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How Ontario Law Prevents “Double Recovery” by Car Accident Victims


Following a car accident, there are two methods of receiving compensation for your injuries under Ontario law. The first is by filing a claim with your own insurance company, which is obligated to pay certain “no-fault” benefits under Ontario’s Statutory Accident Benefits Schedule(SABS). The second is by filing a personal injury lawsuit against any third parties whose negligence caused or contributed to the accident.

In many cases, there will be an overlap between the no-fault benefits and the personal injury award. To address this, Ontario insurance law provides that any damages from the personal injury claim must be reduced by any payments received under SABS. In other words, an accident victim may not receive “double recovery” for the same injuries.

Cadieux v. Cloutier & Carroll v. McEwen: Pedestrian Accidents Lead to Large Damage Awards

On December 4, 2018, the Ontario Court of Appeal issued a pair of judgments clarifying the approach judges must use when addressing these types of double recovery situations. Both cases involved pedestrian accidents in which the victims received insurance benefits under SABS and later obtained a substantial personal injury award against the defendants. The main legal point of contention in both appeals was how to reconcile the jury verdicts with the benefits paid by the accident benefit insurers.In the first case, Cadieux v. Cloutier, the plaintiff was pushed by another pedestrian, causing the plaintiff to “stumble into the path of a truck.” As a result, the plaintiff sustained serious brain and orthopaedic injuries. The plaintiff received $900,000 in statutory benefits from his insurer, of which $300,000 was for past and future income replacement benefits, $250,000 was for past and future medical benefits, and the remaining $350,000 was for past and future attendant care benefits. The truck driver’s insurance company separately settled with the plaintiff for $500,000.This only left the personal injury claim against the other pedestrian. The case proceeded to a jury trial in Ontario Superior Court. The jury ultimately returned a verdict of $2.3 million, apportioning the fault equally between the plaintiff, the other pedestrian, and the truck driver. This meant the plaintiff was entitled to collect one-third of the $2.3 million judgment from the other pedestrian, subject to any deductions to account for statutory accident benefits.As for the second case, Carroll v. McEwen, the plaintiff here sustained catastrophic injuries after being struck by the defendant’s car. As the Court of Appeal noted, the plaintiff was “so badly injured that she will require care for the rest of her life.” Before the Superior Court, the parties agreed the total amount of damages sustained was roughly $4 million. The defendant nevertheless contested liability. Following a seven-week trial, however, the jury returned a verdict holding the defendants were 62 percent liable for the plaintiff’s injuries. It then awarded damages of approximately $2.2 million.

“Apples to Apples” Matching vs. “Silo” Approach

Here is the basic question that the Court of Appeal needed to answer in both of these cases: What is the correct method for “matching” standard accident benefits to personal injury awards? Over the years, Ontario judges have developed two different approaches. The first is to require a strict, “apples to apples” match–or as the Court of Appeal put it “a specific type of benefit [is] only deducted from a head of damage for the identical loss.” The second approach is to broadly categorize damages in metaphorical “silos.” Under this approach, for instance, the damages for attendant care and health care separately awarded to the plaintiff in Cadieux could be categorized together in a “silo” for healthcare damages.The plaintiffs in both cases asked the Court of Appeal to apply the traditional strict matching approach. Conversely, the defendants favoured the silo approach. The Court of Appeal ultimately sided with the defendants and went with the silo approach.As the Court explained in its Cadieux judgment, there are essentially three “silos” of personal injury damages: “income loss, health care expenses, and other pecuniary loss.” That said, the law does not restrict how a plaintiff may spend any of these damages. In this case, for example, the plaintiff used her settlement proceeds to buy a house. Given this, the Court maintained that the strict matching approach “unnecessarily complicates tort actions by focusing on immaterial distinctions or labels for heads of damages.” Instead, it was simpler to apply the silo approach.Similarly, in its Carroll judgment, the Court reiterated, “strict matching encourages formalistic legal strategies and arguments that remove the focus from whether double recovery is occurring, whether in the assignment context or otherwise.” In that case, the Court said there was obviously “overlap between the tort award and SABs payments.” But the jury was not instructed to precisely calibrate its award of damages. To the contrary, the jury awarded a lump sum for the plaintiff’s “future care costs” without matching them to any prior or future payments received under the SABS. So in order to prevent double recovery, the Court of Appeal said the silo approach was the only one that made any sense.

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The Ontario Trial Lawyers Association intervened in the Carroll and Cadieux cases, arguing in favour of keeping the strict matching approach. As the Court of Appeal noted, the Association expressed concern that “requiring plaintiffs to prove all expenses, whether covered by SABs or not, will make motor vehicle accident trials lengthier and more expensive.” The Court of Appeal rejected this argument, noting that personal injury claimants “should be required to claim at trial all damages arising from the accident, including expenses for which compensation has already been received through SABs or will in the future be paid through SABs.”While decisions like these may not resonate much outside of the trial bar, they have a profound impact on the rights of everyday people seeking compensation following an auto accident. “That is why it can be critical to work with a personal injury lawyer who may be able to advise you on the current state of the law. Call the Preszler Injury Lawyers who may review your accident case and advise you of appropriate next steps.

Sources:

CanLII

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