Further Erosion of Plaintiffs’ Compensation Effective August 1, 2015

Ontario Finance Minister Charles Sousa delivers the provincial budget as Premier Kathleen Wynne looks on at Queen’s Park in Toronto on Thursday, April 23, 2015. THE CANADIAN PRESS/Nathan Denette

Dealing another blow to Plaintiffs, on August 1, 2015, the amendments to Ontario Regulation 461/96, Court Proceedings for Automobile Accidents that Occur on or After November 1, 1996, came into effect. These amendments provide for an inflation-indexed deductible to apply to awards for pain and suffering and loss of care, guidance and companionship.

Until now, a $30,000 deductible applied to all awards for pain and suffering below $100,000. A $15,000 deductible applied to all awards to family members for loss of care, guidance and companionship, where the award is less than $50,000.

Thanks to changes proposed by the Ontario government during the most recent budget, the deductible amounts will now be indexed to reflect the effects of inflation since 2003. The Building Ontario Up Act (Budget Measures), 2015 came into force on August 1, 2015, revoking section 5.1 of the Regulation. The following is substituted:

5.1 (1) For the purpose of sub-subparagraph 3 i B of subsection 267.5 (7) of the Act, the prescribed amount is the amount determined in accordance with the following rules:

1. Until December 31, 2015, the prescribed amount is $36,540.

2. On January 1, 2016, the prescribed amount set out in paragraph 1 shall be revised by adjusting the amount by the indexation percentage published under subsection 268.1 (1) of the Act for that year.

3. On January 1 in every year after 2016, the prescribed amount that applied for the previous year shall be revised by adjusting the amount by the indexation percentage published under subsection 268.1 (1) of the Act for the year.

Similarly, the $15,000 deductible for Family Law Act awards will also be indexed, according to the following amendment to s.5.1 of the Regulation:

(2) For the purpose of sub-subparagraph 3 ii B of subsection 267.5 (7) of the Act, the prescribed amount is the amount determined in accordance with the following rules:

1. Until December 31, 2015, the prescribed amount is $18,270.

2. On January 1, 2016, the prescribed amount set out in paragraph 1 shall be revised by adjusting the amount by the indexation percentage published under subsection 268.1 (1) of the Act for that year.

3. On January 1 in every year after 2016, the prescribed amount that applied for the previous year shall be revised by adjusting the amount by the indexation percentage published under subsection 268.1 (1) of the Act for the year. 

Moreover, in the case of pain and suffering awards, the $100,000 monetary threshold beyond which the deductible will not apply has been increased to $121,799 for the period of August 1, 2015 to December 31, 2015, and is to be inflation-indexed each year. The $50,000 monetary threshold for the vanishing deductible in the case of Family Law Act claims has similarly gone up to $60,899, and will be adjusted each year.

While it is not clear whether the amendments will have retroactive application to lawsuits that have been commenced but not yet resolved, the fact that the deductible will be adjusted on January 1 of each year suggests that it is the year the motor vehicle accident occurs that will determine the amount of the deductible. It remains to be seen, however, how the new provisions will be applied to existing actions or in regards to motor vehicle accidents that have already occurred but have not yet been litigated.

The link to the FSCO Bulletin, announcing this amendment as well as other amendments to the Insurance Act, can be found here: https://www.fsco.gov.on.ca/en/auto/autobulletins/2015a/Pages/a-05-15.aspx

 

Najma Rashid
Written by

Najma Rashid joined Howard Yegendorf & Associates in 1999 and became a partner of the law firm in 2009. Her practice is devoted exclusively to personal injury litigation and she is well versed in Ontario’s Insurance Act and its Regulations, including the Statutory Accident Benefits Schedule.

Najma has developed an expertise in disability and bad faith claims against insurance companies, and participates in the Long-Term Disability Section of the Ontario Trial Lawyers Association.

Najma is a member of the Ontario Trial Lawyers Association and the Advocates Society, as well as a supporter of organizations such as REACH Canada, the Ontario Brain Injury Association and the Canadian Paraplegic Association.