Mazzucco et al. v. Herer et al, 2015 ONSC 7083
Released November 16, 2015 | Decision
This was a ruling on the deductibility of CPP and LTD benefits from past and future income loss in a medical malpractice action.
Mr. Justice Skarica began his analysis of the state of the law by noting his impression that the cases indicated “that the law regarding the deductibility of LTD payments is shifting.” He noted the following governing principles:
- Negligence damages are measured by actual loss. Double recovery is not awarded, subject to limited exceptions.
- One exception to the prohibition on double recovery is the “private insurance” exception. This exception provides that if a plaintiff has paid for the insurance benefits as part of his or her wage package, then the disability benefits should not be deducted from awards for income loss.
- Other than in the circumstances described, an injured person is only to be compensated for actual loss and wages earned during a period of disability are generally deductible.
Justice Skarica then reviewed the Supreme Court of Canada’s 2013 decision in IBM Canada v. Waterman, [2013] S.C.C. 70. He found that the Supreme Court had signalled that a “new era” had begun regarding the private insurance exception. Under this new era, the plaintiff’s evidence of having bargained for benefits is no longer determinative. The court must also consider the nature and purpose of the benefits and, in particular, whether the benefits are indemnity for income loss. The Supreme Court also opened the door for broader policy considerations.
Justice Skarica concluded that the plaintiff, who received LTD benefits through the Dufferin-Peel School Board, was receiving indemnity funded by the Ontario taxpayer. This would lead to double recovery funded by Ontario taxpayers. While compensation for actual wage loss was reasonable, double recovery from the already overburdened public purse was not.
In the result, Justice Skarica instructed the jury to deduct both past and future LTD payments from any wage losses.