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The Ontario Trial Lawyers Association in Canada, is up in arms against Ontario's newly passed legislation to reduce car and auto insurance premiums and tackle fraud. The legislation named as "Ontario's Fighting Fraud and Reducing Automobile Rates Act" was passed last week.

Steve Rastin, president of the OTLA, took strong objection to one of the clauses in the legislation that took away a motorist's right to sue an insurance company for denying his claims. Also the Bill does not explicity mention an earlier 15 percent reduction promised in the 2013 budget. The leader of lawyers said he is profoundly "disappointed on what the government has done," by replacing the right to sue for denied claims with a convoluted arbitration system. He said the arbitration process was costly and time consuming, reported The Star.

Reduction in Premium

Expressing support to many other the provisions included in the bill, the lawyers union said its main objection was to the removal of the right to sue and also the step of slashing interest rates that injured claimants used to get on their insurance money. This has been cut from 5 percent to 1.3 percent. That is unacceptable. "While the legislation says it is all about tackling fraud and fighting costs, the legislation actually denies the right of an accident victim to sue an insurance company for not paying the desrved benefits," Rastin said.

However, Finance Minister Charles Sousa said the promise of 15 percent reduction made in August 2013 has been fulfilled. The New Democrats had made it a pre-condition for supporting the then-minority Liberal government's budget in 2013. But this time, the NDP voted against the bill for the reasons cited by the trial lawyers including slower reduction in premiums. It said, from August 2013 to this August 2014, the premiums dropped only by an average of 6 percent.

Insurance Sector Upbeat

However, Ralph Palumbo, the vice-president of Ontario Insurance Bureau welcomed the legislation. He said, "everyone will agree that auto insurance in Ontario is too expensive. It has been adding to the financial hardship for vehicle owners, particularly young people and those in remote communities. The new law is an opportunity to begin fixing the system once and for all."

The Cbc. Ca also quoted Ontario Finance Minister Charles Sousa in a report, who said 21 of the 120 auto insurance companies in Ontario have already reduced their premiums at an average 10 percent in just over a year.