More revelations on auto premiums’ inflated legal costs

More revelations on auto premiums’ inflated legal costs

More revelations on auto premiums’ inflated legal costs Lawyers’ contingency and referral fees driving up the cost of auto insurance made waves at the end of January, and now more details of unverified claims by Ontario’s personal injury legal firms are coming to light.

Insurance Business covered a study by Osgoode Hall Law School Professor Allan Hutchinson that found lawyers’ largely unregulated fees sometimes accounted for 40% of a settlement, and sometimes the majority of a claim.

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The Toronto Star then reported on Monday that legal firms claiming they’re the “best”, “top rated” or “#1 Personal Injury Law Firm” may not actually base those claims on truth and could contravene the Law Society of Upper Canada’s advertising rules.

The Star investigation said Diamond & Diamond, Preszler Law Firm, Goldfinger Personal Injury Law, Mazin Associates and Sokoloff Lawyers all made “dubious” assertions of success and advertised awards they paid for or from unverified organizations.

In the case of Goldfinger, his radio ads referring to him as “London’s personal Injury lawyer” or “Peterborough’s injury lawyer” were subject of a complaint to the Law Society of Upper Canada because his offices in those locations are allegedly unattended rooms.

Goldfinger and other law firms took down some of their awards following phone interviews with the Star, the newspaper reported.

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The latest news, combined with Hutchinson’s A Study of the Costs of Legal Services in Personal Injury Litigation in Ontario, and a previous exposé that found Diamond & Diamond has no lawyers it regularly sends to trial on staff, is painting an unpleasant picture of the personal injury legal landscape in Ontario exacerbated by the fact that Ontario drivers pay the highest auto insurance premiums in Canada, with high premiums partly blamed on lawyer fees.

“Contingency fees are one of the key drivers of claims costs and, as a result, increase insurance premiums that all Ontario drivers pay,” Irene Bianchi, executive vice president of claims, Aviva Canada, wrote in a press release in response to the earlier study.

“The cost difference between the provinces isn’t from more accidents or a higher population density. Instead, it can be directly attributable to the large amount of costs taken from the system that do not contribute to helping accident victims. The system is broken. A broader review of where total claim payments are going is desperately needed,”

Progressive Conservative MPP for York-Simcoe, Julia Munroe indicated she would introduce a private members bill to Queen’s Park addressing the issue. 

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Contingency fees driving up insurance prices in Ontario
  • Jokelee Vanderkop 2017-02-07 5:25:38 PM
    Insurers want the public to think that “Contingency fees are one of the key drivers of claims costs and, as a result, increase insurance premiums that all Ontario drivers pay,” according to Irene Bianchi, executive vice president of claims, Aviva Canada. But this is not true. Contingency fees are what claimants often pay personal injury lawyers to defend wrongful denial of claims for accident benefits such as treatment, rehab, income replacement benefits and to fight for tort settlements.

    Insurers pay multi millions of dollars annually to insurer-hired second opinion medical assessors working out of assessment centres whose primary clients are insurer-sent claimants. Injured parties are sent, not to help them get better, but primarily to discount, downplay or dismiss diagnoses by treating physicians so that insurers can deny claims. A lot of money is spent to deny legitimate claims, forcing accident victims to hire lawyers to have their policy honoured. As few have the money to be able to afford a lawyer, thankfully contingency fee agreements provide a means for them to access legal representation, without which they would be completely dismissed by their insurer. There are problems to be sure with CFAs but that is nothing compared to the problem of insurer-hired second opinion medical experts who retain their lucrative status as insurer assessors thanks to the number of claimants they deny, point to as fraudsters or as malingerers. For auto insurers, it is not about the claimant, but about dollars and cents to the detriment of the health and recovery of accident victims. Insurers know they can wear down seriously injured claimants by sending them to dozens of insurer examinations extended over years. Struggling to deal with their injuries, most of these claimants don't have the physical, emotional or financial means to continue to fight their insurer. Not being able to work at all or not enough hours to make a sustainable living, they can't handle the additional pressure of a claims process geared to deny them. Many give up, a few settle for far less than is owed, and the odd person fights on to the bitter end.

    In addition to the expense of paying their assessors, insurers have their own stable of costly lawyers to defeat a claimant if that person continues the fight. Add to that the multi-million dollar salaries the insurance industry's senior management pays itself, it is the industry, and only the industry itself that is responsible for high claim costs. "So You Think You're Covered! The Insurance Industry Rip-Off" outlines exactly what is happening in this industry and it is not a pretty picture.
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