B.C.’s no-fault insurance system to scrap payments for future earnings


VICTORIA — B.C.’s new no-fault insurance system will freeze compensation for a person’s salary to whatever they were earning at the time of their crash, eliminating the ability in most cases to get extra money for lost future wages.

The change, say personal injury lawyers, will disproportionally affect younger people just starting their careers and earning relatively low salaries. They’ll no longer be able to argue in court that injuries they sustained in a car crash prevent them from getting a future promotion, advancing their careers and ultimately making more money.

“You are throwing a lot of people into a lifetime of destitution if they don’t get fair compensation for their injuries that have basically stymied their ability to work,” said Wes Mussio, managing partner at Mussio Goodman, one of the largest personal injury firms in the province.

But B.C. Attorney General David Eby said it’s a necessary trade-off to address rising costs at the Insurance Corp. of B.C.

“Things like speculative future wages you hadn’t actually earned but thought you had a chance to earn, I think that’s become disconnected from what British Columbians thought insurance was for, and what they were willing to pay for,” said Eby.

ICBC paid $435 million in future wage losses in 2019, an increase of 88 per cent since 2015. The average payment was $104,562 last year, a rise of 30 per cent since 2016, according to the corporation.

Mussio said ICBC’s cost pressures are caused by its aggressive litigation approach and changes to settlement policies. Eby said the problem appears more prevalent in B.C. than other provinces, and reflects the unacceptably high legal costs facing ICBC.

Currently, B.C. courts routinely award “loss of earning capacity” to people injured in vehicle accidents that reflects someone being less capable of earning income in the future, less marketable to future employers, less valuable in the competitive labour market and less able to take advantage of future job opportunities that might otherwise have been available without the injuries.

Under B.C.’s new no-fault auto insurance system, to begin May 2021, ICBC will pay someone roughly 90 per cent of what they were earning, up to $1,200 a week, if their injuries prevent them from working. But the amount will be linked to the job and wages at the time of the crash, with no future earning losses.

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