ICBC paid out nearly $2B to law firms in previous fiscal year

The Insurance Corporation of British Columbia (ICBC) paid out $1.9 billion to 42 plaintiff law firms last fiscal year.

ICBC released additional information on Monday attached to the public insurer’s Statements of Schedule of Financial Information.

“One of four dollars that ICBC spends goes to legal administration and legal cost. The figures as a total may come as a surprise, though, when you look at 30 per cent of what is paid to law firms, if that is what they are taking in contingency, you are looking at more than half a billion dollars in just lawyers fees alone,” Eby said.

1:07 Keith Baldrey on ICBC’s future

“Clearly there is room for improvement in terms of the efficiency in how disputes are resolved.”

The B.C. government is struggling to get a grasp on losses at the public insurer.

ICBC lost $1.15 billion last fiscal year which wrapped up on March 31.

It’s part of a concerning trend where the insurer lost $1.32 billion in 2017/18 and $913 million in 2016/17.

The provincial government attempted to save money by restricting the use of expert reports in settlement cases, but the B.C. Supreme Court ruled the changes were unconstitutional.

2:06 Court overturns B.C. government’s attempt to restrict expert reports in ICBC cases

Eby says the province would have received a one-term budget savings of more than $400 million. The projected savings were based on a backlog of cases that are expected to be settled using the courts.

“I think one of the major issues that ICBC has had is when people call and need a physiotherapist, getting someone on the phone has been very difficult. We have hired additional staff to deal with that,” Eby said.

“These are the changes we are trying to make because as soon as it goes to court the costs start going through the roof for everybody.”

2:04 New drivers getting sticker shock under ICBC rate structure

The financial statements include an update on executive compensation.

Employees making more than $300,000 a year went from six in 2017/18 to four in 2018/19.

ICBC reduced the number of employees making between $200,000 a year to $300,000 from 26 to 17 and between $100,000 to $200,000 from 643 to 544.

“This is one of those areas where have had some pretty good success,” Eby said.

“In every category we have reduced the number of employees.”

1:48 Do ICBC rate changes make it worth cancelling and renewing your insurance?

But the BC Liberals say those numbers are deceiving considering how much executive compensation went up two years ago.

In the 2016/17 fiscal year, two employees made $300,000, nine made between $200,000 to $300,000 and 376 made between $100,000 to $200,000.

“British Columbians should have steam coming out of their ears,” Liberal MLA Jas Johal said.

“Eby says he is fixing the system but we have a huge increase in those making significant dollars.”

The government is also working on changing structural issues at ICBC including the corporation no longer handling its own investments.

Eby has also taken the idea of selling the ICBC building off the table. He says if they sold the insurer’s headquarters in North Vancouver it would cover one fifth of the deficit and then would be gone.

“There is certainty an opportunity for ICBC to be using property they have more efficiently,” Eby said.

“What we will not be doing is selling the silverware to pay the rent.”