Top court rejects insurance cap appeal

CALGARY — Insurance payouts for whiplash injuries will stay capped in Alberta after the Supreme Court of Canada refused to hear the appeal of two women who argue a fixed maximum is discriminatory.

CALGARY — Insurance payouts for whiplash injuries will stay capped in Alberta after the Supreme Court of Canada refused to hear the appeal of two women who argue a fixed maximum is discriminatory.

The controversial $4,000 cap was brought in by the government in 2004 to save private insurers millions of dollars on injury claims in exchange for lower premiums for many drivers. It was later raised to $4,504 to account for inflation.

Peari Morrow from Calgary and Brea Pedersen from Edmonton, who were left with chronic injuries in separate car crashes, took the policy to court. They argued it’s unfair to cap payouts for only one type of injury.

A Court of Queen’s Bench judge originally ruled in their favour last year, finding the policy violates Canada’s Charter of Rights and Freedoms. But in June, the Alberta Court of Appeal overturned that decision.

The Supreme Court’s refusal to hear the case means the Appeal Court’s decision stands and no further appeals are possible.

“The decision to deny our leave application is a disappointment, both to my clients and to me,” their lawyer, Fred Kozak, said Thursday.

“They demonstrated great courage in raising this issue and they did it not for money but because they believe that people should be treated equally.”

Alberta Finance Minister Iris Evans said the decision shows the government has struck a fair balance between people who pay insurance premiums and those who are injured in accidents.

“The unanimous decision by the Alberta Court of Appeal, which is now the final word on the case, supports this and confirms that the province’s auto insurance system responds to the needs and circumstances of those suffering minor injuries,” she said in a statement.

The groundbreaking case originally stretched out for weeks in a Calgary courtroom. It focused on regulation that then premier Ralph Klein imposed — with very little public debate — on soft tissue injuries that don’t show up in X-rays.

The lower court judge ruled that the insurance payouts for the two women should rise to $21,000 for Morrow and $15,000 for Pedersen.

Several legal groups, including the Canadian Bar Association, had supported the women’s case, arguing at its essence it involved the right of everyone to access the justice system to determine compensation.

“It not only affects motor vehicle accident victims in Alberta, but in a general sense places a restriction on access to courts,” said Kozak.

Randy Bundus, general counsel with the Insurance Bureau of Canada, said the case ends the uncertainty for insurance companies and ensures that other benefits brought in with the savings from the cap, such as higher coverage levels for other injuries, remain in place.

He said the cap only applies to damages from pain and suffering and that higher amounts can be achieved for economic losses from injuries.

In order to have a properly functioning system, the government had to draw a line somewhere, Bundus argued.

“No matter where the government drew the line there would be somebody just … outside of the line, they would feel that was unfair,” he said.

“The government had to draw the balance somewhere, they had to balance affordability of premiums with proper recovery for victims.”

Three other provinces — Nova Scotia, New Brunswick and Prince Edward Island — have similar caps, he said, adding an appeal court in Nova Scotia recently also upheld their regulations.

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