Ontario passes Bill 15 but who really benefits?

By: Dale Orlando

On November 20, 2014, the Ontario Liberal government passed Bill 15.  The title of this new law is Fighting Fraud and Reducing Automobile Insurance Rates. With Bill 15, the Ontario Liberal’s are delivering increased profits to insurers and perhaps lower premiums to Ontario drivers.

Unfortunately, the higher profits and lower premiums are being delivered on the backs of the most significantly injured innocent accident victims in Ontario.  Part of the cost savings to insurers are being achieved by reducing the interest rate that insurers pay on awards for pain and suffering in a lawsuit from 5% per year to the current rate of 1.3%.  Keep in mind that only innocently injured accident victims are entitled to receive damages in a lawsuit.  Furthermore, only the most seriously injured people in the province are entitled to receive an award for pain and suffering.

In order for an innocently injured person to receive an award from the Court for pain and suffering, they first must satisfy a judge that they have suffered a permanent and serious impairment of an important physical, mental or psychological function.  Even if the person meets this threshold, there is a mandatory deductible of $30,000 on awards of $100,000 or less (meaning that the insurance company of the person that caused the accident doesn’t have to pay the first $30,000 of the award).

With Bill 15, the Ontario Liberals have added insult to injury.  By reducing the interest rate on pain and suffering damages, the government has dramatically reduced the incentive of insurers to deal in a timely manner with the claims against them.  Insurers will no longer have an incentive to try to resolve a claim at an early opportunity.  Better to hold onto the money and keep it invested where they will expect to receive a return on investment of far greater than 1.3% per year.

Dale Orlando


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