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Car Accidents and Unidentified or Uninsured Drivers

In Alberta, automobile insurance is mandatory.  Driving without insurance is an offence.  After an accident, the drivers are required at law to stop and exchange insurance information.  But what happens if you are in a motor vehicle accident and the other vehicle does not have insurance?  Maybe even worse, what happens if you are the victim of a hit-and-run accident where the other driver leaves the scene of the accident without being identified?

In such situations, a piece of legislation called the Motor Vehicle Accident Claims Act (“MVAC”) comes to the aid of victims of accidents caused by uninsured or unidentified motorists.  MVAC is administered by the Administrator of the MVAC (the “Administrator”).

MVAC is often called the “insurer of last resort”, although the Administrator is not an insurer at all.  Money paid out through the Administrator’s office comes from the Provincial General Revenue Fund (the “Fund”).  The Fund only pays if all the requirements of MVAC are met.  Note that the “limits” or amount the Fund will pay out is restricted to $200,000 (plus costs) per accident.  If a claim ends in a judgment for more than that amount, the remainder is either paid by the Defendant out of his or her own pocket, or by the Plaintiff’s SEF 44 (excess) insurance, up to the limits of the SEF 44. The Fund’s $200,000 limit pays only for personal injuries, not property damage, sustained in the accident.

The most common way for the Administrator to become involved is for a Defendant in a motor vehicle accident to not file a defence.  Both the owner and driver might not file a defence if there was no insurance over the vehicle at all.  Sometimes, the owner does have insurance for the vehicle, but the driver took the vehicle without the owner’s permission and was not a member of the owner’s family, so the owner’s insurance does not cover an accident.  In this case, the owner might file a defence but the driver might not.

Where a Defendant is served with a filed court claim (usually called a Statement of Claim) and does not file a defence within the deadline stated on the claim, the Plaintiff (person suing) can file a document in Court called a Noting in Default which indicates that the Defendant has not defended.  Usually a Plaintiff can then proceed to get a judgment against the Defendant, but where the claim is for a motor vehicle accident, the Plaintiff instead must notify the Administrator.  The Administrator then hires a lawyer and files a defence in the name of the Defendant or Defendants who did not defend the claim.

The claim then proceeds much like a normal lawsuit.  Eventually the claim ends, usually with a settlement, or a judgment following trial.  Although the uninsured Defendant does not have to pay the Administrator’s lawyer, the uninsured Defendant is responsible for repaying the Fund for any monies paid out to the Plaintiff.  All claims defended in this way by the Administrator end in judgment, either by consent (if a settlement) or after trial.  The Fund then pays the judgment to the Plaintiff, so the Plaintiff does not have to worry about collecting from the Defendant.  In exchange, the Plaintiff assigns the judgment to the Administrator, who then proceeds with collection steps against the uninsured motorist.

What if an uninsured motorist files a Statement of Defence?  The Administrator can seek to be added to the action as an Intervenor by Order of the Court.  In such a case, the Administrator does not control the uninsured’s motorist’s defence, but remains involved in all steps.  The Administrator cannot settle such a claim without the consent of the uninsured motorist, just as the uninsured motorist cannot settle the claim without the consent of the Administrator.  These claims are also resolved by a judgment paid by the Fund and assigned to the Administrator for collection from the uninsured motorist.

The procedure is slightly different if there is a hit and run or unknown driver.  Notice of the claim is served on the Administrator.  The Plaintiff must take every reasonable step to try to identify the driver, but if the Plaintiff cannot, then when the claim is issued, the Defendant is named as The Administrator of the Motor Vehicle Accident Claims Act.  The Administrator then defends, and the claim is resolved by payment from the Fund using the same procedure described above.

The involvement of the Administrator means that injured parties have a way to get paid for their injuries where there is no insurance, or where the driver or owner of the other vehicle is unidentified.  This blog has hopefully clarified some basics on how the Administrator functions.  For legal advice on specific circumstances, you should of course consult a lawyer.

By Philip Kirman