Personal Injury

OCA explores intersection of tort damages and accident benefits

By Kathy Rumleski, AdvocateDaily.com Contributor

A recent Ontario Court of Appeal (OCA) decision involving two cases examines the issue of double recovery and how to avoid it in the calculation of tort damage awards and statutory accident benefits (SABs), says Toronto personal injury and insurance lawyer Rohan Haté.

The first case involved the deduction from the tort damages award of SABs paid before trial while the second concerned the assignment of future SABs to the tort liability insurer. The overall principles for both cases are the same, he tells AdvocateDaily.com.

“The court heard them together because they deal with the treatment of statutory accident benefits under the Insurance Act," says Haté, partner with McPhadden Samac Tuovi Haté LLP.

I understand the court’s reasoning as a matter of fairness because the court wants to avoid double recovery.”

The ruling favours the “silo approach” as the best one for deducting SABs from a tort award because it protects defendants from double recovery, he says.

The silo approach requires the tort award to match generally with the broad SABs categories or silos, Haté says, which are:

  • health-care benefits, including medical, rehabilitation and attendant care benefits
  • income replacement benefits
  • non-pecuniary loss, including housekeeping and home maintenance

“A plaintiff should not be in a better position financially than they were before the accident. They should not be able to double dip,” Haté says.

In the first case, court documents indicate two pedestrians were engaged in an altercation when one was pushed into the path of a truck and suffered catastrophic injuries.

The second case also involved a pedestrian hit by a vehicle and injured so severely she will need care for the rest of her life, according to the court.

The appellants in the latter case were awarded $2,610,774.32 in damages, as well as costs of $375,000. The verdict specified that the damages award included a lump sum of $2,232,000 for “future care costs,” the court decision indicates.

Until now in tort awards, when a jury awarded a plaintiff damages for medical benefits, attendant care and housekeeping expenses, the defendant was entitled to deduct anything the plaintiff had already received with respect to these specific benefits, Haté explains.

“Now the Court of Appeal says it’s no longer just a matching principle and that medical benefits encompass medical, rehabilitation and attendant care benefits. So, they’ve lumped it all together,” he says.

“That means from the plaintiff’s perspective, if they receive any settlement from the accident benefits — for example, medical benefits and rehabilitation care — if the jury doesn’t award anything for attendant care, the defendant can still deduct what they receive from the accident benefits even though it wasn’t specifically awarded by the jury,” Haté says.

For plaintiffs, it’s not necessarily good news, he says.

Plaintiffs will now also have to prove at a trial where all of their expenses come from, Haté says.

“If they received a certain amount of money from the accident benefits insurer, in order to prevent it from being completely deducted, they will have to prove where they used that money,” he says.

The OCA decision could mean an increase in the amount of time it takes to conclude a trial, Haté says.

“From the defence perspective, the calculations of deductibility may be more efficient, but when taking into account the additional time to prove a plaintiff’s expenses, that could extend the length of trials,” he says.

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