VANCOUVER (NEWS 1130) — As ICBC continues to grapple with mounting debt and outrage over increased insurance rates, a Vancouver lawyer says taking suspected insurance fraudsters to court is not the best way to address its financial issues.
Wes Mussio with Mussio Goodman law group says his firm’s number of clients being taken to court for suspected fraudulent claims has risen five to 10-fold over the past few months. ICBC’s Special Investigation Unit (SIU) has expanded from 60 in 2015 to 126 employees, and includes a cyber team for online investigations, according to the company.
“They want to send a strong message that fraud isn’t appropriate in ICBC claims,” Mussio says. “Sometimes you have to scratch your head on what the allegations are because, if anything, it’s an exaggeration of an injury claim, not a true fraud, but ICBC wants to make a statement to help preclude people from advancing fraud.”
The SIU completed more than 16,000 investigations for suspected fraud last year, and 54 per cent were found to contain an element of fraud.
Some of those cases, including those which may be more an injury exaggeration, are best dealt with outside the courtroom, according to Mussio. He gives the example of a client who said she was injured on a bus, but ICBC doesn’t think her injuries are as serious as she says they are because a video of the incident doesn’t show her moving around a lot. Another involved a man who was charged for giving an incorrect T4 slip.
“They’re hiring defense lawyers at $200 to $400 an hour to run these cases, and to do a trial is quiet expensive. What it does is create a tremendous amount of expense for ICBC and the person they’re going after. They could have simply worked out a deal and closed out the file without a lot of costs,” he says. “The answer would be is if you come across something that is inappropriate or exaggerated, than deny the claim outright, and force the claimant to go to court if he or she chooses.”
ICBC can deny claims of those they deem to be fraudulent. Other penalties can include asset seizure, fines up to $25,000, denial of optional insurance coverage and civil court. The company stressed criminal convictions can also limit a person’s career options and prevent a person from crossing the border or applying for credit.
Having worked for ICBC in the past, Mussio says the crown corporation’s move to digital claim filing instead of face-to-face at a centre and less spending on initial investigations and adjusting files has also contributed to the rise in fraud.
**Fraudsters could be deterred knowing they won’t be successful**
According to lawyer Kyla Lee, ICBC is very successful with the cases it does bring to court.
“When people are charged with ICBC fraud offences, there’s usually a huge body of evidence that ICBC’s special investigators have collected. It’s very rare to see these types of cases prosecuted with only a small amount of information,” she says, adding the information people provide in their claims could be enough to move ahead with charges.
However, she also doesn’t think prosecuting more people will act as a deterrent to future offenders because the ruling may not get a lot of attention.
“I think more public attention needs to be paid to the consequences of making false insurance claims,” she says. “We need to have a better public education campaign by ICBC to inform people about what the consequences should be.”
This week ICBC announced it received approval from the BC Utilities Commission to increase basic rates by 6.3 per cent on an interim basis starting April 1. ICBC lost $1.3 billion in the last fiscal year and is projecting a $890 million loss for this fiscal year.
An increase in the number of crashes remains the main reason for ICBC’s money woes.