OCA decision may mean more work for lawyers: Romero
By Rob Lamberti, AdvocateDaily.com Contributor
Personal injury lawyers may have to change how they present cases that seek damages for motor vehicle accidents following a recent ruling by the Ontario Court of Appeal (OCA), says Toronto mediator Victoria Romero.
Courts in the past have relied on an "apples-to-apples," or strict matching approach, when awarding damages, says Romero, principal of VR Law. She says it generally means subtracting "the same benefits for the same period of time" received through insurance payouts from the tort award.
Under this procedure, a plaintiff who received attendant care benefits from their insurer, for example, would have that amount deducted from the award, she tells AdvocateDaily.com.
But the OCA ruling ended that approach, conforming to an earlier Supreme Court of Canada decision, along with amendments to the provincial Insurance Act, which allow for a silo approach in the deduction of Statutory Accident Benefits (SABs) from tort damages, explains Romero.
She says the case tells us that there are three "silos" set out in the Insurance Act — health-care benefits, income replacement benefits and other financial losses. SABs are deducted within those three categories from the tort award.
"The benefit to be deducted only needs to fall within one of the three categories," says Romero.
"Obviously, plaintiffs' counsel will continue to work hard to obtain the best compensation possible for their clients. I think one of the changes that may occur as a result of this case is that plaintiff counsel will have to call evidence to prove all losses, even if the plaintiff has been compensated for that loss.
"They will need to make sure they avoid the situation faced in the Court of Appeal case. I don't know if it's going to be more difficult, but it's going to be more work."
She says the appeal case was an attempt by the court to clarify a confusing process. While the court doesn't believe it will increase the work for counsel, Romero suggests the ruling will require plaintiff counsel to file more evidence and account for every penny of treatment and benefits received by a plaintiff in the past.
"The courts are trying very hard to find a fair approach that addresses the interests of all parties, not just those insured but also the insurers," she says. "I think to a lesser degree, court resources as well."
Plaintiffs would receive SABs under no-fault insurance and could then seek further compensation in court, taking into consideration the principle that they do not receive double recovery for the same damage, says Romero.
Deductions for a specific benefit would be subtracted from the tort award in the same category — the apples-to-apples approach, she says. But that strict matching guideline no longer applies because of the OCA ruling.
The silo approach adopted by the OCA places health-care expenses into a single category, says Romero.
"There was confusion as to how to deduct SAB benefits from compensation received from litigation, and this case has clarified what to do," she says. "For example, attendant care benefits received can now be deducted against health-care expenses."
Plaintiffs are generally allowed to "open" two cases in a motor vehicle injury matter, says Romero. One deals with filing a claim for SABs — generally income replacement benefits if they are not working, and medical care — provided by the claimant's policy. The other entails the lawsuit seeking compensation for losses: for pain and suffering, which caused a change in lifestyle, economic losses for both past and future, and expected medical care.
She notes the OCA decision didn't accept the argument that offering details to prove all of the expenses will make motor vehicle accident trials longer.
"Claims should, therefore, be presented on a 'gross' basis, rather than net of SABs. We see nothing unusual or complicated in this approach," the court ruled. "It is done as a matter of course in other forms of litigation where a plaintiff brings suit for both insured (subrogated) and uninsured (un-subrogated) claims."
Romero says the court sought a middle point between plaintiffs and defendants where, in the court's words, "there is no reasonable interpretation of the legislation, in our view, that permits either a more generalized approach to deduction (that is, a deduction of SABs in one silo from a jury award for damages falling within another silo) or a more particularized approach to deduction (that is, the deduction of particular SABs within a silo only from damages for the identical head of damage awarded by the jury within the same silo)."
She says the ruling will require plaintiff lawyers to put in more work trying to account for costs and to assess future care required by an accident victim.
"According to the courts, it doesn't necessarily need to become more protracted," Romero says. "It's no longer the fixed apples-to-apples approach. That's no longer applicable."
She says the issue of prejudgment interest was also addressed in the ruling. It found the application of prejudgment interest was procedural and "not a substantial change, which meant the lower insurance rate which applies now applies to all motor vehicle accidents regardless of when the action was launched," Romero says.
"That's important because it could mean less money in final settlement amounts."