Before the Michigan No-Fault Law was enacted and became effective on October 1, 1973, Michigan operated under a “tort liability” system for compensating its seriously injured auto accident victims.
Under the old law, if a car accident victim wanted to recovery money damages for pain and suffering, medical bills, expenses and lost wages, they had to hire a lawyer, file a lawsuit and sue the person who caused the car accident for all of it.
The problem under the old law in Michigan was that most people who caused serious car accidents normally did not have enough insurance, and this left the people they injured under-compensated. The old “tort liability” system was also clogging the courts as people sued for medical bills, car damage, a few weeks of wage loss, and other financial expenses.
The old law also “denied benefits to a high percentage of motor vehicle accident victims, minor injuries were overcompensated, serious injuries were undercompensated, long payment delays were commonplace … and those with low income and little education suffered discrimination.” (Shavers v. Attorney General, Michigan Supreme Court, 1978)
And so in 1973 Michigan switched to our current No Fault insurance system.
“The goal of the no-fault insurance system was to provide victims of motor vehicle accidents assured, adequate and prompt reparation for certain economic losses. The Legislature believed this goal could be most effectively achieved through a system of compulsory insurance, whereby every Michigan motorist would be required to purchase no-fault insurance … Under this system, victims of motor vehicle accidents would receive insurance benefits for their injuries as a substitute for their common-law remedy in tort.” (Shavers v. Attorney General, Michigan Supreme Court, 1978)
In other words:
“In exchange for the payment of … no-fault economic loss benefits [such as medical expenses, lost wages, replacement services, and attendant care services] from one’s own [auto] insurance company, the Legislature limited an injured person’s ability to sue a negligent operator or owner of a motor vehicle for bodily injuries. In particular, the Legislature limited the injured person’s ability to sue a third party for noneconomic damages, e.g., pain and suffering.” (Kreiner v. Fischer, Michigan Supreme Court, 2004)
This principle of limited tort liability for injuries and pain and suffering compensation behind Michigan’s No Fault Law is found in the following statute, which has come to be known as the “serious impairment of body function” injury threshold law:
“A person remains subject to tort liability for noneconomic loss caused by his or her ownership, maintenance, or use of a motor vehicle only if the injured person has suffered … serious impairment of body function …” (MCL 500.3135(1))
Under our “serious impairment of body function” injury threshold law in Michigan, a seriously injured auto accident victim who wishes to sue the negligent, “at fault” driver for noneconomic loss damages such as pain and suffering compensation must show by law that he or she has suffered a serious impairment of body function.
For the 22 years after the No Fault Law took effect on October 1, 1973, discussion of the “serious impairment of body function” threshold in the context of “noneconomic losses” was limited to that brief statutory mention.
All that changed in 1996.
After the Michigan Supreme Court’s two closely-watched, carefully scrutinized, and frequently litigated previous interpretations of the “serious impairment of body function” threshold law in Cassidy v. McGovern in 1982 and DiFranco v. Pickard in 1986, the 1995 Michigan Legislature took legislative action.
In 1995, a bill was introduced to amend the “serious impairment of body function” statute. The bill passed, was signed into law as Public Act 222 of 1995, and took effect on March 28, 1996.
It amended the statute by adding two new subsections. One defined what a “serious impairment of body function” is:
“‘[S]erious impairment of body function’ means an objectively manifested impairment of an important body function that affects the person’s general ability to lead his or her normal life.” (MCL 500.3135(7))
And, the other new subsection clarified that judges, rather than juries, would generally decide whether an auto accident victim suffered a “serious impairment of body function”:
“The issue of whether an injured person has suffered serious impairment of body function … [is a] question of law for the court if the court finds either of the following: (i) There is no factual dispute concerning the nature and extent of the person’s injuries. (ii) There is a factual dispute concerning the nature and extent of the person’s injuries, but the dispute is not material to the determination as to whether the person has suffered a serious impairment of body function or permanent serious disfigurement.” (MCL 500.3135(2)(a))
Since the 1995 amendment, the Michigan Supreme Court has decided two cases interpreting the amended “serious impairment of body function” threshold. These cases were Kreiner v. Fischer in 2004 and McCormick v. Carrier in 2010.
Today, the best current interpretation of the “serious impairment of body function” threshold law is to be found in McCormick v. Carrier. But the controversy behind these cases, and just how high the bar should be to injured people being allowed to bring a lawsuit to recover for injuries suffered in a car accident in this state continues. The polarizing nature of this debate continues among lawyers and judges, and in Michigan’s legislative and judicial elections.
As attorneys who practice exclusively in automobile accident litigation in Michigan, we continue to follow this closely. The last word on this subject has yet to be written.