Cadieux v. Cloutier, 2018 ONCA 903

Apples can now be deducted from oranges.

Date Heard May 1-2, 2018

Since the start of no-fault auto insurance benefits in Ontario, tort defendants were entitled to deduct collateral benefits the plaintiff received before the tort trial and obtain an assignment for future no-fault benefits that are the same as the damages awarded. The principle is that an injured plaintiff should not receive double recovery i.e. be paid both no-fault insurance benefits and the same type of damage in the tort case. Until recently, the Courts and lawyers practicing in this area followed the Court of Appeal decision of Bannon v. McNeely (1998), 38 O.R. (3d) 659 (C.A.), which required a temporal and qualitative matching of no-fault benefits to heads of tort damages the “apples to apples”or strict matching principle. This meant in practice that if a plaintiff is awarded damages for future physiotherapy services, only money spent or to be pent on physiotherapy services is deducted from the tort award. This strict matching principle is no longer the law in Ontario for deduction of no-fault benefits. A five member panel of the Court of Appeal ruled (it is unclear which judge actually wrote the decision) that the “silo” approach to both the deductibility and assignment of no-fault benefits is the law in Ontario,writing at para. 22:

First,as a matter of statutory interpretation,ss. 267.8(1),(4), and (6) require the deduction of SABs received prior to trial from damages received in a tort action on a silo basis. That is, SABs for income loss are to be deducted from the tort award for income loss (s.267.8(1)); SABs for health care expenses are to be deducted from the tort award for health care (s. 267.8(4));and SABs for other pecuniary loss are to be deducted from the tort award forother pecuniary loss (s. 267.8(6)).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).

What this means in practice is that to avoid plaintiffs being under compensated, plaintiffs’ counsel will need to call evidence to prove all past benefits that have been paid to the date of trial and ask the jury to award damages for those past benefits. This is necessary to avoid the situation in Cadieux where past attendant care benefits of $350,000 was used to reduce a tort award for an ABI support worker of $701,809. The “silo” approach adopted by the Court of Appeal in Cadeiux, lumps all healthcare expenses into one category without any differentiation. Plaintiffs’ counsel in Cadieux had not called evidence on the need for future attendant care benefits, on the understanding that the no-fault settlement fully compensated the injured plaintiff for attendant care benefits. The plaintiff was not seeking future attendant care benefits. In my view and one that I argued at the Court of Appeal on behalf of OTLA as intervener, this was a reasonable approach that promoted trial efficiency. The Court of Appeal did not agree, writing at para.88:

It follows that we do not accept the intervener’s submission that requiring plaintiffs to prove all expenses, whether covered by SABs or not, will make motor vehicle accident trials lengthier and more expensive. Plaintiffs 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.

The Court of Appeal also ruled that payments made to third parties for treatment years before the tort trial can be used to reduce the future health care needs awarded to the plaintiff at trial. Going forward,plaintiffs are now required to call evidence to prove all losses and damages on a gross basis even if the plaintiffs have already been compensated for that loss by the no-fault insurer. This also includes all the payments that were made to third parties for treatment. All claims both past and future must be presented on a gross basis and not take into consideration any payments received from the no-fault insurer.

In an ideal litigation world, the defence will simply agree that the plaintiff reasonably required the past benefits and will not dispute the past treatments. However, we do not live in an ideal world. I expect that defence counsel will argue that the past treatments were not necessary, even though paid for by the no-fault insurer, in an attempt to reduce future damages by these past benefits paid. At trial, we may need to call the insurance adjuster for the no-fault insurer to confirm that the insurer accepted that the treatment and costs were reasonable and necessary.

The Court of Appeal also confirmed that the change in the pre-judgment interest for motor vehicle collision tort actions is procedural and not substantial, meaning that the lower insurance rate applies to all active motor vehicle tort actions regardless of when the action was started.

The same five member panel released its decision in the companion case of Carroll v. Sawywell, 2018 ONCA 902 that dealt with the assignment of future no-fault benefits. The Court of Appeal ruled that the same “silo” principle applies. Which means that all future no-fault benefits paid for healthcare expenses are to be assigned to the tort defendant for all healthcare related damages. That is, if the injured plaintiff obtained a verdict that included future medical care for various goods and services, any no-fault benefits paid for medical, rehabilitation or attendant care benefits are to be assigned and paid to the tort defendant.There does not need to be a matching of the particular type of medical, rehabilitation or attendant care benefit. The silo approach is now the law for both past no-fault benefits paid and future no-fault benefits to be paid.

These two cases are a step backwards for trial efficiency. We are now required to call more extensive evidence on all the treatment and benefits the plaintiff received before trial or will need into the future to avoid being under compensated. The pendulum continues to swing in favour of wealthy insurance companies at the expense of injured victims.

Full decision

Kris Bonn
Written by

Kris focuses on helping people who have suffered serious personal injuries, car crash victims and long-term disability claims. Kris also helps people who are facing impaired driving and over 80 related criminal charges. Kris has successfully argued cases before juries, judges and the Court of Appeal in Toronto. Kris is active in the community as a Director of the Ontario Trial Lawyers Association and the local Brain Injury Association Quinte District. He is a member of the Hastings County Law Association and the Advocates Society. He supports local charities, including the Trenton and Belleville Hospital Foundations.