One of the main goals of no-fault insurance is to keep automobile accident victims out of the Courts. In keeping with this goal, claimants are generally not allowed access to the Courts at all, even if they have a dispute with their own insurer over the amount they are entitled to. Disputed matters are generally handled by internal review, followed by review by a government created appeal commission in a fashion very similar to that currently used by the Workers’ Compensation Board in Alberta. Experience with that type of appeals commission has given rise to significant discontent and perceived unfairness on the part of injured workers.
It is said by proponents of the no-fault system that victims receive their benefits more quickly and with less difficulty than they do under the tort system. The need to hire lawyers is also greatly diminished, as the opportunity to actually argue on behalf of the accident victim is rare. Furthermore, there is said to be increased access to rehabilitation and medical funding. In fact, under the present system in Alberta, we have a form of no-fault medical coverage available to all persons injured in motor vehicle accidents. This coverage requires the victims own insurer to pay his medical expenses for the first two years to a maximum of $10,000.00, regardless of whose fault the accident was. If this fund becomes exhausted, the seriously injured have access to additional medical benefits through the Motor Vehicle Accident Claims Fund.
Upon close examination, many of the supposed benefits of the no-fault system are of questionable or of no value. On the surface, the most important benefit is speedy access to funding for medical or rehabilitation expenses. What the insurance industry fails to point out is that we currently have access to the no-fault benefits mentioned above. However, under a no-fault system, expenses are reviewed by a WCB-style appeals commission. If an insurance company declines to pay for certain expenses the accident victim may simply have no effective recourse. If speedy funding for on-going medical expenses is important to consumers, would it not make more sense to simply increase the benefits payable under the present system without in any way restricting the right of accident victims to full and fair compensation?
Many questions remain concerning the implementation of a no-fault system. The insurance industry suggests that the no-fault system is preferable to a tort system because there is no lawsuit hanging over the victim’s head, encouraging him to focus on his injuries. Very little consideration seems to have been given to the longer term effect on victims who are continually forced to prove their on-going disability in order to recover compensation for their injuries. While it may take months or years for a case to reach a conclusion in the tort system, once it is concluded the accident victim is able to put the case behind him and move on with the rest of his life.
The tort system affords accident victims a certain amount of dignity as the compensation they receive is simply a repayment of that which the wrong-doer has taken away. Under a no-fault system, where on-going entitlement must continually be proven and benefits paid weekly or monthly, the victim may very well be left with the feeling that he is surviving only on welfare from others, continuously required to prove helplessness in order to receive meagre hand-outs from a reluctant insurance company.
In the tort system, there is a built-in deterrence factor which operates to encourage people to drive safely. If you cause an accident, your insurance premiums rise because your insurer was forced to make payments on your behalf. If, however, the claims made on your policy are caused not only by your own mistakes but by the carelessness of others, then this deterrence factor is lost. Under a no-fault scheme, if you are involved in an accident which is 100 percent the other driver’s fault, you will be required to claim through your own insurance company as will the at-fault driver and, as a result, your insurance premiums could increase because you have also made a claim. It is not surprising that the insurance industry likes this idea; it means they can raise both drivers’ insurance premiums in every accident, regardless of whose fault the accident was!