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Will Accepting EI or Disability Benefits Hurt My Personal Injury Claim?

If you suffer a catastrophic injury in a motor vehicle accident, you may be legally disabled and therefore unable to return to work. Aside from any benefits you recover under your auto insurance policy, or from the negligent driver in a personal injury lawsuit, you may also qualify for other benefits, such as long-term disability and employment insurance (EI).

How does accepting such benefits affect your personal injury claim? Depending on the circumstances, a judge may offset a damage award to account for the receipt of such “collateral benefits.” Yet some personal injury defendants try to go a step further and claim that merely by accepting collateral benefits, the plaintiff is somehow exaggerating his or her injuries. To put it another way, the defence argues that the plaintiff is choosing not to work because he or she considers it more lucrative to live off of the collateral benefits.

Ismail v. Fleming: Judge Bars Defence from Raising “Collateral Benefits” Issue with the Jury

Ontario courts tend to view these type of defence claims with a great deal of skepticism. Just recently an Ontario Superior Court justice rejected such a defence. The case, Ismail v. Fleming, was scheduled for jury trial in early October. Prior to bringing in the jury, however, the trial judge sustained the plaintiff’s objection to the defence making “any suggestion, submission, argument or other reference at trial to the effect that the receipt of collateral benefits is relevant to [the plaintiff’s] motivation to work.” The judge ruled such evidence has no relevance to the plaintiff’s claim for damages.

The defence has already conceded liability for the underlying motor vehicle accident. The plaintiff alleges that due to the accident, she suffered “serious and permanent impairments of important physical, mental and psychological functions,” which entitle her to damages beyond what is provided in the Ontario Statutory Accident Benefits Schedule (SABS). More precisely, the plaintiff said her accident-related injuries have left her suffering with “severe pain, discomfort, [and] limitation in movement” that renders her “incapable of vocational activities that she participated in prior to the accident.”

The defence denies the extent of the plaintiff’s injuries. Furthermore, the defence claims that the plaintiff “has failed to return to work when reasonably fit to do so and otherwise failed to mitigate her damages in that regard.” In support of this point, the defence points to the plaintiff’s receipt of collateral benefits, which include EI, income replacement benefits under her auto insurance policy, long-term disability from the Canada Pension Plan, and additional long-term benefits under a separate policy. The plaintiff acknowledged she received these benefits–and concedes they may offset her damages–but maintains she is still entitled to recover damages for “future income loss” from the defendants.

Extending the Kitchenham Decision to Personal Injury Claims

The trial judge, Justice I.F. Leach, explained that the leading case in Ontario on this subject is Kitchenham v. AXA Insurance. In that case, an auto accident victim sought disability benefits from her own insurance company. She also filed a separate personal injury claim against the negligent driver. The personal injury claim settled out of court. The insurer then demanded to know the amount of the settlement, which the plaintiff refused to disclose. The trial judge in that case then held such information was not relevant to the plaintiff’s claim against the insurance company–a decision ultimately upheld by the Ontario Court of Appeal.

Justice Leach noted there was no subsequent case applying the Kitchenham decision to a personal injury claim. And initially, the judge said he was inclined to side with the defence’s argument–namely, that a plaintiff who receives collateral benefits is to a certain extent “freed of the financial incentive to seek employment,” which may be relevant to a claim for damages. That said, there was also no good reason not to extend the Kitchenham reasoning to the facts of this case.

The defence insisted there was a difference between the circumstances of Kitchenham–a claim against an insurance company–and a personal injury lawsuit, as the latter turns more on the plaintiff’s overall “credibility.” But Justice Leach rejected this argument, noting “credibility was just as much a concern in Kitchenham v. AXA Insurance as it is in this case.” In any case, the mere fact the plaintiff accepted collateral benefits does not undermine her credibility. If anything, it enhances it. As the judge pointed out, the “use of collateral entitlements premised on disability to support arguments of ability, in order to undermine residual claims for recovery not addressed by such collateral benefits, seems not only ironic but unfair.”

If every defendant could challenge a plaintiff’s credibility based on upon the receipt of collateral benefits, Justice Leach said that would have a perverse effect on future cases, as “such arguments may cause those legitimately disabled by motor vehicle accidents, and unable to work, to refrain from pursuing all collateral benefits otherwise properly available to them,” lest they be accused by a defence lawyer in a subsequent personal injury case of faking their disability to collect benefits. Although Justice Leach emphasized that while his decision “did not depend on such public policy and fairness considerations,” they nevertheless supported his final ruling to sustain the plaintiff’s objection, thus barring the defence from raising the collateral benefits issue at trial.

Contact Preszler Injury Lawyers if You Need Legal Advice Following a Car Accident

No auto accident victim should ever feel they are doing something illegal or unethical by seeking all benefits to which they are lawfully entitled. The reality is that an accident can leave you with permanent injuries that severely curtail your ability to earn a living. Collateral benefits like EI and long-term disability are necessary and important to helping victims regain control of their life. But these programs are not a “get out of jail free” card for negligent drivers looking to avoid their share of financial responsibility for an accident victim’s injuries.

If you are involved in an auto accident, it is important to seek timely advice from a qualified Toronto personal injury lawyer. Call Preszler Injury Lawyers to schedule a free, no-obligation consultation with a member of our legal team today.



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