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Rastin: deductible, threshold cause further pain for accident victims

In the first instalment of a two-part series exploring access to justice for personal injury plaintiffs, Barrie-area litigator Steve Rastin explains how the threshold test and statutory deductible further hurt accident victims.

The rising deductible applied on court awards to victims of automobile accidents could soon cut off any hope of compensation for all but the most seriously injured plaintiffs, Barrie-area litigator Steve Rastin tells AdvocateDaily.com.

Rastin, managing partner with Rastin & Associates, says the secret shame of Ontario’s laws regarding insurance claims is that those injured in auto accidents are often victimized twice.

No matter how much victims are awarded by a jury for damages, he says almost all of the money they are paid while waiting for settlement — through the Canada Pension Plan disability benefit, accident benefits or long-term disability insurance — is subsequently deducted. Then, in most cases, there’s an automatic statutory deductible of almost $40,000. 

Rastin says the deductible has always been controversial among personal injury lawyers.

“When it was first brought in, it was $10,000 with the purpose of helping insurance companies reduce premiums,” he says, noting it was indexed to inflation in 2015. “But the other issue is we’re not allowed to inform juries that any award they give will be subject to this deductible.

“It’s a secret tax on your pain and suffering, and it makes it more difficult for people to sue,” Rastin adds.

He says even if a jury decides to compensate an accident victim, the judge may rule the plaintiff does not meet the threshold and can reduce the award to nothing. The threshold test is decided by the judge after the jury’s verdict at the end of the trial, and often while the jury deliberates, Rastin says. At question is whether the injuries are considered to be serious injuries of an important physical, mental or psychological function.

As a result, he says an award of $75,000 could immediately be reduced by the deductible or even wiped out by the threshold, leaving the victim with nothing.

Recent court decisions have found that the fundamental principle of motor vehicle litigation should be that victims should be ‘fairly compensated but not over-compensated.’ 

"Older precedents are no longer be followed and tort defendants are now receiving deductions for all benefits received,” Rastin says.

“People pay insurance premiums, but they aren’t going to be allowed to sue,” he adds.

The initial idea was to weed out cases where people were looking for payouts from relatively minor accidents, but the long-term ripple effect has turned it into an access-to-justice issue.

“If you want to weed out non-meritorious cases, have a deductible or a threshold — why have both?”

People can’t afford to sue, and lawyers won’t take cases on contingency if they fear they won’t meet the threshold and deductible hurdles, leaving victims with no options.

Eventually, there will be no access to justice for accident victims if things continue on this track, he says.

“I see it every day in my office,” he says. “People come in and I say, ‘I know you are seriously injured, but you are not going to be allowed to sue because of this problem with the threshold and the deductible.”

Recent decisions have left trial judges without the ability to compensate victims even if they were so inclined, worries Rastin.

Stay tuned for part two where Rastin will discuss two Ontario Court of Appeal decisions that have further eroded compensation for accident victims.

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