'Catastrophic' ICBC fallout if B.C. loses looming court challenge

The B.C. government's budget surplus could be in jeopardy if the province strikes out on court challenges of ICBC reforms.

Last spring, the province brought in major changes to the B.C. auto insurance industry, meant to curb ongoing steep losses at the Insurance Corporation of B.C., but trial lawyers launched two challenges to the reforms.

The B.C. Supreme Court has already sided with the B.C. Trial Lawyers Association on one issue; a ruling last week deemed it unconstitutional to limit the number of expert reports. 

In a second case, trial lawyers are also challenging both the $5,500 cap on pain and suffering claims for minor injuries, and the move to direct disputes under $50,000 to the Civil Resolution Tribunal. 

"If we lose in court on those reforms, it would be catastrophic," said Attorney General David Eby. "Those two changes are foundational in getting ICBC back into financial stability."

However, he's confident those measures will ultimately hold up in court, pointing to other provinces where similar regulations have been challenged unsuccessfully. 

Blow to B.C.'s bottom line?

The first step in these sweeping ICBC measures came last winter.

On Feb. 11, the province announced the change to limit medical experts, effective immediately.

One week later, the budget was presented — and baked into the surplus was the $400-million that change was projected to save, that the ruling last week may have wiped out.

"It's a very bad situation," said Eby. "Taking $400-million back onto the books that we thought had been addressed, that's not great." 

The government may still decide to challenge the court ruling that deemed the expert limit unconstitutional.

But if it chooses not to, or tries and fails, it puts B.C.'s already precarious projected budget surplus in question.

And if the province loses the upcoming court challenge on the other ICBC reforms, it would spell downright financial disaster.

"Those measures alone are responsible for $1-billion in savings at ICBC annually," added Eby. "It would be a very huge deal if for some reason those reforms were unsuccessful [in the courts]." 

ICBC salaries questioned

The grim outlook comes the same day ICBC released its annual financial statement. 

As expected, the report confirms $1.15-billion in losses for the fiscal year, which ended March 31st. 

The numbers show $1.9-billion was paid out to a total of 42 law firms. Most of that money, $1.7-billion, included settlement payments for crash victims. 

The 126-page document also reveals an increase in the number of high-earning ICBC staff compared to the last year the B.C. Liberals were in power.

Ninety-three employees made $150,000 or more a year in 2018-2019, nearly twice as many compared to 2016.

"That's not acceptable ... It doesn't look like Mr. Eby has control over ICBC," said ICBC opposition critic Jas Johal.

"If you're a parent right now paying $6,500 a year for your child to drive, that's going to have steam coming out of your ears."

However, the 93 staff earning above $150,000 is down from the 147 staff at that level last year, the report shows.

The B.C. Liberals, who were in charge of ICBC when the costs started to spiral out of control, believe a top-down review of the public insurer is needed complete with recommendations. 

"Those recommendations could include fixing the present system, perhaps a hybrid public-private partnership, looking at other public systems in Canada, and also looking at private models as well," said Johal.