event of fault, thereby eliminating the time and administrative costs of subrogation.
  • Changes in the rate and start date for pre-judgment interest on non-pecuniary “pain and suffering damages” from an automobile collision:
    • A Court shall not award interest for loss or damage from bodily injury or death before the earlier of the day on which the Statement of Claim is served and the day that the Plaintiff provides written notice to the insurer of the Defendant of the Plaintiff’s intention to make a claim; and
    • Interest for non-pecuniary damages for loss or damage from bodily injury or death must be calculated in the same manner as interest awarded on pecuniary damages.

It is anticipated that these changes in relation to Bill 41 would apply to every motor vehicle injury proceeding commenced on or after January 1, 2021.

A more detailed memorandum setting out the changes made by Bill 41 and the release of the AIAC Report can be found here.

We anticipate that many Plaintiff’s counsel will file potential lawsuits before these changes come into effect in order to avoid the limitations they impose. The Insurance and Risk Management team at McLennan Ross LLP is ready to take on the increase in claims in 2020 and look forward to discussing how Bill 41 and the AIAC Report may change your claim handling strategies in 2021.

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