Bill 47, the Automobile Insurance Act, would largely restrict the ability to sue an at-fault driver for injuries in an accident. It would establish when benefits would be payable to Albertans who are injured or die from a collision, and direct insurers to pay compensation benefits regardless of who is at fault for the accident.
The “care-first” system would be privately delivered and allow Albertans to continue choosing their insurers in a competitive market. It would reduce the time and money spent on litigation and ultimately lead to lower insurance rates, the province said.
“Care-first is a term we use intentionally, because Albertans who are injured in a collision truly need their care and well-being to come first,” said Nate Horner, the province’s minister of finance. “Our goal is to build a stronger auto insurance system to better protect Albertans and their pocketbook.”
The bill also sets out what insurers would need to pay or reimburse Albertans for reasonable and necessary medical, rehabilitation and other benefits, while also establishing the requirement that insurers must assist their clients and would set out the independent medical examination process rules to make claims.
The province’s proposals have met with support in the insurance community, with Aaron Sutherland, vice-president of the Insurance Bureau of Canada (IBC), saying “care-based auto insurance systems work by replacing costly legal battles with more efficient access to benefits and improved premiums.”
But members of the legal community are proving to be decidedly less sanguine.
Laura Comfort, a partner with Cuming & Gillespie in Calgary, said the system proposed by the Alberta government “has really never been done before.” She noted the government’s plan involves bringing in a no-fault insurance model similar to what is done in Saskatchewan and Manitoba — but without a government body to oversee it.
“It would be a predetermined system that’s run by for-profit insurance companies as opposed to the government,” said Comfort, who is also vice-chair of the Alberta Civil Trial Lawyers Association (ACTLA). “And that’s one of the main concerns that a lot of lawyers have here in Alberta.”
Comfort said she would not dispute the fact there are affordability issues in the current insurance system, but there is some disagreement on what the causes of those issues are.
“A lot has been made about legal fees and expenses being the driver, but our view is those are external to the system because our fees — certainly from the plaintiff side — come out of our clients’ awards,” she said. “I think the system currently delivers accountability, so the driver who is at fault is held responsible, as is their insurer. In the fault-based system we have accountability through lawyers who can sue and ensure that people are getting the damages that they’re entitled to — and that’s obliterated by Bill 47 as we move into this no-fault system.”
Jackie Halpern, McLeod Law LLP
“It locks Albertans into a system where insurers call the shots,” she said. “It gives the insurers even greater power over claims and people lose protections, including the right to challenge unfair denials or seek legal recourse against the at-fault driver through the court system.”
The proposed system does provide some limited ability to sue, such as if the at-fault driver is convicted of offences under the Criminal Code or provincial Traffic Safety Act, or if losses exceed the amounts provided by the insurance policy such as lost income.
But David Corrigan of HMC Lawyers said these carve-outs “seem a bit odd.”
“Whether someone is charged is often just up to the whims of the investigating police officer — so you could see this causing some grief with people who want to have lawsuits and are pressuring the police to lay charges, and obviously they shouldn’t have any say in that,” he said. “I understand what they’re trying to do, to make sure the people who are drinking and driving don’t escape responsibility. But it just seems like you’re going to have clashes between the criminal court system and the civil court system.”
The Automobile Insurance Act is enabling legislation, which means that many substantive rules would be developed through future regulations. Comfort said “the devil is in the details” and much remains to be seen about how everything will play out, but the bill is the “most extreme version of anything that we could have that was anything that was being proposed or talked about.”
“It’s a fundamental disruption to the entire industry,” she said. “I think there is some idea that stakeholders will have some say in it, and we hope that those are listened to by the government, because we do have a vast amount of experience here in the Alberta bar.”
Halpern, herself a past president of ACTLA, said people who are concerned about the changes should get in contact with their members of the legislature and urge the province to go back to the drawing board on revamping auto insurance.
“There are ways of doing that while also protecting Albertans’ rights,” she said. “We’re committed to working with the government to address their concerns about affordability while still ensuring that access to legal rights remain available for Alberta drivers — and we’re optimistic that the government will work to find this balance.”
Bill 47 has passed first reading and is currently before the Alberta legislature. If passed, the Alberta government said it will consult with health care and insurance representatives on key operational elements of the model. Further regulations to implement the changes could be introduced in the fall of 2025, the province said.
Alberta plans to have the system up and running on Jan. 1, 2027.
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