The insurance Corporation of British Columbia (ICBC) will be applying to the BC Utilities Commission by October 30 for a rate hike. ICBC has attributed the need for more money to an increase in injury claims. They also suggest that it is due in part to the increased number of fraudulent claims.
I have been representing individuals injured in car accidents for over 20 years. In that 20 years I have seen a lot of changes in the way that ICBC handles claims. Some of those changes have included a reluctance to attend mediation to resolve a case, requiring more document production before settlement, requiring more opinions before settlement and utilizing service providers to obtain their own medical opinions. The reluctance to settle at mediation means that claims go on longer and that more claims go to trial. This in turn increases the amount of money ICBC is spending on their lawyers to defend the cases rather than spending the money on injured claimants. Document production greatly increases the cost associated with adjudicating claims as does increased use of opinions. The most significant increase in cost has been associated with utilization of service providers for obtaining opinions. This has in many cases doubled the cost of obtaining opinions.
When it comes to fraudulent claims I would be interested in seeing numbers from ICBC which actually document an increase in the number of fraudulent claims. ICBC has gotten very aggressive in dealing with these claims. They have embarked on a number of prosecutions of these claims in addition to pursuing damage claims against those involved in the Stanley Cup riots. I am not suggesting ICBC should not pursue these types of claims I am however saying that there is more to the story when it comes to increased costs than increased injury claims and fraudulent claims. The legal fees associated with pursuing the Stanley Cup riot claims is likely in the hundreds of thousands. Finally, there have been significant transfer to general government coffers of ICBC money. It seems to me that this should not be happening if ICBC is in a position where they have to be asking for a further rate hike.
It will be interesting to see what position ICBC takes on the necessity for the rate hike before the BC Utilities Commission. It will be even more interesting to see whether ICBC is forced to answer the tough questions around money transfers, internal practices that are resulting in increased claims handling costs and the pursuit of ICBC’s own legal claims. It is all too easy for ICBC to continually point the finger at increased injury claim costs. It is not as easy for them to explain that the increased cost is due in large part, if not wholly, to the manner in which they have chosen to adjudicate claims.