AUTO INSURANCE
ONTARIO MUTUAL INSURANCE ASSOCIATION
HEAD INJURY ASSOCIATION OF LONDON
RAINBOW REHABILITATION CENTRES, ONTARIO
ONTARIO WEST INSURANCE
BROKERS
MAY-MCCONVILLE INSURANCE BROKERS
LONDON OCCUPATIONAL THERAPY SERVICES
MIDDLESEX INSURANCE BROKERS ASSOCIATION
ONTARIO AUTOMOTIVE RECYCLERS ASSOCIATION
LONDON AND AREA MASSAGE THERAPISTS ASSOCIATION
BRANTFORD AND DISTRICT HEAD INJURY ASSOCIATION
CONTENTS
Thursday 29 February 1996
Auto insurance
Ontario Mutual Insurance Association
Glen Johnson, president
Ron Wettlaufer, chairman, auto insurance committee
Ron Perry, manager, Lambton Mutual
Deborah MacPherson
Head Injury Association of London
Jane Gillett, board member
Rainbow Rehabilitation Centres, Ontario
Nancy Dool-Kontio, intake coordinator
Emilie Newell, doctor of physical medicine and rehabilitation
Ontario West Insurance Brokers; May-McConville Insurance Brokers
Bill Boland
Peter McConville
Thomas Schinbein
London Occupational Therapy Services
Jacqueline McGarry, owner-director
Charlie Vanveen
Middlesex Insurance Brokers Association
Dan Danyluk, territory director
Michael Carberry, president, Insurance Brokers Association of Ontario
Bob Carter, executive director, IBAO
KPMG Peat Marwick Thorne
Jim Hoare, partner
Gail Delaney
David Klein
Ontario Automotive Recyclers Association
Steve Fletcher, executive director
Nigel Gilby
London and Area Massage Therapists Association
Donica Abbinett, member
Melanie Purres, member
Zara Kimball; Morris Karmazyn
Brantford and District Head Injury Association
Lawrence Palk, director
Joanne Buchanan
Dale Head Injury Services
Deborah Delorme, executive director
Craig Brown
STANDING COMMITTEE ON FINANCE AND ECONOMIC AFFAIRS
Chair / Président: Chudleigh, Ted (Halton North / -Nord PC)
Vice-Chair / Vice-Président: Hudak, Tim (Niagara South / -Sud PC)
*Arnott, Ted (Wellington PC)
*Brown, Jim (Scarborough West / -Ouest PC)
*Castrilli, Annamarie (Downsview L)
*Chudleigh, Ted (Halton North / -Nord PC)
*Ford, Douglas B. (Etobicoke-Humber PC)
*Hudak, Tim (Niagara South / -Sud PC)
Kwinter, Monte (Wilson Heights L)
Lankin, Frances (Beaches-Woodbine ND)
Martiniuk, Gerry (Cambridge PC)
*Phillips, Gerry (Scarborough-Agincourt L)
*Sampson, Rob (Mississauga West / -Ouest PC)
Silipo, Tony (Dovercourt ND)
Spina, Joseph (Brampton North / -Nord PC)
*Wettlaufer, Wayne (Kitchener PC)
*In attendance / présents
Substitutions present / Membres remplaçants présents:
Crozier, Bruce (Essex South / -Sud L) for Mr Kwinter
Kormos, Peter (Welland-Thorold ND) for Ms Lankin
Marland, Margaret (Mississauga South / -Sud PC) for Mr Martiniuk
Wood, Bob (London South / -Sud PC) for Mr Spina
Clerk / Greffier: Franco Carrozza
Staff / Personnel: Andrew McNaught, research officer, Legislative Research Service
The committee met at 0900 in Spencer Hall, London.
AUTO INSURANCE
ONTARIO MUTUAL INSURANCE ASSOCIATION
The Chair (Mr Ted Chudleigh): We will call the meeting to order, having all arrived at our appointed places. Welcome to London. We have with us, to start the day, the Ontario Mutual Insurance Association, Mr Johnson, Mr Wettlaufer and Mr Perry. Welcome, gentlemen. We have 20 minutes to spend together. If you would like to present us with your brief, we can perhaps leave some time at the end for questions. Please identify yourself for Hansard, just so they know which voice is which.
Mr Glen Johnson: Yes, I'm Glen Johnson, president of the Ontario Mutual Insurance Association.
Mr Ron Wettlaufer: Ron Wettlaufer. I chair the auto committee for the Ontario Mutual Insurance Association.
Mr Ron Perry: Ron Perry. I'm manager of the Lambton Mutual.
Mr Johnson: First, we'd like to speak a little about who our organization is. I'll quickly go through the first three pages so we can get to our comments on the proposal and leave some time for questions.
The Ontario Mutual Assurance Association is comprised of the 51 purely mutual farm mutuals in Ontario. All policies are participating policies. The companies are guided by boards of directors, typically farmers or small business operators from the community. We're in all lines of property and casualty insurance. Our companies are anywhere from less than $1 million in assets to over $60 million in assets. It's a very financially stable organization; we're currently carrying about $1.50 in surplus for every dollar of premium written. Size-wise, we're about 18th for Ontario automobile insurance. We have our own guarantee fund which stands behind all the companies. We own our own reinsurance company, which I believe is the first wholly Canadian-owned reinsurance company. The point is that we're a purely Canadian and a purely Ontario organization.
Our goals: The farm mutuals are unique within the Ontario insurance industry in that we're purely mutual. There are no profits diverted outside of the system. As such, our goals with respect to automobile insurance are to provide a system which results in adequate, sensible coverage and stable pricing; will not be overly complex to administer and thereby place upward pressure on administrative expenses; will not lend itself to fraud and other abuse; reduces uncertainty so that the premiums we must charge our policyholders are as close as possible to the right premium; and keeps our farm mutuals financially stable.
You have a list of all of the farm mutuals in Ontario. Many are in this area. I'll now pass it over to Ron Wettlaufer to give our comments on the proposal.
Mr Ron Wettlaufer: Mr Chairman, members of the committee, our comments on the government's proposal are as follows.
In regard to the fundamental structure, we have reviewed the government's proposal and are generally supportive of the goals. The package contains many good ideas. However, we also stress that we are very conscious of the fact that if this proposal is implemented, we will be administering the fourth auto insurance system since 1990.
We must stress that we hope the government will implement a system that will be acceptable to the majority of consumers. There is no doubt that consumer satisfaction is a function of price more than any other factor, including the extent of coverage. Price stability must be a prerequisite.
It is essential that consumers be made more aware of the fact that the price of automobile insurance is a function of claims costs more than any other single item. It must be clear to them that broader first-party benefits mean higher premiums; increased access to tort means higher premiums; more complexities of administration and claims handling means higher premiums; more opportunities for fraud and other abuses mean higher premiums.
In order to control price, coverage cannot be overly generous. Administration needs to be as efficient as possible. In our opinion, insurers need to be empowered to control abuses -- which the consumers ultimately pay for.
Whether or not the proposed system stands the test of time will be determined by consumers. All auto insurance consumers pay premiums. Only a small percentage have losses. The unrest with respect to auto insurance over the past 10 years has been driven by price and availability issues, not by dissatisfaction with adequacy of benefits. We believe that the test of the proposed system will lie more with its effect on price and availability than with the extent of coverage provided. We strongly believe that a good basic coverage needs to exist; however, we cannot lose sight of the fact that broader coverage means higher prices.
The question then is whether the proposed new system will adequately control claims costs enough to satisfy the public's expectations with respect to price and availability.
We have not conducted an extensive actuarial analysis of the new product. However, we have analysed the features of the government's proposal and will comment on whether these changes should have a positive or negative effect on price.
We would like to express support for replacing the Bill 164 system with the type of system that has been proposed. The fact that the Bill 164 system seemed to create an attitude of entitlement as opposed to indemnity is a key fundamental flaw that has made it difficult to control claims costs and hence prices. The actuarial data available thus far indicate that these trends would continue.
Once the new plan is implemented, we will have open claims on four systems since 1990. However, whatever system is decided upon, it is important that the fundamental structure will allow adjustments to be made without another complete overhaul. Actuaries can price complex insurance products like auto insurance based on assumptions and mathematical formulas, but no one really knows what the eventual cost will be until the system has been in place for a number of years. It is important that the framework of the new system be sound and that the system be structured such that adjustments can be made to the various components within the framework to fine-tune pricing as the experience develops.
The proposals with respect to greater access to tort have the greatest potential for placing upward pressure on prices. We see a need for some strengthening here and offer the following recommendations.
(1) The concept of allowing innocent parties to sue for economic loss is sound, but adequate controls must be placed if we intend to control claims costs and hence prices. Based on the numbers released thus far, it may be necessary to extend the threshold to economic loss claims in tort to achieve the price expectations of consumers. A threshold could be structured such that adjustments could be made as a mechanism of fine-tuning the system.
(2) Tort access for non-economic losses is a fundamental requirement for certain types of claims. We agree with the concept of a verbal threshold and deductible. Again these are components which could be adjusted once the claims experience is known as a mechanism for fine-tuning claims costs and hence prices. We believe it is generally acceptable to the public to have this type of structure as a mechanisms for controlling insurance costs. We also believe that a stricter threshold and/or a higher deductible would be equally as acceptable if the public understood it was necessary in controlling costs.
(3) We've heard the debates with respect to whether words like "permanent and physical in nature" need to be added to the threshold. If you felt this was too restrictive or unnecessary to begin with, decisions in that regard could be made down the road. Again, we emphasize that the most fundamentally important decision that needs to be made now is with respect to the framework of a new system.
(4) Contingency fees should not be permitted for auto insurance claims. Allowing greater access to tort plus allowing personal injury victims and lawyers to enter into contingency arrangements will certainly put upward pressure on prices. If contingency fees are allowed, they should be subject to tight controls or special restrictions for automobile personal injury cases.
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It would appear that the general nature of the proposed no-fault benefits are reasonable. There have been a number of changes recommended which would address our concerns with the current system related to complexity: the entitlement issue; pay-now, dispute-later concepts; and potential abuses. These changes will all have a positive effect on claims costs and price.
We offer the following recommendations:
If an insured is not earning an income, he or she should not expect a loss-of-income benefit. We recommend that the no-fault coverage not include any benefits for individuals who are not suffering a loss of income. Consumers will understand and accept this.
Students should not be entitled to the $185 weekly non-earner benefit if 85% of their net income was lower than this amount. Again, consumers would not expect this and there is no need to add any additional cost or complexity to the system.
Include case management type expenses within the insured's limit for no-fault rehabilitation and medical benefits. This will give the insured a vested interest in controlling those costs.
Only offer optional benefits on the major areas such as income replacement, medical-rehabilitation-attendant care and death benefits. The concept of optional benefits in these areas is sound. If too many options are offered in other areas, it will add to the complexity and confusion for consumers and the errors and omissions exposure for brokers.
Visitor expenses need to be tightened. They could be limited to catastrophic injuries only and restricted to only immediate family members living in the same residence.
Housekeeping and home maintenance expenses should be restricted to the catastrophically injured only.
The accident benefits exclusions should not require that the offending party be convicted. In cases involving operation of the vehicle while impaired or with over 80 mg of blood-alcohol content, insurers should have the opportunity to pursue the exclusion if, for one reason or another, a charge is not laid or a conviction pursued but where evidence exists that the policy was violated. Insurers should not be restricted from pursuing their rights under the contract. Costs of excluded claims should not be a burden on the new auto system.
Individuals who operate uninsured vehicles or who are occupants of vehicles which they know to be uninsured should also be excluded from income replacement benefits.
Generally, accident benefits reimbursements should be limited to meaningful items; for example, there should be a 50-kilometre per trip deductible on travel expenses, and family members should not be paid for tasks that they would normally perform gratuitously, such as grass cutting or babysitting.
We are in agreement with the move towards more empowerment of insurers to control accident benefit claims costs. We believe this is fundamental to controlling costs. Insurers must have the ability to discontinue payment to ineligible insureds. We recognize that insureds must also have recourse where they are treated unfairly. However, we believe the concept of "Pay now and dispute later" will only drive prices upward.
As we have already said, consumers ultimately pay for the cost of regulation of our industry. We are generally in agreement with the government's proposal to streamline this process and reduce these costs as much as possible.
However, we wish to emphasize that Ontario's farm mutuals are provincially registered companies which only do business in Ontario; in fact, most confine their area to a very small number of counties. We are opposed to any shift of regulation of provincially registered companies to federal authorities. We are receptive to entertaining concepts of self-regulation, and in fact in 1994 we implemented a solvency protection process in the interest of protecting the fire mutuals guarantee fund. This mechanism was implemented with the support of the insurance commissioner. Although this process is in its early stages, we are extremely pleased with its results.
The farm mutuals have continually maintained a good working relationship with our regulators, from the days of the department of insurance when it was a branch of the Ministry of Consumer and Commercial Relations, through the advent of the Ontario Insurance Commission which came with Bill 68, and the Ontario motorist protection plan. We have maintained a working relationship with the commission and have found them to be accessible and helpful to us. We would not want to look to Ottawa as our regulator.
Further, in the interest of streamlining the regulatory process, we believe that mediators should be empowered to a greater degree. Specifically, rather than add another layer to the dispute resolution process through a neutral evaluation, we believe the mediator should be empowered to give an opinion with respect to the probable outcome of a proceeding in court or arbitration.
With respect to other issues related to the proposal, we offer the following recommendations:
The recovery of health care costs will be funded by consumers whether they are continued in the cost of automobile insurance or contained within taxes or some other type of levy. Adding health care cost recovery to the auto insurance system will force premiums upward. Although the details of the mechanism have not been released, we assume the intention is to charge automobile insurers a percentage of their premiums. We recommend that a better method would be to charge a per-vehicle levy which would be connected to the annual vehicle registration fee. All vehicles must be insured. Therefore, it makes sense to share the health care recovery cost among all vehicle owners.
We also believe that offences under the Compulsory Automobile Insurance Act should be moved within or at least cross-referenced with the Highway Traffic Act such that demerit points are given for these offences and records are available through the Ministry of Transportation. We applaud the proposed increase of fines for driving without insurance.
In conclusion, we generally support the direction which has been taken. Most of the proposals will have a positive effect on the price and availability issues. However, based on the actuarial data available thus far, it appears it will be necessary to institute further refinements to achieve the level of price stability that consumers expect. We stress that:
Price and availability issues will be foremost in driving consumer attitudes about automobile insurance and ultimately determine the fate of the new system.
Consumers must be made aware that claims costs drive prices and that stricter controls on claims will have a positive effect on prices.
The new system must consist of a sound framework and enough flexibility to allow for the adjustment of its components to control claims costs or broaden benefits as experience develops.
We urge that you move forward without delay, and we thank you for the opportunity to present our views.
Mr Bruce Crozier (Essex South): Thank you, gentlemen. You've given one of the more complete and reasoned presentations we've had, and I compliment you. The fact that you've mentioned price numerous times throughout this presentation indicates to us that you know exactly why we're here. I wish we could discuss more of your points, but I would like you to elaborate briefly on the extended threshold to economic loss that you suggest.
Mr Johnson: Basically, we're just saying that if that's what it takes to control the prices, we think the public will accept it. Price is the driver of the discontent. We haven't priced out that option, but we think the public would agree, if that's what would control the price.
Mr Crozier: To a verbal threshold, similar to Bill 68, something like that?
Mr Johnson: Yes. That's what we're thinking of.
Mr Peter Kormos (Welland-Thorold): I suppose after this many years and this many kicks at the can, a minute is considered by some to be too much time. I consider it to be too little. I've got to tell you, it's been a great experience for me, after the 68 wars and the 164 wars and now the no-name bill inquiries, to be seeing all these same folks over and over and over again.
One of the things that's bothersome is that the industry has not come to this committee with the same vigour and enthusiasm with which it came to the committee during 68, somewhat diminished with 164, and now here we are again. This is the third successive government that's going to try to grapple with premium increases. Quite frankly, in view of the failure of the previous two governments, I can't think of any good reasons and there's nothing in this bill.
The problem is that Zurich doesn't agree with the IBC. The big players dominate the submissions in terms of tort, no tort, no-fault and what type of blend. My concern is that the industry doesn't really have a handle on what generates premium increases, what creates stability. IBC of course endorses tort, Zurich says, "No, it's no-fault." I of course disagree with both of them, simply because that's my nature and because Osborne and the OAIB, among others, have indicated that no-fault doesn't decrease increases, simply provides one-time savings.
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The Chair: Do you have a question, Mr Kormos?
Mr Kormos: Yes, sir, of course I do. The problem here is, why is there such disagreement within the industry? You know that I feel you've got to have some higher regard for the farm mutuals than you do for the bottom feeders like the direct sellers and so on. The farm mutuals come from the community. Why is it that the industry itself doesn't have consensus or agreement as to what constitutes a scheme that provides control over premium increases and provides stability? What gives here? How can there be such divergent opinion among the big players themselves?
Mr Johnson: It's not a case of tort or no-fault, it's a case of what's the balance between the two, and I think that's where the disagreement comes. Probably the centre of the disagreement is more with respect to how much tort you allow into the system and how much that will drive prices upward. I can't really answer your question on why the industry isn't of one mind except that there are 200 companies in the industry, but I think we all agree we need to stabilize prices.
Mr Perry: There is also an important aspect in our presentation, that we're talking about the framework of a system. You're right, we've gone through all sorts of systems. You've seen us, and we're talking to you, it seems like, every two or three years. As we said, we are aware that this is now going to be the fourth system in the last four to five years coming in. It makes it rough on us, it makes it rough on the consumers, and it's not doing anything good out there to have these systems revolving. We're trying to make a key point here: Let's get a framework set up that we can work with and adjust as we see time go along. The problem has been that we've had so many systems and none of them lasts very long, and nobody can get a handle on the effects of those systems before we're going into something completely else again. Let's try to get something in there that's a framework, that we can monitor as it goes along and will adapt to change.
Mr Wayne Wettlaufer (Kitchener): Gentlemen, thank you for coming today. You talk about it being the fourth auto system in six years. I was in the insurance business for 33 years. I agree it's the fourth system; however, there have been many, many changes. It's a constantly evolving product.
You talk about broader coverage equalling higher prices, increasing costs equalling higher prices, increased tort equalling higher prices, more complexities equalling higher prices, fraud equalling higher prices, increased claims equalling higher prices. The problem I have with this is that the insurance industry has not done enough, in my opinion, to educate the consumer on what equals higher prices, and this could be the source of the discontent. I'm going to depart from that criticism now.
During the past two weeks, we've heard a number of complaints about the deductible and what it does to the innocent victim vis-à-vis that it not only eliminates the $15,000 claim but could also perhaps eliminate up to the $30,000 claim. We had an interesting submission this week in Sault Ste Marie. It's one with which the insurance industry is not unfamiliar; that is, the waiver of deductible, that it reaches a certain threshold, perhaps $15,000, and the deductible would be waived. What would you think about that?
Mr Johnson: I think the answer would be in what it did to the price. It might be a good idea, but you'd have to take a look at its effect. Frankly, we haven't discussed that prospect thus far.
Mr Perry: As we were saying here very strongly, we're trying to control price. We feel that one way of controlling price is to have insurance available for the serious type of loss, not the minor types of things, if we're going to make this product affordable. A thought quickly comes to mind that if you have a disappearing deductible, how is that going to be seen in the system? Will the claims be elevated such that the deductible then will disappear?
The Chair: Thank you. We appreciate the Ontario Mutual Insurance Association making its presentation.
DEBORAH MACPHERSON
The Chair: We now welcome Deborah MacPherson to the standing committee.
Ms Deborah MacPherson: I'm here, not representing any group or anything, but I was in a car accident on June 30, 1990, about one week after the no-fault law was put in. Basically, I'm just here to tell you about how difficult it's been under the no-fault law.
The most important thing I find is that I've had to prove myself over and over and over again to many people. It's been very costly as well as time-consuming, because I'm paying my lawyer for three hearings or more instead of just one. Like I said, I just have to keep proving to doctors. It's been proved of my injuries.
I've been through three hearings. My case is in court right now, so I ought to be careful with what I say. I feel like I'm straddling both systems, one foot in one system and one foot in the other, and it's very difficult on an individual in my situation. I feel I'm not the victim; I'm being treated more like a criminal, I guess would be a way to put it. I was a passenger in a car for the accident, so it's not even an issue of whether I was part of the cause.
With the tort system, the biggest thing is you can sue once and get it over with. I think that's very important for victims who do have real injuries, who have to keep proving it over and over. I feel like the law right now is more a new-fault rather than a no-fault, and that's simply because you keep having to prove it to new people over and over again. I just think it's ridiculous to keep doing that.
I don't know what else to say other than if I could get questions, I could answer what it's like.
Mr Kormos: I wonder if the Chair might make inquiries without using up caucuses' times and ascertain when the accident happened so we know which legislation it's under.
The Chair: You gave the date of your accident.
Ms MacPherson: Yes, June 30, 1990. I think it's one week after the no-fault was put in.
Mr Kormos: So Bill 68. And whether the litigation is about the no-fault or trying to pass the threshold.
Ms MacPherson: I have to pass the threshold to sue.
Mr Kormos: Thank you. That makes it easier.
You're one of, I believe, not just tens of thousands but probably into the six digits in this province. Be it Bill 68, OMPP, or be it Bill 164, which was the son of OMPP -- it was like the sequel to one of those Friday the 13th kind of movies, because it's just as horrible because of its reliance upon no-fault -- or be it this bill, at the end of the day, you've got to fight insurance companies.
Ms MacPherson: Exactly.
Mr Kormos: They've got deep pockets, they've got lawyers coming out of their yin-yang, and you are in a position where you've got to retain counsel to fight them. It would be nice if you could do it without hiring a lawyer, huh?
Ms MacPherson: It would be cheaper.
Mr Kormos: But you're not about to go there and face all those middle-aged, blue-suited, pin-striped guys and gals on your own. That would be nuts, wouldn't it?
Ms MacPherson: Right.
Mr Kormos: What about the no-fault? You were entitled to no-fault coverage under the OMPP, which is Bill 68, for a limited period of time.
Ms MacPherson: The no-fault benefits?
Mr Kormos: Yes. Did you have trouble getting those?
Ms MacPherson: No. I had them for a time and then they were taken away. I had to go to arbitration, I got them back, and they were taken away again. Whenever the insurance feels like stopping it, they stop it.
Mr Kormos: Again, they're playing the odds, because they know that if they simply terminate the no-fault, only a certain percentage of people are going to have the wherewithal to get legal advice. Most are simply going to say: "Oh, I don't get any more? Fine, I'll just live with the pain."
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We've had insurers come in here and criticize what they call feel-good treatment, and I suspect they're talking about some of the kinds of therapy that similarly occupational therapists and massage therapists have come here and talked about, but the insurance company dismisses that and says: "Oh, this is just feel-good treatment. These people are being scammed by the respective health care or quasi-health care therapists." Have you had experience with that, too?
Ms MacPherson: Yes. I've had a lot of therapy. The biggest problem with the insurance companies is, first two years after my accident, I received benefits. When they stopped, I fought my own insurance company for three years. I didn't even fight the people that caused the accident; that's what I'm doing right now. We called my insurance company the day of or the night of the accident and they said they'd take care of me. If I didn't have a lawyer, I'd be so screwed right now it wouldn't be funny. I had to fight them. All the arbitrations I went to were fighting them.
Mr Kormos: Your own company?
Ms MacPherson: My own insurance company.
Mr Kormos: The one you've been paying the premiums to.
Ms MacPherson: Exactly.
Mr Kormos: The ones that you thought were on your side.
Ms MacPherson: Yes. I hadn't even started fighting the other people till two weeks ago, and I'm in court now.
Mr Kormos: Because, you see, these people who are fans of so-called no-fault, that's what they tell you. They told us that back in Bill 68, they told us that during 164. They said, "Heck, it's a better system because it's not adversarial, because it's your own insurer," and why would they want to screw their own client?
Ms MacPherson: They do.
Mr Kormos: Of course.
Ms MacPherson: If I didn't have a lawyer -- you wouldn't know what to do.
Mr Kormos: Because Mother Teresa hasn't all of a sudden gotten a position on the board of directors of any of the auto insurance companies in Ontario.
Ms MacPherson: Right.
Mr Kormos: They always have had, always will have short arms and deep pockets, and profits mean charging the most amount of premiums and paying out the least amount of benefits.
Ms MacPherson: Yes.
Mr Kormos: How about the legal fees? How's your lawyer handling that, without getting into numbers or naming lawyers, because I suspect you wouldn't want to divulge that publicly right now.
Ms MacPherson: I pay for some of it and some of it's being paid by the insurer, but I'm paying for a lot of it, too.
Mr Kormos: So you're out of pocket and still no end in sight.
Ms MacPherson: I'm no further ahead or behind than I would be under the old law, except I'm behind financially because I've had to pay for more than one hearing.
Mr Kormos: So the insurance company lawyers are digging in their heels, hoping you'll just run out of money or run out of interest and go away.
Ms MacPherson: Pretty much, yes.
Mr Rob Sampson (Mississauga West): Thank you for your presentation. I don't want to talk about your particular circumstance, but we can kind of translate that into some generalities here to help us deal with the redesign effort that we're going through.
I think you're telling us that you have some difficulty with the tort side, especially as it relates to this threshold, because that seems to be the item that is causing the concern around the tort right now; is that correct?
Ms MacPherson: Having to cross the threshold?
Mr Sampson: Yes.
Ms MacPherson: Yes.
Mr Sampson: So you would be concerned about there being a threshold in a tort claim, if any?
Ms MacPherson: I crossed the threshold. I've got the TMJ, but I've got other problems too that would be more difficult to prove to cross the threshold. Even if the jaw injury was gone, I'd still have other problems, but to cross the threshold would be very difficult to do.
Mr Sampson: Okay. Now on the no-fault side, I found it rather interesting that Mr Kormos was able to question you on the fact that you actually used lawyers to extract the benefits from the insurance companies, I guess is the way he would have put it, so open and on the table.
Mr Kormos: Without Novocain.
Mr Sampson: But you had to use lawyers, but we heard from a number of people saying that one of the beauties of the no-fault system is that it takes the lawyers out of the system and takes the expense of the lawyers out of the system. I gather you'd disagree with that.
Ms MacPherson: I disagree with that. I couldn't even begin to tell you where I would be if I didn't have my lawyer. I don't know how to handle insurance companies. They're there to screw you; they're not there to help you -- at least in my situation I found that. They have been no help at all. Like I said, they keep taking me to arbitration, to hearings, to prove over and over and over again the same things.
Mr Sampson: Are you on therapy or treatment now?
Ms MacPherson: Yes.
Mr Sampson: One of the other items we've been hearing has to do with referral among practitioners as it relates to therapy.
Ms MacPherson: Right.
Mr Sampson: Have you seen any of that in your treatment so far, where you have been referred by somebody who's done an assessment on you and has referred you to a clinic that they may have an interest in?
Ms MacPherson: I've been not referred to particular clinics but referred to different types of therapy, yes.
Mr Sampson: Were you aware of any interest that the person referring you may have had in that particular therapy?
Ms MacPherson: No, just in the interests of helping me.
Mr Crozier: Thank you, Ms MacPherson. I want to tell you at the outset, I'm not going to put any words in your mouth, but I am interested in what you have to say.
You say you've been receiving treatment, be it off and on, and that you've had to go to arbitration to get that. Can you just tell us, are you better now -- is there progress -- than you were at the time of the accident and do you see an end to this as far as your physical treatment is concerned?
Ms MacPherson: Are you asking if I'm going to get better?
Mr Crozier: Exactly.
Ms MacPherson: No. I've already been told the damage is permanent. I've been to a number of therapies over six years. Nothing has helped. After the accident, I had my neck in a neck brace, whatever. The only improvement I've had is neck motion, but as far as pain, the scar tissue and the muscles in my back, it's not going to heal. The TMJ joint's not going to heal. So I don't see an end in it at all. In fact, a lot of the physical therapy, I've been told by different doctors and therapists that there's only about a 10% chance, if even that, of it helping. In fact, it worsens the pain a lot rather than helping it.
Mr Crozier: Can you tell me the circumstances that led to you only starting a tort suit recently, as opposed to a year ago, two years ago, three years ago?
Ms MacPherson: I don't know what the circumstances are. We were supposed to go in November and the judge wasn't available, so we had to wait till now.
Mr Crozier: But when did you first give notice that you were going to sue? Was that some time ago, like right after the accident?
Ms MacPherson: A couple of years ago, yes.
Mr Crozier: Why would you have taken that long?
Ms MacPherson: I can't answer that.
Mr Crozier: Your lawyer just didn't advise you?
Ms MacPherson: To start suing? We had to go through our own insurance company first, and then start suing the other. I don't know whether it took so many years to prove that I went over the threshold or not, whether that had part to do with it, but the first three years I was fighting my own insurance company.
Mr Crozier: Has anybody suggested to you that were it not for no-fault, you may be receiving -- I don't know whether you were employed at the time -- an accident benefit of $100 a week under the pre-Bill 68, you still may not be receiving any therapy, it may still be tied up in court? I suggest, part of the reason for the no-fault was to at least get some of this under way, notwithstanding that the battle may not be any less difficult, but that you may be sitting with something, even now, six years after, tied up in court, not having received any rehabilitation. Has anybody suggested that the system may at least have allowed for something to have happened in the meantime, or does that not matter?
Ms MacPherson: Of course it matters. I don't think I'm any further ahead than I would have been in the other law.
Mr Crozier: But you've received benefits in the meantime, whereas if it were only the tort system, you may simply have no more than a piece of paper filed in court at this time.
Ms MacPherson: Right. I've been receiving benefits but I'd rather have it settled at one time rather than being dragged into arbitration whenever they feel like it.
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Mr Crozier: I guess neither of us will know, but I'm just suggesting that for all the experience and the good and the bad with no-fault, there's also that experience under the old system --
Ms MacPherson: Yes, I understand that.
Mr Crozier: -- where it just simply sits in court while you sit on the sidelines receiving no rehabilitation, no benefit whatsoever, while all the lawyers fight over it, and notwithstanding what Mr Kormos says, it happens.
Mr Kormos: He's got the insurance companies --
Mr Crozier: He always gets yippy when somebody else makes a point, so don't listen to him all the time.
Mr Kormos: You have no idea what you're talking about.
The Chair: Thank you very much, Deborah. We appreciate your presentation to us this morning. These kinds of cases give us insight.
Interjections.
The Chair: They're really having fun. This is their method of having fun.
Interjections.
The Chair: Can we have some order, please. Mr Crozier, Mr Kormos, please.
Ms MacPherson: If I can before I leave, I just want to point out one more thing. Another problem that I find with the system is when you've been to arbitration, how long you have to wait for decisions. I've had to wait for up to six months for decisions to be made. Like I said, I'm in court right now. Hopefully it'll end tomorrow; it's supposed to. But even a decision from that could take up to nine months or more. You have to start looking at us, the victims, because it's my life they're playing with. I feel like it's a game. The lawyers think it's a big game and it's me being screwed around and it's just not right.
The Chair: We do appreciate your input, and thank you very much for coming to the meeting.
Interjections.
The Chair: Gentlemen, your time has expired.
HEAD INJURY ASSOCIATION OF LONDON
The Chair: We now welcome the Head Injury Association of London, Dr Gillett. Welcome to the standing committee on finance and economic affairs. The committee seems to be in a festive mood this morning, but we'll try to keep some manner of control.
Dr Jane Gillett: I like good arguments.
I'd just like to first start off by telling you what kind of people I'm representing today. I am a board member on the Head Injury Association of London. As well, I happen to be the medical director of the paediatric traumatic brain injury rehabilitation team at Children's Hospital of Western Ontario and at Thames Valley Children's Centre, and I do outreach head injury clinics throughout southwestern Ontario, so I see a wide range of children with head injuries and a lot of problems throughout the province.
What I'd like to address is some of the issues that I have in terms of the amendments to the new no-fault and put it more in terms of the children, because often, when you read through the document, it talks a lot about getting back to work, vocational rehab etc, but there isn't a lot of emphasis on the needs of the children and the paediatric population, and I'd like to address some of those today, if I may.
The first one, and probably the main one, that I would like to address is the definition of "catastrophic injury." There are several portions to it, but the one in particular that I'd like to address is in section 2, clause (b), where they describe "`catastrophic impairment' meaning brain impairment which results in a score of 9 or less on the Glasgow coma scale, as published in the `Management of Head Injuries,' Contemporary Neurology series, volume 20."
What I'd like to propose is that we add in the amendment "or which results in substantial interference with cognitive and behavioural functioning." The reason why I'd like to bring that up is as follows: When you look at the list of what they define as "catastrophic injury," most of the definitions that they use are strictly physical definitions -- total loss of vision, loss of the arms, loss of an arm and a leg, paraplegia, hemiplegia etc.
I'd like to point out that you can be blind, you can be paraplegic, you can have no arms and still manage to carry on in this world quite successfully with the use of technology. You can hold down jobs. I happen to know a physician who's blind. I happen to know another physician who is a paraplegic. I don't believe they look upon either of their impairments as being a handicap or a disability or catastrophic. That's not to say if it happens to you acutely that you would not need some rehabilitation, but I think there's more to what happens in a motor vehicle accident than just necessarily physical injury, particularly with acquired brain injuries.
In acquired brain injuries, most of those with acquired brain injuries are left with cognitive and behavioural injuries. The reason for that is when you have an impact to your brain, your brain goes crashing forward into the front of the skull and rides back again and then goes crashing forward again. The frontal lobes and the temporal lobes are the ones that impact on the skull, and on the base of your skull there are tiny bones that stick up that rip your brain as it's running back and forth. Your brain's like Jell-O. You all know what happens when you hit a bowl of Jell-O and how it ripples back and forth. That's what your brain does in an accident.
So you've injured your frontal lobes, you've injured your temporal lobes. They have to do with memory, they have to do with thinking, they have to do with attention and concentration. All those things are really important when it comes to learning, when it comes to being able to hold down a job, when it comes to being able to function in today's society. If you can't think and you tend to suddenly go off the handle and decide to attack somebody and take a knife to them, and I have at least four children right now who periodically try and do that because of their head injuries, you're really in trouble, and they're the ones who are gong to need the long-term ongoing care. I believe if it's not put in as part of the definition of "catastrophic," there may be some difficulty in the long run in battles over whether or not they truly are impaired sufficiently to deserve the catastrophic component to it.
Furthermore, if you use the Glasgow coma scale of less than nine as your criterion, you will catch several people who will have the behavioural injuries, but not all of them occur with Glasgow coma scales of less than nine. They do occur with Glasgow coma scales of greater than nine, particularly in children. Again, the reason for this has to do with the fact that it's a child. A child's skull is not fused together like yours and mine. It's designed to allow growth and it is therefore separated. So when you have an injury that would cause a Glasgow coma scale of less than nine in an adult, you often do not get that degree on the Glasgow coma scale in a child. That's because the skull will allow the brain to expand. You don't get the same degree of pressure on the brain and you do not put them into a coma on that basis.
If you use just a Glasgow coma scale of nine or less as your criterion, you're going to miss helping those children, and they're the ones who are going to require long-term, ongoing support for the rest of their lives, and we're talking from the age of five and six right on up into their 30s, 40s and 50s.
The other component as well with children is that part of the Glasgow coma scale requires you to be able to talk. You get rated on whether or not you can verbalize and say who you are and what's going on and how you respond. Obviously, a child does not learn to speak well enough, so that you cannot use the Glasgow coma scale in a young child. Again, that makes it very hard to rate a child as having a Glasgow coma scale of less than nine. So I think serious consideration should be given to modifying and amending that component of catastrophic, which is why we're recommending the amendment that I added in my handout here.
The other component that you might like to know -- at least I'm going to assume you'd like to know because I'm going to tell you about it anyhow -- has to do again with the fact that children are not little adults, that they're growing and they're developing. As such, I'm sure all of you have had some experience with two- and three-year-olds, if not your own, at least nieces and nephews and/or grandchildren, depending on how old you are, but a three-year-old doesn't have an attention span. A three-year-old goes from one thing to the other thing and darts around and has a great time and plays, and you would not expect a three-year-old to have an attention span.
The problem is that if you have a child who has an injury at three, they come back with that short attention span but they fail to go on to develop the attention span when they're eight or nine. That's when the problems start to show up and they have more difficulty in school. They start to have the behavioural problems because they don't understand the rules in the school yard, they don't understand the rules of society, they don't quite catch everything that's going on. They think they understand and they react before they have a chance to do anything more and then they're into the fights in the school yard. With the zero tolerance, they're the ones who are getting kicked out the school now because they're so impulsive and they're unable to control their behaviour.
When you have an injury in a child at age three, they will frequently look and act like they've recovered, because they're acting like a three-year-old. It's only when they're older and they fail to do the normal development that you realize the full impact of the head injury, and that's when the behaviour and the cognitive issues really come to the forefront. But again their Glasgow coma scale would not have indicated that that's going to happen.
Further along the line in terms of children and their needs, the way I read the provisions -- and I admit I'm not a lawyer so I do get confused when I'm reading them -- there is provision for some educational assistance but not anything that goes on for the long term. If you think in terms of a child who is acting at age three like an age three but gets into grade 5 and is still acting like someone who's aged three and is having a lot of difficulty with learning, it's in grade 5 that they're going to need the educational assistance, not when they're, say, four, not when they're five and not when they're six, and it's only going to get worse because the educational demands increase. They're expected to attend more, they're expected to concentrate more, they're expected to process faster and they can't do it. They fall further and further behind and they get into more and more trouble. So there should be some provision made to provide further educational assistance for children.
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The other component I'd just like to address has to do with the definition of the health practitioner in section 2 of the regulations. This has been an ongoing thing, as far as I can tell, where they say that a health practitioner is a physician, a chiropractor, a psychologist, a dentist, I believe an optometrist, and a physiotherapist. I would like to make the case that an occupational therapist and a speech-language pathologist should also be included as being health practitioners.
An occupational therapist would be one who's probably better able to assess the functional needs of a child, or an adult for that matter, and what kinds of adaptation and technology may be of assistance. A speech-language pathologist would be one who could assist with the aphasia, the difficulty in finding words, the ability to understand language, the ability to understand the social implication of language, to know that when a person is saying, "You said what?" that they mean they're asking a question versus when they say, "You said what!" when they're really astounded and surprised, because people with head injuries have difficulties with that as well. I think without including an occupational therapist and a speech-language pathologist as health practitioners, you're doing a disservice to the people with head injuries. Are there any questions so far?
Mr Sampson: Thank you for your presentation. Your recommendations for the change to "catastrophic impairment," is there a time reference here? You suggest that we add "or which results in substantial interference with cognitive or behavioural functioning." Should there be a time limit that this added phrase should apply to? I mean, how long can one expect to be tied by that extra phrase?
Dr Gillett: There are two components to the answer. In an adult there is evidence to suggest that if you have suffered a substantial head injury, your risk of developing Alzheimer disease early on goes up, but that means instead of getting it perhaps at age 75 you're actually going to get it at age 60. Alzheimer patients need a lot of support. Do I think that the no-fault insurance should be responsible for it? Probably not.
But the difficulty with children is that the effect of that head injury does not show up because they haven't developed those skills that interfere with what they're expected to do until they get older. From that point of view, I think that it should be left open for the needs of that child, at least until they've gone through several years more of schooling, to see whether there's going to be a difficulty.
Mr Sampson: What about the Glasgow outcome scale? We've heard some suggestions that that's an alternative we might look at.
Dr Gillett: The Glasgow outcome scale is a pretty crude scale. It doesn't really look at behaviour and function all that well. It looks more at the physical outcome and a child would score fairly well on that initially, because most children who have had acquired brain injuries are not left with a major physical impairment. They're left mostly with the cognitive and the behavioural injuries. They would score really quite nicely on that, and the problems would not show up until they were an older age group. I don't use the Glasgow outcome scale in what we do because it's not a sensitive enough scale to pick up the difficulties.
Ms Annamarie Castrilli (Downsview): Thank you very much, Dr Gillett. It's good to have a practitioner speak to this issue. I'd like to go back for a moment to your amendment. You talk about "substantial interference with cognitive or behavioural functioning." I wonder if you could help me understand how you would define "substantial interference," who would decide what is substantial interference under your model and, to pick up on the question that Mr Sampson posed, whether you would be advocating periodic re-evaluation. You've discounted the Glasgow outcome scale and I take you at your word -- you're the expert, I'm not -- but I wonder if you could help us on those other issues.
Dr Gillett: From the standard that the head injury team here in London does, we see the children initially fairly frequently and continue to see them throughout their school-age programming. Like I said, you often start to get the problems when they're older, and we go in on behalf of the child to the school and try and make them understand what happened, why the child is behaving the way they are, how the school can help. I think there is a need for a sort of ongoing assessment and intervention along those lines.
What do I mean by "substantive"?
Ms Castrilli: The problem is someone's got to interpret it.
Dr Gillett: Yes, I know.
Ms Castrilli: If the medical profession doesn't do it, then the legal profession or the courts will have to do it.
Dr Gillett: That's true. From my point of view, we're looking at substantive interference if they need ongoing educational assistance, like a full-time educational aide, to help them in school to be able to learn and be able to attend, or if they need behavioural modification programming in some form, so that they're actually taught skills on how to control their anger, how to read social language, how to interact in society, that there's a substantial impairment. Whereas if they have an attentional difficulty which is easily controlled with some minor modification in the school and some medication, perhaps that's not necessarily as serious an injury.
If you look at OHIP right now and the people they have in the States, they're all in the States because of behavioural issues. They're not there because they need physical rehabilitation; they're there because of their behaviour and the need to train them again on how to fit back into society. So I think that's one thing I'd look at.
Ms Castrilli: But who would decide? You're alluding that it might be teachers and doctors. What kind of mechanism would you devise for that?
Dr Gillett: There are a lot of factors that interact with behaviour. Sometimes the child has a problem but what you really need to do is to teach the family. The child's too young to learn, so you teach the family how to deal with the child's behaviours. In that case it's probably a combination of a psychologist, a neuropsychologist, teachers, family members and the physicians involved in looking after them, be it paediatric neurologists like myself or other physicians who have had experience with head injuries.
Mr Kormos: Thank you, doctor. As you know, the Ontario Head Injury Association and various regional head injury associations have been active in discussions on auto insurance, dating back to Bill 68, Bill 164, and now to this no-name piece of legislation.
Your comments echo or at least parallel similar comments made by other advocates for persons with TBI/ABI that have made presentations across the province. One of the things I would perhaps want to point out is to emphasize the incredible personal cost to the person who suffers TBI/ABI, the family cost and the social cost, however crude that may be.
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Dr Gillett: That's true.
Mr Kormos: It was mentioned earlier that I was a lawyer. Quite right. Mind you, it was criminal defence work, which is a highly suitable background for working with politicians. But one of the things I experienced in that practice was an inordinate number of young people inappropriately, in my view, before the courts but in fact persons with ABI/TBI.
Dr Gillett: That's true.
Mr Kormos: And again, one looks at the tragic cost. I'm concerned about the two-tiered system in terms of funding for rehab for ABI/TBI persons and this creation of a threshold, if you will, the catastrophic. Even with your amendment to it, which I would certainly support, the fact is that shouldn't all ABI/TBI persons be entitled to rehab so as to fulfil as much of the potential that can possibly be nurtured in them if they're victims in motor vehicle accidents within an insurance scheme? Why should there be two tiers? Why should there be an arbitrary cutoff point? Because a whole lot of ABI/TBI rehab won't come anywhere near the cap for the second tier.
Dr Gillett: I agree. I mean, 40%, 50% of what I see in acquired brain injury is not caused by a motor vehicle accident and it is far more difficult to find services for them than they are currently if you're with the motor vehicle accident. In fact, we joke around about how, if you're going to have a brain injury, make sure it's because of a car and not because of anything else.
I agree with you. I would prefer that all acquired brain injury have access to the services that they need in a prompt manner, but that's not reality.
Mr Kormos: Sure, but within the context of an auto insurance scheme, realizing that we're dealing here with victims of motor vehicle accidents, why should there be two levels of rehab available, one for a diagnosis that's below, in this case, your nine-point proposal or the subjective interpretation?
Dr Gillett: Actually, that's one of the reasons why it's put in there as being an "or," so that those people whose Glasgow coma scales were above nine but do have the behaviour and the cognitive difficulties can get the help they need. So you're not using the nine strictly as your criterion.
Mr Kormos: I'm wondering if maybe we shouldn't delete the Glasgow coma scale and simply talk about substantial interference with cognitive or behavioural function. Is that a fair consideration?
Dr Gillett: I'd like that, yes.
The Chair: Thank you, Dr Gillett, for sharing your experiences with the committee today. We appreciate that.
RAINBOW REHABILITATION CENTRES, ONTARIO
The Chair: We would now like to welcome the Rainbow Rehabilitation Centres, Ontario, Dr Newell and Dr Freilink.
Mr Kormos: I hope these folks know there's free coffee for them, Mr Chair.
The Chair: Yes, there is coffee out there.
Mr Sampson: There's nothing free, Peter, as you know.
Mr Kormos: I thought you paid for it.
Mr Sampson: It's on your bill, actually.
The Chair: It's on the taxpayers' bill, I'm afraid, as everything else is.
Ms Nancy Dool-Kontio: Thank you very much. I'll just introduce everyone at the table. My name is Nancy Dool-Kontio. I'm the intake coordinator at Rainbow Rehabilitation Centres. On my left is Henriette Freilink Wilcox, a physiotherapist with our centre, and Dr Emilie Newell, who is a physician of physical medicine and rehabilitation, also at our centre.
We'd like to thank you, Mr Chairman, and the standing committee, for having us here to present to you today our view on the draft insurance legislation. Rainbow Rehabilitation Centres is a private facility providing services for persons who have sustained traumatic brain injuries. I was interested to see that the previous speaker also spoke on brain injury, so you're probably going to hear some overlap in our presentations.
Rainbow rehab centre was opened in July 1993 in response to the need for brain injury services in southwestern Ontario. Rainbow rehab centre provides community-based services with the goal of community re-entry for our clients, with the main idea of returning the client to their maximum level of functional performance. We service clients on an outpatient basis in our clinic but also in the community, in their homes, in their workplaces or at school, and also through our residential supported living program.
As I'm sure you are aware and have heard from other presenters in Ontario, there are approximately 12,000 to 15,000 people who sustain a brain injury every year, and approximately 60% of these are a direct result of a motor vehicle accident. The majority of the people in this category that receive a brain injury are males between the ages of 18 and 35. You've probably also heard that a high percentage of people who sustain brain injuries do not return to full-time, competitive employment.
We have reviewed the draft legislation, and I've outlined goals that we understand are present through this process, the goals being: to reduce automobile insurance premiums, to provide swift access to reasonable rehabilitation, to allow for timely settlement of claims and disputes and to provide an environment that minimizes the risk of fraud and abuse in the insurance industry.
However, in reviewing the legislation, we have several aspects of the document that we would like clarified and amended. These include the following: first of all, the definition of "catastrophic impairment" as it relates to brain injury; second, the monthly limits on attendant care expenses; third, unrestricted insurer examinations; and fourth, the process for establishing a professional fee schedule for services.
I will begin with number 1, the definition of "catastrophic impairment." In the regulations, under the "Definitions" section, Rainbow Rehab Centres has concerns about the proposed definition as it relates to brain injury and the method by which the draft is suggesting the injury be quantified. The definition reads:
"`catastrophic impairment' means...
"(b) brain impairment which results in a score of nine or less on the Glasgow coma scale...."
We understand that the intended purpose of the proposed definition is to provide a method by which to quantify the degree of injury and impairment and, in effect, the higher level of funding for med rehab benefits will then go to those individuals who have more substantial injuries and subsequently more substantial need.
We do recognize the need for objective, consistent and fair means by which to distinguish these individuals from individuals who have less significant impairments. We do not agree, however, with the use of the Glasgow coma scale as the only measure of impairment or disability resulting from brain injury. We understand the intended use of the GCS was to be for acute emergency medical management.
We are aware of various clinical situations where the GCS would prove to be an unacceptable and unfair indicator of appropriate treatments for injured persons. These situations would include times when the GCS score may not be measured or recorded and times when the GCS is measured at a point after which the level of consciousness of the injured party has already started to improve. In southwestern Ontario, we service many rural clients. They may be injured on country roads late at night. They may not have immediate access to medical care that arrives in a timely manner, and therefore their GCS scores may not accurately reflect, depending on when it was measured.
We have treated and are presently treating persons with brain injuries who represent a wide range of GCS scores. At this time, we feel that a score of nine or less is not a definitive measurement of functional impairment or prognosis for recovery. We have worked with individuals with GCS scores greater than nine who demonstrate serious, lifelong functional impairments.
We would suggest the use of a measurement that reflects the functional impairments and/or disabilities and handicaps resulting from the brain injury. It is understood by us that several other presenters have suggested the use of the Glasgow outcome scale. We would support this recommendation, as it is understood the scale is designed as a measure of outcome for a person with acquired brain injury. However, we would also recommend that it may be beneficial to investigate the use of other suitable outcome measurement scales that are multidimensional and functionally based as well. It is suggested that this may be achieved by having a standing committee such as yourselves consult with a broad range of health care providers to get input on what other additional tools may be available.
I'll now move on to our second point, limits on monthly attendant care expenses. This is under part V. It is understood from reviewing the draft regulations that the proposed monthly benefits of attendant care shall not exceed the limit of $3,000 for someone who has not sustained a catastrophic impairment and a maximum of $6,000 per month for individuals who have.
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Rainbow rehab centre is concerned about these monthly limits for persons with brain injury. The nature of brain injury tends to be complex. Persons with traumatic brain injury as a result of a motor vehicle accident may suffer a range of musculo-skeletal injury as well as cognitive and behavioural impairments. In many cases, the injured person's musculo-skeletal injuries will resolve in a shorter period of time; however, their cognitive and behavioural impairments, as well as neurologically based physical impairments, may continue to have lifelong impact on the person's functional abilities.
In some cases, the person with brain injury will require up to 24-hours-per-day attendant care. The proposed monthly limit of $6,000 for the injured person requiring 24-hours-a-day attendant care allows them approximately a cost of $8 per hour to pay an individual. The current average cost in the London area for basic attendant care ranges from $13.50 to $15 per hour. At these current rates, the injured person would only be able to access approximately 13 hours per day of attendant care services.
Rainbow has observed that when resources available through insurance coverage to the person with brain injury are insufficient or become depleted, the only alternative for the injured person is to attempt to access publicly funded services, in effect placing the cost on the public system and on taxpayers. Public costs for care include stays at chronic care hospitals, nursing homes, community home care agencies, psychiatric facilities and correctional services. Family members who do their best to support their loved ones in their homes may find themselves also in financial and emotional distress, requiring the use of publicly funded support services or financial services, including things such a social assistance or welfare.
Rainbow rehab centre recommends that the monthly benefit for attendant care be established on an individual basis through the use of an assessment process. In circumstances where individuals require a level of care in excess of the monthly limit, it is suggested that the individual case be referred to a DAC for attendant care. This provision will allow the injured person the opportunity to have his or her individual needs addressed.
I'll now move on to number 3, unrestricted insurer examinations. This is in respect to part X, "Procedures for Claiming Benefits," subsection 46(3), where it says, "The insurer may require such examinations as often as is reasonably necessary."
Rainbow rehab centre is concerned about the wording "reasonably necessary." In this proposed aspect of the draft, it appears that the insurer may have unlimited right to examinations. We would suggest that a clear definition or clear guidelines be given to explicitly reflect the meaning of "reasonably necessary" and that the wording be changed to reflect that. As the current draft reads, the wording "reasonably necessary" allows for a wide variation in interpretations by the insurer and may subsequently subject the insured to numerous examinations and/or misuse of the examinations.
We would recommend that the limit for examinations be explicitly stated, indicating a suitable maximum per year or per monthly period to be completed by any one health practitioner. Guidelines that we would suggest would be three examinations per 12-month period. These guidelines would serve to benefit the interests of the injured person as well as maintain costs.
We would also recommend that the wording of this section reflect that the health practitioner providing the examinations for the insurer must provide opinions only appropriate to his or her expertise and/or professional qualifications as indicated within one's professional scope of practice. We have experienced, clinically, specific instances where persons with brain injuries have had benefits and/or services withdrawn on the opinion of examiners not qualified or with limited expertise who render opinions regarding cognitive and behavioural issues and comment on ongoing attendant care needs for the injured person.
I'll now go on to part 4, the establishment of a professional fees schedule. With respect to part VIII, "Reimbursements," under "Cost of Examinations," subsection 32(3), the draft appears to be looking at proposing a limit on professional fees. Rainbow Rehab Centres recognizes the need for a certain degree of uniformity and consistency in professional fee schedules. However, the phrasing of this raises concern regarding a conflict of interest when the Ontario Insurance Commission is involved in establishing the professional fees schedule. We are also concerned with the wording of "as it may be amended from time to time," suggesting the lack of a clear process for fee review.
We would recommend that the professional fee schedule be developed in collaboration and consultation with a wide variety of health care providers, including private sector and professional organizations. We would also recommend that the wording of this section be amended to reflect an annual review process for the professional fee schedules.
We agree with the statement of having the professional fee schedule published in the Ontario Gazette by the Ontario Insurance Commission.
At this time we would like to thank you for listening to our viewpoint and we would be happy to answer any questions in the time remaining.
Ms Castrilli: I'd like to address something you've not touched on in your presentation, and I apologize for that. We've had a lot of discussion on the conflict-of-interest rules and specifically the referral for profit and what should be done about it. You are obviously in a private clinic that caters to a specific clientele that gets referrals from a variety of places.
Ms Dool-Kontio: That's right.
Ms Castrilli: I wonder if you might comment on that aspect and what you think should be done.
Dr Emilie Newell: Any one of us could address this. I'll speak quite clearly to services for people with ABI, leaving out muscular, skeletal and so on. ABI services in Ontario have been pretty scant. I've been in the system for about 20 years and have worked through the entire range of services, including liaising with American programs. With so very few services available in Ontario, it is appropriate that we recognize if there is conflict of interest. It's appropriate that the cards be on the table, and if there is conflict that it be recognized appropriately. However, I don't think it should rule out the provision of services where the conflict arises, just because of the lack of services throughout.
Ms Castrilli: So you'd favour disclosure necessarily and that right then --
Dr Newell: Yes, that is correct.
Ms Castrilli: -- and referral for profit on the part of physicians and lawyers and so forth.
Dr Newell: Yes.
Mr Kormos: Thank you, people. You make reference to the fact that people who aren't covered under the provisions in this as of yet unnumbered bill find themselves seeking public services. The sad fact is, though, that in short order there are not going to be very many public services left, which is an unfortunate and egregious abandonment of injured people across the board. In particular, you've addressed this business of insurer examinations. Let's cut to the chase here. This is all about the so-called anti-fraud measures?
Ms Dool-Kontio: Right; I think so.
Mr Kormos: To be fair, I suppose I can understand why somebody might want to fake or enhance a whiplash injury because it means another week off work -- maybe. I suspect there might be. Who would want to or be capable of faking ABI? Give me a break.
Ms Dool-Kontio: No one I know.
Mr Kormos: Who would want to or be capable of faking traumatic brain injury?
Ms Dool-Kontio: I'll just state my personal opinion. I think it would be very difficult, based on the complex diagnostic procedures that are used to measure brain injury, to fake a brain impairment. I also think that the seriousness of brain injury for the clients and the long-lasting impact it has on them would not be something you would wish to sustain or partake in. Dr Newell could speak more to the diagnostic procedures.
Dr Newell: Let me address this. The issue is never with individuals who have had a severe brain injury. They are very obvious. Where the issue arises is the definition of who is eligible for benefits, because one has to demonstrate that there has been impairment, at least so far, of a serious function, and ideally to have objective measurement and imaging of the brain in order to produce to come within the definition.
Most of the people who have been in motor vehicle accidents and have brain injury are going to fall within the realm of mild brain injury. It's going to be somewhere between 70% and 80%. They are also going to have whiplashes. They're going to have a lot of psychological, emotional distress. The issue is, is there a mild brain injury or not? There may be recognition of cognitive dysfunction -- in other words, things aren't working right -- and is it because of psychological distress, is it because of mild brain injury? We go through all sorts of shenanigans for months and months of trying to prove that there has or has not been a brain injury. That results in independent assessments. It involves numerous, months and months of delay for treatment.
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Mr Kormos: In a way it's a serious impediment to recovery, isn't it?
Dr Newell: Yes.
Mr Sampson: Thank you for spending the time and coming to speak to us this morning. I want to talk to your item 4, the fee schedule concern. I think you'll find that section refers to the fees charged by designated assessment centres, but we have made statements that we believe it's appropriate, in fact as you have suggested, for the practitioners and the industry, and perhaps representatives even of claimants, to get together and come to grips with a standardized fee schedule that can be adhered to. There are fee schedules out there now. The fact of the matter is they're not adhered to. I see some nodding, so I gather you've seen some of that happen in the system.
Your recommendation is a good one. It's one we've heard numerous times over the last couple of weeks, and indeed, I guess in my vernacular, the person paying the cheque and the person receiving the cheque should come to grips with what the fee is and not have it imposed from above by some Legislative Assembly that's not involved in the process. I want to ask you, though, what do you think the form would be for that? How do we get the groups together to come to grips with the fee schedule and other related items, maybe treatment protocols, maybe even accreditation processes? How do we do that?
Ms Dool-Kontio: I think you would need to get representation from professional organizations -- all the regulated health care providers would have people who could sit on that -- as well as service providers in the community. For example, in the London and surrounding area there are three main brain injury service providers. In other bigger area centres like Toronto you would have a much greater draw and different aspects to look at. It would be important to look geographically at all of Ontario because there may be price differences based on where you live geographically and how much competition there is in the market.
Mr Sampson: Is this an achievable objective in your view?
Ms Dool-Kontio: We sit on several committees, Ontario province-wide committees, like the brain injury advisory committee, and private service providers. It's feasible that we get together one day or one afternoon out of the month and discuss important issues. If it was important to the people involved, they would come and they would give their input. They would have someone there.
The Chair: We appreciate the presentation from the Rainbow Rehabilitation Centres today. Thank you very much for joining us.
ONTARIO WEST INSURANCE BROKERS
MAY-MCCONVILLE INSURANCE BROKERS
The Chair: We now welcome the Ontario West Insurance Brokers and also the May-McConville Insurance Brokers. Gentlemen, we welcome you this morning.
Mr Bill Boland: My name is Bill Boland and this is Peter McConville. Before we commence the presentation, Mr Kennelly was unable to be here today, so Peter and myself on quick notice were able to put together a brief presentation for you which will leave probably sufficient ample time at the end for questioning with respect to our piece of the puzzle of automobile insurance in Ontario.
I want to thank you for allowing us the opportunity to present to you today our brief on the proposed automobile insurance changes and on the state of the Ontario automobile insurance market.
My name is Bill Boland, I am a principal of Ontario West Insurance Brokers in the city of London. Our firm is small. It represents 1,500 automobile clients and we have a staff of six.
Mr Peter McConville: My name is Peter McConville. I am the principal of May-McConville Insurance Brokers here in the city of London. Our office is in London and we have a small branch office in Sarnia. Our firm represents approximately 13,000 auto insurance clients and we have a staff of around 40.
For some time now you have listened to opinions and problems related to the current system under Bill 164, and have had a parade of individuals and groups, many with very apparent special interests, presenting their cases before you. The government should be congratulated for its initiative in addressing this issue early in its mandate and allowing public input.
In our opinion, there is no question that should Bill 164 continue, insurance premiums will escalate beyond what our customers are prepared to pay.
The proposals are a vast improvement over Bill 164, and each special interest group would like to have some modification. The simple fact is there will be costs associated with each and every change. This committee has to find the balance for the average consumer.
We believe the proposed system will generally and adequately insure the average driver of Ontario and does not force them to pay for benefits over and above their requirements. For those who have needs over and above a basic package, there should be provisions for optional coverages which trained, licensed, regulated insurance professionals are able to provide.
For those consumers or not-at-fault victims who are seriously injured in a car accident over and above the benefit packages, then provisions for access to tort, in our view, is a progressive step forward.
To summarize, we feel that there should be a return to the basic principle of indemnity rather than entitlement.
Mr Boland: There are many variables that affect a fair price with respect to the automobile product. Premiums are affected by the cost of physical damage repairs, the value of the Canadian dollar, weather conditions -- I don't need any more evidence on that than what happened on the 401 yesterday morning -- accident frequency, the escalating level of vandalism and the theft of vehicles which is occurring in all of our communities and, probably the most important of all, road safety.
We are unable to control many of the above factors affecting the costs, yet the provisions of the government's proposal attempt to address many of the controllable costs such as fraud and escalating medical and rehabilitation costs, although we feel the legislation can go further to control rehabilitation abuse and conflict of interest. Interesting, the last speaker and the questions directed to her in that regard.
For many Ontario motorists the present system has become unaffordable and unavailable. As brokers we are optimistic that the proposed changes will restore an open market competition -- a key word there is "open" market competition -- encouraging companies to risk underwrite. In addition, the market will be further enhanced if all insurers are allowed more rating variables to level the playing field between those insured through group plans and those as individual policy holders.
Mr McConville: For a quick summary of our proposal we offer: The first item is to repeal Bill 164; secondly, introduce a basic policy to indemnify the majority of claimants; offer optional benefits, allowing access to tort for those who are not at fault and the benefits do not suffice; improve road safety; control and regulation of rehab; repeal 5% sales tax; streamline the OIC.
Mr Boland: We would like to thank the committee for allowing us the opportunity to present our brief presentation and trust we have given you some information to assist in your final deliberations. If you have any questions, Peter and I would be more than pleased to answer them for you.
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Mr Kormos: Thank you, gentlemen. I'm sorry Mr Kennelly couldn't be here because he, once again, is a veteran of these things. I really want to reflect on -- because again, I really think there's been enhanced confusion about what is insurance, especially with the introduction of an enhanced no-fault beginning with OMPP and then -- agreeably, no issue with anybody -- 164.
Look, historically in our society -- and it predates us back into pre-Christian times, and we're talking about the responsibility of a wrongdoer to compensate the person they hurt, and these folks know it goes back to Leviticus in the Old Testament, lex talionis, what have you -- the reason why auto insurance was made compulsory was so that you or you or I driving on the road could be assured that when we were injured by somebody else there'd be somebody to back up that driver or vehicle owner in terms of getting compensation from them. Boom, end of story -- in itself, not a complex or a confusing proposition.
No-fault benefits of course pre-existed Bill 68. They were introduced at least a decade before and, mind you, they hadn't been developed with the passage of time, but it was recognized that all injured parties should have some modest income replacement. When you've got a primarily no-fault system -- right? -- when people are insuring themselves rather than insuring themselves against claims by people they injure, doesn't that start to diminish the need for insurance to be compulsory? Because, as I say, the reason insurance is compulsory historically is that if I'm injured I want to be sure that Mr Brown or Mr Ford, what have you, has adequate coverage to compensate me for my injuries. That's the only reason it was made compulsory.
I can go out now and buy income replacement insurance whether I'm a driver or not. I can buy sickness and accident benefits. Hasn't the issue become increasingly confused by the high role of no-fault benefits and the fact that we're imposing now upon drivers a concept of self-insurance which has never been historically related to the concept of auto insurance?
Mr Boland: If I can address part of the question, and, Peter, his comments. First of all, I think the general public are not all members of employer-sponsored programs which have group benefits for them. I have no idea what percentage are as against which percentage are not. But if an individual were to come into either Peter or my office today and wants to buy a health care program, dental etc, the cost would be abhorrent, greater than an automobile insurance program. Now, mind you, that will protect that individual 24 hours a day, not just in an automobile accident and for all sorts of incidents that may happen if he falls off his ladder at home. But the point is, it is expensive and the consumers would not be able to afford that.
Now we have the situation of an individual, if the automobile insurance is not compulsory, involved in an accident, doesn't have a group-sponsored plan, doesn't have a plan, who pays for that? The public purse, and the public purse is broke.
Mr McConville: And in all cases of every bill we've had before insurance changes, there has been a form of tort available to them, whether it's through some form of threshold or whether it was pure access to tort, prior to OMPP. So either way, there was that access to tort over and above that so people are going to need that required coverage.
Mr Kormos: But tort has been chimerical. In the case of 68 -- now mind you, I'm not disputing that. I'd far rather be injured, if I were an innocent victim, under 68 than under 164 or even under this proposed legislation if I were seriously injured and passed the threshold. But in the case of 68, tort was very limited to only the most catastrophically injured people. Bill 164 paid lip-service to tort, because you see there was an effort to appease the bar in that one by introducing tort for pain and suffering with a $10,000 deductible, which made it irrelevant to a vast majority of victims.
This legislation, in terms of so-called addressing tort, all it does is emulate, interestingly, the new Saskatchewan model which extends the no-fault benefits, because that's all the tort access is, to 85% of net, the same as the no-fault benefits beyond the new cap of $400 for higher-income earners. In fact, if a person is a higher-income earner and does have workplace-provided or self-provided wage replacement benefits, there is no tort then, in any event, because that person has to access --
The Chair: Do you have a question, Mr Kormos?
Mr Kormos: Yes.
The Chair: A short one.
Mr Kormos: -- that person has to access that workplace-provided or sickness and accident benefits. It's really illusory. Why aren't we getting down to the nitty-gritty and either implementing no-fault or restoring the prominent level of tort?
Mr Boland: Is that your question, why we're not?
Mr Sampson: We've been struggling all week to --
Mr Boland: I was going to say, might I suggest, Mr Kormos, that's your and your committee's prerogative and why we're having these hearings.
The Chair: Thank you very much. We appreciate the brevity of your answer.
Mr Sampson: As opposed to the brevity of the question?
The Chair: That would go without saying, I suppose.
Mr Bob Wood (London South): I'd like to ask you about your suggestion that we should streamline the OIC. Do you see there being any possibility in getting rid of the OIC and giving its functions, where they're needed, to other bodies? Do you think that's a realistic possibility and, if so, how would you do that?
Mr Boland: A very brief answer: Yes. How I would do it: There are many aspects to the Ontario Insurance Commission which over the last few years have been an irritant to myself personally. One is, when we lost an insurer, Maplex Abstainers Insurance Co in Ontario, the Ontario Insurance Commission was of absolutely no value to any of those claimants who were subject to a lot of delay in the settlement of their claim process; was of no value to the process with respect to -- I had a client in my own office, for example, the claim had been settled, the cheque had been issued prior to the default of the company being declared by the courts, yet the cheque had never been sent out. When the insured got his car some months later, a lien was going to be placed against his car and seized because the auto repair garage had not been paid.
In taking this person's case to the Ontario Insurance Commission, once you could get through the bureaucracy of the voice message machines and punching numbers in forever, the answer I got back was, "Go see Deloitte Touche; they're the trustee in bankruptcy."
The case of issuing documents with respect to the competitive nature of automobile insurance in Ontario and the list of companies: That doesn't need to be done by a bureaucracy or by an organization that's costing -- and it is an inherent cost to the insurance companies which has to get passed on to the consumer -- that's available. Look at the yellow pages. In London alone there's probably 15 pages of yellow pages that an individual can call any insurance broker or company direct and obtain competitive quotations. Let the marketplace dictate that. There are, what, 135 insurance companies licensed in the province of Ontario. We don't need a commission to produce competitive rates.
Those are just two or three of the factors, Bob. There's much, much more, if I had a lengthier time, with respect to the commission that should be done away with. On a general basis, yes, do away with it.
Mr McConville: As a matter of fact, I have one more thing. Part of the OIC was to help control the rating of Ontario, where the average company in applying for a rate decrease now has to wait weeks and weeks to get a response from the province of Ontario. So in some ways it's holding up the competitive nature of the product rather than enhancing.
Mr Boland: One other point on that, if I may, which is the other irritant. Which review? When we were reviewing this process a number of years back, I think some statements were made -- and I believe it was when the NDP was in power -- that age, sex and marital status were going to be done away with respect to the rating of an automobile policy. The only thing that should affect the rate was the type of vehicle the individual was driving and their driving record.
That has not been corrected under OIC and, in fact, part of our proposal here is that there needs to be more variables in order to make the product more competitive for some individuals with respect to double collateral benefits, and that's just not being done. It's done for some companies who are allowed to mass merchandise in group auto, but it's not done for the vast number of other companies that are doing business in the province. So in that regard the OIC has not served the public well, in my opinion.
Mr Wettlaufer: Gentlemen, we've heard that the cost of lawyers is going to dramatically increase the cost of the product under the readvent of tort. We have seen, in the last couple of weeks, that no-fault hasn't really eliminated lawyers from the system and, in fact, on doing a little bit of checking, my understanding is that we had approximately 1% of the cost of the product was caused by the lawyers in the old tort system prior to Bill 68, and in fact it's still about 1%. Do you have any comment on that?
Mr McConville: With any product that has an appeal process, if it's not a pure no-fault product or even if it is a no-fault product, if there are ways that claimants can go through some form of an appeal process, either through lawyers or through rehabilitation, you're going to have that cost. That's something that has to be borne by society through insurance, and that's going to be cost of insurance.
A lot of lawyers do get involved -- there's still a lot of larger claims -- with the dispute in benefits, of no-fault benefits. I think that's created a special niche for lawyers. If you speak to any of the larger law firms around the province, in each of the major law firms where before there were a number of lawyers that would do insurance work, now it's highly specialized. They are much more trained. That's what they're doing 100% of the time. It's much more complex. That's the problem with Bill 164. It was just so complex that even a law firm had to have one person just specialize in that one item.
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Mr Jim Brown (Scarborough West): You mentioned that you'd like to see more competitors in the marketplace. What suggestions would you have?
Mr McConville: One of the comments that Bill's alluding to was with OIC, if companies want to raise or lower their rates to stay in the marketplace, they can't. They've got this large bureaucracy they've got to appeal to.
One of the other problems that he was alluding to was major group plan carriers can use collateral benefits to lower the cost of delivery of their product, and the average insurance company representing the average person on the street cannot ask certain questions, such as "Do you have a group plan," and offer a discounted rating program to those consumers. So what's happening is the people that are working for large corporations who are members of groups, either real or synthetic, can get reduced premiums where the average driver on the street cannot get reduced premiums.
Mr Crozier: Good morning, gentlemen. One of your recommendations is to repeal the 5% retail sales tax. That would cost about $260 million. I think it would be much more effective and widespread than the proposed personal income tax in that it would touch every automobile owner in the province of Ontario, and I think would give some relief to your industry. So I would hope the government might look at that.
I want to ask you about price, because that's the reason we're here, and I certainly support every effort of the government to repeal all the bad parts if not the total Bill 164 that sent prices skyrocketing, because we have reason to believe that prices in fact had stabilized, reduced a little, maybe increased a bit in that period between 1990 and 1993.
You're front-line people. When I go in to get my auto insurance renewed or I want to come to you as a broker to shop the market, price increases are of concern to me. If the draft legislation that we're looking at now increases prices, as it has been suggested, would that make your life more difficult?
Mr Boland: Not necessarily our lives more difficult; certainly to the consumer it would. There's no question, I've said for many years now there are two things that the public do not like to pay. One is income tax and the other is automobile insurance premiums, because their perception is that they receive no value for either of them, or very little value.
The story we constantly get is that "I've been driving for 15 years, 10 years, 20 years, 30 years," whatever it is, "I've paid $800 a year all that time." These are the ones who've never had an accident yet they continually see, every renewal, a 5%, 7%, 8%, 10% increase applied to it. Those are the people that continually are calling us and saying, "Why are we paying this increase?" And in some cases, it's very obvious to justify to an individual, "Well, you've had several claims," whether they're comprehensive, physical damage, not-at-fault claims or whether they're actually at-fault losses, to be able to justify a premium increase. But to the motorist who has not had the claims, even a 5% increase is one that's not acceptable to the public.
Mr Crozier: I guess by not being acceptable, I'm suggesting that it makes your day-to-day relationship with your clients more difficult.
Mr Boland: More difficult and time-consuming to try to explain to them that it's a general rate increase and then the theory of insurance being that the premiums of many pay the losses of a few.
Mr McConville: If I could just add to that quickly, it's inevitable prices go up in every commodity and service. We have inflationary factors and what have you. I think in the case of this legislation, I believe that the public is not prepared to pay 5% to 7%. I think that's too high. I say that, though, in caution, because if Bill 164 stays, I know from experience that the industry's stating 12% to 15% or to 20%, it might go up. I can guarantee that's going to happen if Bill 164 stays.
The product is getting more expensive and it's getting unaffordable for the consumer, and it's getting unobtainable for the brokers to find coverage. I do believe the public doesn't want a price increase with this new legislation, but I also know that if we don't change what we currently have, it's unavoidable.
Mr Crozier: Certainly the government has more control over that, but on this side of the table we're going to do our best to help them do that. The point was that when you said it was inevitable that prices increase, we found it was different in 1990; actually, prices decreased. I was just trying to relate it back to Bill 68 when we worked at getting a price decrease. I hope we're able to do that this time round, although the evidence that's been given to us so far is that it's going to be difficult.
Mr Boland: Having made my comments, in the presentation I also said there are some areas of the automobile insurance product that are just uncontrollable. We have no control over the cost of imported parts and the devalued Canadian dollar as it fluctuates. We have no control, necessarily, over incidents that happened yesterday because of weather conditions with 50 cars and trucks involved in, I would suggest, a multimillion-dollar accident on the 401. A year ago we had a mild winter. If we have two bad winters in a row, with serious road conditions --
The other issue too is the policing and road safety. The London Insurance Brokers Association had a presentation at its breakfast meeting just yesterday regarding the establishment of automobile accident report centres here in the city of London, similar to what I understand has been set up in the Metro Toronto area. The indication is that as the individuals involved in accidents with no bodily injury -- minor, just property damage -- go to the policing authorities at these report centres, in actual fact fewer charges are going to be laid because there will be no investigating officer. It'll be merely Peter's side of the story as against my side of the story. Information's taken, vehicle damage is assessed, but fewer charges will be laid, is my understanding. If that happens, and less policing on the highways, obviously that all has an impact on how motorists drive, their habits, increasing accident frequency, costs are going to go up.
This whole issue is like jelly on a wall in many respects, because it's not just the government's proposed changes that affect the price of automobile insurance. There are too many other factors involved in the whole process.
Mr McConville: Some costs are controllable by legislation and changes in auto legislation. The other expenses of auto insurance are not controllable. They're never going to go away, and those can go up.
One comment about the pre-OMPP. Yes, rates did go down after OMPP, but I think that would've been short-lived, because with rehabilitation -- we've heard some groups say that businesses have started since OMPP with rehabilitation. By and large they're all doing the best job they can for their clients, but there's a cost to that and we're seeing this happen. If Bill 164 didn't come along, we would've seen an increase under OMPP as well.
Mr Crozier: We'll never know, will we?
The Chair: Thank you very much, gentlemen. We appreciate your presentation today.
Mr Gerry Phillips (Scarborough-Agincourt): Mr Chair, just before the next presentation, a couple of things. Mr Wettlaufer mentioned 1% in legal fees, but the numbers I've seen are like 15%. Maybe Mr Sampson could provide us with the estimate of that. Also, I think the committee asked Mr Wettlaufer to table a document he read from the other day. I haven't got my copy of it anyway, and it might be helpful for us.
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THOMAS SCHINBEIN
The Chair: We now welcome Thomas Schinbein Actuarial Services to the standing committee.
Mr Thomas Schinbein: Thank you, Mr Chair. Good morning, and thanks for the opportunity to address the committee on a few issues I saw in the draft bill. My name is Thomas Schinbein. I'm an independent actuary in London, Ontario. My practice is in the area of providing actuarial evidence. I provide calculation for people who have been injured, and I also work for insurers, so I work for both sides of an injury matter. I work on personal injury matters, fatalities and other issues where people are injured.
The current automobile insurance plan in Ontario implemented in 1994 created many inequities and complexities for Ontario residents. Automobiles are a key aspect of the economy in Ontario; therefore, a fair and basic auto insurance plan is in the best interests of Ontario residents.
With the introduction of Bill 164, the Ontario government became financially involved in the daily operations of an automobile insurance plan. This transferred part of the cost of an automobile insurance plan away from the owners and operators of vehicles to the taxpayers of Ontario. With Ontario's increased public debt and deficits, the full cost, in my opinion, of an automobile insurance plan must be transferred back to the private sector.
Under Bill 164, innocent victims lost the right to full recovery for their economic losses. In many cases, the no-fault accident benefits are being cut off after three years and therefore the innocent victims are left with no right to recover and have to end up on Ontario social assistance. Again the taxpayer of Ontario is subsidizing the cost of negligent drivers. I think the current draft legislation goes a long way in transferring the true cost of operating an insurance plan back to the private sector and back to the negligent drivers. This should end the taxpayers' subsidy for high-risk drivers.
Under the current draft legislation, the statutory accident benefits for non-catastrophic impairments have been reduced. The high levels in Bill 164 for accident benefits transferred the cost created by high-risk drivers back to low-risk drivers. The low-risk drivers who are innocent accident victims are forced to seek recovery from their own insurer. As the experience for good-risk drivers deteriorates, their premiums go up. This creates an unfair premium structure and takes away the financial incentive for poor drivers to improve their driving habits.
The catastrophic impairments under part V of the draft bill are very high for a basic automobile plan that includes a tort regime. The $2-million aggregate limit, in my opinion, should be reduced to $1 million, and for non-catastrophic, the $447,000 limit should be reduced to $75,000.
The duration restriction for medical and rehab benefits for non-catastrophic impairments should be eliminated, as it discriminates against accident victims by type of treatment needed for their unique injuries. With lower combined limits and no duration restriction for part V benefits, the basic automobile insurance plan is more efficient and flexible to meet the needs of accident victims.
In adopting a lower basic level of statutory accident benefits the current draft legislation could be amended to make optional part V maximum benefits. For example, you could have options to buy additional units of $500,000 for catastrophic impairments and additional units of $50,000 for non-catastrophic impairments. With the tort regime under the current draft legislation, the high-risk drivers would likely elect these additional no-fault benefits. As the higher statutory benefits would be optional, the insurers would have a better chance to price for them. Making very high limits of statutory accident benefits as an optional part of the plan will help reduce the cost for a basic plan, particularly for low-risk drivers.
The mandatory indexing of statutory benefits under Bill 164 represents a significant portion of the cost. Mandatory indexing of social insurance benefits, such as workers' comp, has caused the costs to escalate, so one of the good features of the bill was making indexing optional. This again, for a basic plan, would help reduce the premiums for good drivers.
The current draft legislation eliminates many complexities of administering Bill 164. Annual mandatory indexing on numerous benefit amounts, limits and deductibles under Bill 164 is unnecessary and creates pricing uncertainty. The mandatory review of statutory benefits every two years by the minister and making more optional coverages for statutory benefits will enhance the price stability for an automobile insurance plan and provide an orderly method for updating the benefits. People who feel inflation is getting out of control would have the option to buy more coverage, and they'll do the indexing themselves.
The current legislation tort regime helps to restore financial fairness to innocent accident victims and their dependants. A fundamental right under other insurance products is to seek full recovery for your economic losses from negligent individuals and organizations. Taking away an innocent victim's right to full economic recovery discriminates against innocent victims. For example, an Ontario single mother with dependants who slips and falls in a shopping mall has the fundamental right to seek full recovery for her income losses. However, if instead the same individual is involved in a motor vehicle accident going home from the shopping mall, with the same injuries, the income loss recovery is limited to 85% of net. To innocent victims and their dependants, this is unfair.
Under the current draft legislation, innocent victims and their dependants are discriminated against by type of loss. Consider two individuals whose economic loss is $500,000. For individual A, the loss is 100% income, and for individual B the loss is 100% medical, rehab and attendant care. Individual A's maximum recovery is $425,000, while individual B can receive $500,000. The financial loss is the same to both individuals, but individual A must subsidize the negligent driver for $75,000. The current draft legislation must be revised to allow full recovery of income loss for innocent victims regardless of the source of the loss.
The current draft legislation does not contain a comprehensive definition of income. Many innocent victims of an automobile accident have employee benefits provided by their employers. An individual's income includes taxable and non-taxable benefits. The draft legislation must include a definition of income that provides for past and future employee benefit losses.
The definition of income loss needs to be revised to include both past and future income losses. This would be particularly important to young individuals who have just started their working careers. The definition of income loss in the draft legislation should be expanded to include losses that surviving spouses and their dependant children incur. Future economic loss in the death of the single income-earner for a young family can be significant. An example would loss of household services.
Full recovery of an innocent victim's past and future income loss should be based on gross income to avoid discrimination against innocent victims of automobile accidents. Victims of other accidents are entitled to seek full recovery on gross income. Basing recovery on net income will require the draft legislation to contain additional rules to govern situations where future income is not level, for example, promotions and retirements. How will the net income be recalculated? Use of gross income eliminates these complexities involved in tax calculations and would streamline administration of the plan.
The investment income generated by an income loss award is taxable, so in limiting the income loss recovery of an accident victim to net income, you will require an additional allowance for the tax that investment income would generate. If you fail to provide an allowance for the additional tax, this is just another loss that the innocent victim must finance on behalf of negligent drivers.
One approach to compensating for future tax liabilities would be to gross up the net income loss award, but this adds complexities to the settlement process. The use of gross income for future income loss is a more simple process and it already has built into it a tax allowance, because gross income is equal to net plus tax.
The collateral benefit rule under the draft legislation transfers a significant portion of the financial loss caused by negligent drivers to innocent victims and their employers. With global competition reducing Ontario job opportunities, Ontario employers cannot continue to afford additional employee benefit plan costs from negligent drivers. Employers that cut benefits to control costs just increase the number of innocent victims and dependants from a negligent driver's action.
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The current draft legislation must explicitly include in the definition of an income continuation plan any benefits payable under a pension, retirement savings plan or superannuation to be excluded. Such retirement plans represent a form of deferred compensation and private savings which negligent drivers must not be entitled to receive a credit for. As the Ontario population ages, the cost of pensions will increase, generating more competitive disadvantages for Ontario employers who provide pension plans for their employees. Again, employers who cut the benefits to control costs are just increasing the number of innocent victims and dependants from negligent drivers' actions.
The current draft legislation is to prescribe a method for determining the present value of collateral benefits. Section 1 of the Insurance Act defines an actuary to be a fellow of the Canadian Institute of Actuaries. The Canadian institute establishes standards and regulates accepted actuarial practice in Canada. Under section 60 of the Insurance Act, the actuary must provide an opinion on the adequacy of claims liabilities in accordance with accepted actuarial practice. Use of accepted actuarial practice is also required under the federal Insurance Companies Act for those who are licensed federally. Since accepted actuarial practice is applied in determining the insurer's future obligation, for consistency the present value of the collateral benefits, for which the insurer receives credit, must be determined in accordance with accepted actuarial practice.
To the individual, the value of a $400 weekly statutory accident benefit is the same regardless of which insurer provides it. In the case of pensions, the Ontario Pension Benefits Act has specified accepted actuarial practice as the industry standard for determining the value of an individual's benefit. The current draft legislation needs to prescribe accepted actuarial practice as the industry standard for determining the present value of collateral benefits.
In Ontario courts, the determination of an award for future care or for fatal injuries includes an allowance for the income tax payable on the investment income generated by the award. This allows the innocent victim to receive full recovery for the additional taxes caused by their losses. The lump sum award allows the individual financial flexibility and control over their future. The right to a lump sum award is available to innocent accident victims involved in non-motor-vehicle accidents.
To avoid discrimination against innocent victims by source of injury, the draft legislation must allow parties involved in a particular case to determine if a lump sum is the appropriate settlement option. Under the current draft legislation, the statutory accident benefits already are a structured settlement, and this restricts the parties to just one settlement option whether it's appropriate or not.
In mandating structured settlements, the current draft legislation sets out no controls over structured settlements. Given the recent collapse of Confederation Life, this should be of concern to the courts that must mandate a structured settlement. The cost of a structured settlement is not regulated under the current draft legislation. The current draft just takes on faith that a structured settlement will always be less than a lump sum award that finalizes the claim for all parties involved.
Prescribing circumstances for mandatory structured settlements creates additional unnecessary regulations that will require interpretation and amending. The objective of the draft legislation must be to reduce unnecessary regulations whenever possible to ease the administration of the act and reduce costs to taxpayers. The current provisions in the Courts of Justice Act have served Ontario residents fairly and must be left in place to ensure that innocent victims of automobile accidents enjoy the same fundamental rights under the law as other accident victims.
In conclusion, the current draft legislation moves towards a fair and streamlined basic automobile insurance plan that reduces the transfer of costs from negligent drivers away from the Ontario taxpayer.
To eliminate discrimination against innocent victims of automobile accidents, a 100% recovery for past and future gross income and dependency losses must be allowed.
The collateral benefit rule needs to be revised to reduce subsidizing of negligent drivers by innocent victims and employers.
Discrimination against innocent victims of automobile accidents by denying them the right to elect an appropriate mix of a lump sum award and a structured settlement, which is the right of other accident victims, must not be allowed. Thank you for the time.
Mr Sampson: Thank you very much for your presentation. We've heard from one insurance company, Zurich, which is somewhat concerned with respect to the swing more towards tort and less towards no-fault and how that could impact future costs. You're an actuary. You've no doubt had to cost the elements of tort in a plan. What's your response to their view that, add more tort, you're going to jack up the premium to pay for it?
Mr Schinbein: The difference, in my opinion, is that to get a settlement in a tort is a negotiated process. Both parties sit down and agree and figure out what the claim is worth and it's a compromise position. With the statutory accident benefit approach, having no-fault benefits, the problem I see on a lot of claims I work on is that after the three-year period, benefits are cut off, so no-fault means no coverage.
Mr Sampson: You wouldn't agree with their actuary's view that increased tort will necessarily mean increased premium levels plus escalating premium levels?
Mr Schinbein: No.
Mr Phillips: You suggest in here that high-risk drivers could purchase an optional benefit package that would give them additional benefits. Do people understand when they buy their insurance premium -- my judgement is that a lot of people just assume they'll never be in an accident and have very little idea of what their benefits will be until it happens. But I gather from your experience that that's not the case. You believe that people know they're high-risk drivers, that they may very well get in an accident and are going to buy the higher-risk benefits. Has that been your experience?
Mr Schinbein: What will likely happen for people is that when they sit down with their brokers to go over the options available, they'll know by their ratings that they're a bad driver, which means they're more likely to cause accidents than be an innocent victim. What you're trying to do is reduce the level of statutory benefits, that you've got a smaller basic plan, and that will give you price stability. For the people who think they're going to be the cause of accidents and want the coverage, they can buy optional units on top of that.
Mr Kormos: Your observations about no-fault versus tort and what generates greater expense or the rate of increase are consistent with what Osborne said, with what Kruger said in the OAIB hearings, and what your colleagues in the actuarial business, like Mercer among others, say.
One of the big things that was flaunted during the course of Bill 68 and the introduction of the hierarchy, and no-fault taking supremacy in the hierarchy, was that this excluded lawyers from the system. I have a rather Shakespearean view of lawyers most of the time myself, but the bottom line is that what we've heard more and more is that lawyers are as involved in litigating for no-faults, although we haven't heard the numbers yet -- well, not as involved but certainly significantly involved, just as they were in pursuing tort actions. There's a considerable legal cost that we haven't really had a handle on yet by the insurance industry and by applicants in terms of legals.
If there are concerns about legal costs -- and I appreciate you're here as an actuary -- wouldn't the way to address it be in the same manner as the Attorney General, Charlie Harnick, recently suggested, that is, to control the lawyers, not to deny people access to full recovery of damages?
Mr Schinbein: My perspective is that individuals, as residents of Ontario, have rights and they'll need lawyers to protect those rights. They need somebody to guide them through the maze of auto insurance, because most consumers don't understand the product once they're in an accident, and there's a service they can provide. I think the assumption is that lawyers create the costs. Well, it takes two lawyers to tango. One of the lawyers is hired by the insurer, so the insurers have a direct bearing on the cost when they drag out the claim longer than it has to be. Two parties create legal costs, the injured person and the insurer.
The Chair: Thank you very much Mr Schinbein. We appreciate your presentation very much.
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LONDON OCCUPATIONAL THERAPY SERVICES
The Chair: We now welcome the London Occupational Therapy Services, Ms McGarry. Welcome to the standing committee on finance and economic affairs, Jacqueline.
Ms Jacqueline McGarry: Thank you very much. I appreciate the opportunity to speak with you about the draft legislation on auto insurance reform. I'm a practising clinician with 30 years' experience as an occupational therapist, the last 10 of which have been as a businesswoman running a private occupational therapy practice. Much of my work in the past six years has been with clients referred either directly or indirectly from insurance companies and lawyers as a result of injuries sustained from motor vehicle accidents.
As an occupational therapist, I am concerned about the functioning or performance of clients with respect to their self-care activities, their productivity in the home or workplace and their leisure pursuits. Occupational therapists use their skills to enable people to do whatever it is that they are motivated or want to do. We are client-centred and holistic in our approach. Although as a profession we're generally categorized in the medical model, our philosophy is that of enablement, and our client-centred practice fits most effectively in a community setting where we enable and facilitate, in the case of motor vehicle accidents, the client's return to a pre-accident functioning level.
We are educated to assess the whole person, including the emotional, psychological and spiritual as well as the physical aspects of the person. I have left with the clerk five copies of the Profile of Occupational Therapy in Canada, which outlines the competency expectations for Canadian occupational therapists if any of you wish additional information about our practice.
Based on my experience in the community, I would like to outline one or two concerns which I believe interfere with the client's recovery process and which I would like to see addressed in some way in the proposed legislation.
The first is the prevalence of an adversarial attitude between the insurer and the insured. It's a major concern for me in my practice, as I believe it is not conducive to the speedy resolution of injuries and interferes significantly with the rehabilitation process. In general, though not in all cases, there exists a suspicious and unhealthy relationship between the client and the insurer. In some instances this suspicion is justified, in others not so, but in neither scenario is this adversarial attitude beneficial to enabling the client to return to productive living as soon as possible, which is what we all want.
I note in the proposed legislation that there is a duty of the applicant to cooperate. I could not find equally clearly written a similar expectation placed upon the insurer. I suggest that such an expectation be written into the document outlining the duty of the insurer to work supportively, empathetically and cooperatively with the insured.
Other issues which seem to contribute to this adversarial attitude include:
Differing expectations of recovery. Claimants expect that they will be free of pain and be able to function at pre-accident levels, while the insurer may be satisfied when the claimant can do substantially all they used to do with adaptive devices or alterations to the claimant's lifestyle.
The lack of disclosure by the insurer of the options, benefits and resources available to the client under the policy, and a difficulty in explaining clearly is another issue.
When the claimant feels they cannot understand or get the answers they require, many choose to consult a lawyer, and he or she tells the claimant what is in the legislation, what they are entitled to, which then places the insurer in the position of one who did not disclose these options to the insured. The perception is that the insurer is withholding legitimate expenditures or trying not to give the benefits to which they're entitled. This mistrust reinforces the adversarial approach to the claim.
The kinds of recommendations that I think might help us:
Policies should be written in simple lay language to facilitate explanation and understanding. I would think it would be a pretty easy thing to do for someone to translate the policies into lay language.
Insurers should take responsibility for reviewing the resources, the benefits and expected process of recovery thoroughly with the claimant, possibly several times at different stages in the rehabilitation process.
That there be a reciprocal duty to support, empathize and cooperate with the claimant by the insurer.
That insurers establish this supportive relationship at the beginning of the claim by providing any necessary services as soon as possible to enable the claimant to cope with the stressful initial period when many are overwhelmed as well as injured. These services, however, should be time-limited and reviewed or reassessed within a month. They often are not time-limited and the claimant becomes dependent upon them, especially those related to housekeeping and massage therapy sessions.
That a delay be established in seeking legal action, for at least six months to one year, so that the rehabilitation process can be established and begin to take effect. Many clients indicate that when looking back on their rehabilitation, they recognize that they made decisions in the early stages of their recovery which were coloured by emotion, revenge, anger, which they later wished they had not done. A six-month waiting period before taking legal action may assist the claimants in making wiser choices and more stable decisions. Prognosis and potential for recovery are also more accurately assessed at this time.
More direct discussion between the insured and the insurer as to the expectations of the outcome of intervention. Insurers may want to close the claim as soon as the claimant does his/her pre-accident activity, but the claimant may feel that it should not be closed until she can do it consistently, regularly, under pressure and without pain. The differing expectations must come closer together, and in so doing a more positive attitude is fostered.
The issue of costs of services is one that I can only talk about from my own experience in the community. Many clients with whom I work complain of having too many appointments to keep with professionals. They find it particularly difficult to establish a regular routine for their pacing and scheduling because of this. Many are exhausted with an increased level of activity due to appointments. The list of involved professionals is often between six and eight, several of them on a twice-weekly or weekly basis. Somewhere, it seems, the client has got lost in the services.
Those claimants who have either soft-tissue injuries or injuries of a more serious nature, but not catastrophic, have demonstrated, in my experience, the best results when the insurer has referred directly to health professionals and there is direct communication between therapist, insurer and insured. Initial intervention is timely, communication is direct and quick, and intervention can be paced to the requirements of the client at the speed of their own recovery. If the services are instituted early enough, much preventative work can be effected by close cooperation between professionals, education around positioning and energy conservation techniques, adaptation to the environment, loan or purchase of assistive devices, pacing and scheduling, and the facilitation of a positive attitude towards the recovery process which fosters motivation and success orientation within the client.
I understand that there are examples of effective cost-saving measures established by some insurance companies. Co-operators has a very clearly documented rehabilitation manual of expectations of professionals and a direct referral service from the insurer to the professional. Guarantee Co of North America is piloting a project with occupational therapists as the initial assessors to establish the claimant's needs.
My recommendations on this area are:
To clearly outline treatment goals established with the claimant within one month of the accident. I don't think many people realize just how difficult it is for the claimant to understand all that's going on for them.
As direct a communication between client, insurer and professional as possible to facilitate and speed access to services and intervention.
Similar projects to those of Co-operators and Guarantee Co be piloted to provide outcome measurement statistics. Guidelines could then be developed to replicate the successful strategies. This could be done cooperatively with the respective professional associations that are also interested in evidence-based studies.
That occupational therapists be considered as the initial professional assessors to determine needs and services. The fee schedule guidelines from the Ontario Society of Occupational Therapists range from $60 to $100 an hour. A new schedule is due within the next months, but an initial assessment and two follow-up visits to educate re energy conservation, proper positioning, pacing, scheduling and monitoring of assistive devices in most soft-tissue referrals or simple orthopaedic conditions may cost between $700 and $1,200.
As an aside, and obviously from a very biased viewpoint, I believe the skills of occupational therapists in undertaking initial needs assessments are severely underutilized. In England, in Exeter, a physician who ran a regional children's centre used occupational therapists as the initial interviewers and assessors because of their holistic philosophy, their focus on function and their ability to assess not only the physical demands of the child, but the family dynamics, the barriers to progress and rehabilitation, and the emotional aspects of the problem, which were in turn shared with the team members prior to allocating the appropriate professional and resources for intervention.
I've already mentioned the time-limited and goal-oriented intervention and I note the inclusion of the treatment plan requirement in the proposed legislation. It is recommended, however, that the requirement to obtain written treatment plans be accompanied by reasonable time lines so as to avoid any unnecessary delay in establishing intervention and the recovery process. Health professionals will need to be efficient in writing their plans and the various colleges may well be able to support this in their regulations, or the associations in their documentation guidelines. The 60-day expectation for medico-legal report timeliness would not be appropriate in this instance. The Guidelines for the Client Centred Practice of Occupational Therapy indicate that a program plan involves not only the development of a strategy for intervention, including what to do in what order and when, but that it should refer also to the discharge plans and other contingencies such as referral to other professionals or agencies. It is this plan that will include the outcome measurement by which to determine whether the client has reached their goals. Consequently, I support the requirement for treatment plans from all professionals involved with the claimant.
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My concern, however, is that these treatment plans and goals should all pull in the same direction. Where many professionals are involved, there needs to be an integration of the care plans. It is one of the difficulties in community practice and it is costly with so many independent practitioners contracted. In my experience, to avoid duplication and manipulation, this can only be resolved by a team conference, well organized and efficiently chaired. It should include the client as an active participant to contribute to and agree to the final plan.
I support the reduction of the non-earner benefit for the first 26 weeks, as I came to believe that this was a disincentive to recovery. I believe, however, that a timely functional assessment to clarify abilities and needs could facilitate a shorter recovery period and time-limited housekeeping to support the client in the acute stages when stress and strain on the tissues is contraindicated, together with time-limited and goal-oriented professional services, will significantly reduce costs.
I'd like to make a final point with regard to the brain-injured client. I will not belabour my disagreement with the use of the Glasgow coma scale, as you have had many submissions to justify its exclusion from the criteria. In its place, I would like to see a functional assessment in conjunction with neuropsychological testing.
Head-injured clients receive a functional assessment. I believe that it is more relevant because my own experience suggests that in some cases a mild head injury, because of the client's life role, family expectations or employment need, results in a severe functional loss while an apparently more severe injury becomes a mild functional impairment for the same reasons. For example, a senior executive with a mild injury which affects his judgement, decision-making and concentration, may be functionally more impaired than the landscape contract worker with a more serious injury whose job entails little responsibility, working as part of a team and primarily heavy labour. The assessment of this and the recommendations are best evaluated in the community by the client, the family, the employers and, as you might have guessed, an occupational therapist.
Intervention and retraining with a brain-injured client is time-consuming and costly. I do not have any statistics to indicate whether $75,000 is adequate for the intensive and long-term intervention required. But my sense, from my experience, is that it will not be adequate. I would recommend, therefore, that additional statistics be gathered to establish an appropriate limit for clients whose major injury is brain injury, whether mild or severe.
As you will see, I've left the issue of the health practitioner status until last, for I know that most every professional who has appeared before you has requested to be so designated. I believe the case for the occupational therapists has been put to you by the Ontario society and by the Association of Canadian Insurers, and I ask that you give it serious consideration. Thank you.
Mr Crozier: Thank you, Ms McGarry. We in the past eight days, at least to this point, have probably heard from in the neighbourhood of 20 various kinds of rehabilitation centres and health care givers. I need you to help me put this in perspective. You've been in the business for more than five or six years, so obviously you have some experience back into the 1980s. What percentage of your clientele might have been accident benefit victims then and how were they referred to you at that time?
Ms McGarry: I think that you have hit a really important point because I will be the first person to let you know that I have seen a huge mushrooming of all kinds of rehabilitation services. In 1986 I maybe had one client who was referred by a lawyer. I was in fact the only practising occupational therapist in private practice in 1986 and now I can't count them on my hands and fingers, but also I can't count the number of other professionals in private practice, the number of rehabilitation companies. I believe that we've done very well under this legislation. That's one of the reasons, from my perspective, why costs are so high. There is a huge number of people involved with clients, and in many instances the assessments are done and redone and redone because nobody will trust or believe the results from one of the professionals.
Mr Crozier: So this huge mushroom would have happened in the last two or three years?
Ms McGarry: Certainly I've been involved in the past six years with insurance claims and my business has steadily grown. I wouldn't say that it has gone berserk the last two years, but it's steadily grown.
Mr Crozier: Not like costs under Bill 164 -- it hasn't gone berserk -- but I agree with you.
Mr Kormos: Thank you kindly. We've heard from representatives of your profession across the province, this committee has. As well, we've heard from massage therapists and they're going to be spoken to this afternoon. Yet remarkably it was yesterday, when I was in Ottawa with this committee, that Royal Insurance, Ms Matthews, with disdain, dismissed what she called "feel-good treatments." She wouldn't specify what they were -- it was a very cramped period of time, just like it is today -- and I had to draw some inferences.
I thought, "What could she be speaking about that she as a major executive with a major insurer would dismiss these so-called feel-good treatments that are escalating their costs such that they can't contain premiums?" I got a feeling she might be talking about some of the things that the massage therapists and even the OTs have been talking about. I'm sorry; if she is talking about massage therapists and OTs and other non-prescribing health practitioners, I say they're out to lunch. They just don't get it, because with the mushrooming of involvement of you and other non-prescribing health practitioners -- and correct me if I'm wrong -- haven't we seen people return to or as close to their original state as possible more promptly, getting back to work and being economically productive more readily, such that at the end of the day costs could actually be reduced?
Ms McGarry: I believe that is so, but I also don't believe that anything an occupational therapist does is primarily concerned with feeling good. That might be an outcome and it's one of the hopes that would be an underlying goal, because if a person feels good, they're much more motivated, they work much better and they are positive about their return to work.
Mr Kormos: Oh, that was just one of those dismissive labels as they try to devalue or diminish the type of work. It's nuts.
Ms McGarry: I understand that, but it's a very misunderstood one, because there are people out there who do feel-good things. You can do them in your community centre, but I'm not sure that you should pay money for it, unless it's an essential aspect of the treatment of the client who really needs some self-esteem and feel-good treatment.
Mr Wettlaufer: Thank you, Ms McGarry, for your presentation. I'd like to follow up on what Mr Crozier asked you in so far as the numbers of rehab specialists who have mushroomed in the last eight years are concerned. Do you feel that the designated assessment centres will be a solution to this problem?
Ms McGarry: I think that if they're involved with quality assurance, that if they will be looking at ensuring that quality care is undertaken, they may be.
Mr Wettlaufer: But you still feel that an occupational therapist should be brought in at the beginning as opposed to a DAC?
Ms McGarry: I think that the DAC may be more expensive in the long run, if you bring it in for every case. But there has been a lot of success with very early intervention -- certainly in my own experience -- where that intervention was directly from the insurer and it took maybe three or four -- and this won't be for catastrophic injuries or for very serious ones -- but for a good number of people who have car accidents, if you hit it right at the beginning, there's no need for them to become dependent on housekeeping, dependent on chiropractors, dependent on massage therapists. Those are the kinds of treatments -- and I'm not criticizing the ability of those professionals -- but they are treatments that seem to go on for years, and I don't see any goal orientation, I don't see any time limitation. In my own experience, if you can get in there quickly, if you can work really well with the physiotherapist and the insurer, it's a matter of three or four visits and you're finished, and that's less than $1,500.
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Mr Wettlaufer: One last, quick question. You mentioned something that we have heard a lot over the last couple of weeks and that had to do with the number of rehab specialists or independent consultants an insured was sent to as a result of an injury and lack of progress. Is this epidemic?
Ms McGarry: No, I wouldn't say that it's epidemic. It's difficult to generalize from the particular, but I think it's something that could be a cost-containment issue if it is clearly defined at the beginning. There has to be somebody you trust to make the right decision, but what I find is that if people don't get the answers they want, either the client or the insurer asks for another assessment.
Mr Wettlaufer: Who asks for that?
Ms McGarry: Usually the insurer.
The Chair: Thank you, Jacqueline and London Occupational Therapy Services, for your presentation today. We appreciate your input.
CHARLIE VANVEEN
The Chair: We'll now move to Mr Vanveen. Welcome to the committee. We have 20 minutes to spend together. If you would like to make a presentation, we could ask you some questions following that.
Mr Charlie Vanveen: Members of the committee, I was a passenger in a motor vehicle which was involved in an accident on May 20, 1994. I was an innocent accident victim, being in no way responsible for the accident. That accident changed my life forever. As a result of the accident, I'm now quadriplegic. I am paralysed from the chest down and will be wheelchair-bound and totally dependent upon others for the rest of my life.
Prior to the accident, I was an avid bodybuilder, sports enthusiast, handyman and, most importantly, a productive member of society, being an electrician by trade. To add insult to injury, at the time of the accident I was making $15.75 an hour, which wage would have increased within a week to $29 an hour as I would have been receiving the journeyman's rate if it wasn't for the accident.
I was a victim in the car accident and again victimized by the insurance law in place at the time of my accident. I am victimized by the law in the following ways:
I will receive for the rest of my work life 90% of the net of $15.75 an hour without any right to obtain more income, even though I would have been earning almost double that wage within a week of my accident. The law says that I have no right to sue for my financial losses which, over the rest of my life, will be substantial, despite the fact that I was not at fault for this accident. I have lost all other avenues for financial gain, such as overtime wages, other work possibilities, pay increases from increased training, general raises etc. I have no right to sue for my care costs and am stuck with whatever the government and my insurance company deem appropriate.
I have to pay for most medical equipment up front and go through a very time-consuming repayment procedure through the insurer who can deny any of my claims at any time. As an example, I purchased a power chair, but it took 10 months for the insurance company to pay for that chair. I have to pay for my own power bed, which cost $4,000, and again it took me seven months to be reimbursed for that expenditure. I purchased a sports wheelchair for $2,400 in June 1995 and I still have not been reimbursed for that expenditure.
I've been trying to get a van, so I can become more independent and I've been fighting with my insurance company for a year and a half and I still have no van. I had to pay own home care worker $3,000 per month because the insurance company is late in paying these expenses for up to five months in a row.
Before this accident, I was a fully independent person about to make some $5,000 per month with my entire future in front of me. I am now confined to a wheelchair for the rest of my life and will make $1,600 per month for life and have to live on credit and family loans in hopes of reimbursement by the insurance company.
I am being victimized by the insurance company. I not only have to deal with the emotional, financial and physical ramifications of this accident but have to swallow what little pride I have left to plead with the insurance company to pay for the expenses and allow me enough home care to pursue a relatively active life.
I am stuck in a wheelchair for the rest of my life and stuck with the insurance scheme that was in place at the time of my accident. Nothing that this government will do will in any way, shape or form help or change my circumstances. I wish that this law could be made retroactive, but I know that it cannot and will not.
I am here not to represent myself but to represent all those people who are out there who will become innocent accident victims, some who will sustain injuries as devastating as my own. I am here to speak for them because I honestly believe that I am the best person to understand the problems with the present system and some of the proposals with the suggested new system because I have to live every day with the consequences of what my accident and the former government have done to me.
I am not a sophisticated person but have had an opportunity to review the proposed legislation. Although I do not understand all of it, there are some things that I do understand and which I think need to be changed. Those are as follows.
I see no reason whatsoever why an innocent accident victim should only get 85% of their net income. I see no definition of net income. If I were involved in my accident and this proposed legislation were in effect, what does 85% of net income mean? Does it mean I would only get 85% of my $15.75 an hour, 85% of my $29 an hour I was going to receive or 85% of the money I might have earned in the future, which would have been more than $29 an hour? Why 85%? Why should I, as an innocent accident victim, have to pay 15% when I did nothing wrong? Although I would have earned a good wage at $29 per hour, there are many people who are involved in accidents who would find it financially devastating to lose 15% of their wage. Why make the innocent accident victim pay? Although I think that it is a step in the right direction to allow people to sue for their lost wages, why 85% of the net income?
I do not understand why there should be a $15,000 deductible. It is like punishing me for being involved in an accident which is not my fault and which I did not ask to be involved in. I understand why there are deductibles on property damage when somebody causes damage to their own car, but if somebody caused damage to my car, I would not be responsible for that deductible, so why should I be responsible for a deductible on my injuries when I did not cause them? If there has to be a deductible, it should be certainly less than $15,000.
I applaud the government for putting in a provision that I could sue for 100% of my medical expenses and care expenses. Under the present law I have no such right.
Please do not make the innocent accident victims of the future become victims of the insurance system like I am. This government has the opportunity to make things fair, and fairness requires that innocent accident victims be fully compensated for their losses. Thank you.
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Mr Kormos: Thank you. I spoke with Mr Vanveen quickly outside. Bear with me. I'll top it up with a question just to keep the Chair --
The Chair: Under control?
Mr Kormos: -- complacent and feeling that he's still in control.
Mr Vanveen, in my view we've had far too little consumer victim participation. That's just the way it's been -- it's only been two weeks -- but here you are today. Let me take advantage, yes, of your appearing here and your presentation, because we've heard from advocates of pure no-fault and high-emphasis no-fault who have talked about the nasty lawyers -- and I'm inclined to agree, lawyers can be avaricious and expensive -- and about the delays in the court system and litigation.
But here you are, and I appreciate there are some people in my own party and in my own caucus who are advocates, as I am not, of the supremacy of no-fault over tort. They explain, "What about the person who isn't the innocent accident victim?" Here we are, and you presented the scenario you found yourself in, but for four and a half months in terms of your accident you would have been under Bill 68 where -- and I concede this. If one's going to suffer as an innocent victim catastrophic injury as you have, I'd far sooner have it done under Bill 68 than under 164 or under the legislation that's being proposed.
So I say to my committee members, here's Mr Vanveen. Here's the person and others like him that the advocates of tort have been talking about, who have been dismissed on occasion so readily as being special-interest, as lawyers who want to line their own pockets, as people who want to see the maintenance of a court system that can sometimes be unwieldy.
I defy anybody, and I tell you in a non-partisan way, to sit here with Mr Vanveen and explain to him why he, as an innocent victim, should not be entitled to recover the full cost of all of his injuries, why he shouldn't be entitled to be restored to the position he would have been in, why he shouldn't be entitled to be compensated for what he could have been. He's come here with grace that I'm not sure I could muster, explained to you that he's had his future stolen from him, the potential for pursuing his trade, of earning that income and all the things that would come with that. He's had that stolen from him.
While Bill 68, notwithstanding the threshold, acknowledged the level of injury Mr Vanveen has, Bill 164, with its supremacy of no-fault, denies that to him, and this bill denies that to him. We can talk about spreading the premium dollar around, but why should Mr Vanveen be denied full compensation so that guilty or at-fault drivers can receive a bigger chunk of the pie?
We've got to establish some priorities here and we've got to accept some very basic principles of justice. Innocent victims should not be the victims of 15%, that is to say 85% of net income, should not be the victims of having their income potential fixed at the point it was when they were injured, should not suffer the indignity of being told that they have to utilize no-fault benefits before they're entitled to access to any other tort.
Why should this young man suffer at the capriciousness of actuarial studies and profit interests? I can't think of any damned good reason and I implore the rest of the committee to reflect on the comments that have been made about tort. Tort is designed to make sure this young man receives justice, and tort has been denied.
Mr Bob Wood: I'd like to ask you to make a choice. What you're really advocating here, and certainly from the victim's point of view you're right, is the pre-1990 system, where you got full compensation. Let me give you an unpleasant choice. It would be helpful at least to me if you were to give some guidance.
If we said to you as a victim, "We'll give you some money for pain and suffering or you can get full compensation for your losses," in other words, you don't get anything for the pain and suffering, which is very real and it's going to be with you permanently -- we understand that. If we said to you, "You've got to choose between getting money for pain and suffering or getting full compensation for the actual expenses and loss of income," which would you choose of the two?
Mr Vanveen: You're telling me I get a choice between one or the other?
Mr Bob Wood: I know you don't want to make the choice and neither would I. I'd like to not have to ask you the question, but we do get down to some of these choices. I just wondered, from your perspective, which of the two would you choose if you had to choose one or the other? In other words, you get partial compensation and money for pain and suffering, or you get nothing for pain and suffering but you get full compensation --
Mr Vanveen: The only way the pain and suffering would be a benefit to me is if it was a very substantial settlement, because then I could make a wage earning off of that settlement. I could invest it and that investment would be able to pay for my home care, would be able to pay for my medical expenses. If the settlement was not made large enough, then I have no other choice but to say I need to be protected for my home care and be protected by my medical expenses. Those would be my priorities.
Mr Bob Wood: I want to see if I've got correctly your answer. I think what you said was, if you had to choose, you would rather forget being compensated for pain and suffering and get full compensation for what you actually have to pay out and the actual wage loss. Did I correctly pick up what you were saying?
Mr Vanveen: Yes.
Mr Bob Wood: Thank you. That's my question.
Ms Castrilli: Thank you very much, Mr Vanveen. I really do appreciate your being here. On behalf of my colleagues, I applaud your courage and your clarity. It's ironic that your accident occurred just four months after the introduction of the new regime. Had you had an accident prior to January 1, 1994, under Bill 68 or OMPP, you in fact would have been able to recover for loss of income through the tort system because it did allow for some limited right to sue. Of course, it also allowed for access to medical and rehabilitation costs, which obviously you have incurred.
I don't have any questions for you. I just want to go on record as saying that you are an inspiration and I wish there were something the system could do to change the very difficult situation that you're in.
The Chair: Thank you very much, Ms Castrilli, for expressing those emotions, which reflect those of the committee as well.
Thank you very much for coming in, Mr Vanveen. We appreciate your presentation.
MIDDLESEX INSURANCE BROKERS ASSOCIATION
The Chair: We now welcome the Middlesex Insurance Brokers Association: Mike Carberry, who's president of the Insurance Brokers Association of Ontario; Bob Carter, who is executive director of the Insurance Brokers Association of Ontario; and Mr Dan Danyluk, with the Middlesex Insurance Brokers Association.
Mr Dan Danyluk: First of all, my name is Dan Danyluk. I'm a territory director for the Middlesex Insurance Brokers Association and a partner in Crawford and Danyluk Insurance Brokers of Delaware, Ontario.
To my right here is Michael W. Carberry, who is the president of the Insurance Brokers Association of Ontario and also a principal in Carberry Davis Insurance Brokers Ltd of Oakville, and to my left is Bob Carter, who is the executive director of the Insurance Brokers Association of Ontario. These gentlemen are here to assist me in the event that you do have questions, not only about this presentation but about the presentation made on behalf of the Insurance Brokers Association on February 20.
Some general comments, I guess, on the proposed reform. The Middlesex affiliate of the Insurance Brokers Association of Ontario represents 19 independent insurance brokerages, 73 licensed brokers and their support staff. Since the introduction of Bill 164, our primary concern has been the affordability, availability and understandability of an insurance product that provides generous benefits regardless of fault.
Regarding affordability, since 1993, we have seen double-digit annual premium increases, primarily, we are told, because of the generous benefits payable under Bill 164. In addition, we have heard of a significant increase in fraud created by a system lacking in adequate checks and balances while supporting a concept of entitlement rather than indemnity.
We note with interest the Ontario Medical Association's investigation into various practitioners recommending additional treatment through owned or affiliated facilities. We commend them for taking this step to assist in controlling accident costs.
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We support your initiative to discourage fraud and control costs. However, we do not believe that premium increases of 7% to 8% a year, as anticipated by the Insurance Bureau of Canada, while substantially less than their projections on Bill 164, constitute stable pricing. The insurance companies set pricing and we, the independent brokers, suffer with the consumer when price increases are unreasonable. The costs of automobile repair, generous medical benefits and increased fraud have a strong impact on the cost of claims. However, we believe that insurance brokers, insurance companies and the Ontario Insurance Commission and all others involved must work together to control costs.
We must ensure that automobile repairs are completed at the lowest possible cost, without deductible rebates to the consumer; that insurance companies be permitted to manage the claims process more strongly to control not only physical damage claims but also medical and accident benefits; and that legislation provide substantial fines for those who drive without insurance so that they do not look upon their fines as cheap insurance. All stakeholders should be charged with the responsibility to eliminate fraud.
The vast majority of Ontario drivers who pay their insurance premiums regularly and act responsibly tell us that they are tired of paying for drivers who abuse the system. We must find a way to stabilize rates while providing adequate coverage and proper service to Ontario drivers.
Regarding availability, over the past three years we have watched insurance companies come up with ways to write less and less auto insurance, in spite of the "all comers rule." While some companies quietly ask brokers to send their business elsewhere, others found a unique way to reduce their automobile writings: by cancelling brokers' contracts.
When brokers are cancelled, severe dislocation occurs. Any consumer who has had any kind of incident, even though they may have been insured with the same company for over 20 years, will lose any preferred rating or forgiveness features when moved to a new carrier. For example, most companies allow one accident as a forgiveness feature while maintaining a preferred rating. If a broker is forced to place the business with a new company, higher zero rates would apply.
Of course, no business wants to continue supplying a product that consistently provides a negative return, but automobile insurance is compulsory and the insurance industry as a whole must work with government to deliver the product to Ontarians. We have learned from a number of insurers that your proposed program provides an outline under which they would be willing to write automobile insurance. This attitude of wanting to do business must be encouraged so that consumers actually do have a choice of product, insurance broker and insurance company.
In terms of understandability, the complexity of the current accident benefits regulations under Bill 164 makes it extremely difficult for all of us involved in the industry to adequately explain consumers' rights and responsibilities. This, of course, did nothing for consumer confidence. Your proposed legislation reduces the regulations by about a third, I think. However, we would like to see it simplified even further so that the automobile insurance product can be more easily understood by both the consumer and the distributor.
The Middlesex Insurance Brokers Association strongly supports our provincial association and your ministry's efforts to develop road safety initiatives that will lower accident costs by reducing accident frequency and severity.
Discrimination: We strongly support the ability of individual brokers to obtain sufficient information on collateral benefits, income and occupation so that underwriting rules for automobile policies are the same for individual subscribers as they are for those who subscribe to group plans. The individual consumer must have the same ability to obtain competitive automobile insurance.
In conclusion, the industry must provide a product that is affordable, available and understandable. The consumer is tired of double digit increases and will not accept a 7% to 8% per annum increase. The product must be available; therefore a business climate must be created where insurance companies want to write automobile insurance. The product must be simplified so that everyone involved can understand their rights and obligations under the contract.
We support your initiative. We suggest that further modifications be made, if necessary, to control costs while providing adequate basic coverage to Ontario's consumers.
We, as brokers, are more than prepared to offer any and all additional coverages tailored to the individual consumer's needs. We are committed to working with you towards achieving that goal of returning stability to the insurance marketplace.
Thank you for allowing us to speak to you today. We're more than willing to answer any questions you may have.
Mr Wettlaufer: Thank you, gentlemen, for your submission today. You mention on page 3, "...we believe that insurance brokers, insurance companies and the Ontario Insurance Commission and all others involved must work together to control costs." We heard over the last two weeks about a possible adversarial situation which has been allowed to develop between claimant and insurer. Is there an adversarial relationship building up between insurer and insurance broker? Has it built up?
Mr Michael Carberry: "The kettle is warming," I think would be the way to describe it. The insurance companies are looking at how they're going to control costs and all the different factors in the development process, and brokers are just part of that equation. I think they are seriously looking at the commissioning structure. We have, over the last 25 or 30 years, seen our portion of the pot reduced and yet we've worked hard to maintain and do our job well as the brokers, as the purveyor of the product. I don't know whether insurance companies have reduced their factor quite as much as we have. I think probably 25 or 30 years ago it was a 20% commission on auto and we're down at 12.5% to 10% with Facility. We're down to $25 in some cases as our cost of developing the product. But to go back, yes, I think the pot is warming on that issue.
Mr Wettlaufer: Two weeks ago I asked the Insurance Bureau of Canada if it had reduced its administration costs over the last 10 or 15 or 20 years and I have not yet had a reply. Could you give me an indication of what you believe their reduction in administration costs have been over that period?
Mr Robert Carter: I'll try that one. I don't think we can speak for them, but I can recall, back in the early 1980s, expense factors of insurance companies were noted as being in the 40% range. I think they're down into the 30s now and there are some companies in the 20s. I think, to make the product affordable, as an industry we have to get the cost of the product into the low 20s, or around 20%.
Mrs Margaret Marland (Mississauga South): Some of the concerns that have been brought to us certainly involve the way claims are handled. We've had frankly some absolutely brutal examples: People requiring six to eight assessment in a year; a woman in a wheelchair in Sault Ste Marie who had to get on an air ambulance several times in the last eight months because somebody didn't believe the last assessment or the last evaluation. I'm wondering if you have any advice to us in terms of the role that government can play in dealing with the way investigations of claims take place, who's doing it, who's involved, so that the victims don't become victims again and again and again. They're just appallingly disgusting stories, in my personal opinion, of what these people are subjected to.
Mr Carter: I think one of the things that happened in 1990 when we went from a tort system to a no-fault system in the industry -- and I don't say all, because some of the companies have done a very good job -- but some of them did not change their stripes. The comment I heard at the time was that they should have taken a segment of their claims adjusters and sent them to school so that they would handle claims the same way your group insurance provider from your employer handles claims. You're on the same side, you're trying to find the best way to get a person healed and back to work or compensated.
I think that process has been very slow as far as changing from an adversarial role by some companies to one of assistance to the consumer to accomplish their needs is concerned. As an industry and as a government, I think we have to work very, very hard to get that change in attitude accomplished as quickly as possible.
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Mr Crozier: Thank you, gentlemen. We're down to the last day of our hearings, and in fact, as I look over the list, I think you're the last representative anyway of the insurance industry. You've given some very generic comments, but we haven't yet in two weeks I think heard some of those hard solutions we need to the problem that we have.
I need your opinion on this. You've said without any question your primary concern as brokers is affordability, availability and understandability. There may be others, but one that isn't in that list is fairness.
We heard a young man this morning. As Ms Marland just said, we've heard from people who have had difficulty with insurance companies, albeit I think there must be many, many more out there who haven't appeared before us who we could reasonably assume have had good relationships.
We want to do what's right but we want to keep the price down. Do you think that's possible?
Mr Carberry: I think the restoration of tort would bring some fairness back into it because you don't have insurance companies that can basically hide behind no-fault provisions and just look at that. Everyone seems to think that the courts and lawyers are bogeymen and I don't necessarily think all of them are. There are some.
Mr Crozier: We know one or two.
Mr Carberry: As Mr Kormos has said, there are a few, but for the most part I think the ability of someone like Mr Vanveen to go to the court for a fair response is a prudent course of action. I think this bill does move towards that. You'll never solve all the problems and all the situations, and if you try and reach that level, you'll never get anywhere. But I think you have to and our view has always been to try and do the best you can for everybody. We as brokers have always tried that, and I think the tort will move towards that.
Mr Phillips: Just to try and follow up a little bit on that, I'm not sure I heard the numbers right, but my feeling is the industry is around a $5-billion industry. I gather your fees are roughly $500 million of that, I assume. I gather the insurance industry -- I'm not sure I heard Bob right on that, but I thought he said 20% of it is the insurance industry, which I gather is roughly $1 billion of overhead.
Mr Carter: For the companies?
Mr Phillips: Yes.
Mr Carter: I think it is about now. We are about 10% to 12% and the companies themselves and their costs take it up to over 30%.
Mr Phillips: Then if the lawyers are involved, that's $400 million. I'm just saying, in terms of the benefits to the people who pay the premiums, we now have got a $2-billion overhead and a $3-billion benefit to the people who are paying the premiums. Are those numbers right and is that a fair way of looking at it?
Mr Carberry: There's a delivery cost of any product. It doesn't matter what it is. I don't think saying is 10% from a broker point of view too much or too little -- we are running businesses and have costs in operating our businesses, the same as insurance companies do.
Mr Phillips: Of course.
Mr Carberry: I really don't know. I don't think my colleagues could say whether 40% as a gross amount in the delivery process is far too high.
Mr Carter: I think what we're working towards as an industry now through various committees is to get the combined costs down to the low 20s and 20% range, and that's been a struggle. With the changes in automation, it looks like it's going to be easier. We have to eliminate duplication. There's a whole bunch of things the industry has to do.
Mr Phillips: Personally, I put the $400-million lawyer fees in it, because the consumer's got to buy $400 million worth of legal services to obtain their benefits, and, Bob, your view is you've somehow got to get the total down to 30%.
Mr Carter: Yes, but I think if the system is simplified -- and that's part of our presentation; it has to be simpler -- I don't think the consumer will need that degree of legal advice in order to collect their basic benefits. Legal advice would only come in in more serious situations. What we're finding under the current bill is people are seeking legal advice even at the bare bones bottom end because it's hard to determine what they deserve and what they should be receiving. It's just too complex.
Mr Kormos: In reference to the relationship, or lack of it, between insurers, the private corporate insurance industry, and brokers, you talk about the pot warming up. Down where I come from, down in Niagara region, Golden Horseshoe, I think the pot's boiling over. I have been getting calls from brokers throughout that part of Ontario. Some are reduced to being able to represent only one insurance company, and they of course are deathly afraid that anybody in the community is going to find out about it, because if the consumer knew they only had one company, the myth of shopping for the best rate would be blown all to hell. How can you when you've only got one company?
I've had calls from brokers who have asked me to advocate on behalf of claimants, because they don't want to be seen as advocating for the insured because they don't want to be put into a bad light with the insurance company, to the point -- and they don't like having to do it, but they're betraying their customer and not fulfilling the traditional advocacy role that most, if not all, brokers did in terms of difficulty about getting satisfaction and settlement of claims. They've been asking me, and I'm sure other MPPs and lawyers and so on, to do it for them, because they don't want to be cancelled by that insurer.
I appreciate that this committee wasn't specifically struck to focus on that. I know Mr Sampson is familiar with the problem, and all of us are anxiously waiting to see whether there's going to be resolution coming from the government or whether the industry will resolve it itself.
The whole business of uninsured drivers -- and some Metro Toronto data, I think, that were contained in some of the material talked about, at least in cases that were investigated, 20%. I'm not about to dispute that. It's going to be hard to track, but not impossible to track.
The sad reality is, though, it's not just scofflaws driving without insurance. One can live with that -- not live with it, but one can understand that. I've got a feeling it's working people, it's seniors, it's a whole lot of people who otherwise wouldn't be breaking the law, because they perceive and their budgets aren't enough to accommodate increasingly higher premiums. IBC, of course, talks about 7.6%. Zurich, the second-largest insurer in Ontario, automobile, talks about twice, three times that in terms of premium increases with this package.
The whole phenomenon of pink slips, of course, because every tavern, and on occasion -- you know, this is investigative work as an MPP -- I have to visit taverns in small towns across Ontario, and there hasn't been a tavern, or scarcely a tavern, I've been in that hasn't had blank pink slips for sale, which of course is what scofflaws use to protect themselves when they're stopped by the police and they ask to see the pink slip. Obviously, these pink slips show up all over the place. There have been a whole lot of prosecutions under the Criminal Code for uttering a forged document, which is the offence.
But the question I asked the other day is, where the heck do these pink slips come from? Because nobody's suggesting that they're counterfeit pink slips. They're bona fide pink slips that are being forged. Well, it was answered. They come through brokers' offices.
Why isn't there a better regulation and control, be it numbering, be it identification of the source of a pink slip in terms of which broker's office it comes from so that maybe some brokers can be prosecuted, assuming they're not victims of mere theft or break-and-enters, for these pink slips showing up in the underground?
Mr Carter: I think that was an awfully long question.
Mr Kormos: It sure was, sir.
Mr Carter: But you've been doing that all day. Our experience has been the pink slips in most cases have been stolen. I think there was one where we found out it was the cleaning people at night.
Having said that, we're working with the government and the road safety, and believe it or not, we started this under your government, where we're going to look --
Mr Kormos: I don't disbelieve you.
Mr Carter: There are one or two things that happened that weren't bad.
Mr Kormos: Bill 40, the employment equity, pay equity.
The Chair: Nice one.
Mr Klees: He's provoked me now, Chair.
Mr Carter: We are working with the current ministry on getting the computer synchronized between the industry and the police so this can be checked on line in police cars, and we're also working at a strip or something on the pink slip so that it can be checked and identified very quickly, but it's a long process to get --
Mr Kormos: A system where there's no insurance, no validation sticker in the insurance year instead of when you commence insurance, coordinated with your sticker year, might be one way of approaching that. That's why we should be travelling, or at least making phone calls to BC to find out how a successful public auto insurance system works, because that's how it works there.
The Chair: Are you suggesting the committee travel to BC, Mr Kormos?
Mr Kormos: No, but I'll make the phone calls, and I'm prepared to fly out there at my expense. Aren't you?
Mr Carter: I don't think we want to get into a debate on how successful or unsuccessful BC has been. It has been up and down far more than Ontario has.
Mr Kormos: I've already challenged Mr Sampson to a public debate anywhere, even here in the city of London, on the issue of public auto insurance.
Mr Sampson: Why don't you debate the other candidates from the NDP party?
Mr Kormos: I'll be doing that in my own right, Rob.
Mr Sampson: Well, I haven't heard any debate and I haven't heard you challenge them yet.
Mr Kormos: I'm expecting to win that one, as well as the one with you, Rob.
Mr Sampson: I don't know, Peter.
The Chair: I'd like to thank the Middlesex Insurance Brokers Association for their presentation today. We appreciate your input. Thank you very much.
There being no further business to bring to the committee prior to lunch, we will recess until 1:20. I would ask the members to be back promptly.
The committee recessed from 1211 to 1320.
KPMG PEAT MARWICK THORNE
The Chair: We welcome KPMG Peat Marwick Thorne. Mr Hoare, thank you very much for joining us. We have 20 minutes together. If you'd like to make a presentation, we can fill any remaining time with questions. Please proceed.
Mr Jim Hoare: Thank you. I appreciate the opportunity to come to speak to you today. My name is Jim Hoare. I'm a partner at Peat Marwick Thorne, responsible for the forensic and investigative accounting practice here in London. One of my responsibilities is to look after calculations of damages in motor vehicle accidents and other claims, and I've prepared in excess of 300 calculations under the former tort system, Bill 68 and Bill 164.
I want to touch briefly on probably six areas today. The first is a fairly minor area. Subsection 70(2) of the draft regulations talks about insurers and insureds having access to income tax assessments. I believe that should be changed; it should be the personal income tax returns and corporate income tax returns with respect to self-employed individuals. The income tax assessments simply don't provide enough information to accurately calculate any losses. Secondly with respect to that issue, the regulations talk about the insured providing audited financial statements. In my experience, in excess of 80% to 90% of self-employed individuals in this province don't have audited financial statements. There's no requirement for audited financial statements, and I think that's simply a little bit restrictive. I think the word "audited" should just be removed.
Secondly, I want to talk a little bit about the concept of gross and net income. In the draft legislation, the way it is now, there is a definition of "net income," which I appreciate. As part of the definition of "net income," a term "gross income from employment" is referred to but there is no definition of "gross income from employment." I think there should be some additional information to define "gross income" to include such things as benefits, to include such things as pensions, but with respect to self-employed individuals it should probably exclude such things as interest income on shareholders' loans. So I think there's some clarification that's required.
Also with respect to the distinction between gross and net income, in theory I agree with the concept of calculating damages on a net income basis. There are significant practical problems in a calculation of net income. To be fair to an innocent victim of a motor vehicle accident, if you're going to calculate benefits on a net income basis, you have to take into consideration a gross-up factor for tax purposes to put that person in the same position he otherwise would have been. A gross-up for income tax purposes requires three or four key assumptions, including an assumption with respect to interest rates, inflation and income tax, and when you're dealing with a fairly young claimant those assumptions can be very speculative, given that the term of the calculation could be over as long as 40 years. If we looked at it on a gross basis, those assumptions would not have to be made, so the calculation would be simplified. To do it on a net income basis in theory makes some sense, but I don't believe that in the long run you would have a fairer calculation or a calculation that would necessarily reduce the claims.
With respect to the 85% of net income, I don't see any economic justification for a calculation on 85% of it. All other calculations of damages that I'm involved in are done on 100% recovery of economic losses. I just don't see any justification with respect to that calculation.
With respect to future income loss, I did not see much reference in the draft legislation with respect to guidance in calculating future income losses for students or for dependants of deceased claimants. In my experience in those types of situations, certain problems arise that are different than normal employed individuals, and I believe that in those two instances there should be some reference in the legislation to clarify the calculations of those future income losses so those people recover their full economic loss.
Indexation of benefits was brought in under Bill 164, and I agree that there should be some indexation of benefits. I believe there could be a cost saving in that this indexation could be done on a basis of optional coverage. I see that as a similar situation to property damage insurance policies where coverage is offered on an actual cash basis or on a replacement cost basis, and it seems to me that costs could be saved somewhat by making that an option as opposed to providing it to each of the claimants.
Finally, in the section with respect to structured settlements, it appears to me that the legislation is going towards promoting structured settlements, which in some cases I believe is a good thing. Structured settlements for certain claimants make a lot of sense, but I don't think it should be so restrictive as to try to force in structured settlements, because in many cases a structured settlement is not the right course of action for all claimants.
I'd be pleased to answer any questions.
Mr Crozier: Good afternoon, and thank you for your presentation. We haven't discussed a lot about structured settlements over the past two weeks of these hearings, yet they've been brought up on occasion. Could you elaborate for the committee those instances, or perhaps give examples of where you think structured settlements would be appropriate, and then perhaps of those where they are not?
Mr Hoare: Certainly a structured settlement is very appropriate for claimants who do not have a lot of sophistication from a financial standpoint, may not be able to manage their money properly, and a structure simply forces them into a periodic payment which presumably puts them back in the position where they otherwise would have been. But for people who are financially responsible, who have some sophistication in dealing with their financial matters, a structured settlement is somewhat restrictive and doesn't provide them enough leeway to financially control their future.
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Mr Crozier: So this would be something where perhaps the court, with either evidence or advice, may then be able to make a decision that would be appropriate to what you've suggested.
Mr Hoare: Yes.
Mr Phillips: One of your recommendations is that there be an opportunity to purchase options, and one of your suggestions was on indexing benefits. This is one of the challenges for the committee: Just what should be the fundamental package, and then what should be the optional package. Today we've had conflicting recommendations. I think from the start the mutual farm group suggested very few options because they felt that left them vulnerable. You're suggesting options on indexing. You think that not indexing benefits and having that as an option is more important; you would not suggest having as an option 100% of your net income and leaving it at 85%?
Mr Hoare: I would suggest that's possible for the no-fault benefit portion. I think that would be reasonable, because I see that 85% as a type of co-insurance. If I want to purchase 100% benefit, then I should be able to do that at a cost to me. I don't think, from recovery of innocent motor vehicle accidents, that should be an option.
Mr Phillips: Okay, but the indexing should be an option. Are there any other things that are currently mandated that you think should be optional or vice versa?
Mr Hoare: No, I agree with the draft legislation in terms of the ability to purchase additional no-fault benefits. That makes sense to me.
Mr Phillips: In your experience, and I gather you periodically deal with individuals as well as companies, when they've had an accident and are now trying to find out what benefits they're entitled to, do you find most individuals have a good idea of what was in their policy?
Mr Hoare: No, they don't.
Mr Phillips: What per cent would know what was in their policy?
Mr Hoare: Oh, it's hard to say. I would say probably less than 20% would know specifically what was in their policy. I think that's a different issue. Certainly, education with respect to what's in a policy is a big issue. I think people see this as simply a cost issue, where it's really a fairness issue and a cost issue.
Mr Phillips: I think that's one of the things we'll wrestle with, Mr Chair, just what is the basic package, because I suspect a lot of people are like perhaps I am, which is just, "I need insurance; please get it for me." I appreciate your experience of currently relatively few. You believe that's changeable, though, I gather from your comments.
Mr Hoare: Yes, I think it is.
Mr Kormos: You've obviously canvassed and you're obviously familiar with the two earlier bills that purported to constitute reform, Bill 164 and before that Bill 68. You've noted the current proposal for no-fault benefits as well as the tort recovery. It's interesting that the tort recovery is limited to the same amount, in terms of economic loss, 85% of net, as is the base no-fault benefit, because of course Bill 164 changed the no-fault benefits to 90% of net, which I trust in many cases amounted to less than 80% of gross.
Now, 85% of net is even lower than the 90% of net that was contained in Bill 164. But from what you're saying, my impression is, and there's this competition almost between no-fault and tort, that you would perceive that the base coverage ought to be tort and then it's the no-fault benefits that could be topped up or added on to by the particular insurer. Is that fair? I realize that's a pretty crude analysis.
Mr Hoare: As a consumer, I want to be in a position to protect myself with insurance if I am an at-fault driver, so that I can protect myself by buying more coverage. But as somebody who could be an innocent victim, I want to be assured that I can recover 100% of my damages. I'm willing to co-insure for the risk with respect to myself being an at-fault driver.
Mr Kormos: Quite right. We were talking about this earlier today. So we're talking about what the Legislature and the legislation ought to require. At the very base it ought to require, in terms of mandatory coverage, tort coverage so that you, as an innocent victim, can be assured that you're going to be able to collect in the event that you're injured by a wrongdoer. When it comes to the no-fault provisions, protecting yourself against yourself, you regard that as a very individual decision, based on the amount of money you want to pay and the amount of need that you perceive yourself as having.
Mr Hoare: Yes, and the risk with respect to myself being an at-fault driver.
Mr Kormos: The risk that you perceive in terms of assessing yourself.
Mr Hoare: Yes.
Mr Kormos: We saw the caps go from $600 under Bill 68 to $1,000 under 164 in terms of no-fault benefits recovery, and down to $400 as is proposed here. There was a lot of debate. In Bill 68 the government proposed initially $450, and then during the course of the committee it was increased to $600. The $1,000 was attacked by some as the lower-income driver subsidizing the more prosperous ones, but at the same time, having said that, insurance is all about people subsidizing each other, isn't it?
Mr Hoare: Yes.
Mr Kormos: Good drivers subsidize bad drivers; lower-income people subsidize higher-income people. The other counterargument was that the $1,000 cap in many respects was illusory because very few people would reach that cap in terms of who made that kind of income in our society and the vast majority of people who made incomes where they would reach the cap would tend to have alternative sources of income replacement. Is that a fair analysis as well, as a generalization?
Mr Hoare: Yes, as a generalization. I guess I didn't see the $1,000 in that light; I saw it as just a simple ability to abuse that system.
The Chair: Thank you very much, Mr Kormos.
Mr Kormos: Now the proposal of $400, does that ring true as an appropriate level of cap? Thank you, Chair.
The Chair: Mr Kormos is getting used to me cutting him off, and I feel badly every time I do it. I'm sorry, Peter.
Mr Kormos: He apologizes both during the hearings and afterwards, and he calls me early in the morning to apologize. I'm grateful for your kindness, Chair.
Mrs Marland: Actually, we don't think you cut him off soon enough, Mr Chair. Sometimes it's quite interesting listening to Mr Kormos, because -- just excuse me a moment, Mr Hoare -- if we listen long enough to the representative for the third party, as we have on and off for the last two weeks when we've had the privilege of you being here, and you and I have been together for 11 years --
Mr Kormos: The last eight years, Mrs Marland.
Mrs Marland: It's always an education, because sooner or later you've talked around the whole 360 degrees of the debate and in favour of all of it on the way around. It's very exciting.
I think it's interesting when we look at the percentage of people who understand their insurance policies, because I would respectfully suggest it's probably about the same percentage of people as understand their mortgage agreements. When we are into that kind of contractual agreement with other parties, we are dependent on the person in between, who in this case would be the broker, and we sometimes have to assume that when we're dealing with something we're not specialists in, we're dependent on that middle party. In your own profession it's the same kind of thing.
When you talked about being in favour of the ability to purchase additional benefits, that is something I agree with. I agree with it very strongly as a matter of fact, as a democratic right in anything, and I sort of anticipated that Mr Kormos might take umbrage with that comment. But I felt that it's rather similar to whether the person who is buying automobile insurance in the first place is buying it on a brand-new Ferrari or buying it on a 12-year-old Chev. We make these choices based on our own circumstances and desires. In making those decisions, however, some people find there are ways to get around the whole system.
The concern I have from listening to examples in the last two weeks is the fact that there are still loopholes to any either existing legislation or the draft legislation that's before this committee at this time. I'm wondering if you have any further suggestions, in addition to your presentation today, to deal with people who frankly have cost us all money, speaking on behalf of the members for Mississauga South who are fed up with what it costs them to insure against motor vehicle accidents.
The things that affect all rates are multidimensional, but one of the areas that really annoys me a lot is the people who sign up for their insurance, then go and buy their car or take ownership of an old car. They meet the requirements of the licensing because they have the insurance, and then the next day they go back and cancel their insurance. I'm wondering, from your professional perspective, if there's any solution to that problem that you would like to suggest to us.
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Mr Hoare: I think the draft legislation does address some of those issues with respect to the level of no-fault benefits at this point in time. As I said before, with the level set at $1,000, that just opened up the floodgates to abuse. With a cap at $400, obviously it's not as attractive to try to take a run at the system, if you will.
I think bringing back the tort claims is also a very good control, although some people may not agree with me. But in terms of the situations I'm involved in, once you get involved in a tort situation, there is this check and balance. It's a natural check and balance which tends to weed out the very frivolous claims.
The Chair: Thank you very much, Mr Hoare. We'd like to thank Peat Marwick Thorne for their presentation before the committee today.
GAIL DELANEY
The Chair: We now welcome Dr Gail Delaney from Parkwood Hospital. Welcome to the committee. If you'd like to make a presentation to the committee, we could fill any remaining time with questions.
Dr Gail Delaney: I noticed that.
I'm a specialist in physical medicine and rehabilitation, also known as a physiatrist, and I've been working in the field with spinal cord and brain injury patients for a number of years. The patients that we see at Parkwood Hospital and our two main rehab programs are spinal cord and brain injury. They are two of our big programs, and we have some concerns that the expected legislation could have a negative impact on them.
I've prepared a document and I've got three appendices at the end that may help the committee members with some of the lingo that we use. The first appendix refers to the spinal cord injury group, the second to brain injury, and the third, just the definitions of disability, handicap and impairment that are World Health Organization definitions and the ones that we follow.
There are a lot of things in the legislation that cause concern. I thought it would be most fruitful if we just zeroed in on a couple that we were most concerned about.
The first one is the definition of "catastrophic." I understand you've heard lots about the brain injury side of it and I won't belabour that, but I would like to point out a few things. The big thing we're concerned about is that the definition is left too ill-defined and that really it'll be just too ambiguous and subject to negative interpretation on behalf of our patients. When someone says something like "quadriplegia" or "paraplegia," it may seem on the surface that that should be obvious, that the person would in fact have a catastrophic impairment. But we've had some experience with different types of insurers, shall we say, where that's not always so clear-cut.
Even within medical circles, one could interpret the term "paraplegia" as referring to a complete paralysis, and in that kind of a situation a person who really couldn't walk and was confined to a wheelchair might have some weak leg movements, but not be considered paraplegic if that definition was followed. Paraparesis and paraplegia in medical circles tend to be used somewhat interchangeably. We also use terms like "complete paraplegia" and "incomplete paraplegia," and we define those according to how much movement's left or how much sensation is spared. So we're really concerned that this is considered when the definition of catastrophic is being looked at.
I thought it might useful if we just took an example that I think would illustrate the point. I've assumed that there's a 34-year-old insurance adjuster or politician, Mr Kelly, and he's driving home from work one day and going the speed limit, not breaking any laws, hits black ice and goes out of control -- by the way, this isn't a real person, but this sort of thing happens to our patients all the time -- and he collides with another vehicle in an intersection. He's properly insured and he qualifies for the income replacement benefit.
At the scene, he's paralysed from the shoulders down. He arrives at the trauma centre and it is determined he has broken his neck. He has a C5-6 fracture dislocation which is in the neck. He can shrug his shoulders. He doesn't have any feeling in his legs or his body, he can do a few things with his elbows and, other than that, has no use of his hands. By two days after injury, he can wiggle the big toe of one foot. By definition, in medical circles, he now has an incomplete quadriplegia. He does not have complete quadriplegia, even though he can't scratch his nose, feed himself or do any of those kinds of activities.
It would be typical for a patient like that to spend about three weeks in and out of intensive care, get a tracheostomy tube, come to our rehab program and spend four or six months in a hospital. It may take him years to recover. It wouldn't be unusual for a patient like that to be getting therapy for many years, never regaining full control.
Where does the definition fit in this kind of situation? When would the determination be that it's a catastrophic injury? Would it be at the scene? Would it be a month later? Would it be two years later? I think that's a really critical point in terms of the needs being met for these kinds of patients.
Another example of this would be the brain-injured patient I once treated with a left permanent hemiplegia. By any medical definition, he had hemiplegia. He had no use of one arm, minimal use of one leg, used a brace, a quadripod cane, kind of dragged his foot. If you picture it, he looked like somebody walking with a very severe stroke. That's what he looked like.
He had an accidental death and dismemberment policy which was worded very similarly to the way this definition is, and it said that he would qualify if he lost the use of both arm and leg. The insurer decided that, although he had absolutely no use of his arm and he had very poor use of his leg, since he could move his leg a little, he did not meet the threshold and didn't qualify.
The other point would be with brain injury, regarding the Glasgow coma scale and how that's used. The way it's written now it excludes many moderately severely injured patients. I'm not going to elaborate because I know you've gotten into that quite a bit already, and I think the appendices will help clarify where we see that would go.
In terms of this first point, we had three recommendations that I discussed with the other physicians at our place and some of the other staff.
First, "paraplegic" and "quadriplegic" could be defined according to commonly held standards in medical circles, also used by the Olympic association and so on, where we look at impairment codes. They're coded A, B, C, D, E, and that's explained in the appendix. We would say that if you look at what that level is about a month post-injury, you're going to capture almost all the people with very severe impairments who are going to have long-lasting problems.
Second, we suggest that "loss of use of arm or leg" be interpreted to be any substantial use or most use rather than requiring complete loss in order to qualify.
Third, in terms of brain injury, we suggest looking at moderate and severe brain injury, not just severe, as the definition currently does. Again, that's explained in the appendix and in the recommendation on page 4.
The second point I'd like to make is about what we perceive as abuse of services. We recognize it's not good for the patient or the insurer if the patient is prescribed weeks, months or years of unnecessary, expensive treatment, and we're not by any means proposing that that be done. But there are more for-profit organizations springing up in Ontario and there doesn't seem to be any clear accountability whatsoever.
We've certainly had patients who have used up their moneys and they get dropped off the cliff, then we get them over at our hospital saying: "Gee, our benefits are all used up but we had all these therapies. I'm not sure exactly what they were supposed to do for me but I still have a lot of problems, and now I don't have any money left."
There's just no accountability. The self-referral by one member of a for-profit organization back to other members in that same organization should be seen as a potential conflict of interest, and it doesn't appear at this time to be in any way regulated. If an assessment's done by someone at a private clinic and they determine a person needs certain types of treatment and they just happen to be available at the same private clinic for a large profit, we see that as not necessarily helpful at all to the patient.
We think if the assessment's done and no non-profit service providers are available to provide the service, the insurer can facilitate finding a suitable provider or other agencies, rehab counsellors and so on, who don't have a direct vested interest in a particular organization. It doesn't benefit the patient for a large number of professionals to be involved in providing expensive services if they're not helping achieve rehabilitation goals needed for the patient. That would apply to catastrophic and non-catastrophic injuries.
We'd like to see something in the regulations that would address this issue of self-referral, the abuse of this privilege and the conflict of interest that's obvious to us but seems to be not addressed at the present time.
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Mr Kormos: Thank you kindly. You're right, this has been addressed any number of times, never twice in obviously the same way.
I take a look at the chart in one of the appendices that talks about the length of time prior to re-employment, and rather than a bell curve it's an inverse bell curve, if you will. That is to say, it appears from that chart that people who suffer brain injury are either capable of returning to work in a short time, or in a very long time or not at all.
Dr Delaney: That's exactly what we see.
Mr Kormos: I appreciate your comments on the two-tiered system in terms of rehab, and I appreciate your attempts to clean up a somewhat arbitrary but at the very least incomplete grading system. But why have two tiers? Either it's going to take $30,000 worth of rehab or $40,000 or $50,000 or $100,000 or $200,000 in any given case, depending upon, I presume, the nature of the injury, the extent of the injury, the type of employment one is returning to. That would have an impact on how much rehab is required, wouldn't it?
Dr Delaney: Absolutely. That's get into the issue of handicap and disability, not just impairment.
Mr Kormos: So why are we creating these two tiers? Why do we rely upon some sort of definition of "catastrophic," no matter how narrow or how broad? Why aren't we requiring insurers to provide rehab for a response to brain injury incurred in the course of motor vehicle accidents?
Dr Delaney: That's an excellent idea. I'm not sure how realistic it is.
Mr Kormos: Why wouldn't it be realistic?
Dr Delaney: I think the issue, as I've seen it, really relates to how much money it's going to cost to do it. There has been abuse in the system by patients as well; I realize that. What I think we're trying to ensure in our presentation is that you don't lose some who are definitely catastrophic injuries and are not being included in this definition, and the lower amount just doesn't fit. We'd like to see more available for people who have deficits, not less.
Mr Kormos: Quite right. But what is the value of this lower cap if it means that there are going to be X number of brain-injured persons who will not be the subjects of an effective rehabilitation program?
Dr Delaney: Not much. What I would rather see is a single definition of disability and handicap base needs that are going to be able to get treatment.
Mr Kormos: Yes, and in your appendix you've made reference to some universal -- among others, the United Nations' definition. Those are strictly starting points, right, and that's your purpose in including those?
Dr Delaney: There's ambiguity. The terms "impairment," "disability" and "handicap" are not used consistently in the insurance industry, and I think we should be following some sort of standard.
Mrs Marland: Thank you very much, Dr Delaney. This is a very concise, easy to follow presentation. After two weeks, we now appreciate the ones that have clarity, and the summation of your recommendations is very straightforward.
You have, in the abuse of services where you are talking about the self-referral issue, hit on an item that has been brought up to the committee a number of times in the last two weeks. It's a concern we have, because in the existing Regulated Health Professions Act we now have the requirement where a referring party has to declare their interest if they're referring a patient to -- in fact, I can give you the wording: "It is a conflict of interest for a member to order a diagnostic or therapeutic service to be performed by a facility in which the member or a member of his or her family has a proprietary interest, unless the fact of the proprietary interest is disclosed to the patient and to the college before the service is performed." The point is, we have that in legislation now.
Dr Delaney: But where's the accountability? It's happening all the time, so it's not working.
Mrs Marland: Exactly. It's not working. How would you, as a person in the profession, suggest we deal with it as a government? Enforcement? Is it the withholding of fees through OHIP? Whatever suggestions you have.
The other issue is the point you made that for-profit organizations seem to have grown like mushrooms around the province. We've heard people, not in so many words -- but certainly it sounds like it's a licence to print money because this is what the system engenders at the moment. One of the suggestions we've had is that these facilities should be accredited. Would you like to comment on both those areas for us, please.
Dr Delaney: In terms of the conflict of interest, it isn't always that the person necessarily even owns the organization. But if you're working for an American company you want to keep your job, so you want to bring in the business. That is one of the types of things that we see. For an example, if a physiotherapist or a physician sees a patient and makes a list of recommendations, I don't think that same assessor should then be able to offer those services at their centre. Someone else, an independent person, a physician or someone in a similar speciality, should look at that and say, "Yes, this is reasonable," or "No, it is not reasonable."
I guess the DAC allows that sort of assessment to be done, but I think it has to be looked at. What can happen is that you get a long list of services. We have people who don't have third-party funding, with injuries from falling down the stairs, and they do just as well as some of these people who get 15 services but they only did it with three or four services, but they were good quality services. Where's the evidence that you need the 15? I don't think it's there. We need to actually look at in a critical way and ensure there's something specific that's going to be required and that they really do need all these nine or 10 people and that the same thing can't be accomplished with a fewer number of people at a cheaper cost to the system.
Mrs Marland: And you think DAC can do the looking at it?
Dr Delaney: I think the DAC can do a lot of it. I don't think the DACs are used perhaps as much as they should be.
As far as your issue about accreditation, I'm not sure it should be that. The regulations, if they were tightened up a little and addressed some of this, it would somewhat take care of itself. I don't think it necessarily has to be accreditation. The people working in these facilities are all certified through their colleges, so they're people who are already certified. I don't think you need to introduce another expensive level of assessment and accreditation. If you make it really clear what your regulations are, these organizations have to comply and there needs to be some random checking that they do comply.
Mr Crozier: There's one left, so please sit down, Dr Delaney, because there's something nice I want to say and I want it on the record. You may not recall, but I called you about a year or so ago to help a constituent. You were very helpful and I appreciated that. So everybody doesn't do everything for profit these days.
I too was concerned about the conflict of interest, and I think that question has been answered. Have you been practising for, say, 10 years or more?
Dr Delaney: I've been practising since 1979.
Mr Crozier: So I can ask you this. Mrs Marland used the term "mushrooming," and that was used by one of our presenters this morning. Do you find that you're treating more -- I'm thinking, in this case, of brain-injury patients, but others -- than you used to for automobile accidents? And do you think it's because of the system that's improved the access of people to your services, or what might be the reason, if that's the case?
Dr Delaney: I haven't practised in brain injury long enough to look at it over the long term. What I can say is that we've looked at our statistics in terms of the number of cases who present and there's a bit of an increase in the number of brain-injury patients, and that's true right across the country -- not just looking at the fact that some people are being diagnosed with mild brain injuries and that's sometimes questionable, but also looking at the moderately and severe brain-injured. A lot of people who died are now surviving with severe brain injuries, so we're getting more survivors, and in that sense we're getting a higher prevalence, we're getting more numbers. I'm not suggesting that I don't think the public system can handle it all. I don't have a problem with that. I just think it needs to be fair and equitable, and right now it isn't.
The Chair: Thank you very much, Dr Delaney. We appreciate your input.
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DAVID KLEIN
The Chair: We move now to Dr David Klein. Welcome to the standing committee.
Dr David Klein: Members of the committee, I would like to begin by saying that most of you have never used your auto insurance; therefore, low rates are of primary importance. However, for those who are in a major car accident and do need their injuries covered, having adequate insurance is a number one priority. What this committee needs to decide is whether the benefits of low insurance outweigh the rights of those injured.
I was in a major motor vehicle accident in December 1994 and was completely innocent. I soon found out that I was not adequately covered and I feel a bit betrayed by the whole system. I was hit by a drunk driver and I've been left with permanent heart injuries which will probably shorten my life. I had a fractured, dislocated hip which will probably lead to a hip replacement somewhere down the road. I had a fractured knee, several fractured ribs and was off work for five months.
I am a physician, and as such am a self-employed individual. The no-fault insurance really does not address self-employed individuals and they're really not treated with any kind of continuity. When a self-employed individual is injured, not only is his own income affected but also the income of the people he employs. A self-employed individual is not only going to lose his income but he may also lose his business. I think for that reason there has to be adequate legislation to protect all innocent accident victims.
The currently proposed legislation has improved from the standpoint that a victim in my situation can now sue for lost income, although why for only 85% of net income I have no idea. Income from my practice was nil during my time off. Because of my injuries, my working ability has diminished significantly compared to my pre-accident abilities and has directly affected my income since returning to work. I will never be able to recoup this income loss. It just does not make any sense that I should take a loss for an accident that I was not at fault for. I realize optional coverage is available for increased income replacement benefits, but why should the innocent victim have to incur extra cost for an accident he did not cause? Even though suing for lost income has been reintroduced, the proposed legislation still, in my judgement, falls short of what I feel is fair legislation.
First of all, if a self-employed individual is injured and the business comes to an abrupt halt, there is often a cash-flow problem. How is net income decided for income loss? Is what the business was generating the same as what it would generate in the future? A business just starting up is vastly different from what it may be five or 10 years down the road. For the many people who are living from paycheque to paycheque, a 15% reduction in after-tax income would most likely affect their ability to pay bills. If they are totally innocent of the accident, in that they did not cause the accident, why should they suffer? They have already lost their health, and according to the proposed legislation, there's a high probability that they will also lose their ability to pay their debts.
Second, catastrophic injuries need to be broadened by definition. How do you define "severe impairment" under the threshold to sue for income loss? In my professional judgement, and you must realize too, what would be a severe physical impairment to one person would not necessarily be that severe to another. For example, losing a finger would not necessarily be a severe impairment to a teacher but would be to a surgeon. You have complicated your legislation with a physical threshold, which, as I illustrated, will be full of inconsistencies, and also a proposed deductible of $15,000. I suggest that by proposing only the deductible, you will still eliminate any trivial claims, but at the same time give all victims the chance to sue if their individual situation warrants it.
Again, what is insurance for? Is it to protect those who are injured? If so, let us be offered legislation that in fact does this. Give the innocent the ability to at least not suffer financially.
It is not fair or wise to allow insurance companies to have a lot of influence on these issues. They are businesses with a bottom-line interest in dollars and cents. Insurance companies are very quick to take our premiums but not so quick to pay benefits. If you let the insurance companies dictate what the innocent victim gets, the innocent victim will certainly be the loser.
I did not realize when the present legislation came into effect in January 1994 how very little I really was covered for. It is mandatory for the government, if they pass a law that gives very little protection to the public, that the public is informed that their insurance rates are down but they are covered for less. I am concerned that this system is going to be costed on the backs of the victims. You can never appreciate this fact unless you are a victim.
One last thing I would like to draw attention to is the attitude of insurance companies towards their clients. I have found in my dealings with them that one of the most stressful and disappointing things was the way I was treated. Despite having major injuries, I worked very hard at recovering, yet I was made to feel guilty during that time.
The insurance company should be expected to come down at the time of the accident to explain the victim's rights and what the individual has the right to benefit from under the no-fault system. They should also be honest with the client concerning what information is deemed necessary for their files versus voluntary. If there are falsehoods with their presentation, they should be held accountable. No doubt you are aware that in my profession, physicians are certainly held accountable for any pertinent information withheld from their patients, unintentionally or not.
Being a physician, I understand the difficulties the insurance companies experience regarding verification of a claim from an automobile accident. I'm not trying to generalize by saying their job is easy or clear-cut, but I do not think, as mentioned earlier, our society can walk on the backs of the victims in order to have cheaper insurance. I appreciate that there are always going to be those who abuse the system, but let's not sacrifice the true victims to get at those who abuse it.
It is surely a crime that not only have I been victimized with my loss of health but also my loss of income. I worked hard for an education that would lend as much security as possible. However, because of an irresponsible driver, my future ability to work at my previous level of commitment will be greatly diminished. As a result of this, along with government and insurance intervention, my family and I have been left with a future financial situation that is in jeopardy and definitely no longer very secure.
Thank you for giving me the opportunity to voice my opinions.
Mr Douglas B. Ford (Etobicoke-Humber): Dr Klein, thank you for coming today. Could you give me the overall scenario? Say Doug Ford goes out and gets in a very serious accident. They take me down to your hospital and you're taking care of me. Could you tell me the whole scenario that goes on from there? I come down, I have some serious injuries, and I end up in your care at the hospital. What carries on from there?
Dr Klein: You're assessed, and depending what injuries you have, you will be treated for those injuries.
Mr Ford: I realize that. I'm saying, how do I get involved with all these other people coming in, the insurance and everybody else?
Dr Klein: The thing I found most frustrating with my experience was that I was injured, my wife had a call from the insurance company the next day, and it wasn't the most pleasant phone call in the world, and all of a sudden they're asking for all this information. I'm a self-employed individual, and I'm not able to prepare it.
Mr Ford: Who calls the insurance company? Yourself or your wife or somebody? I just want to know how it gets started.
Dr Klein: I'm not sure who called the insurance company. I wasn't really in any condition to know how they got involved. I guess my wife must have called. Right from the point I was in the accident, I almost felt like I was guilty of something.
Mr Ford: Don't you have a peer group of doctors that examines you? You're the doctor, you got injured, they examine you, they make recommendations. How do these carry on from there? Where does the insurance company come in saying something different?
Dr Klein: The insurance company then looks for somebody to say something different.
Mr Ford: But you've got your peer group there --
Dr Klein: I've got my peer group. They will look for another physician to say what they think they would like to hear.
Mr Ford: Why do they have that power over a person like you and your associates? I can't understand that, I'm a little confused, and I'm on this committee.
Dr Klein: My understanding is that the insurance company has the right to have a second opinion on whatever your injuries have been.
Mr Ford: Is that one person's opinion? You've got a group of doctors, your peer group there, specialists, everybody, taking care of their friend.
Dr Klein: Right. They've given that opinion and then the insurance company will say, "Look for something to make things seem less clear-cut." At least, in my opinion, that's what's been happening.
Mr Jim Brown: We've heard some presenters who have suggested that we increase the fine for lack of proof of insurance. I'm curious on your views about how we cure the impaired driving problem.
Dr Klein: Not only was guy who hit me drunk, he didn't have any insurance either, or a licence, for that matter. The laws have to get stiffer with drinking and driving. I can't see how we can continue. This fellow has not even come to trial yet. My accident is over 15 months old. A trial date has not even been set yet.
Mr Jim Brown: Is he still driving?
Dr Klein: He didn't have a licence to begin with, so I hope not.
Mr Jim Brown: What do you think about confiscating the vehicle?
Dr Klein: It was his friend's vehicle, and the vehicle wasn't in very good shape afterwards anyways.
The Chair: If we could move to the --
Mr Ford: Just one second. Your peer group, you have five or six specialists there, they're going to give you service and advice, and then this outside person, whoever they are, comes in makes a decision. What do they do, wheel you out somewhere else?
Dr Klein: They'll ask me to go to another area to be assessed by another physician. I guess they look at records and files, at some point far removed from the accident.
Mr Ford: And they have the authority to do that over your group there?
Dr Klein: Yes.
Mr Ford: Thank you. I just wanted to get that information, to get it straight.
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Mr Phillips: Thank you, Dr Klein. It's my understanding that the coverage you now wish you had is available; it's that somehow or other you weren't aware of what you were covered for under your auto plan.
Dr Klein: I had other insurance. Basically, the car insurance hasn't kicked in a whole lot. The problem lies in being self-employed and having the business expenses as well, and the insurance company can come in and look at my business expenses and say, "You really don't need that." I'm still buying things for the business, things that "You don't really need," therefore my income actually keeps on plummeting, because they're saying, "If you didn't buy that, it would mean your income would be that much higher." You get caught in this catch-22 situation.
Mr Phillips: Yes. What I'm trying to get at is, for the committee's help, what is the fundamental package that everybody should be required to cover and what things should be optional, and how do you make sure people know what they are covered for? What I'm taking from your comments is a couple of things. Correct me if I'm wrong here, but one is that after the accident you seemed quite surprised by how little coverage you really had.
Dr Klein: I did look at the act when the car insurance thing came in; they give you one of those little pamphlets. My impression was that if you're really badly injured you'll be covered, and if it's something trivial you're not going to be covered. I thought, "Okay, fine, I can live with that," and I didn't really think too much more about it until I actually looked at the details of, what am I covered for? I didn't realize that loss of income was something I wasn't going to be covered for. Maybe I didn't read it closely enough, but I just looked at it and said, "If I'm badly injured, I'm covered, and if I'm not badly injured, I have to take my lumps and get on with it." That's where the surprise came.
Mr Phillips: I'm just trying to pursue what your recommendation would be for what should be in a basic package that everybody has to have when they are purchasing auto insurance in Ontario and what things should be optional.
Dr Klein: The fellow was talking earlier about allowing you to get 100% coverage. That is something I would like to see. If I could have bought 100% coverage, I would have bought 100% coverage, because I've always had the umbrella policies and all that. Through my own association I had extra disability insurance, so I wasn't too concerned about upping the weekly benefit.
My biggest problem has come with the increased costs of business and running into the problem of having to justify everything I buy for the office. It's difficult enough, as most people in business know, to know what to purchase and what not to purchase and the rest without having somebody looking over your shoulder and saying, "You don't really need that" or "Why did you buy this?" I don't have time to deal with those kinds of issues. I just have to go out and do what I think is reasonable, and if the insurance company doesn't agree with it, I guess I just lose. These are some of the issues I find frustrating from a self-employed person's perspective.
The other thing is that my income fluctuates every month. The insurance company still has no idea what to do with me. They can't peg me into any spot, because my income might be X number of dollars one month, twice that the next month, half that the next month. They are having difficulty knowing what to do with that.
The other thing is, when you have outside coverage -- like you're saying, you can be covered for other things. I was covered, but quite often now it's very difficult for a self-employed person to get insurance that starts before 30 days, and then usually at 80% as opposed to the 90% that was with the car insurance. I think that covers you for all illnesses, so obviously you're going to want outside insurance anyway. When I bought insurance, I wasn't thinking specifically of a car accident. I was thinking: "What if I get sick? What if something happens to me?" I bought the vast majority of my insurance through the other, not being too concerned about a car accident. I guess I should have been more concerned about it, but I wasn't.
Mr Kormos: Thank you, Dr Klein. You're one of several victims who have come forward -- nowhere near enough -- to talk to this committee. I appreciate Mr Ford's line of questioning, because he was getting at something very important: a very firsthand sense of what goes on from the point of accident through to the receipt of benefits, if indeed there are any.
The insurance companies, like they have during the Bill 164 debates and like they did during Bill 68 -- this is the third major round of so-called reform -- come to these legislative committees, cap in hand, for all the world looking and sounding like Mother Teresa, as if all of a sudden they had undergone major conversion, talking about how eager they are to contribute to the welfare of the community and the driving public and their great concern and compassion for injured people, innocent victims et al, when in fact at the end of the day their goal is to collect the most amount of premiums and pay out the least amount of benefits. That's what private sector, profit-oriented -- and I understand that. I'm saying that's the reality of it.
My friend Mr Ford responds by his questioning to the complaint from the industry about how the lawyers are mucking things up. "If it only weren't for those lawyers in there advocating for innocent victims, why, insurance premiums would be so much less." But the industry won't come clean -- these guys are the masters of obfuscation -- because they won't talk about the amount of money they spend on lawyers fighting valid claims, they won't talk about the amount of money they spend on doctors arguing against valid depictions of injury by bona fide physicians. These guys are the bait-and-switch artists of Ontario. They are the three-card monte dealers of this country, and a pretty despicable lot in total.
You talked about information, and you, like several others, have appealed to this committee to have the government or somebody engage in educational processes. What about the broker? These guys, by and large, rake a big chunk -- talk about a rake. You know the sort of rake they take at a casino? That's nothing compared to what brokers rake off when it comes to selling insurance contracts. Aren't they responsible for educating their clientele about exactly what it is they've bought and what the shortcomings are? Shouldn't the onus be on them, even to the point of perhaps making them a little more liable even at law for making sure that you or Mr Ford or Mr Hudak or Mr Wettlaufer or Mr Arnott are adequately covered and indeed own what you thought you bought?
Dr Klein: I think the problem here lies in the fact that most people, when they're not in an accident, aren't thinking about insurance. I never really thought too much of insurance other than the fact that I bought it. In fact, my original insurance policy that I had through my association was purchased about seven years earlier and had never been updated. That's where I think the problem lies, that most of us are just too busy in our everyday lives to worry too much about insurance.
In honesty, I remember the broker did send me a pamphlet and I did read it, but I would like to see at the time of the accident maybe somebody coming down and explaining the rights to the victim's family so they have a clear-cut idea. That's what I would like to see, because there was a lot of confusion and a lot of things that happened that I didn't think were right. I would like to see them held responsible for some of that kind of stuff. I think they should be held responsible. Just like the police officer has to give the Miranda before somebody can be arrested, somebody should come down from the insurance agent and give the facts the way they are, what information has to be provided and if you need to talk to a lawyer, all that kind of thing. The way the insurance presented themselves to me was: "We're not adversarial. That went out with no-fault insurance."
Mr Kormos: Meanwhile, they've got your wallet and your watch.
Dr Klein: I certainly did not find them not adversarial. I would like to see them held accountable at least for some sort of information after the accident, that whatever legislation is passed here today, they come down and lay things out to the victim.
The Chair: Thank you very much, Dr Klein, for appearing in front of the committee. We certainly appreciate firsthand information like this.
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ONTARIO AUTOMOTIVE RECYCLERS ASSOCIATION
The Chair: We now welcome the Ontario Automotive Recyclers Association, Mr Fletcher, executive director.
Mr Steve Fletcher: The majority of people are here before this committee talking about the personal damage side of the automotive insurance industry; I'm here to talk about the physical damage side, and specifically some of the fraud opportunities that exist.
Our industry is the industry that processes end-of-life vehicles, and one of the most valuable end-of-life vehicles is the insurance write-off. In looking at insurance write-offs currently, we've identified two specific problems.
One is that the current system of controlling and disposing of insurance write-offs actually promotes vehicle theft in this province, which has a negative impact on rate stability, and also the fact that anyone can purchase salvage or an insurance write-off, which promotes the underground economy, again promotes the auto theft component of disposing of those write-offs.
Currently what happens is that if a vehicle is stolen you try to go to your licensing office, the vehicle identification number is identified by law enforcement as a stolen vehicle and you will be stopped at that point. The underground economy attends an auction or purchases a salvage vehicle, takes the VIN plate off that salvage vehicle and puts it on to a stolen vehicle, both physically on to the car and electronically registering it that way. When the vehicle shows up at the licensing office, the fact that it's a stolen vehicle is hidden.
In Quebec, in 1992, they put legislation in place to address that and it's the model that Ontario is looking at and that the Canadian Council of Motor Transport Administrators is advocating as a national model. In that model there's a mandatory requirement for the insurance industry to declare a vehicle a write-off to the ministry, and they brand that vehicle identification number into one of two categories, either a non-reparable vehicle or a salvage vehicle.
If it's non-reparable, that identification stays with the VIN for ever and ever and it can never go back on the road. If it's a salvage vehicle, again that brand stays with the vehicle for ever and ever. If you then steal a vehicle and try to attach a wrecked VIN plate to that vehicle and are stopped by your local licensing office, the vehicle will be branded as non-reparable or salvage and it can't go back on the road. Basically, it stops the usage of VIN plates from insurance write-offs to hide stolen vehicles.
In Ontario, in 1995, there were 35,000 vehicles stolen, and that's a number that's increasing by about 10% per year. In Quebec, where they've had the legislation in place, we now have surpassed them as the stolen car capital of Canada and their rates are going down by 5% to 10% a year.
What has happened is that because Ontario does not brand its insurance write-offs, the underground economy is coming from Quebec, purchasing our salvage vehicles, taking the actual VIN plate back to Quebec, hiding the stolen vehicle. Unfortunately, they've also shown the underground economy how that operates in Ontario. So it's a very thriving business in this province.
To put a salvage vehicle back on the road, the model outlines a specific reinspection process that not only looks at the safety of the vehicle, has it been repaired properly, but is it the original vehicle that was written off so that you're not hiding a stolen vehicle, and there's also a stolen part component to it all to make sure you're not supporting chop shops to get rid of parts illegally. Once that vehicle passes the inspection, it obtains a rebuilt status and it can then go back on the road.
The second part of what is happening with insurance write-offs is that basically anybody can buy a written-off vehicle in the province and that promotes the access to the underground economy, whether they're going to use it for a stolen vehicle hiding process, or they are bought by backyarders or people who use auto body repair as a hobby, take a vehicle and repair it to the best of their ability, selling it back to a consumer and that consumer has no idea that vehicle was ever in an accident.
The insurance industry is actually reinsuring those vehicles. Today's modern vehicle, if you're in an accident, is designed to crumple around you so that the occupant's safety is maximized. If you cosmetically repair that vehicle, the next accident that happens is going to be cataclysmic. It's not designed to take another impact. Those vehicles are out on the road and nobody knows how many or if they're being driven.
We have been discussing the fact that these problems exist and that there are solutions out there with a variety of people. The Insurance Bureau of Canada is participating, the brokers' associations, GM, law enforcement, and it has yielded a policy brief, which is included as the handout, and that brief supports the implementation of a CCMTA model within Ontario. It also goes one step further than the model that's recommended and in place in Quebec in that it develops criteria for who can purchase salvage, and utilizes a self-regulatory model so that there's some control as to who has access to those vehicles.
That brief has been presented to the Minister of Transportation as well as to Finance, Environment, Solicitor General, Consumer and Commercial Relations. There's a wide variety of ministries that are involved.
The benefit, if that model and the revitalization of the criteria are put in place, is a decrease in auto theft by cutting out the VIN switch fraud, which provides rate stabilization and cuts down on insurance fraud. It also allows the police to get on to other business, because it institutionalizes some things that can happen rather than chasing after these vehicles one at a time.
Our estimation is that if the model is put in place, over a three-year period stolen vehicles will decrease by 30,000 over that three-year period in Ontario. There will be improved road safety in that the vehicles that are written off, when they go back on the road, will have gone through a proper reinspection process, and improved consumer protection in that the consumer will know if a vehicle's been written off, and if it has achieved a rebuilt status, they will know it has passed a more significant safety reinspection than the current safety check that's utilized when there's a registration transfer.
There will be an increase in PST collection. Because it is an underground activity, there's a tremendous amount of cash for parts business out there. Basically, if you are only purchasing a VIN plate, you're left with a hulk that you have to get rid off, and that vehicle is cut up into parts and sold for cash. So there's a tremendous amount of lost PST revenue.
The fifth component is environmental performance in the province in that if you restrict the vehicles or make it very difficult for an amateur to purchase the vehicle, the fluid recovery, CFC recovery, which they're not currently doing, will be greatly enhanced.
Again, I come from this a little differently than a lot of other presenters. I'm not discussing the personal damage side to it all, but there are some fraud components in the draft legislation that we would like to see pursued a little bit further in that this issue is happening. It's a significant issue and we see it as an opportunity for the government to take a stand on the VIN fraud theft.
Mr Phillips: I really appreciate this. It's kind of mildly out of left field, but it seems to make so much sense. Who would likely argue against it?
Mr Fletcher: The underground economy.
Mr Phillips: Who would argue publicly against it?
Mr Fletcher: No one we know of. The stakeholders we've talked to have covered the consumer groups, and obviously they want the protection that the vehicles are going back properly, and they don't want to have their vehicles stolen.
The insurance industry is now cooperating. The theory is that you obtain more money for your insurance write-off if you sell it to anybody because there are so many insurers in the province that I have a guaranteed return on that salvage, where the probability that a like vehicle's going to be stolen from the policyholders I have is slim, but they are beginning to see that for every salvage vehicle that they throw out there, they're greatly increasing their theft rates.
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Mr Phillips: I gather you believe this will reduce theft by about a third.
Mr Fletcher: Correct. It will slow the increase. Right now we're in double-digit increases, and if we look at the Quebec model it's decreasing it by 10%. We want to get it down into the negative numbers. Over three years, we're looking at a reduction of a third.
Mr Phillips: In theory, I don't know what per cent of the $5 billion of insurance premiums go for theft.
Mr Sampson: Ten per cent; just a guess.
Mr Phillips: Your judgement is that this should have -- when I say significant, I mean a 1% impact or something on insurance premiums, would you think, or have you done any estimates on that?
Mr Fletcher: Law enforcement considers it their number one stolen vehicle issue because it is organized. It's not a joyriding situation. These are people who specifically go out looking for specific cars and get them out of the province as fast as they possibly can. Because it's underground, nobody has a handle on it. The government, the insurance industry, as far as we can see, do not have a handle on how big and the total impact of it.
Mr Phillips: When you combine this with what are quite sophisticated anti-theft devices on new cars, I think, do you see dramatic drops in auto thefts over a five-year period, more than just the third that you're predicting here?
Mr Fletcher: These are professionals who are involved in this, so I don't think there's anything you can throw at them in terms of keeping them out of the vehicle that's going to keep them out, but if you cut down on their opportunities to resell that vehicle -- they only make a profit when they actually sell the vehicle again. If you can cut down on their ability to get rid of the vehicle, that's where the real benefit is.
Mr Kormos: You remind me of the maxim, "Locks are for honest people only." That is, if somebody's a professional, first of all, they're going to find a way to do it one way or the other; second, they're less likely to get caught than an amateur; that's what being professional's all about. You're simply talking about reducing it and making it even more difficult, perhaps taking away some of the profiteering which makes it attractive.
Annually, we see lists of most stolen vehicles. What qualities does a vehicle have that puts it on this top-10 list of most stolen vehicles?
Mr Fletcher: A combination of resale value. The 4x4s and the sport utility vehicles are popular vehicles, therefore they're easy to sell. There are certain vehicles that have the VIN number identified throughout the vehicle, so a sophisticated thief should replace all of those VINs, but if they're all over the vehicle, they just avoid them.
Mr Kormos: But then it's even the scrupulous buyer who gets burned because it takes a trained anti-fraud person, be it OPP or from the private sector, to discover the stolen VINs and to tell that bona fide good-faith owner that he bought himself a hot car or motorcycle as the case may be.
Mr Fletcher: Yes. His only recourse is, if he's bought it through a legitimate dealer, to go back and say, "You sold me a stolen vehicle." About 70% of all auto sales are privately, so you basically have no recourse once they determine that it's a stolen vehicle.
Mr Kormos: But you don't want to discourage, surely, the use of replacement parts from scrapped vehicles, do you?
Mr Fletcher: Not at all. That's the industry basically that I represent. We make our profit by selling used parts to body shops that generally work on insurance repairs.
Mr Kormos: But you want them sold as parts to be added to a bona fide legitimate VIN vehicle?
Mr Fletcher: Right. The non-repairable vehicles are for parts only, which obviously we would like to go to a legitimate auto recycler. There are certain classes of vehicles that should be rebuilt because it's had hail damage or it's cosmetic. Those vehicles should also be rebuilt. It's just determining what those different levels are that are of great issue.
Mr Kormos: Now auto dealers -- and the insurance companies are buying into it. I don't know if they own that company that manufactures these little gadgets, but a whole lot of auto dealers, because you know the add-ons on to a car or what the high markup is, it's like the rust-proofing which is, by and large, a scam when it's done by auto dealers, but they're marketing now these little devices that you mount under your dashboard with the gadget that you insert in it and then you pull it out and it's a theft-proofing for the vehicle. Are those very effective?
Mr Fletcher: Not that I know of. I've never really heard of the product. People just continually innovate new things to attempt to slow down the stolen vehicle market, but again in our opinion they're just cosmetic. There are some structural things that should be looked at.
Mr Wettlaufer: Thank you, Mr Fletcher, for your presentation. Through the two weeks that we've been holding these hearings, the one group of people who have come off without any criticism whatever are the automobile manufacturers. I think it's probably because we all have had in this society a love affair with the automobile, and I'm no exception. I've gone from the very powerful cars to the luxury cars at various times in my life.
You've mentioned that the vehicle was designed to crumple around you. This was done supposedly -- in the marketing efforts it certainly was anyway explained by the manufacturers -- to reduce serious injuries and yet it doesn't appear that serious injuries have been reduced one iota. It seems to me that somebody screwed up because we've substituted a very great -- we haven't even substituted. It was supposedly a substitution of a major increase in cost of repairs for an increased cost in injuries.
Could you give us a guesstimate, of an average $25,000 or $30,000 car, at what point does it become insurance salvage?
Mr Fletcher: The economic equation that the insurance industry uses is -- I hope I get this right -- if the cost of repairs, plus the cost of salvage, exceeds the pre-accident value, then it's a write-off. So it costs you more money than it does to get out of the policy. What is happening is, as you write off more vehicles and as the price of salvage continues to escalate, more and more vehicles get written off.
Nobody knows that answer in terms of how many vehicles are being written off. The rule of thumb that's used around North America is 75% to 85%. If the cost to repair the vehicle is 75% to 85% of the pre-accident value, that vehicle is probably written off.
Mr Wettlaufer: Is that market value?
Mr Fletcher: It's pre-accident value, so it's usually based on the Red Book value.
Mr Wettlaufer: So actual value. Okay. In the cost of repairs, do you want to give a guesstimate as to what it costs to repair the average vehicle?
Mr Fletcher: No. It's highly variable. The later the model year, the more substantial the cost because of air bags and some of the structural things that they've manufactured into them. But at the same time, the later model the vehicle, the more likely it is to be dealt into the underground economy; therefore, there's no parts available for it.
The Vice-Chair (Mr Tim Hudak): Mr Fletcher, on behalf of the standing committee, thank you very much for your very interesting presentation today.
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NIGEL GILBY
The Vice-Chair: Next is Mr Nigel Gilby, representing the Advocates' Society. Good afternoon, sir.
Mr Nigel Gilby: My name is Nigel Gilby. I think I should say in starting off that after almost two weeks of hearing what I'm sure are 125 to 150 people who have been presented to this committee, I feel a little bit like Elizabeth Taylor's seventh husband in that I know what's expected of me, but I'm not too sure how I'm going to make it exciting.
If I can put into a nutshell what I'd like to say, I guess what I'd like to say is this: Innocent accident victims in this province have two big knives in their backs: One with the name David Peterson written on it, the other with the name Bob Rae written on it, and I urge this government is not to put a third knife in the backs of innocent accident victims with the name Mike Harris on it.
I am somebody who is pragmatic and I appreciate the difficulties this government faces in balancing all of the various interest groups and the concerns with respect to what coverage and at what cost. If I can be blunt about it, I suspect there will be a knife in the back of innocent accident victims, but what I would ask this government to do is to make it a penknife as opposed to being a rather large dagger, as have been the knives used by both the Peterson and the Rae governments in the past.
My paper -- and I apologize for some of the typos; I haven't even had a chance to proofread it myself yet; it's hot off the presses, so to speak -- addresses some issues where I think this government can consider weighing the issue of providing more benefits to the innocent accident victim and at the same time trying to control the cost of insurance as it relates at least to the issues of personal injury claims.
The difficulty, as we've heard from a number of people, is that I think accidents and people being injured in them have had a little bit too much play as being the root cause of increase in premiums. I think, if nothing else, what I've gathered from some of the representations made today, particularly from the insurance brokers, is that there are many factors that play in increasing insurance rates. That only, in my opinion, re-emphasizes the point that you don't and you can't and you shouldn't put it all on the back of the injured victim, and particularly the innocent injured victim, because you are asking them to take on the cost of not only the people who are at fault but also all of these other things that we've heard about: the cost of sheet metal etc.
Dealing specifically with the proposals, at page 3 of my paper I've set out various avenues in which I believe this government can control costs and at the same time ensure full rights to the innocent accident victim. The premise is pretty simple: If you allow essentially 100% recovery to innocent accident victims, then they are safeguarded in regard to what you may do in the no-fault legislation. In other words, if I'm an innocent accident victim and I know I'm going to get 100% recovery in tort, what happens to me on the no-fault side is more palatable because of course I have my tort rights for recovery. So the suggestions are basically looking at areas in which the no-faults can be reduced in order to keep the premium costs down but at the same time ensuring that the innocent accident victim maintains their right to recovery.
I've dealt with the income replacement issue and some suggestions there with respect to who should or should not claim; the cutoff period in terms of retirement age. I've also dealt with the question of people who are self-employed, people who are on unemployment insurance, and some recommendations that I believe could be implemented that will reduce the cost of insurance.
The medical rehabilitation benefit issue has probably been the one this committee's heard the most of, and I think you have representations from people saying that it's increased -- I think it was the State Farm person who said it increased 700% or something like that, to of course the individual rehabilitation companies who all say, "We're just out there trying to do the best for the injured persons."
If I can go back in time -- and I've been doing this for a number of years, sometimes it seems like since the days the dinosaurs roamed the Earth -- when you deal with pre-everything, in the days before you got OMPP or anything, I could literally count on the fingers of one hand the number of times that people used up the $25,000. The reason for that is that the majority of accident victims sustain what we commonly refer to as whiplash injuries or soft tissue injuries, which doesn't mean they're not legitimate, but it means that the type of treatment and the effective treatment they need is substantially different than that person who is catastrophically injured.
One of the things that I have also handed out is the Ontario Insurance Commission's own bulletin, which of course seems now to be adopting the research that has come out of Quebec that talks about the effective treatment of those types of injuries. To be honest with you, from my personal experience, it is seldom, if ever, that that type of injury requires more than $25,000 in terms of rehabilitation. It just doesn't happen.
My concern -- and you've heard it from people like Dr Delaney and others -- is that the definition of catastrophic has to be broadened. What you need to do is you need to ensure that those people who really do require the benefits get them. But at the same time, by reducing what is otherwise available to other people, I think you do a number of things: (1) It helps control premiums; (2) I think it directs people to more effective treatment, because if there's a limited resource available, if somebody's going for massage therapy or chiropractic treatment or physiotherapy, and if after 30 sessions they are absolutely no better, then the light's got to come on that maybe that treatment's not effective and it's time to move on to some other type of treatment. Hopefully, it will also discourage what has been indicated, at least on some occasions, of clinics that open their doors because they see a huge amount of money out there available to themselves and simply start treating people and treating them and treating them and treating them and so on and so forth.
Attendant care: I have some confusion as to why attendant care would be necessary in a non-catastrophic injury, assuming again that you're covering catastrophic injuries based upon a definition of function. I don't see the need for it, I don't understand why it's there, and again, I think people would be concerned that when it's there and available, then there's always the concern of people abusing it. There are many instances now where wives or husbands are being paid care benefits to look after their spouse, and the question is whether they should be paid and whether or not that care is necessary.
Designated assessment centres: I have problems with them. Using London as an example, you get a different result from a designated assessment centre depending upon where you live in this city. I can tell you exactly what is going to happen in a designated assessment centre based upon where the person resides, and that is a problem.
Medical examinations: I think the legislation presently drafted suggests that an insurer is only entitled to a medical examination when benefits are being paid. I think in fairness to insurers, they should be entitled to a medical examination even if benefits have ceased as long as it's on a reasonable basis.
The reimbursement of expense, which is found at page 4 of my paper: I deal with a number of issues there that I again see as being areas where this government could reduce benefits, again on the understanding that the innocent accident victim can make that claim if they can establish to the satisfaction of a mediator or a trier of fact that their expenses in fact exceed that amount.
Case management: As an example, I don't understand again why one needs case management in a non-catastrophic injury case. And it's not just accident victims who are doing this. I was indicating at lunch time, a lady phoned me the other day, seven months' pregnant with twins, with an injury, and the insurance company is sending a voc rehab worker already. I just don't understand why that's being done. It's completely unnecessary and an absolute waste of money. That's something the insurance company has done in that situation.
OIC: I appreciate that this committee is not here to really deal with that. I see the OIC as being again a bureaucratic nightmare. It has become very ineffective, it has become very costly and what its original mandate was has been completely lost. I think significant savings can be effected if there is an undertaking to completely reform the OIC and the way it operates.
Given that I've got 10 minutes to talk, I will essentially shut up and I'm open to questions.
Mr Kormos: It's interesting you're here now, Mr Gilby, because of course this morning we heard, among others, from Mr Vanveen, an innocent victim who certainly was denied his day in court. But that's not the point of it. He was denied compensation when he was a thoroughly innocent victim, in no way contributing to his own injury. I just can't understand how any fair-minded person could tolerate this innocent victim being called upon to trade off her or his rights so that at-fault or guilty or negligent drivers could somehow receive higher no-fault benefits. Would you interpret this purported balance between no-fault and tort and the compromise in that same way, or would you interpret it in a different way?
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Mr Gilby: Yes, I would. Unfortunately, to a large extent lawyers who do this type of work see people -- and the reaction is really one of anger. A person who has already been in an accident, who has sustained an injury, whose life is literally turned upside down -- and I'm not talking about somebody who has a six-month soft-tissue injury where their neck aches; I'm talking about people who have real injuries that cause real turmoil. It's anger, because they really feel, as I think some people have already mentioned today, like they're the ones who are guilty, somehow they're suspect and they're being victimized again. It's not bad enough that they've been in the accident; now all of a sudden they have to forfeit something. I really have a great deal of difficulty in trying to get them any kind of reasonable explanation as to why they have to give up their income, why they have to give up their rights because some government decided to do something.
Mr Kormos: From my point of view, I've got this old two-storey house down in Welland and if I'm stupid enough to not tie down the extension ladder when I go up fixing the eavestroughs or painting the soffits and I fall off the ladder, I can injure myself. I know that I'm the author of my own misfortune and I accept the responsibilities, and if I haven't prepared for that by virtue of coverage for sickness and accident, I can understand that. But I'll be damned if it's because my neighbour comes by and literally and maliciously knocks the ladder over. In that instance, when I'm doing all the right things, as Mr Vanveen was, I'm sure I or any other member of this committee would feel a gross sense of injustice at not being compensated by the person who literally and maliciously knocked the ladder out from underneath us. I just really don't understand the sellout of innocent victims. I don't think there's a person in Ontario who's fair-minded who will tolerate that.
Mr Kormos: There's a response from Mr Gilby.
Mr Gilby: I think the perfect example is, you had that subway tragedy in Toronto. I don't know if anybody else has mentioned this in the hearings -- and if they have, I apologize -- but there's nobody here in this room right now who wouldn't say that the people who lost loved ones or the people who were maimed, who had amputations onsite, shouldn't get 100% compensation. Because all they did was buy a ticket and ride on a train. It's exactly the same as somebody like Mr Vanveen. All he was doing was sitting in a car, minding his own business. Why do you differentiate between those two? How can you justify that? You've got to look the Charlie Vanveens of the world in the eye and tell them you're going to do that to them.
Mr Ted Arnott (Wellington): Thank you, Mr Gilby, for your presentation. Thank you also for the humorous way you started it. We have heard a great deal over the last two weeks and we appreciate your constructive comments as well throughout your presentation.
This committee can choose to make recommendations to the Minister of Finance on the OIC. On your concluding point, I'd just like to hear very briefly what specific recommendations you would have for the committee for reform of the Ontario Insurance Commission.
Mr Gilby: It'd take a long time. I think you've got to look at the abolition of it. I think that it has become a bureaucratic nightmare. Decisions now are taking nine, 10, 11, 12 months to be rendered. There's inconsistency. You have a lot of people, because of course they have no right to have any counsel at the first level of mediation, so what's happening is that the mediators are acting as both counsel and mediators, and doing insurance work as well as plaintiff work. I know that the insurance companies as well would echo the same sentiment. If we could agree upon nothing else, I suspect you would find there's a general agreement that if you don't get rid of it completely, you have to have a massive overhaul of it. It is just becoming too cumbersome, too costly. I could, and would be happy to, give a written submission to this committee on some of the specific proposals or changes I would recommend, but there are a number of things that should be done.
Mr Arnott: Would you not agree, though, that the government should maintain some dispute settlement mechanism outside of the courts?
Mr Gilby: Absolutely. One of the things that I say in my paper, that I applaud this government for proposing, is the idea of the advance payment, the idea of the early settlement encouragement, the idea of what -- you can call it mediation, alternative dispute resolution, it's got so many different names. It exists, it's out there, absolutely and clearly. I think, in fairness and in honesty, with the courts and right now the federal government, with cutbacks, you've got to divert it to another system because the courts are getting to the point that they are overburdened. So I support that 100%. I think the OIC has simply lost its focus, it's lost what it was intended to do and it has become, as I call it, the Workers' Compensation Board of accident victims and it's going to end up in the same situation, in debt and with all the workers hating it and all the employers hating it.
Mr Phillips: I look on the thing as simply as I can. To me, this is about a $5-billion industry -- I think that's about right -- and theoretically it's trying to find a way that money and services flow to people who have been in an automotive accident and trying to find a way to maximize what they get from the $5 billion and minimize the cost of administering it; at least, that's my own view. What I've heard so far is that -- and I don't know whether these are the right numbers or not -- the brokerage industry is roughly 10% of that $5 billion, the insurers are roughly 20% of it. My understanding is that pre-1990 the legal fees involved in the auto insurance business were roughly $400 million, so my simple view of it is that the consumer is paying $400 million for services, legitimate services from lawyers to get them access to their portion of the $5 billion. You've given us several recommendations on how you would cut almost the administrative cost and maximize the benefits to people. You know this industry extremely well. Here you say you were chair of FAIR outside of the city of Toronto. Is the $400 million an accurate figure in terms of legal fees that were paid, or what is the number?
Mr Gilby: I forget exactly what the Osborne commission found. At one time I did know that; it's been a number of years now. My recollection -- and I may be wrong on this -- was that the Osborne commission found that the legal cost part of the system was something under 10%, although if you listen to some insurance companies, they would suggest something to the contrary.
It sounds very self-serving and you may just assume that it is and disregard it, but I think it's like anything; you've got good and bad of everything. You've unfortunately got some bad lawyers out there who don't know what they're doing, but generally speaking, I think lawyers make the system more efficient because the reality is, have you read this legislation and do you really understand it? If you do understand it, I want to tell you that you're one of the few people in the province who do understand it, outside of lawyers who specialize in this area. One of the individuals from one of the associations said that lawyers now have become more specialized because of this legislation. It is so difficult, it is so complex that people are coming to lawyers to explain fundamental rights. If there's an increase in legal costs because of that, it's because of the complexity of the legislation.
I think people always need an advocate -- and I don't mean to slight insurance industries necessarily -- because they're going up against a sophisticated entity which knows and understands what's going on, and they are somebody who has walked into a completely foreign environment. You might as well take them and put them on Mars, and they've now got to deal with the Martians, who speak a different language. What they need is an interpreter. Lawyers have that task of being the interpreters to try and explain and understand and make sure that people get what they are entitled to. That's the whole purpose.
So there are always going to be legal costs in the system. Unfortunately, I think it's a necessary evil, if it is evil, and I believe personally actually keeps the costs down, because when you get people who are unrepresented, that's when hearings become much more protracted, that's when problems become much more difficult, because they don't understand and they have no one on their side who can explain things. Lots of times it's telling somebody, "The insurance company's right." Lawyers aren't just there to say, "Sue the bastards." They're there to say, "Listen, the insurance company's right," or, "You're wrong," or, "You don't have a claim for this, that and the other."
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The Vice-Chair: Mr Gilby, thank you very much for your time today and also for your detailed answers.
Mr Gilby: Thank you. If I may, I'd like to leave with the committee some submissions of one other person who was an accident victim, who did not get on the hearings but asked if I would file this on their behalf.
The Vice-Chair: Very good.
LONDON AND AREA MASSAGE THERAPISTS ASSOCIATION
The Vice-Chair: Our next deputation is the London and Area Massage Therapists Association, represented by Donica Abbinett and Melanie Purres. Good afternoon.
Ms Donica Abbinett: Thank you very much. Good afternoon, members of the committee. My name is Donica Abbinett. I'm a registered massage therapist in practice in London. My practice includes treatment of motor vehicle injuries. Along with myself is Melanie Purres, another massage therapist in practice here in London and also one of the council members for the College of Massage Therapists of Ontario.
I would like to thank you for making these changes to the legislation and see that they will be of much benefit to the system. I also want to thank you for holding these hearings and allowing us to express our concerns about legislation.
My concern is that registered massage therapy is not included under the statutory accident benefits schedule. Many of my clients, who are survivors of motor vehicle accidents, have expressed much relief after a series of massage therapy treatments. These clients have entered into these treatments as a way of finally getting relief from chronic pain. Many of these clients have had other forms of treatment done before they entered into massage therapy. They found that either their previous treatments were limited in results or had no effect in changing the quality of their pain. The use of prescription drugs was not something they were willing to deal with for the rest of their lives. In one case, the client has extreme environmental allergies and reacts to synthetic substances. In her letter, in appendix 1, she writes:
"Being a person who is highly allergic to numerous medications whether they be oral or topical, I have attempted on numerous occasions to find whatever means of therapeutic treatment useful for me in my `accident recovery.' This has led me to registered message therapy. I cannot stress enough how massage therapy has helped me physically and mentally in such a way that I am capable of performing my activities unaffected by reactions medications have subjected me to."
This client was a pedestrian in a motor vehicle accident five years ago. I started to work on her in October. She had approached me to consider taking her on as a client because she was currently in court proceedings with the insurance company. She was not sure if she could pay or even a possible date when they may pay for treatment. I took her case because I felt that delaying continuous treatment would set her back even further. In over 20 treatments, she has gained more relief than her previous treatments -- which were not continuous, due to the problems with the insurance company -- has had increased mobility and been able to experience one day of no pain. Please remember, this is the first day of no pain in five years. This has affected her greatly and given her a positive outlook and put the accident behind her.
It is not just myself asking to be under this legislation, but other massage therapists who have had similar experiences in their clinic. We work on motor vehicle accident survivors daily. Sometimes problems that may have happened many, many years ago crop up as problems today. If a client is treated at the initial time of accident, this may help to decrease the possibility of further complications as time passes. This way I am able to treat the injury itself rather than the injury and secondary complications. An example of this is a whiplash case that may have happened many years ago that later crops up as headaches or shoulder pain or numbness and tingling into the hands. These could have been prevented had they had massage therapy at the initial time of rehabilitation for the motor vehicle accident.
Another thing that massage therapy provides for the survivor is the chance to ask questions as to what has happened to them. By this, we can educate the client and can help them to help themselves and not become dependent upon the system. Often I give a series of stretches or exercises in conjunction with treatment. This part is called home care. This gives the client empowerment of their rehabilitation process. Sometimes it can be as simple as hydrotherapy, which is a treatment using ice or a warm water bottle applied each day, or simple stretches done on a regular, set schedule.
We don't necessarily work alone. Often we work in conjunction with other health care practitioners listed in the statutory accident benefits schedule. The most dramatic and shortest time I have seen with a motor vehicle accident is with a team effort allowing the client to get back to where they were before the accident.
I ask you to include massage therapists in the statutory benefits schedule under "health practitioner." We are under the Regulated Health Professions Act, 1991, otherwise known as the RHPA, and are specialists in soft-tissue injury and pain and are fully prepared to be accountable for our treatment plans.
I appreciate this opportunity to present in front of this committee. I have a very busy practice and rescheduled my clients to be here today. I really thank you for giving me this time, and so do my clients. If you have any questions for either myself or Melanie Purres, we would be happy to answer them at this time.
Mr Sampson: Thank you for taking the time out of your busy schedule and forgoing some opportunities at the office to earn some income to come and help us through this dilemma.
The issue as it relates to being included in the definition of "health practitioner" relates to being able to sign treatment plans. That's effectively it, isn't it?
Ms Abbinett: Yes.
Mr Sampson: Are you establishing treatment plans now anyhow, when somebody comes in?
Ms Abbinett: Yes.
Mr Sampson: So you'll map out to the claimant. Are you also mapping out this treatment plan or providing this treatment plan to the insurance company?
Ms Abbinett: For the motor vehicle accident victims I've been working on, it depends on whether the insurance company is asking for them or not, because often, in order for me to release information to them, they have to have signed a release form with the client first before I can send them any information.
Mr Sampson: They're paying for the treatment but they may not know what they're paying for, frankly, now. Is that the situation?
Ms Abbinett: For the direct treatment plans, initially sometimes that is the case.
Mr Sampson: That doesn't make a lot of sense, does it? You can understand why they would be concerned about where they were going and where the money was being spent if they had no idea what the treatment plan was.
Ms Abbinett: When people come in to see me, it's usually because the client has asked for it. They've either had some experience with motor vehicle accidents previously and had massage therapy treatment or they've come in on their own. In my particular clinic, most often I'm looking at people who have had motor vehicle accidents many, many years ago, as opposed to within a short period of time.
Mr Sampson: Okay, good. That was getting to my second question, when do you normally see them? It's not right off the bat. This is somewhere down the road when something else hasn't worked effectively.
Ms Abbinett: It depends upon the way the clinic is set up. In my particular clinic, most times it's quite a few years later, as opposed to right after the accident.
Mr Sampson: But generally in response to the fact that some other prior treatment hasn't really done the full job, if I can put it that way?
Ms Abbinett: Yes.
Mr Sampson: And so to a large degree you've got some insurance company and I suppose claimant frustration right off the bat when they enter your door, some concern that the insurance company is saying, "Well, gee, I don't know whether this is going to do it or not." Are you finding some dilemma of the insurance companies in that regard?
Ms Abbinett: There's only been one case in my particular clinic. I can't speak for anybody else's clinic.
Mr Sampson: How long would you do this treatment plan for? Would it be for six months? How long would you map out a treatment plan for?
Ms Abbinett: Most times when I set a period of time for a treatment plan it's usually over a six-week period, but each time the client comes in I'm continually reassessing them as to how they're doing today, how they've been doing since the previous treatment, have they noticed any changes, have they unconsciously been able to do things that they weren't able to do beforehand without feeling any pain?
Mr Sampson: But at or near the end of the treatment plan, are you sitting down and determining outcomes versus expected outcomes and then re-establishing a treatment plan?
Ms Abbinett: Usually, after six weeks, if we don't see a change, I refer them elsewhere.
Mr Sampson: How many times have you said to a patient, "I can't do anything for you any more"?
Ms Abbinett: On percentages or numbers?
Mr Sampson: Take your pick. Percentages maybe is better.
Ms Abbinett: Percentages, probably about 30%.
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Mr Phillips: We're trying to get I guess an idea of how to improve the system and what not. One presenter this morning said that one of the challenges that they face is that some of the people they see are almost too tired, because they've been running from one professional to another for treatment and are seeing six to eight different professionals during the week for different treatments. It struck me at least as a bit odd that somehow or other there are, firstly, that many involved -- and I tend to think each of them has a fee, obviously, attached to that -- and secondly, that it just didn't seem like it was good practice.
I guess my question to you is, is that something that goes on on a routine basis, that people you may be seeing may also be seeing three or four other professionals doing other techniques? Second, how do we legitimately improve that system so that we are saving money, obviously, but also improving the service to the injured party?
Ms Melanie Purres: If I can address that, on the second part of your question as to how you can reduce costs, my own experience in treatment of different conditions -- not exclusively those suffered through a motor vehicle accident, but any soft-tissue injury -- is that the most effective treatment and rehabilitation comes from a team effort, and that's not exclusively massage therapists, it's not exclusively physiotherapists or other treatment modalities. My personal experience with the people I've treated is that I see the fastest results with massage therapy applied directly after an injury so that the tissues can get to a healthier state, and at that point a physiotherapist would take over and strengthen the healthy tissues. That has been my experience so far as fast recovery and rehabilitation of an injury.
Mr Phillips: Of course I'm not an expert in the area, but it just strikes me as intuitively odd that somebody would be running in a week to eight different professionals for different services. But you're in the area. Is that something that I shouldn't be surprised about, that they would be seeing eight different professionals in a week?
Ms Purres: With respect to those who have survived a motor vehicle accident, I personally have never done a survey of my clients to find out how many practitioners they're visiting during a week, but it is very common that they do seek different treatment modalities, and that does come as a result of their insurer demanding that they see this practitioner, this vocational rehabilitation specialist, this occupational-related nurse, different modalities, different therapeutics.
Mr Phillips: So they would be following a plan. Normally, the people who come to see you would be following a plan that had been laid out by --
Ms Purres: Not necessarily, no. Often they're seeking massage therapy because many of the other treatments they have sought haven't been effective. So they're seeking massage therapy because they're finding results. Any other stuff they have to comply with their insurer and the demands of their insurer.
Mr Phillips: How would they have located you? You would not have been on their prescribed plan. They would have heard about you through referral or something?
Ms Purres: They may have been on the rehabilitation program in the plan. They may have been referred by another health care practitioner. They may have been referred by a friend. They may have been referred by someone they've talked to in a support group who has had benefits from massage therapy. There are referrals from everywhere. As massage therapists, although we are covered under the Regulated Health Professions Act as a recognized health practitioner, recognized by the Ministry of Health of Ontario, we don't require a physician's recommendation or referral in order to treat someone.
Mr Kormos: Thank you, both of you. We've heard from representatives of your profession in various parts of the province and the committee has heard even more as it's been to yet other places. In Ottawa, yesterday, Linda Matthews from Royal Insurance -- that's one of the big international corporate insurance companies -- again, with real disdain and with a very dismissive tone of voice, talked about the so-called feel-good treatments and complained about how they weren't in any way --
Mrs Marland: On a point of order, Mr Chairman.
Mr Kormos: Don't deduct this from my time, Chair.
Mrs Marland: Mr Chairman, I raised a point of order yesterday about Mr Kormos's choice of words and impugning what other people were saying. I would suggest that he is bordering on that again now and I'd ask him to perhaps be careful about quoting other deputations from yesterday.
Mr Kormos: Indeed. Thank you, Chair. Thank you, Ms Marland.
With real disdain and with a dismissive attitude, Linda Matthews, of that large international corporate insurance company, just passed away what she called "feel-good treatments." Now, she didn't define these, but she suggested that there was a plethora of feel-good treatments that weren't really doing anything to help accident victims and were putting something of a financial burden on these poor insurance companies. I didn't have a chance to ask her yesterday, and I still haven't found out what she's talking about. Is she talking about massage therapists? Who is it that the insurance company's trying to label dismissively with these so-called feel-good treatments?
Ms Abbinett: I guess my question is, was she referring to registered massage therapy?
Mr Kormos: Well, darned if I know. As I say, we have such a short period of time. Because my understanding of massage therapists is that they're prepared to work within the context of the management of rehab of a given victim. Is that fair to say?
Ms Abbinett: Yes.
Mr Kormos: As part of a team?
Ms Abbinett: Yes.
Mr Kormos: Recognizing that treatment or rehabilitation is not the sole prerogative of pharmaceutical-prescribing health practitioners, huh?
Ms Purres: You're asking if a massage therapist addresses things other than a pharmaceutical-prescribing health care practitioner?
Mr Kormos: You address different things than what that person addresses.
Ms Purres: I should clarify that for you, if I can. We address the same things essentially, but we address more, and that more is that we address the problem, versus most pharmaceuticals address the symptoms.
Mr Kormos: They mask the problem.
Ms Purres: I don't mean to suggest that. I'm saying they treat the symptoms. We treat the problem.
Mr Kormos: Right, and your goal is rehabilitation.
Ms Purres: Absolutely.
Mr Kormos: Right, so in no way could you be described as mere feel-good treatment.
Ms Purres: No, and I can appreciate where that view may come from. Unfortunately, in Canada there has been very little research in massage therapy. There has not been research money available. Only recently in the US has there been research money available. Consequently, there's not much documented statistical evidence to support the efficacy of massage therapy, although in European countries there is a great amount of research, unfortunately in foreign languages that are beyond my comprehension.
Mr Kormos: And the real proof is in the pudding in terms of the results you get, right, for any given person that you're working with by way of rehab?
Ms Purres: Yes, the proof in the pudding is the results, not necessarily scientifically measurable or proven or documented in scientific research. It's quite enough to measure, for instance, range of motion, personal function and personal feedback from the patient.
Mr Kormos: I can't for the life of me think why this committee wouldn't recommend that massage therapists and occupational therapists, perhaps among other others, be a part of the recognized professionals who are involved in rehab. We'll see what they do.
The Chair: Thank you for appearing and sharing your views with us. It'll be helpful in our deliberations.
ZARA KIMBALL MORRIS KARMAZYN
The Chair: We now have Mrs Kimball and Dr Karmazyn. Welcome to the committee.
Ms Zara Kimball: My name is Zara Kimball. I'm a 31-year-old, married and the mother of a 16-month-old girl, rather than boy, as it says on the piece of paper.
On January 8, 1995, my life changed forever when a man who fell asleep at the wheel collided with the car that my family and I were driving in. The accident took place here in London, on Commissioners Road just west of Wortley. The driver of the other car crossed right over the centre line and hit my family's car head on. There was nothing we could do to avoid the collision.
I was hurt quite severely in this accident. I had left hip and leg injury, separated my collar bone, sustained a whiplash-type injury to my neck and back, and most seriously, I injured my right upper arm and shoulder, resulting in a painful and disabling condition that is called reflex sympathetic dystrophy. This also diminished my range of motion, my ability to use my arm, and strength as well.
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At the time of my accident I was off work on a maternity leave waiting to return to my work as a nurse in the near future. Because of these injuries, I have never returned to nursing and I have been told by my doctors that I will never be able to work as a nurse again. Attached to the written portion of my submission you will find a report of Dr David Taylor. He is a doctor whom I was sent to by my insurance company. His opinion is that I am not capable of returning to work as a nurse because of the restrictions caused by the reflex sympathetic dystrophy.
Before my accident, I believed that the NDP government brought in the no-fault legislation to provide me with income and other benefits that take into account the fact that I cannot work as a result of my injuries and that I need special care to help me cope on a day-to-day basis. I thought this system was designed so that it would be easy for me to get what I was entitled to without fighting with my insurance company. I also believed that this was brought in to diminish the amount of people going into court and suing and that the insurance company would work for me.
Now that I am part of the NDP no-fault system, I know that it doesn't work too well in practice. For example, I am to receive a weekly income replacement benefit that is equal to 90% of my pre-accident net earnings. I do not understand why I do not receive 100% of my net weekly earnings or receive an amount calculated on my gross earnings, when none of my injuries were caused through my own fault.
One of my primary sources of complaint is the constant battle, and I choose that word intentionally, that I must face with my own insurance company. Every single decision that I make concerning rehab, child care and personal activities is criticized, picked apart or challenged in some fashion by the insurance adjuster who has been assigned to my case. I feel victimized over and over and over again.
At the very beginning, the insurance company did not accept the fact that I was scheduled to return to work when my maternity leave expired. I may have to explain this in more detail in that at the time of the accident, actually prior to the accident, I had been working at Henry Ford Hospital as a nurse for two and a half months. At that time I became ill during my maternity and I had to quit work. I could not take a leave because it was under three months. On leaving, I was told just to make a call to my supervisor and she would initially contact human resources and I would get my job back. A week before the accident, that's what happened. I made the call, I spoke to my supervisor, and I had the job back verbally. I was then assigned to wait for another person to call me from human resources to do the paperwork.
I have never understood why the insurance company took that position because I supplied letters from my employer that confirmed the fact of my maternity leave and which also confirmed that I could not return to work because of the accident. I was forced to mediate this issue. I had to hire a lawyer to do so, and although I was successful, I was told by my lawyer that there is no provision for my costs. Although I had won, I had lost too because it cost me money I should not have had to pay and it wore me down just a little bit more mentally and emotionally.
Even though I was successful with the mediation in that my insurance company had agreed to pay me my benefits, it is still not paying me the proper amount. Just like before, I have supplied a lot of documentation confirming the extent of income so that my income replacement benefits can be calculated. Even though this documentation is very simple and very clear, the insurance company is still paying me just a portion of what I should be receiving. Instead of paying me 90%, I am receiving 50% of my net income. I seem to have no choice but to mediate again.
Shortly after my accident an old adjuster, so termed, was assigned to assist me. He put things into motion quickly and I felt that I was being looked after. Suddenly a young adjuster was assigned to my file who immediately cut me off most of my benefits that I had been receiving. For example, I was receiving 24-hour care around the clock which was well-needed. He walked into my home on a Thursday and by the Friday had reduced it to 15 hours per week, in which I relied on my mother to help out.
It was explained to me that the older adjuster was unfamiliar with Bill 164 and that he had made a lot of mistakes by giving me "too much money." The new and younger adjuster is supposed to know more about Bill 164, but all that he has done is badger me to the point where I sometimes just feel like giving up. But believe me, I won't.
For example, I was receiving in-home child care to assist me with the care for my baby, since I do not have the proper use of my right arm. My baby was just three months old at the time of the accident. After the second adjuster became involved, I now only have child care services provided to me for a few hours per week. Since this letter, that has also been cancelled.
In an effort to save money, the adjuster suggested that my mother perform the child care. It was explained to me that she would be paid for providing these services. For some reason, although my mother has been providing these services for quite some time, she has not been paid anything by the insurance company. I feel as though I have been tricked, because the insurance company knows it can take advantage of my mother more so than a licensed care provider.
My own experience has been with Bill 164. I can say that I do not like the system as I am not being properly compensated for my injuries and disabilities. The system that was supposed to be easy to understand, fair to me and inexpensive has turned out to be unfair, complex and expensive. My preference would be to sue for all my damages and have a fair chance to prove my case and escape from the manipulation and unilateral action of my insurance company. I do, however, think there should be some no-fault benefits available, pending a resolution of any lawsuit.
I have reviewed some of the proposals in the new legislation. One of the changes I disagree with is the further reduction to 85% of net earnings with respect to income replacement benefits. Although I do believe that it is better to give back the right to sue for lost income, I disagree with the proposal that income loss be limited to 85% of actual loss. Believe it or not, my family lives on a tight budget and that missing 10% hurts and missing a further 5% would make it even worse.
I am pleased to see that there is a right to sue for 100% of medical care, rehabilitation and housekeeping. I think that it is a good idea to have no-fault benefits available for these sorts of expenses until the whole claim can be settled or dealt with by a court.
As I stated earlier, I disagree with the limit of 85% on the right to sue for income loss. It just doesn't make any sense why this type of claim should be limited. If my injuries were caused by the fault of someone else other than a negligent car driver, I would be able to sue for 100% of my loss.
I also disagree with the increased deductible that is being proposed. As it has been explained to me, with my injuries as serious as they are to me and my family, none of my family members would recover anything with the proposed system because the proposed deductible would exceed the reasonable amount of their claim. Thank you.
Dr Morris Karmazyn: Mr Chair, members of the committee, my name is Morris Karmazyn and I live in London. I am a professor in the department of pharmacology and toxicology here at the University of Western Ontario. On June 16, 1994, my wife, Dr Margaret Moffat, was a passenger in a commercially operated airbus travelling from London, Ontario, to the Pearson International Airport in Toronto. She was on her way to catch a flight to Winnipeg to visit her family. This passenger van was travelling on Highway 401 near Cambridge. The airbus driver moved from the right driving lane into the left passing lane to move around the truck. The driver of the airbus failed to notice another truck directly ahead of him and drove the airbus at a high rate of speed directly into the rear of this truck. The airbus had 11 passengers, all of whom were injured, but three of whom, including my wife, died from their injuries.
My wife was an associate professor of pharmacology at the University of Western Ontario. We were married in 1988. She left behind her mother, a daughter and two grandchildren, along with many close friends and colleagues. It is extremely difficult for me to sit here and talk about these matters. I feel, however, it is important that this committee, as it contemplates changes to motor vehicle accident compensation, has the benefit of my experience in dealing with Bill 164 passed by the previous government. I also wish to comment on some of the legislative proposals you are currently studying.
I'm not a lawyer and obviously I do not fully understand the technical aspects of Bill 164. However, I have come to appreciate the unfairness of Bill 164 in compensating the innocent accident victims, particularly when a fatality has occurred.
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As a surviving spouse, I was entitled to receive a death benefit calculated by a formula that amounts to receiving a sum equal to 90% of my wife's net weekly income for four years. The minimum amount of the benefit is $50,000 and it is capped at $200,000. Other dependent relatives were entitled to $10,000. In the case of our family there were no dependent relatives.
My wife, who was extremely successful in her chosen career, was just shy of her 50th year at the time of her death. Her income was important to our family unit. We were fortunate to be able to enjoy some of the good things in life. Under the restrictive formula in Bill 164, the death benefit which I received was less than $130,000. This amount was supposed to compensate me for the loss of the benefit of support that resulted from my wife's death, assuming that she would have been able to work to her normal retirement age. Obviously, this figure has no relationship to the actual value of my loss, which I am told would probably be closer to $400,000 to $450,000, given her level of earnings. While I recognize that through illness or other accident our joint life together might have ended sooner, I must still deal with the harsh reality that it was the negligent conduct of another person that caused my wife's premature death.
Based on the scheme of Bill 164, I am denied the right to bring a claim against the driver and owners of the vehicles, who were responsible for my wife's death, for losses that my family and I have suffered. What troubles me is that those restrictions apply only because my wife died as a result of a motor vehicle accident. Please don't get me wrong. There's not enough money in the world to replace my wife or to compensate us for our loss. What deeply troubles me, however, is that my family and other families of those who died in this airbus crash are being treated differently than those survivors of victims in non-car-accident cases.
Take, for example, the recent Toronto subway tragedy where a number of people were killed as a result of the negligence of others. The families of those victims have suffered no more or no less than my family. We are all the victims. Yet for some reason those victims are entitled to claim full compensation for their loss while my family receives only a fraction of our compensable losses. Can any of you explain to me why my family should be treated differently than the families of those victims? Why are we not entitled to be compensated fairly and reasonably?
It is unclear to me whether the draft legislation is a step in the right direction or a step backwards as far as fatality claims are concerned. I have reviewed section 267.4 of the Insurance Act that deals with the limitations on the right to sue. It is unclear to me, for example, whether or not under the new legislation a claim can be advanced for the future loss of financial support as a result of a death of a family member. The only expressed reference to a fatality claim is in subsection 267.4(3) that deals with non-pecuniary losses, which under the Family Law Act are for loss of guidance, care and companionship. If you intend to permit the surviving members to advance a claim for the loss of the benefit of the financial support of the deceased family member, then the draft legislation must be amended to make that perfectly clear.
To my untrained eye, it is unclear whether section 267.4 applies to a fatality claim. The reference to a claim for 85% of the income loss appears to refer only to a claim in a non-fatality situation, and I assume this was never intended. This section, I feel, needs to be reconsidered. Without amendment, it would be open to insurance companies to argue that the legislation does not permit a claim for any future income losses in fatal accident cases.
If this is true, then the draft legislation only permits a claim for a death benefit of $25,000 for the surviving spouse and $10,000 for the surviving dependants unless the deceased purchased the optional additional benefits. I have no complaint with the death benefits set out in the regulations so long as it is clear that surviving family members have a right to pursue a claim for loss of guidance, care and companionship as well as past and future loss of financial support and loss of services. To do otherwise would create a gross injustice to the innocent survivors and would make the current draft legislation even more unjust, in my view, than Bill 164.
If it is your intention that subsection 267.4(2) apply to a fatality claim, I must then question why the legislation restricts the claim to 85% of the net income loss.
I have been advised that compensation to the survivors is generally based on the net income of the deceased family member and that this amount is then multiplied by a dependency factor that takes into account the fact that the surviving family members may not have benefited from all of the net income of the deceased. The current legislation makes no reference to these factors, and it is unclear how the issue of dependency will be determined.
As I mentioned earlier, I hope the primary focus of legislative reform is fairness and reasonable compensation for innocent accident victims. To allow only 85% of the net income loss is an artificial deduction that cannot be justified. Why should the family be entitled to only 85% of an actual loss? As stated earlier, it is also unfair when one takes into account that if the death occurred as a result of negligence other than in a car accident, the family would be entitled to full compensation and would not be limited to just 85%.
I know that in your search of reforming automobile insurance, you will keep in mind the innocent victims of accidents, both those who are injured and the families of those who are killed. Although reasonable insurance rates are important, fair and reasonable compensation is, in my view, more important. A reasonable balance between the interest of the public to have affordable insurance and the protection of those who require the benefits of that insurance is required. We did not ask to become a part of the group of victims of motor vehicle accidents and look to you for the protection to which we are entitled. Thank you very much.
The Chair: Thank you very much, Dr Karmazyn and Ms Kimball, for your presentations.
BRANTFORD AND DISTRICT HEAD INJURY ASSOCIATION
The Chair: We now welcome the Brantford and District Head Injury Association and Lawrence Palk.
Mr Lawrence Palk: Mr Chairman and members of the committee, on behalf of the Brantford and District Head Injury Association, I would like to thank you in advance for the opportunity to be here today. Before I begin the formal part of my presentation, I would like to tell you a bit about myself and our organization.
In May 1988, I was the victim of a hit-and-run bicycle-car accident in Brantford, Ontario. The result of the accident was that I sustained numerous serious injuries, including a broken neck, a concussion, a fractured skull and numerous other injuries. In April 1989, I was diagnosed with a permanent brain injury to the frontal lobe area. In 1989 I became involved in the head injury movement through the Hamilton-Wentworth Head Injury Association and sat on their board of directors until late 1990, when I and the president of the same group formed the Brantford and District Head Injury Association. I continue to sit on the board of directors of the Brantford association, dealing with outreach issues and government relations.
Since 1990, our association has worked closely with representatives, such as yourselves at Queen's Park, on a variety of issues of concern to head-injured persons. In 1990 and later in 1993, we spoke at auto insurance hearings on Bill 68 and Bill 164. For nearly two years, our association worked with the Honourable Dianne Cunningham on bicycle helmet legislation. Since our existence in 1990, we have urged the government of Ontario to bring home head-injured Ontarians from American rehabilitation institutes so that (1) head-injured Ontarians might be closer to their families, and (2) so that they might be able to spend Canadian dollars at nearly half the price of American rehab institutions.
I'm happy here today to thank the government for this most recent announcement in this regard. In addition, I would like to refer you to a copy of a recent letter that the Honourable Jim Wilson sent our association, thanking us for our continued work in the head injury field. As an association, we continue to work tirelessly on behalf of our members and we look forward to continued dialogue with this government on matters of common interest, such as auto insurance.
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With respect to the proposed draft bill on auto insurance, our association is both pleased and amazed at the balance which the new draft proposal shows in a number of areas. However, we do have some real concerns about the bill which we urge you to consider.
(1) In respect to the non-earner benefit section of the draft bill, we are of the belief that a 26-week waiting period is entirely too onerous a burden to place on a potential innocent accident victim who, through no fault of his or her own, may be temporarily unemployed and actively seeking future employment. We therefore urge the committee to consider a one-week waiting period before the $185 weekly benefit kicks in.
(2) We seriously disagree with the government's financial proposal regarding the right to sue for economic loss. In particular, we are of the belief that limiting the income recovery to 85% of net and future losses is an unnecessary threat to a victim's economic future. Having been through a civil suit myself, I can appreciate the necessity for economic certainty and security in one's later life. In point of fact, far too many innocent accident victims will never again return to traditional job settings, regardless of whether their head injuries are mild or extreme. This is not because they are lazy, but because they have suffered a lifelong injury. Better the innocent accident victims be granted some type of reasonable economic protection than that they become dependent upon the state on an ongoing basis.
(3) We are of the belief that the use of the Glasgow coma scale as an accurate measure of head injury is fatally flawed, as most head injuries are usually not detected for at least a year post trauma. The use of this scale serves to minimize the tragic and life-altering changes that take place in the lives of mildly head-injured persons. In previous presentations before this committee you have heard of some of these changes; from my experience, I can identify with the disruption they cause in one's life.
We recommend the following changes and additions to the draft bill:
(1) A one-week waiting period for the non-earner benefits.
(2) The use of the Glasgow outcome scale in the assessment of brain injuries re the catastrophic impairment designation in the bill.
(3) The right to sue for economic or pecuniary loss for innocent accident victims should not be restricted. Clearly, the defendant insurer will receive full credit for statutory accident benefits, but all economic losses should be recoverable. If there is to be a limitation on a claim for income loss, it should be limited to 100% of net income, as opposed to 85% of net income.
(4) We recommend a change in the bill to a $50,000 death benefit and a $7,000 funeral benefit.
(5) We recommend that the draft bill be amended to read, "a deductible of $10,000 for non-economic loss for pain and suffering."
We also note that there is no mention made in this draft bill with respect to measures involving impaired driving. We recommend that the committee either amend this bill or draft a companion piece of legislation. We believe that the use of proactive measures to combat these offences will have beneficial effects in reducing premiums, loss of lives, medical and rehab costs and will add to the safety of the roads which all Ontarians deserve and want. We therefore recommend:
(1) In accordance with the spirit of the recommendations of MADD Canada, Mothers Against Drunk Driving, that after a second conviction for impaired driving, licences be taken away for life.
(2) That driving interlock devices be used in Ontario and that any related costs of such devices be borne by the offending motorist.
(3) That the government of Ontario move with immediate dispatch to encourage the federal government to amend relevant sections of the Criminal Code of Canada relating to penalties for leaving the scene of an accident. The maximum sentence for these offences is currently two years, whereas the maximum for impaired driving is 14. This difference in the law is a direct encouragement, under law, for impaired drivers to avoid responsibility and avoid maximum penalties. We recommend a maximum sentence of nine years.
In conclusion, on behalf of our association, I would like to thank the committee for its attention. I would be happy to answer any questions you might have.
Mr Crozier: Thank you, sir. I'm glad that you came before the committee and introduced yourself. You were at our meetings in Toronto and it's good to see you here today. I have a question with regard to your accident. Were you wearing a helmet at the time?
Mr Palk: At the time, I was not, and I would tell you, as I would tell anybody, that back then the only people who wore helmets, for the most part, were competitive cyclists, and that's the reason.
Mr Crozier: I understand. I only ask that because there's been so much awareness made of that. I assume that you obviously are a proponent of it because of what happened to you.
Mr Palk: Very much.
Mr Crozier: It's strange to me, and you may want to comment on this, that I had many people in my riding call me objecting strenuously to any kind of law that would require them to wear a helmet on a bicycle, and yet we have to on a motorcycle. Some of the accidents -- and I don't say this facetiously; I know it won't happen -- some of the incidents that we've heard over the last two weeks, you'd almost think we've come to the point where we should wear them in a motor vehicle.
In any event, I appreciate the work you've done and must have done in order to put forward the helmet law, and we appreciate it. Having said that, I think my colleague would like to make a comment.
Ms Castrilli: Mr Palk, I too am glad to know who you are, because we have been following you with great interest in this committee. Could you tell me a little bit about how your injuries were dealt with and compensated? You were pre-Bill 68, so you would have been under the old tort system. Did you have a tort claim, or were your injuries dealt with through the health system?
Mr Palk: I had a tort claim. It took about four and a half years to settle.
Ms Castrilli: Did you go to court with it or was it settled out of court?
Mr Palk: We settled within about two weeks of going to court.
Ms Castrilli: Without asking any details, do you think that the claim as it was settled in your particular instance was fair? How does it compare with some of the provisions under the legislation that we're now contemplating?
Mr Palk: Given the situation, I think the settlement that I got was relatively fair. I'm sure any victim could always say, "Well, I wish I could have had more." Being realistic about it, I think I got a fair settlement. With respect to this legislation, I really urge the government to go back to 100% of net at the very least. The thought that people could be given what I can only consider a 15% deductible on top of net is something that most people I know in the head injury victims' movement would find most repugnant.
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Ms Castrilli: Having gone through the tort system, I assume you would advocate that there is a legitimate place for tort.
Mr Palk: One of the people that presented before your committee in Toronto said it better than I could have said it. When the insurance company, with its lawyer, and the plaintiff, with his lawyer, go to court, at least it's a fair fight. That's about the best I can put it.
Mr Kormos: Mr Palk, you're yet another veteran of these insurance wars. Jesus, I told some brokers this morning I suspect you and I will be sitting in this type of forum in four years' time.
Mr Palk: I hope not, Peter. I'm getting tired of this.
Mr Kormos: I know that, but the solution may not well be here. I should mention, and I know you wouldn't mind me mentioning, that a written submission that has been filed by Mr David Rowe was provided here. I hope committee members read it because once again, it's about an innocent victim, an 18-year old young woman, Jenni. No fault could be attributed to her, but as a result of a drunk driver crossing into the lane of the car that she was in, she finds herself now, at the age of 18, as a paraplegic, dependent solely on the no-fault system contained in Bill 164. Of course, she had no income at the age of 18. There was nothing upon which to base the no-fault benefits for the rest of her life; a bright, young woman, victim of a drunk driver and a victim of no-fault.
No-fault, Mr Palk, I submit to you, didn't work under Bill 68, didn't work under Bill 164. We're deluding ourselves. You've made a case for innocent victims. We read of young Jenni Rowe. We've seen the presenters before you. We saw Mr Vanveen earlier this morning. I wish Ms Cunningham was here, because this is her bailiwick and there wasn't but a member of the Legislature who didn't support her private member's bill. It was a dramatic thing for a private member's bill from the opposition to have been put on the order paper and received approval. I can't believe Ms Cunningham would endorse anything less than the right of innocent accident victims. She can speak for herself and I hope she will, but I can't believe that Ms Cunningham would support anything less than the right of full compensation for innocent accident victims.
Having said that, in the instance of preventing motor vehicle accidents -- but I should say this: It's interesting that there are in this country provinces wherein there is the full right of innocent victims or the at-fault parties to recover, plus decent no-faults which take care of those innocent victims until their litigation is resolved by way of settlement or by way of judgement, places like British Columbia which provide full tort for innocent victims, full recovery of all losses, as well as no-fault benefits. Why isn't this committee looking at those too? I appreciate they may not be enamoured with public -- well, not that they may not; the private corporate insurance industry isn't enamoured with public ownership of auto insurance. But why we're not looking at systems that work, wherein there is full recovery for innocent victims as well as no-faults, beats the daylights out of me. We've got another dog's breakfast, which implies that Bills 164 and 68 were tantamount to dogs' breakfasts too. Here it is. I've said it before, I'll say it again: Why don't we look at something that works instead of keeping on trying to reinvent the wheel when we know the axle's broken?
Mr Palk: Peter, one thing I would say about that, without getting into the political ramifications of it all, is that I don't honestly think that you have to go to any particular system in order to get what innocent accident victims deserve, which is full right to sue.
Mr Kormos: You have to go to a system that's fair and just.
Mr Sampson: Thank you for your presentation. It's not the first one that we've had that is asked, on behalf of innocent accident victims, the right to 100% of the economic loss, and I want to get to that number in a few minutes, but it's the first one that says that in addition to doing that we should also change the category for the non-earner. Most of the presentations on behalf of the innocent accident victims have said the non-earners are entitled to nothing. You're telling me you want to bring it back up to where it is now. I'll tell you, you can't have it both ways; it just doesn't work that way. We're going to have to find some way to balance it out. As I've been struggling with since July and Mr Phillips has now been struggling with over the last couple of weeks, the pie is that big, and what we give to the innocent accident victim we must take from the category of the at-fault victim. We have heard from numerous individuals over the last couple of weeks who would say that they are entitled -- because they pay premiums -- to dollars to deal with their recovery, because they've paid premiums, like you, the innocent accident victim, have paid premiums. So what are they paying premiums for if there's no benefit to be earned, if there's nothing there for them to deal with their loss of income, with their loss of association with family, with their physical and mental losses as well? What are they paying the premiums for?
Mr Palk: That's a very good question. When you mention the non-earner benefit, I have an awful lot of problem with the supposition that says that everyone who is a non-earner and who is theoretically unemployed is a malingerer. I hope that's not something that is in the thoughts of this committee, because there are legitimate cases of people who are trying to get back to work as best they can. I'm sure there are all manner of cases of fraud, but I would put it to you, sir, that in terms of percentage, during these hearings I've heard of anything from 20% of the cases are fraud to a gentlemen who had lived in England who was quoting 58%. Now it may be that way in Great Britain, but I can tell you from my experience, it certainly isn't 58%.
Mr Sampson: I agree with you that just because somebody is unemployed at the time of the accident, it doesn't mean that they're going to unemployed for the rest of their life, which is why we have not responded yet to the pressures from the innocent accident victim groups to completely obliterate them from any earning capacity or any subsidy capacity on income under any plan. That's what the innocent accident victim groups have been saying and we've not done that.
But let me talk to this business of 100% income. You've gone through a situation where under the scenario you were entitled to receive 100% of future income loss. I would wager to you that you didn't get 100% income loss in your number. I don't want to hear what it was, but would that be a fair estimation?
Mr Palk: No, that wouldn't be a fair estimation.
Mr Sampson: So you got effectively 100%. There were no other transaction costs associated with --
Mr Palk: Oh, of course there were transaction costs.
Mr Sampson: What would have those been?
Mr Palk: My legal fees amounted to 15% of the settlement and were paid by the insurer. I wish in 1996 I could say the same thing.
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Mr Sampson: Yes, 15% of your award was paid in legal fees, paid by the insurer, but this money comes from somewhere. It just doesn't come from thin air. It comes from premium dollars.
Mr Palk: Of course it does.
Mr Sampson: Don't you think 15% is a rather large number?
Mr Palk: No, I don't. You've thrown the gauntlet out to me, so to speak; now I'm going to answer. I'm sure everybody could say, "There are good lawyers and there are bad lawyers, and there are good electricians and there are bad electricians," but I can certainly say to you that if it weren't for the fact that there were plaintiffs' lawyers around to take care of people when they are absolutely in a traumatized situation, I hate to think what would happen to them. I have personally gone through my own situation and I have personally seen other situations, and it is not pretty.
Mr Sampson: Mr Phillips was struggling with the legal costs associated with the tort period. That 15% number, just on the general damage side, if that number is average for all legal costs, would have put just general damage costs for the first six months alone of 1990 at about $345 million -- just for general damages for six months. Big numbers. He's underestimating his legal expenses associated with tort, isn't he?
Mr Palk: Big numbers, perhaps, but in this situation, when Mr Phillips is talking about a $5-billion business, that sounds like a pretty small percentage to me.
Mr Sampson: Yes, but that's just general damages for six months.
The Chair: Mr Palk, we appreciate your presentation before the committee today. Thank you very much.
JOANNE BUCHANAN
The Chair: We now welcome Joanne Buchanan to the standing committee. You have a presentation to make, and perhaps we can ask some questions if there is some time remaining.
Ms Joanne Buchanan: I'll try to make it brief. I would like to duly note, though, that I have three motor vehicle accidents currently under litigation and I am here at great fear of repercussions from the legal and the insurance system for speaking out.
I have provided a letter for all of you which is more or less a summary of what will probably end up being my victim impact statement. I'm a three-time accident victim under different insurance legislation. I wanted to provide other people's statements as well, out of my own client files; I'm a registered massage therapist. Unfortunately, most of them also feared legal threats and insurance repercussions and were too terrified to provide those.
I am continually amazed at the level of fear and paranoia that the insurance industry is able to invoke from intelligent consumers such as myself. I am putting my neck on the line by going public with my case, as it is still in litigation, but I've nothing left to lose.
Each system or insurance legislation promised reduced premiums, increased benefits, ease of redemption and compensation. The result repeatedly has been a carefully wrapped package with nothing inside, at least in my case.
I could criticize the new proposal line by line, but 10 minutes really isn't sufficient time to do that. I could also cry the plight of the hard-done-by accident victim to get public support and sympathy, but that's not why I'm here. Given enough time, as I said, I could produce other victim statements to back up my case, and numerous other people like me. The simple fact is that the auto insurance does not treat accident victims fairly.
Life isn't fair, but insurance, by definition, should insure the victims. In a slightly exaggerated analogy, I'm not a victim, I'm treated like a common criminal. Since it is against the law to operate a motor vehicle without insurance, I am forced to purchase no-fault insurance, at a rate determined by insurance companies, which I pay for on time. I ignorantly assume that "no fault" means that if an accident is not my fault, I can collect on my policy, and this just isn't so.
Criminals in this province appear to be treated better than a lot of accident victims. They are innocent until they are proven guilty, but I've been presumed guilty just by virtue of being a victim. I've been accused of trying to bankrupt insurance companies with false claims. I have legitimate, medically substantiated claims, but they can be refuted with simply one visit to a medical adviser or adjuster paid by the insurance company to write an unbiased opinion.
You are arbitrarily spied on by private investigators and presumed guilty of malingering long before any trial takes place. You are subjected to scrutiny usually preserved for hardened criminals. Your entire private, medical, personal and financial records become open to public scrutiny simply for the asking.
If I robbed a bank today, I would be before a judge tomorrow. I'd be sentenced, provided with free room and board, three balanced meals a day, complete medical and exercise facilities, education and rehabilitation expenses would be paid, and when I get out I'd have a new outfit and money in my pocket. I wouldn't have any freedom, but this isn't freedom either. They have controlled my life for eight years and continue to do so.
I am a victim of three automobile accidents, one in November 1986, one in November 1988 and one in January 1995. I was fortunate enough to survive these three motor vehicle accidents, under two provincially regulated auto insurance plans, but the cost to me financially, physically and emotionally can't be categorized or compensated. I won't get my life back and chances are I won't be compensated fairly for my losses.
At 16, I rushed to obtain a driver's licence and took the prescribed driver training course which promised me 10% less on my premium and I was classed as an occasional driver under my parents' policy. At 20, I purchased my first automobile and blindly paid a premium that I naïvely assumed, if I had an accident, would cover my damages, but I couldn't have known then how wrong I was. At 22, I was rear-ended in what was classed as a no-fault accident at the time. The other driver was charged. I hired a lawyer and my nightmare began.
Under the system in 1986, I was basically entitled to three benefits: lost wages -- 80% of my income to $140 a month; medical damages for four years or $25,000; and the right to sue for pain and suffering. What no one controlled at that time was how long or if I would ever receive any of these benefits. I waited 11 1/2 months to collect only one cheque for $140, which I should have been paid all along, and I have never received a cent since.
I paid every medical expense out of my pocket and waited to be reimbursed. I was offered a ridiculous settlement at the two-year mark and was financially and legally coerced into accepting this offer because I had had yet another accident. I was blatantly told, and incorrectly so, that I would have to settle my first motor vehicle accident and proceed with my second one, or I would face two insurance companies battling it out in court for 10 years down the road and would probably end up with nothing.
In 1988, I had my second motor vehicle accident. I proceeded with legal action for yet another no-fault injury. My insurance company at that time did pay $25,000 worth of medical expenses over a three-year period, but when that money was gone there was nothing else forthcoming and I was left to wait for a trial to recoup my damages. I am still waiting for my trial after eight years.
Throughout the second motor vehicle accident, I persisted with my lawyer and the legal parties for a settlement, begging them to resolve this, and I kept questioning what would happen to me if I had another accident before this matter was settled. Unfortunately, I found that out in January 1995. The changes to the original system I was under are basically as follows: Now I could collect 80% of my lost wages up to $600 a month, which was then increased to $1,000; I could collect medical damages for 10 years or $500,000 if I met threshold; and my right to sue for pain and suffering had been removed and later reinstated with a $10,000 deductible.
I am now caught in a three-way insurance battle, with each company trying to blame my injuries on two other accidents. The fact remains that all three motor vehicle accidents were no-fault and I am being penalized for this. I am not at fault, yet I am forced to pay money out of my pocket for all medical mileage and treatment expenses and this should never occur under any of the systems. I am forced to wait for reimbursement and I will never recoup the full dollar amounts or the loss interest nor my lost wages.
The bottom line appears to be that there is no bottom line. The insurance companies in the province are not accountable for the policies they sell. They have managed to build in enough loopholes and escape clauses that they never have to pay what you are, in writing, entitled to. There are no set time frames for litigation, mediations or arbitrations and, in my case, all three methods have cost insurmountable delays and have all ended in stalemates.
Under the current legislation the insurance companies have forced me to be examined by their medical experts who refute all prior evidence because they feel they're all biased towards me, the victim. Under the new proposal, it appears to me that the insurance company will have a carte blanche approach, that they will have full approval and that they will only be accountable unto themselves. The no-fault victims have the right to medical opinions and this can be terminated with simply one visit to an insurance-appointed specialist and the new proposed rehabilitation centres.
I've been told by an insurance case manager that they are expert just due to the sheer volumes of claim files they read, and this is a horrific injustice to accident victims. Whether a victim simply gives up fighting out of fear, exhaustion or financial necessity, whether they have legitimate, medically substantiated injuries, whether they try to merely survive, they are penalized financially, emotionally, and most of all, physically. How can a system that gives free rein to the insurance companies claim to save the government or the consumer money? My premiums have never decreased and now you want to give me the option to purchase top-up insurance.
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Changes to auto insurance are definitely needed, but you should talk to the victims who have already dredged their way through three previous systems and can tell you undeniably that it doesn't work. If you promise it on paper and never deliver or only deliver a fraction, after years and months of waiting, then what have you gained? I pay my premiums, I purchase mandatory insurance and all I ask is to be compensated fairly, on time and without being presumed guilty.
As a multiple victim, I am self-employed. I cannot get extended health care due to the previous injuries I have sustained in other accidents. I don't feel I will ever be economically or physically compensated. I've had three accidents in 30 years and the likelihood of having a fourth one seems to be pretty good in my lifetime.
I don't agree with 104 weeks of payment period because I don't believe that if I haven't recovered in eight years two years is sufficient. I financially can't afford to wait a 26-week waiting period. At the current time, I cannot receive welfare, family benefits for disability or Canada pension. It's an eight to 12 months application period and all of those take a further eight to 12 months for appeals, and I'm in that process at the moment. I've been told that because I am self-employed, I don't qualify for any of these three, no matter what my legal circumstances are.
I have gone to newspapers, radio, Ombudsman Ontario, Goldhawk Fights Back, Dianne Cunningham and every avenue I can think of to find out what a poor accident victim, in my case, does for justice, rather than wait for the legal system to slowly come to a conclusion.
The only quote I could come up with in preparing this presentation was that every night before I go to sleep, I pray that the people with the power will have the common sense, and that the people with common sense will have the power, and that the rest of us will have the patience and perseverance to put up with people in authority in the meantime.
Mr Kormos: Thank you, Ms Buchanan. You never thought that there was any likelihood of being struck the second time or the third time, never mind the fourth.
Ms Buchanan: No.
Mr Kormos: What's really wacko is that there are insurers who treat not-at-fault accidents as worthy of demonstrating that you're a higher risk driver because somehow you put yourself in positions where other people are going to aim and take shots at you.
Ms Buchanan: Yes. I've also been told, as of my third accident, that I must stay with the company I'm with because if I switch to another company, I'm rated as an at-fault victim.
Mr Kormos: That's right, or else they're throwing you to the wolves.
Ms Buchanan: Yes.
Mr Kormos: How can the wolves throw you to the wolves, though? You obviously got the impression that I don't have much confidence or faith in the insurance system. I acquired my cynicism probably in a different way from what you have. Yours is probably far more valid.
The bottom line is that there are problems with the court system, and nobody's going to suggest there aren't, in terms of how quickly cases are getting through. I agree with Mr Harnick -- I've said this before, I'll say it again -- the Attorney General. Let's fix the problems with the court system and/or with the lawyers. But similarly, if there are problems with the insurance companies, let's fix those.
Ms Buchanan: I'd also like to note that after eight and a half years of waiting for my case to come to trial and two and a half years on a trial list, I had a trial date set. Three days prior to the trial, the insurance companies had their lawyer go before a judge and petition to indefinitely adjourn my case because they hadn't had time to prepare.
Mr Kormos: Horse feathers. They're trying to freeze you out. It's the oldest tactic in the book. These guys will play the game as dirty and as mean-spirited and as rotten as possible, because at the end of the day, they're playing the odds -- we've talked about this before -- that X number of people simply are going to abandon it or are going to be forced into speedy settlements where they're not getting a fraction of what they deserve.
The insurance companies have got lawyers, doctors, all these folks on the payroll. Don't forget, lawyers are the world's second-oldest profession. The ones that the insurance companies have working for them warrant that title in a way that no other lawyer could. They've got the power, you don't, and you, like so many other innocent victims, are left to twist in the wind.
I'm looking for a government -- I feel like Diogenes with the lamp. The Liberal government didn't do; the NDP government didn't do it. I'm afraid that lamp's still going to keep shining, because this government with this bill isn't going to whip these scoundrels, these thieves, these highway robbers, into shape. Let's keep our fingers crossed.
Mr Sampson: Thank you for your presentation. If I can just boil down, in a very short period of time, the gist of your presentation, you really don't care about the tort access or the not tort access; you just want to make sure that you have the benefits to deal with your injury, is that correct? Do you really care how that comes to you?
Ms Buchanan: I do in a sense, but, no, I don't. As long as what I am told on paper I am entitled to is what actually materializes; that's sufficient for me. I don't see that the new proposed legislation offers much more differences than the other three, other than changing the dollar amounts around. But it doesn't matter if they present it to you and don't ever have the intention of paying it.
Mr Sampson: Right. You've been through this three times. What, in your sense, is the frustration that the industry has in paying? Is it just that they don't want to pay, they don't care? Is that what you sense, or do they have some lack of confidence with the treatment that's being provided? Where's the breakdown in communication?
Ms Buchanan: They have adequate medical evidence to substantiate my claim. They have a number of experts and medical expertise. They have boxes of files of unrefutable testing that prove my medical condition. The insurance company can quite simply say that it didn't come from the specialist, it came from the family physician, so that's not sufficient, "We don't have to pay for these damages because there's some degree of discrepancy whether this was caused by accident 1, 2 or 3." There's not a magic dividing line where my pain from number 1 stopped and the pain from accident 2 started. There's a lot of grey area as to the continuing injuries.
Mr Sampson: Which caused which.
Ms Buchanan: Yes. So rather than pointing a finger and saying accident 2 is responsible or accident 1 is responsible, everybody has just opted that no one is responsible, so no one is paying until this is resolved through the courts. Under the current legislation, under no-fault benefits, this accident was a no-fault accident. I was in hospital for 11 1/2 weeks. they are not paying me anything.
Mr Sampson: I think the no-fault is an unfortunate misnomer in the current legislation. As somebody said to me the other day, it's not no-fault, it's everybody's fault.
Ms Buchanan: Due to my injuries from my second accident, I wasn't working just prior to this third accident, so the no-fault now is saying that they don't have to pay me lost wages because I wasn't working at the time of the accident.
Ms Castrilli: Thank you very much, Ms Buchanan. I was struck by something you said early on and you've repeated in your paper, that you are afraid of reprisals, and like you, many others.
Ms Buchanan: Yes.
Ms Castrilli: What is the nature of the threats and why would you be afraid?
Ms Buchanan: I have been told that if I go public with my case, the insurance can cut me off, that when my case comes to trial, they can use this against me, that anything that I have publicly said or put in writing will be used against me.
Ms Castrilli: I certainly don't want to ask you any details of your accidents on that basis, but it seems to me, for the record, Mr Chair, that kind of attitude in a free and democratic society is simply not acceptable and I just want to go on record as saying that.
Ms Buchanan: As a registered massage therapist, I have ample files to pick from, as the bulk of our practice is motor vehicle accidents. Every patient I contacted to write something to provide for this hearing was terrified of repercussions from their insurance company or their lawyer, and quite frankly, refused to do it based on that.
Ms Castrilli: I find that unfathomable and unacceptable.
The Chair: Thank you very much, Ms Buchanan. We appreciate your presentation to our committee.
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DALE HEAD INJURY SERVICES
The Chair: We now welcome the Dale Head Injury Services, Ms Delorme and Mr Gilby. Welcome, Ms Delorme; welcome back, Mr Gilby. We have 20 minutes. I think you're aware of the procedures. Please begin.
Mr Nigel Gilby: I'm only here because I happen to be the chairperson of Dale Head Injury Services, which is a non-profit organization that deals with traumatic head injuries and treatment. Ms Delorme, who is the director, will be the person speaking. I'm here in a hand-holding capacity only and to perhaps answer some questions if they get into the legal realm.
Ms Deborah Delorme: Thank you, Nigel. Thank you to the committee today for the opportunity to speak on the proposed automobile insurance legislation. Just to give you a bit of background on Dale Head Injury Services, we're a non-profit community-based organization. We're located in London, but we serve individuals who have experienced a traumatic brain injury throughout southwestern Ontario.
We have a volunteer board of directors, of which Mr Gilby is the chair, and this organization has been in operation for the last 12 years. We're currently serving 57 individuals in a variety of different ways. We provide a wide range of services for this population.
We are funded under the Ministry of Health. However, we also bill insurance companies and Workers' Compensation Board for services that we provide to automobile accident victims as well as injuries sustained in the workplace. So we have a number of different funding sources.
We view the draft legislation put forward as an improvement over the previous drafts, but we still have some concerns that there are aspects of the legislation that are not going to meet the very unique and specific needs of individuals who have sustained a traumatic brain injury.
Just to summarize what we're going to talk about: the issues around the proposed definition of "catastrophic impairment," which I know you've already heard about; the application procedures and how they may in fact impede the speedy delivery of needed rehabilitation; the adequacy of the attendant care services definition as it currently is put forward and the inadequacy of the proposed coverage for people who have sustained a traumatic brain injury in particular; and finally, we'd like to talk about the importance of building some accountability into the designated assessment centres and their overseeing committee, because that's an issue of concern to us.
I feel that in order to understand the position that we're taking, it's important to spend a bit of time trying to get a handle on the traumatic brain injury and its effects, because it is a very unique and specialized area. Even a mild or a moderate brain injury can leave an individual with a very complex array of impairments which can devastate not only their lives but the lives of their family members.
You may have already heard about the impairments. I just want to review some of the major ones, such as the cognitive impairments that people can experience in memory, judgement, problem-solving, language and speech and a myriad of other cognitive functions that can be impaired.
As well, there are physical impairments in ambulation, balance, some sensory activities can be impaired through brain injury, there can often be severe chronic pain accompanying a brain injury and as well many people are dealing with behavioural issues such as aggression, there can be sexual inappropriateness, there can be apathy, there can be lack of initiative, there can be impulsiveness, there can be a wide range of very, almost embarrassing social skill problems that follow a traumatic brain injury.
These impairments have a huge impact on the individual, because they can remember their former self, their pre-accident, active self in which they were a functioning member of society. As a result of that, it can leave an individual not only with this array of impairments and disabilities, but also it can lead to very severe depression. That can in turn lead to substance abuse, and the potential for substance abuse is much greater with this population because of these issues. As well, the suicide rate is higher among this population because of the devastating effect of the injury.
It's also very important to note that the majority of these injuries occur to individuals who are between the ages of 16 and 35, so we're talking a very young population. The other piece is that these people have relatively normal lifespans, so you're talking about a group of people who are injured early and can live a fairly normal length of time.
In the absence of appropriate and timely treatment, the lives of these people are characterized by family breakdown, unemployability, often great isolation from their family and friends -- a case in point, of course, is the people who are down in the US, and some of them have been down there for years -- and obviously dependency on others to get through their day.
This is a great financial burden and it ultimately will fall on the system and on the taxpayers to support these individuals, without timely and appropriate rehabilitation. However, our experience has been that with appropriate treatment, with timely treatment, these people can resume normalized lives, if not their normal pre-accident life, and they can engage in meaningful activity. They can get re-employed. They can do volunteer work. They can make a contribution to society. They can maintain their family connections. However, it depends on the accessibility of proper treatment, and with the appropriate treatment, the burden of care to society can ultimately be reduced as well.
However, with this legislation, what we're concerned about is that there are some aspects which will block the delivery of appropriate and timely treatment to these people, and I'll just go through them for you now. The first one has to do with the definition of "catastrophic impairment." I understand that you have heard quite a bit about the Glasgow coma scale and its inappropriateness as a tool. I just want to make sure that you're clear on the difference between the Glasgow coma scale and the Glasgow outcome scale, because I think it's being interchanged occasionally. The Glasgow coma sale is used at time of coma to measure the condition of the patient at the time of the injury; the Glasgow outcome scale identifies the outcomes of the person following the injury in terms of their functional skills and their ability to get through their day.
I'm not going to belabour the issue of the Glasgow coma scale as an inappropriate tool, but I decided not to just skip over it, because I do think that the more often you hear about this tool, the more it's going to sink in that it really would not be at all an appropriate tool to use. I do have some more information on the Glasgow outcome scale for your reference in the brief.
Our second concern is that the proposed legislation doesn't permit access soon enough, which is immediate, for critical rehabilitation services and supports. We're concerned that the application procedures may actually lead to a lengthy wait before the start of rehabilitation, and in our experience, and I would venture to guess Dr Delaney would agree, a lot of the recovery can occur between the first 12 and 24 months, certainly the physical recovery, and that is a critical period to deliver needed rehabilitation services. If those services aren't available, what has been lost is a potentially rich period of rehabilitation which can't be recovered.
Also, with the absence of appropriate rehabilitation during these not acute phases but early stages, the potential for the development of severe behavioural disorders is greater. That's the time when we'll see behaviours start to manifest themselves which, with appropriate treatment, would not have surfaced, and it's those behavioural disorders that in fact are the very expensive ones in terms of providing treatment. Those are the ones that cost the very big dollars.
What we feel is that the legislation should provide for a mandatory payment of initial rehabilitation costs for victims of traumatic brain injury -- I think we're speaking specifically of that group -- if that can be built in. We'd like to see it somewhat similar in principle to the mandatory prepayment provisions for physiotherapy and chiropractic treatments which are set out in section 42 of the regulations, but we'd like to see it broadened to include what we feel are the necessary treatments for traumatic brain injury, which can include, but are not limited to, things such as speech and language therapy, occupational therapy, behavioural management, a very important one, psychological services, again very important, as is family counselling and family education. Those are the services that are going to decrease the huge impact that's going to land on these family members down the road.
Thirdly, in the proposed regulations, the attendant care provisions and definitions are inadequate, in our view. I don't feel that the term itself is clearly defined and would ask that this be done, and with regard to the definition that is arrived at, I'm concerned that the definition may somehow be viewed or confined to attendant care activities that have to do with physical support for individuals, such as assisting them with hygiene, toileting, dressing, that sort of thing.
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This is often how attendant care is viewed, and what we found in the field of traumatic brain injury is that people don't recognize that attendant care can simply be a person who can serve as almost a prosthetic device for an individual who has cognitive or behavioural impairments. A person even with a severe traumatic brain injury actually -- not all of them, but some -- can get through their day and manage to feed themselves and perform their hygiene activities and dress without an attendant. However, they can't manage to maintain their appropriate behaviours that they've learned through rehabilitation. They may not be able to problem-solve or remember what the next activity is or even have the initiative to get up and do whatever it is they need to do. Those are the things that a support person does, and we call it personal support as opposed to attendant care, and those services are absolutely essential for people who have had a traumatic brain injury, so we'd really like to see that included in the definition.
Also, further, with regard to attendant care, we're concerned that the $6,000 limit for people who've had a catastrophic injury may in some cases be inadequate, and I'd like to really stress here that this would be a very small proportion of injured victims who would not be able to be appropriately supported with a $6,000 attendant care ceiling, but there will be some who will require 24-hour care or support and $6,000, according to my math, isn't sufficient to cover more than about 13 hours of support. I suppose if you narrowed it down or drove the salary down to a minimum wage level you could get 24 hours of support for somebody; however, I believe that in order to appropriately support somebody with a brain injury, you'd need to have some level of expertise and training. You can't just bring in somebody got laid off at McDonald's and ask them to come in and support somebody with severe traumatic brain injury who may have behavioural issues and cognitive issues, so there needs to be a reasonable salary for these people.
You need to know that there will be some who won't be able to be supported with that ceiling, and the concern is that at that point, they're still going to need support and they're probably going to end up in the institutional correctional system. Somehow the taxpayer or the province is going to have to assume the burden of care for those individuals, and they will not be appropriately served in those institutions.
We're also concerned that some of the care costs, the medical and rehabilitation care costs, for individuals who have a catastrophic injury may not be sufficient over time, because there does not seem to be an inflationary increase built into them, and we're concerned that over a period of time, even if they don't access those funds, the funding will not last long enough for them to get the medical and rehabilitative services that they need.
The second-to-last point is with regard to the designated assessment centres. We are pleased to see that there is a committee to oversee their operation. However, we would like to see, in light of the fact that the DACs are going to probably be evaluating the efficacy and appropriateness of treatment plans developed by service providers, that there be some measure built in to oversee the activities of the DACs and make sure that they are in fact making good recommendations with regard to these issues and that they're accountable for the service that they provide.
Finally, I'd really like to emphasize the importance of developing standards of care and some sort of accrediting body for service providers in this province, particularly with the increased number of private practitioners in practice now providing services. There are absolutely no standards in place, and it's questionable whether all the services that are being delivered are effective and needed. There is a committee that's doing this now. The PABIAC committee is working on this, and I would endorse the work of that committee and ask that this group work together with them to see that it's in place.
I think that's about it. I don't need to go through my conclusions. Are there any questions?
Mrs Marland: Thank you, Ms Delorme. You're absolutely right when you say you know that we've heard from other head injury associations and groups around the province, but it is very important for us to have that input, and repetitively, as well, because when we started last week, I hadn't heard of the Glasgow coma scale. I don't know how many of my colleagues had, but I hadn't, and in the same presentation we also learned about the outcome scale. I followed that particular group out into the hall to ask them to explain to me where else in the world this was used and what other reference points we could have. So the more we hear, the more we learn, and I appreciate your effort.
I just have a very fast question. When I look at the Dale Head Injury Services, and you say that you receive funding from the Ministry of Health, I'm wondering how much funding you do get from the Ministry of Health.
Ms Delorme: Our funding is in the neighbourhood of about $1.5 million per year.
Mrs Marland: Then you also bill the insurance companies back, and sometimes the WCB, for the services, is what you said in the opening.
Ms Delorme: That's right.
Mrs Marland: Who do you think looked after these victims of MVAs before Dale Head Injury Services came into being?
Ms Delorme: I would venture to guess that many people, before there were services available for them, ended up in the streets. Some of them ended up in the correctional system. We've had many people come through our doors who have spent years in psychiatric institutions because there was no other place for them; chronic care wards of hospitals, nursing homes. Some of them are at home, living in unbelievable conditions with families that are going through enormous stress.
Ms Castrilli: Thank you very much for being here today. It's nice to see Mr Gilby again.
Mr Gilby, I'm going to pose this question because we've had a fair bit of discussion about clinics such as these and the whole issue of referral and conflict of interest. I note with some interest that you are chair of the board of governors. You are coincidentally a personal injury lawyer who has a very busy practice according to your own announcement earlier on. I'm just wondering how your clinic handles the issue of conflict of interest. Do you, for instance, refer some of your clients to the clinic? Is there disclosure? Is there a prohibition? I'm not quite sure what the practice is.
Mr Gilby: The answer to that question is, in all the years that I've been involved, the number of clients I've had go through is about two or three in number. It's not very many. It's done on referral generally from medical practitioners in that facility. The fact that I'm involved is known; it's disclosed. It's also certainly known to the insurance industry as well as to the defence lawyers.
I got involved in this as one of the founding board members long before we had any of these systems in place because there was clearly a need for a facility, and through funding of a private source we were able to start what was then Dale Home and is now Dale Services. I've stayed on as a board member. I think it's important, because I benefit from the system literally because that's how I earn my income, representing people who are injured in accidents, to give something back. I quite frankly see this as my way to give something back, by committing my time and my expertise in helping to deal with Dale Services in the management of the facility. I think we've been very effective in doing that.
Ms Castrilli: So disclosure is the way you handle it?
Mr Gilby: Yes.
The Chair: I thank Dale Head Injury Services, Ms Delorme and Mr Gilby, for your presentation today. We appreciate it.
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CRAIG BROWN
The Chair: We now have Professor Craig Brown, faculty of law, University of Western Ontario. Welcome to the standing committee.
Mr Craig Brown: Thanks, Mr Chairman. I understand I'm the last of what must seem like a long list today.
The Chair: As we get to the end we're more anxious, and of course we're more attentive as well.
Mr Craig Brown: I wish my students were the same way.
The Chair: We'll charge the committee with being more attentive on this one.
Mr Craig Brown: I bear that in mind and I will endeavour to be brief. I've only a few points that I would like to make and I don't have anything additional for you to read.
My interest in this area is both academic and professional. I teach and research and write in the area of insurance law. In particular, I've had an interest in automobile insurance over my career as well. I've also served as an arbitrator for the Insurance Commission of Ontario, arbitrating disputes under the OMPP. They had a pilot project for part-timers last summer and I worked for them in that capacity. I have also served as a consultant, primarily to the IBC, not recently, but I did serve as a consultant with them during the 1980s when no-fault was a fresh issue. So it's those perspectives that I bring to this.
I should say that, generally speaking, I support the thrust of this legislation. The structure of it in fact resembles a proposal that I helped IBC put together in 1987. I guess I feel a little vindicated in the sense that it's coming back after all these years in the form that we initially recommended, more or less, subject to a couple of details that I will talk about.
I agree that what we are appropriately on about is finding the right balance between containing costs but providing fair compensation to the victims of accidents, and I appreciate that this legislation represents an attempt to do that. However, there are one or two areas in which I think the balance is slightly out of kilter that I would recommend review of.
In particular, I want to really talk only about the restrictions on tort rights, or the removal of restrictions on tort rights, under what will be section 267.4. Basically, that's what I'm going to concentrate my comments on.
I want to talk first about the ability to sue for excess economic loss, which in principle I agree with and which was part of this proposal that we made back in 1987. I'm a little concerned with the way in which it's worded, because it seems to exclude a couple of categories of damages which I think may have fallen between the gaps. This just may be that I'm interpreting the wording incorrectly, but I think it's fair to say that at the very least it's unclear and possibly ambiguous. I would recommend that some attention be paid to subsection (2) in terms of defining when somebody can sue for excess economic loss.
The first area of concern I have in that regard is that it seems to exclude recovery in tort for loss of earning capacity. In terms of income loss, it seems to say you can only get excess lost income up to 85% of that actual loss, but it doesn't talk about loss of earning capacity. Even though I understand that the regulations are going further to refine this, and my concern may be taken care of then, my concern arises because as term, loss of income is different from loss of earning capacity.
Loss of earning capacity arises, for example, when you have somebody who is at the time of the accident, perhaps a medical student, not earning any money, and therefore entitled only to the $185 a week under the no-fault benefits, with no excess income loss, as I read that term, to sue for. Yet what has been taken away from that person, if that person has been rendered, say, a quadriplegic, is a lifetime of the earning capacity he would have got as a physician. Tort law recognizes in some, albeit limited, circumstances the right to sue for those kinds of damages.
What we would be doing, if I'm reading this legislation correctly, is basically freezing someone at the time when they are injured in terms of their income status, either at $185 -- it applies equally to somebody on the way up the ladder who happens to be injured at a time when they are relatively low on that ladder but it was fairly certain that they would have gone on, through promotions and so forth, to earn a lot more. Now the accident has deprived them of the opportunity to earn that extra, and I think that tort law recognizes that in some limited circumstances. That element of tort law seems to have been removed by this wording.
The other situation in which loss of earning capacity arises is where a person, after two years, is able to go back into the workforce and so doesn't qualify for the ongoing post-104-week benefit, but can't go back to his or her own job and has to take a job at a lower pay. They've lost the capacity to earn what they formerly were able to earn. So after two years there's a substantial drop: not entitled to any no-fault benefits; can only earn something much less. Tort law, if it wasn't restricted by the wording that's currently in subsection (2), would allow plaintiffs in the appropriate case to recover that difference if they could establish that that's what indeed they had lost.
It may not be that that's going to arise in all that many cases, but there are some cases where it will, and I think it's a significant loss that should be addressed. As things are presently drafted, it falls between the gaps of the no-fault benefits and what is allowed to be sued for in tort. So I would recommend that you revisit that topic of loss of earning capacity.
The other category of loss which seems to be excluded by the present wording of that section is a claim by a dependant in the event of a fatality. Subsection (1) seems to me to say that all tort cases are banned or barred in cases of personal injury or death except when it comes to economic loss from income loss or certain medical and rehabilitation benefits, which don't seem to me to capture the loss suffered by a dependent child or a dependent spouse when the breadwinner is killed. The no-fault benefits provide only $25,000. I think that's a big and serious gap and it should be specifically allowed that in the case of death the dependants can recover.
I suspect that may be an oversight, because in subsection (3), which deals with non-pecuniary loss, the specific reference is to claims under the Family Law Act, which is the kind of claim that I'm now talking about, but there's no reference in subsection (2) to claims under the Family Law Act, which covers dependants' claims. I would urge that you revisit that, and if I'm wrong in my interpretation, that you think about clarifying it so that those heads of damages are included, the dependants' claim under the Family Law Act, for economic loss as well as for non-economic loss.
The concerns then are that the renewed right to sue is defined in too narrow terms, given at least a couple of categories of important losses that people might face in auto accidents.
As I said before, I understand we're in a balancing process here and I appreciate that. The way I would do it, though, is while I might loosen up on the tort rights for economic loss, I would recommend tightening even further the threshold for non-economic loss and I would add the word "permanent" into your threshold.
The reason is not just to do with cost, although that's significant. I'm sure you've seen all the data dating back to the Osborne report which showed that in pre-no-fault times, more than half of the money that went in tort payments was in the form of general damages in amounts of under $20,000. So if you can eliminate those, you eliminate a big potential cost in the system.
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But it's not just a cost question. There's a question of principle here as well, I think, that supports dividing the line between those permanently injured and those not permanently injured for the purposes of non-pecuniary loss.
Remember what the phenomena are that we're addressing with non-pecuniary loss: pain and suffering and loss of facility and the trauma of having to adjust your life to drastic new circumstances and so forth. The no-fault provisions, particularly the rehab provisions and also the medical expense provisions, go some way to addressing those phenomena directly and reduce the need, in my view, for general damages in those kinds of cases. However, we have to accept that there are some people for whom all the rehabilitation in the world, all the medical care in the world, will not restore them to full health. Those are the people who are permanently injured, and it's appropriate that those people have access to compensation for that loss. But people who are going to be restored -- by definition, those not permanently injured -- those are people who I think are adequately taken care of with (a) the no-fault benefits and (b) the ability to sue for excess expenses for medical and rehab.
We can argue about whether it's proper to deprive certain people of damage and so forth, but as I said, we're talking about a balance. We have to draw the line somewhere and save some cost somewhere and sort out priorities, and in my view the priority is economic loss along the lines that I talked about just a few minutes ago.
So I would suggest revisiting those two aspects of the threshold. It's really readjusting that balance, which I agree is what you're trying to achieve.
The only other matter that I want to raise is to do with dispute settlement, in particular the proposal to add the possibility of private arbitration. I confess this is a little self-serving since I have served as a part-time arbitrator for the OIC and would welcome more work.
Mr Sampson: You are allowed.
Mr Jim Brown: Everybody else is self-serving. Join the crowd.
Mr Craig Brown: I would say this further in favour of it, though. I think that it helps in a number of situations to have people who are local available to conduct these hearings, because -- and this was my experience last summer -- it provided for much more flexibility, quicker response to the request for an arbitration, a quicker turnaround of the decision than is possible through the centralized office in Toronto. I think that whatever system there is, there should be accommodation for this option of arbitration.
However, having said that, I have to say that there are a couple of potential problems with the model as drafted, that is, simply saying you can arbitrate under the Arbitrations Act.
One is to do with cost. Normally when we think of arbitration we think of something that's cheaper, but from the point of view of the parties, this will possibly be a more expensive option than the present option under the OIC. That is partly because private arbitrators tend to charge more. The amount payable that I was being paid last summer was $450 a day, and I know private arbitrators charge about $200-plus an hour. So it's likely to be a more costly enterprise.
Secondly, under the Arbitrations Act, there's much more freedom for the arbitrator to award costs against the applicant, against the insured, whereas that tends to happen very rarely, if at all, under the OIC system. In addition to that, the Arbitrations Act allows either side to appeal to a court and basically start the whole thing over again.
For those kinds of reasons, I would suspect that there would be a tendency for people not to agree, for insureds not to agree to that system, as opposed to the OIC system. So you might want to think about a schedule of fees and some other rules, perhaps, that pertain to private arbitrations in this field to kind of even the playing field a little bit in terms of the options that people have.
The other aspect, the final point in relation to arbitration, is that the more you go to ad hoc private arbitrators under the Arbitrations Act, the more likely you are to have inconsistency from award to award. One of the things in favour of the present system with the OIC is that there are people who talk to each other all the time and there's a relative consistency. It took a while to achieve that, but now I think there's relative consistency in terms of what disability means and all the other things under the regulations. At the very least, I think there should be a requirement that private arbitrators be required to submit their awards for publication with all of the others at the OIC and possibly allow for some other kind of interaction so there's some consistency.
The Chair: Thank you very much, Professor Brown. I know Ms Castrilli wants to ask a question.
Ms Castrilli: You do, do you, sir? Thank you.
Thank you very much, Professor Brown. I'm interested in the statement that you made that you had given advice to the IBC in 1988, and I wondered what you had advised with respect to the excluded damages that you'd find under this legislation. Was that part of the package?
Mr Craig Brown: We simply said that you would be free to sue for any economic loss that wasn't already covered by the no-fault benefits, period.
Ms Castrilli: That's pretty much the position that was taken under OMPP, was it not?
Mr Craig Brown: No, under OMPP you could only sue at all if you crossed the threshold of permanent and serious, which applied both to non-economic and economic loss. What we recommended was that you apply that permanent and serious threshold only to non-economic loss and that that person be free to pursue excess economic loss unrestricted, except it was only in excess of what you had already received from no-fault.
Ms Castrilli: What would you do in the case of fatalities? That's one of the areas which you mention. There is now, what, a $25,000 benefit that's paid on the death of a spouse, and there's virtually nothing for loss of income and nothing for dependants. What would your recommendation be?
Mr Craig Brown: People now have a choice to buy life insurance, so you don't need to worry about the no-fault benefits, I don't think. But I think that it's still appropriate to have a tort right for a fatality claim. For example, if I was killed tomorrow and this system was in effect, my children would be able to recover from the at-fault person's insurance company something approximating the level of income I provide for them now. That's an important gap that, as I read the legislation, it leaves.
Mr Sampson: With respect to the changing of the threshold, going back to the OMPP threshold for the pain and suffering or general damages category, I think you'll find that that will have less of an impact on the lost costs than you might be expecting. In fact, to a large degree, according to the preliminary numbers we saw when we took a look at various costing models, it was almost negligible, because of the fact that we had changed dramatically the economic threshold, from $10,000 to $15,000.
Mr Craig Brown: That may be so. The other thing that worries me a little bit about it is that the definition of serious, as we're seeing from the case law already, is kind of fluid. The other thing is that I would predict you would see a kind of inflation in the value of pain and suffering, which would gradually minimize the impact of the deductible.
Mr Sampson: The dilemma is that over time economic deductibles get eroded, but also because of the way in which we've got a wonderful court system, so do the verbal thresholds get eroded. It happens. So it's a matter of a catch-up periodically to make sure the original thrust of the deductible or the thresholds remains valid, and that's why we've suggested two-year reviews of such things as the economic and verbal threshold on items such as the pain and suffering category.
Your comment with respect to a fee schedule for private arbitration: It's a very good comment. I suspect, though, that they might not particularly like us to go to the average fee that the OIC is charging. But anyhow, thank you very much.
Mr Jim Brown: Mr Chairman, can I ask Mr Kormos's question?
Mr Sampson: Only if you have a 10-minute preamble.
Mr Jim Brown: I can't talk that long.
Ms Castrilli: Could you be that partisan?
Mr Jim Brown: Just a quick quickie. You participated in 1987-88. Presumably you did it to save money. What happened? What went wrong? Because we didn't.
Mr Craig Brown: You want the story of 1987?
The Chair: I thought you said that was a short question.
Mr Jim Brown: It was a short question. What went wrong? You did it to save money, and here all kinds of costs got added in. I'm curious. What happened?
Mr Craig Brown: This was a proposal made to Justice Osborne in his committee of inquiry, and he did not accept that it was necessary to have a threshold even for non-pecuniary loss.
Mr Jim Brown: I mean, no-fault: What happened?
The Chair: Thank you --
Mr Jim Brown: We'll talk after.
Mr Craig Brown: Okay.
The Chair: I'd like to thank you, Professor Brown, for your presentation today.
I'd like to thank the committee for their cooperation. Mr Crozier, did you have a comment?
Mr Crozier: Yes, I do, and it's very quick. It's rather moot after eight months, I think, but just for the record, there was a document tabled, and I don't have the benefit of Hansard, but I think when Mr Wettlaufer mentioned it, it was from the Liberal plan. I think he said 15% was promised in savings and I don't see that in here. But, as I say, it's a little moot after all this time.
But I would like to say on behalf of the Liberal caucus, Ms Castrilli, Monte Kwinter, Mr Phillips and I, that I think these last two weeks have been beneficial. In some way I hope we've added to it and that we will in the future, and I want to thank Mr Sampson, representing the ministry. You, sir, as the Chairperson, you've done a great job, and certainly to the staff, Franco and his people. In my own short two years here, it's been one of the most non-partisan committees, with a few exceptions who shall remain unnamed.
Mr Sampson: You don't want to put them on record, do you, the exceptions?
Mr Crozier: It has been one of the more non-partisan committees and I hope these two weeks will end up with something that we're all working towards.
The Chair: Thank you very much, and I do appreciate the committee's cooperation in making it non-partisan and in its cooperation with me.
This committee will stand adjourned until Monday, March 4, at 9:30 am in a committee room to be determined at Queen's Park.
The committee adjourned at 1703.