Fee cap proposed for personal-injury lawyers

Days after an opening salvo from the Ontario Trial Lawyers Association, the insurance industry has replied with its own broadside, endorsing a proposed fee cap on personal-injury lawyers.

Motor & Fleet

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Days after an opening salvo from the Ontario Trial Lawyers Association, the insurance industry has replied with its own broadside, endorsing a proposed fee cap on personal-injury lawyers.

“This is welcome news. It is important that the consumer gets looked after,” said Greg Somerville, the president and CEO of Aviva Canada. “We have to look at any and every opportunity to get the costs down in auto insurance.”

The IBC states that it is the lawyers themselves who are adding to the problem by billing excess contingency fees that cost consumers an estimated $500 million annually (2013 figures).

“Real reforms to the auto insurance product have been ongoing and continue and are reducing the cost of auto insurance in Ontario,” said Ralph Palumbo, the vice president of the Insurance Bureau of Canada. “If the lobbyists and well-heeled lawyers want to know who is driving up insurance costs, they need to take a look in the mirror.”

The petition, presented by the Conservative MPP for York-Simcoe Julia Munro, asks for the following:

- That the government introduce legislation to cap the maximum rates that personal-injury lawyers charge injured motorists;

- That personal-injury lawyers be required to submit to the superintendent of insurance information on fees, disbursements and referral arrangements;

- That the superintendent publicly publish an annual report on the information collected; and

- That the superintendent develop a consumer-friendly fee disclosure statement that must be used by personal-injury lawyers.

It is the counterpoint to a study conducted by two York University professors for the Ontario Trial Lawyers Association. According to professors Fred Lazar and Eli Prisman, the average Ontario family should have paid $100 to $120 less for auto insurance in 2013, adding up to a total of $840 million in overcharges that year.

The study also states that individual auto insurance companies have earned “significantly more than the 11 per cent return on equity” allowed by the Ontario government, despite cuts to accident benefits. (continued.)
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“Families in the province are paying more and getting less,” said Steve Rastin, president of the Ontario Trial Lawyers Association during a press conference coinciding with the release of the study.

The petition that is currently before the Ontario legislature states that personal-injury lawyers “often charge contingency fees of up to 45 per cent of a settlement;” adding that consumers do not understand just how these fees are calculated.

Munro’s petition continues that “it is in the public interest for reasons of transparency, consumer protection and public accountability that the Ontario superintendent of insurance be authorized to collect from personal-injury lawyers and paralegals representing claimants on tort and accident benefits claims, information on case-specific fee arrangements, costs, disbursements and referral fees to determine the impact of such fee arrangements on the cost of auto insurance in Ontario.”
 

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