Injured parties at a ‘gross disadvantage’ in accident claims
By AdvocateDaily.com Staff
In the final instalment of a two-part series, Toronto personal injury lawyer Jennifer Hoffman explores challenges to the tort system.
Increasing deductibles, rising thresholds and the risks of going to trial are key factors contributing to the significant imbalance between people who are injured in motor vehicle accidents in Ontario and the insurance companies, says Toronto personal injury lawyer Jennifer Hoffman.
Ontario is the only jurisdiction in North America to have deductibles, she tells AdvocateDaily.com.
"When a jury decides an insurance company must pay a plaintiff damages for injuries suffered in a crash, the victim will often not receive the full amount of the award," says Hoffman, founder of Hoffman Law P.C. “Most people aren’t aware of this, but the public needs to know."
When a jury or court makes a monetary award, close to $38,000 is automatically deducted right off the top, Hoffman explains.
“This statutory deductible was introduced in 1996 and has regularly been increased over the years,” she says. "And it continues to increase each year with inflation."
So if a jury or court awards an individual $50,000 for their pain and suffering, they will only receive $12,000 — and the jury can’t be told that the plaintiff won’t receive all of the cash they award, Hoffman says.
Contrast that to the benefits accident victims receive under the no-fault regime that haven't increased with inflation for many years and it paints a stark picture of how injured parties are at a “gross disadvantage,” she says.
“It’s becoming more difficult for plaintiffs to recover when they have, in fact, been injured through no fault of their own in a motor vehicle accident," she says.
Another challenge for plaintiffs is the threshold that is required for them to recover costs — those seeking general damages must be able to prove that the injury is permanent and substantially impacts their daily life, Hoffman adds.
For instance, she says someone who has sustained injuries following a car accident might feel pressure to go back to work if they’re unable to receive compensation from the insurance company — even though they are suffering through the pain and taking medication.
“You would think in those circumstances insurers would recognize that this person has returned to work, but they’re struggling. And, in the past they have, but what we’re seeing more and more is that when someone does return to work, it becomes incredibly difficult for them to recover in a lawsuit," she says. “The insurers take a very strong stand on the threshold.
“It’s being used illogically by some insurance companies. Not all of them, some are more fair than others. But for the most part, we’re seeing a significant attitude shift among insurers in Ontario, leading to huge challenges in the industry.”
There's a risk that the injured party will walk away with nothing, Hoffman says.
“Going to trial is an intimidating prospect for any individual. The risk is now even higher with increased deductibles and the threshold. If an injured person loses the trial due to these obstacles, they face the risk of paying a portion of the insurance company’s legal costs," she says.
That huge gap in the balance of power is creating inequality in the system, Hoffman says.
"That’s always been the case, in a way, because insurers are large corporations, with deep pockets, that can better afford the risks of trial, compared to the single mother who’s been injured in an accident, and has no choice but to return to work," she says.
While the Ontario Trial Association has been fighting this imbalance, Hoffman says the public is generally unaware.
“It isn’t until they are injured and talk to a lawyer about suing that they learn these challenges,” she says.
Click here to read part one where Hoffman examines the erosion of accident benefits in Ontario.