In 2004, Alberta engaged in some aggressive insurance reforms with an aim to, among other things, reduce insurance premiums by limiting claim payouts. This resulted in the introduction of a “cap” on soft-tissue injuries in Alberta. Injuries falling within the purview of the “cap” would be limited to a maximum recovery of $4,000.00. This cap was also to increase with inflation each year, and it currently sits at approximately $4,500.00.
In February, 2008, the Court of Queen’s Bench of Alberta ruled that the “cap” was unconstitutional. Two arguments were advanced in this regard – that the “cap” offended either (or both) section 7 and 15 of the Charter of Rights and Freedoms, and that this infringement of the Charter was not warranted or in the public interest (in other words, justified by section 1 of the Charter). The Court of Queen’s Bench agreed with the Plaintiff’s counsel in this case, and felt that the “cap” offended section 15 of the Charter, which reads:
Every individual is equal before and under the law and has the right to the equal protection and equal benefit of the law without discrimination and, in particular, without discrimination based on race, national or ethnic origin, color, religion, sex, age or mental or physical disability.
It was argued that since soft-tissue injury sufferers may suffer a disability, and the law treated them differently because of the nature of their disability, the “cap” was unconstitutional. This ruling was appealed to the Court of Appeal where it was ruled that the Court of Queen’s Bench made an error in its assessment of the law. The Court of Appeal said that it was wrong to focus simply on the perceived discriminatory effects of the “cap.” Rather, the “cap” needed to be viewed as part of a large scheme of legislation designed to reform the insurance industry and protect the public interest. It was noted by the Court of Appeal that the result of the “cap” was that insurance rates declined by 18% in Alberta. In viewing the entire legislation, and not simply the “cap”, the Court of Appeal reversed the lower-court’s ruling and re-instated the “cap.” In other words, the legislation viewed as a whole was not considered discriminatory.
Now, it is highly likely that this decision will be appealed to the Supreme Court of Canada. This case, by its very nature, was bound to go all the way to the Supreme Court regardless of the outcome. An analysis of what could happen may be the subject of a future blog post. What one needs to take from this is what the “cap” covers, what the “cap” does not cover, and how the “cap” may affect you if you make a claim against someone for soft-tissue injuries.
TO BE CONTINUED