More revelations on auto premiums’ inflated legal costs

Details of unverified claims by personal injury legal firms in province come to light

More revelations on auto premiums’ inflated legal costs

Motor & Fleet

By Will Koblensky

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. 

Related stories:
Contingency fees driving up insurance prices in Ontario

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