LEGISLATIVE ASSEMBLY OF ONTARIO
11 JANUARY 1990
G-203

The Vice-Chair: Our next individual is Barry Fitzgerald from the Freedom Party of Ontario. Mr Fitzgerald, you also will have 15 minutes and I suggest that you try to maintain a portion of that for questions.

FREEDOM PARTY OF ONTARIO

Mr Fitzgerald: Let us first consider the perceived underlying problem, excessively high premium rates. My insurance company tells me that with the rate caps, it now pays out 131 per cent of premiums collected and that costly litigation is its major expense. They are very evasive about how this loss is made up, but I have noticed that some companies have been insisting that applications for new policies-also, they try to get them to buy a home owner's policy or another type of insurance, so perhaps there is some clue as to how that is made up in that situation. Incidentally, you are dealing with that in section 76 of this act.

This is all because of price controls; they have not worked and they never will. But there is much that can be done to the civil justice system to make it more efficient, to streamline it and make it for the people instead of the lawyers. One suggestion I have in this regard is to allow lawyers to charge a percentage of whatever settlement would be handed down from the judge. This would destroy their incentive to prolong litigation and it would also be of benefit to victims who cannot afford to put the money up front for a lawyer.

Other changes are possible in making the court system less formalized, and I do not see any reason why the average person could not present his own case before a judge. The People's Court comes to mind, that type of system, where the judge inquires, finds the facts and gives a decision on that basis.

Benefit controls are not the answer either, and this appears to be what this bill is all about, controlling the benefits. One of the stated objectives of the bill is to provide incentives for people to obtain insurance. I would argue that it does the opposite.

Thinking back, before mandatory insurance, most drivers voluntarily purchased third-party liability in order to protect themselves from civil awards against them. Now it will no-fault, almost no civil liability, and most of the rationale behind the mandatory insurance is gone.

Let's look at the winners and losers of this bill.

Losers: seriously and permanently impaired victims. They will have to go to court just to get the right to sue that they have now. That is an expense.

Losers: people earning more than S450 a week net. These individuals are going to have to buy supplemental insurance just to have basically the same coverage they have now. That is not going to make their total insurance package any cheaper.

Losers: lawyers. Let's not grieve about that one.

Winners: Insurance companies, at least initially, by the reduced litigation, benefits and tax, but I expect this will be eroded by future regulations and the expected increase in accident rates.

I would also expect that benefits will have to be increased. There is a balancing act going on here and the equilibrium is not very good. This bill proposes that there be no relationship between the actual loss and the benefit paid, and that is something I strongly object to.

Another concern is the effect this bill will have on competition. It appears the accompanying regulations could produce 150 different insurance companies that have the same premiums, the same risk classification and the same premium rates. In a free market, with that many companies, consumers should be well served. Unfortunately, it takes the whim of only one government to see that they are not.

I would like to remind the committee members of the last piece of no-fault legislation that was before you in the Legislature, Bill 162. A comparison shows this Bill 68 to be much less generous to victims, so prepare yourselves for an organization of injured motorists outside.

The Vice-Chair: Any questions? I have not been given any signal.

Mr Kormos: As I asked Mr Palk, how representative do you believe your views are of the community that you come from?

Mr Fitzgerald: Well, Peter, I have asked around at work and nobody really understands it.

Most people do not even realize that these hearings are going on or that there is any shake-up in the insurance process at all. That would not make me very representative.

Mr Kormos: Okay, I hear you.

Mr J. B. Nixon: Just a comment, and I guess a question. As I have been following the debate that has been around for several years now on insurance and about insurance, what I find amazing is the very few people who even know who their insurance company is, and I do not know anyone who has read his insurance policy. Do you?

Mr Fitzgerald: Yes. I have.

Mr J. B. Nixon: Good for you. You are the first person I have met, quite honestly, who has read his insurance policy. I told myself I was going to do it, but I never did. And no one knows-now that you have read the policy, maybe you know; maybe you understood it.

Mr Fitzgerald: I read it and I understood most of it. It was a long time ago and I have probably forgotten most of it.

Mr J. B. Nixon: I was going to say I do not think anyone knows what benefits he is entitled to now under his existing insurance policy, which makes this discussion difficult. It has to be done. The discussion has to take place. The issues have to be debated and considered. But it makes it that much more difficult.

Mr Fitzgerald: Yes. I agree.

Mr J. B. Nixon: Thank you for coming.

Mr Fitzgerald: Thank you very much.

The Vice-Chair: I would just like to remind the committee that we meet again Monday at 1:30 pm. Until then, this committee stands adjourned.

The committee adjourned at 1700.