Attorney General David Eby is looking at the idea of capping or restricting the costs of using expert reports in ICBC cases.
Eby says one of the surprising increased costs at ICBC has been the huge increase in lawyers’ commission reports to support their claim requests for clients injured in crashes.
“We have seen a massive inflation in the cost per report and an inflation in the number of reports that are required to resolve a dispute. The reports are very expensive. They can range from $5,000 to $20,000,” Eby said.
“Ideally, to resolve a claim you would use as few of these reports as possible because they are so expensive. All of it is paid by ICBC and by extension paid for by the car insurance rates paid for by British Columbians.”
ICBC recently reviewed around 1,200 files that were within three months of trial. What the public insurer found is that lawyers are using more than three experts 80 per cent of the time on files valued above $100,000.
Expert reports are used to make the case for a certain settlement amount. They often require medical experts who can assess whether an injured person can work again or what impact the crash will have on their standard of living.
The public insurer says the trend of increasing the use or experts is new. There are restrictions in other provinces like Alberta and Ontario that prohibit the excessive use of experts without at least first making the case to the court that they are required.
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In almost all cases, ICBC reimburses injured plaintiffs for these expert costs on top of any settlement amount provided for their injuries. The review into the use of reports did not include files classified as “catastrophic” where more experts may be expected.
Eby says the cost of these reports is part of what has been driving up legal costs at ICBC.
“The problem is that there has been an increase in the year-over-year cost in settlements and inflation in the amount of money being paid out to people suing ICBC without any justification of why that is happening,” Eby said.
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According to ICBC there is also a huge difference in how much the insurer spends compared to how much plaintiffs spend in settlement cases. The insurer says plaintiffs use more than three experts 60 per cent of the time, compared to ICBC using three experts 29 per cent of the time.
The cost concern is part of a larger group of changes coming to ICBC on April 1, 2019. Lawyers have been critical of the way the province plans on capping settlements at $5,500 for soft tissue injuries. The province is also restricting the amount lawyers can charge.
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All of this is to address $1.3 billion is loses at ICBC last year and a forecast loss of more than $800 million this year.
Trial Lawyers Association of B.C. president Ron Nairne says he doesn’t buy the government’s number. When asked about the soaring cost of expert reports he said ICBC is not showing the full cost picture.
“We don’t really know what the losses at ICBC are,” Nairne said. “We think this is a political game that ICBC is playing and the numbers are not real at all.”
“Their financial reporting is very thin.”