There is the existence of a compensation crisis in Ontario. The changes to the system of compensation following the enactment of the first threshold/no-fault system in 1990 set in motion a process of devolution in compensation. This is particularly interesting because the impetus for enacting this system of compensation was the insurance crisis of the 1980s.

Five categories of deficiencies with auto accident compensation emerged from an iterative review of my data.

The first category illustrated that accident benefits are too costly to administer. This stems from the complexity in receiving the benefits as well as the cost of administering them. This casts some doubt on some of the academic pieces favouring a no-fault system of compensation because these administrative costs were not previously accounted for. The sample also identified the huge expense of funding medical and rehabilitative treatment. Again, these costs are unique to the no-fault system and they need to be considered further because they represent a tremendous economic burden on the no-fault compensation system.

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As well, there were inefficiencies identified with the tort system, namely the threshold and the deductible. With respect to the threshold, the sample identified the expensive transaction costs associated with having to interpret and litigate it. The threshold spoke to the inefficiency of compensation whereas the deductible attacked the sufficiency of compensation. The size of the deductible is perceived to be a harsh tax on the general damages of the innocent victims. Also, the use of both the threshold and the deductible were identified as being redundant since the goals of the threshold/no-fault system can be addressed through the use of only one of these filters. Finally, the sample identified that the auto insurance consumer should play more of an active role in understanding the benefits available to them in the event of an accident.

In summary, the first threshold/no-fault bill can be viewed as a progressive piece of legislation. Although tort rights were curtailed, the threshold was not draconian by any stretch and there was no deductible. In exchange for some innocent victims losing the right to sue, all injured individuals received accident benefits. However, by the time the fourth threshold/no-fault legislation was introduced in 2003, the trade-off had lost its lustre. With the enactment of a four-page regulation defining the threshold, the increase of the statutory deductible to $30,000 and the standardization of no-fault benefits, it was clear that the level of compensation had devolved since Bill 68. What was surprising was that although tort rights were eroded further, there was no accompanying enhancement of no-fault benefits. Therefore, it was clear that the balancing of tort rights with no-fault rights was upset.

Further, there was no empirical study that had been conducted that tested the theory that no-fault benefits compensated individuals more efficiently than the tort system. If anything, the critique on tort law was presented naïvely without turning a critical eye on what would replace it. The empirical data that I gathered from my sample confirms that there is a significant amount of complexity to the no-fault system that serves to render that compensation inefficient and insufficient. Although this data gathered from the interviews cannot be accepted as conclusive, they do bolster the argument that Ontario is experiencing a compensation crisis and this needs to be investigated further.

I concluded my study by making a series of recommendations to reform the system of auto accident compensation in light of the categories that emerged from the data. These should be treated as a general framework requiring further study, particularly an economic analysis. It is important to note that my study is a small contribution to the existing literature. With some further empirical study, a new system should be created that carefully considers the areas that have been identified as deficiencies. The starting point has to be a clear vision for what we want the system to accomplish.

Joseph Campisi Jr., B.A., M.A., LL.B., LL.M., Ph.D. (Candidate), personal injury lawyer, Carranza, Barristers and Solicitors.