The reasoning behind this decision pervades our thinking as a society. If your neighbour throws a stone through your window, he should pay to have it repaired. If he happens to break his own window in the process, he should bear that loss himself. The innocent victim has a right to demand compensation, the wrong-doer does not.
Legislators throughout North America have come to recognize the importance of automobile liability insurance, making insurance mandatory in virtually every province and state. The loss of life and the damage caused by automobile accidents each year is astounding. Very few of us would be financially capable of properly compensating a victim should we be unfortunate enough to cause an accident. Mandatory automobile liability insurance accomplishes two goals: first, it ensures that accident victims will have access to funds (hopefully allowing the victim to provide for himself and his family without government assistance), even if the driver who hit him has little money; second, it provides a measure of assurance to motorists that they will not be financially ruined should they be responsible for a collision.
Unfortunately, we often resent our government telling us where to spend our money. Ever since liability insurance became mandatory, there has been a continual call for the government to do something to make the insurance more affordable. This is so even though over the years the cost of insurance has gone down in constant dollars. In fact, it has gone down in constant dollars even though the insurance product which is now sold is vastly superior to that which was sold in the past (we are getting much more for our money).
The insurance industry claims that it can no longer earn a satisfactory profit by selling automobile insurance. The reason, they say, is that claims have simply become too high. There are only two ways to effectively increase profits: raise premiums; or reduce the amounts paid out. The insurance companies, by lobbying for no-fault insurance, are trying to drastically reduce the amounts paid to accident victims, and thereby increase their own profits.
Have damages in personal injury cases increased to the point where insurers cannot make a fair profit? There are certain forces which have tended to increase the amounts insurers have paid in recent years. Generally, the most drastic increases have been caused by changes in provincial legislation, brought about to deal more fairly with accident victims. For instance, it used to be the case that if a motorist caused an accident and thereby injured his passenger, the passenger would not be compensated unless he could prove that the driver was “grossly” negligent. Not only did the passenger have to prove that his driver caused the accident, but he had to prove that the driver “departed markedly” from the manner in which cars are normally driven. This was often very difficult to prove and many accident victims went uncompensated. Clearly this was unfair and in 1990 the provincial government changed the law to allow passengers to successfully claim against their drivers without proving gross negligence. As a result there are now more victims who are able to claim from the insurance companies.
Similarly, in the past, family members were unable to claim under the insurance policies of their immediate relatives. If a father caused an accident injuring his son, the son could not be compensated from the father’s insurance even if he could prove that the father was at fault. Again, the provincial government realized that this was unfair to accident victims and changed the law. Now, if a relative is injured by the negligence of a family member, he has the right to be reasonably compensated for his loss as would any other member of the public. The family member is now properly compensated for his income loss and medical expenses and is not forced to rely solely on the public coffers for assistance.