Another reform continues to be the abolition in many provinces of the guest passenger rule. Under that rule a non-paying passenger in the private automobile couldn’t recover in tort against the driver unless there was clearly proof of gross negligence.
Clearly, removing this rule has increased the number of claimants who may now recover in tort. Each one of these developments improved the probabilities that an innocent victim of an automobile accident will be compensated a minimum of to some extent. But there still had to be a proof of fault and, in most cases, the defendant had to have liability insurance. To pursue further the compensation goal of tort law as it applied to automobile accidents, provinces instituted incentives to induce pet owners of cars to buy insurance.
These were the so-called Financial Responsibility Laws which required proof by any motorist responsible for an accident, that they could pay, by insurance or otherwise, any damages resulting. If proof had not been forthcoming, penalties followed. Fund that payments were made to victims whose losses and injuries ended up caused by uninsured or unidentified motorists. This basic concept was copied by the many other provinces. The funds were made up of contributions by those that, upon registering their vehicles, chose not to buy liability insurance.
This was not really a form of insurance for these people because, under threat of the lack of their driving privileges, these folks were required to reimburse the fund for any losses they caused.
Not quite happy with financial responsibility laws as a means of encouraging the availability of insurance to pay for judgments, all provinces have now resorted to regimes of compulsory automobile liability insurance. If you need more info, recommended reading. Accordingly, it’s a criminal offence for an uninsured motor vehicle to be operated on public highways. Registrants of motor vehicles are required to provide information on insurance when obtaining licenses or renewals of licenses for vehicles and cops routinely demand proof of insurance when a motorist is stopped for reasons uknown.
Offenders are prone to pay heavy fines. Special arrangements are made to provide cover high-risk applicants. All of this is clearly made to protect victims (instead of insured defendants). It is, in short, a form of compensation plan.