At 1:30 p.m. on the 8th of February, 2008, the Court of Queen’s Bench of Alberta issued its reasons in the case of Morrow v. Zhang, declaring the Minor Injury Regulation, Alta. Reg. 123/2004 (“the Regulation”) to be struck down as being inconsistent with Canada’s Constitution Act, 1982, (“the Charter”) and therefore of no force or effect. The Regulation had come into force in October of 2004; s. 6(2) of the Regulation essentially capped non-pecuniary, or general damages for minor injuries arising from the use or operation of an automobile at a maximum of $4,000 (with adjustments over time). “Minor Injuries” were defined as follows: (h)“minor injury”, in respect of an accident, means (i) a sprain, (ii) a strain, or (iii) a WAD injury caused by that accident that does not result in a serious impairment. (“WAD" being an acronym for “Whiplash Associated Disorder”). In the context of personal injury actions arising from two automobile accidents, the Plaintiffs challenged the constitutionality of the Regulation, submitting that their Charter rights under ss. 7 (the right to life, liberty and security of the person) and 15(1) (the right to equality) had been infringed. The constitutionality of the sister regulation, the Diagnostic and Treatment Protocols Regulation, Alta. Reg. 122/204 was not challenged although there was comment on it.
The Insurance Bureau of Canada was granted leave to intervene, and Her Majesty the Queen in Right of Alberta (“the Crown”) was a statutory intervenor on the Charter issues.
But for the existence of the Regulation, Associate Chief Justice Wittmann would have assessed non-pecuniary damages for each Plaintiff at amounts significantly in excess of the $4,000 cap.
In performing his Charter analysis, Justice Wittmann reviewed the history of the events leading up to the coming into force of the Regulation and insurance reform generally. In the context of his s. 7 analysis, (whether the right to life, liberty and security of the person was infringed) he found that there was insufficient evidence to conclude that the Plaintiffs' right to retain counsel or obtain access to justice was infringed by the Regulation. He also found that the Regulation did not infringe on the Plaintiffs' right to security of the person, as the Plaintiffs were essentially attempting to bring a claim for pure economic rights within the purview of s. 7.
However, he did find that the Regulation created a distinction, and differential treatment of persons within a class based on physical disability (one of the protected equality rights under s. 15(1) of the Charter). This constituted discrimination.
The focus therefore turned to the Government of Alberta to justify the passage of the Regulation pursuant to section 1 of the Charter. Section 1 provides that the guarantee of equality under the Charter is “. . . subject only to such reasonable limits prescribed by law as can be demonstrably justified in a free and democratic society.” In applying the Supreme Court of Canada’s classic test in R. v. Oakes to these facts, he was content to find that: (a) maintaining affordable mandatory automobile insurance was a “pressing and substantial objective”; (b) there was a rational connection between the objective and the Regulation; but that (c) the Regulation “plainly overshot the mark” in terms of whether the Regulation provided “minimal impairment” (i.e. there were other, less intrusive means of addressing the objective); and (d) the overall scheme had a deleterious effect on the targeted group.
In the result, the Minor Injury Regulation was struck down. Surprisingly, Justice Wittmann refused to grant a temporary suspension of his ruling pending appeal and in the result, his decision has immediate effect.
It is noteworthy that the Diagnostic and Treatment Protocols Regulation continues in force and will assist injured persons in addressing minor injuries notwithstanding this result.
This alert is a general overview of the subject matter and cannot be regarded as legal advice. Please contact Don Dear at ddear@mross.com, Dave Risling at drisling@mross.com, or any other member of our Insurance Practice Group for further advice on this or any other Insurance Law matter.
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