Dramatic reduction in claims and improved recovery time with no fault insurance system

Posted April 19, 2000

(Note: Dr. David Cassidy conducted this study while Director of the University of Saskatchewan Institute for Health and Outcomes Research, Department of Physical Medicine and Rehabilitation. Cassidy, who joined U of S in 1992, left Dec. 31, 1999. This release was prepared by the University of Alberta.)

Injured whiplash claimants recovered twice as fast and the number of claims dropped 28 percent under a 'no fault' insurance system when compared to a 'tort' system, according to a study led by a U of A public health sciences professor released today in the New England Journal of Medicine.

The study, conducted under the direction of Dr. David Cassidy while at the University of Saskatchewan, found that by removing the possibility of litigation for pain and suffering, health recovery improved dramatically.

The study was the first to investigate the role of the insurance compensation system in the recovery of those injured in traffic accidents.

Under no fault insurance, there is little or no litigation and benefits are not tied to pain and suffering, thus people can concentrate on getting better rather than focusing on the negative aspects of their injuries. According to the study, this translates into huge improvements in recovery time.

The study involved all traffic injury claims in Saskatchewan that occurred in adults over an 18-month period, July 1 '94 to December 31 '95 - during the last six months of a 'tort' system and the first year of a new 'no fault' system. Of the 9,006 claims made, 7,462 (83 percent) were for whiplash.

The study found that the most important factor in recovery under the tort system was whether or not the claimant retained a lawyer and those who did took about 250 days longer to close their claims than those without, regardless of injury severity. Under no fault, those with lawyers took on average 100 days longer to close.

Statistics showed that tort insurance compensation can be a barrier to recovery for traffic injury claimants because in proving their pain is real, claimants can be exposed to conflicting medical opinions, unsuccessful therapies, legal advice to document their suffering and disability and the stress of court action.

Under the tort insurance system, claimants can sue for pain and suffering while under no fault claimants cannot sue for this. Under the no fault system in Saskatchewan, medical benefits were increased and more money was made available for income replacement. In addition, benefits were made available to anyone injured in a traffic collision, regardless of fault, thus removing any incentive for establishing fault and creating a victim.

Three provinces, Saskatchewan, Manitoba and Quebec, operate under a no fault insurance system where no payments are made for pain and suffering.

For more information, contact:

Sandra L. Halme
Media Relations Manager
Public Affairs
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University of Alberta
Edmonton, Canada
T6G 2E8
780-492-0442; fax 780-492-2997
www.ualberta.ca
www.ualberta.ca/publicaffairs

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