Highlights of Bill 59

Notice and Disclosure

• There are a number of notice and disclosure requirements that must be met before a plaintiff can commence an action. A plaintiff must: apply for accident benefits; provide written notice to the defendant within 120 days of his intention to commence an action (pji will not begin to run until that notice is given); undergo a defence medical if requested by the defendant; provide a statutory declaration describing the circumstances of the accident if requested by the defendant; and provide evidence of the plaintiff's identity if requested. These notice provisions are set out in s. 258.3 of the Act.

• There is a relief section which stipulates that if these notice requirements are not followed the action can still go forward but the failure to comply is to be taken into account in awarding costs (s. 258.3 (9)).

• There is also a new Regulation which sets out further obligations on a plaintiff. The Regulation entitled Court Proceedings For Automobile Accidents That Occur On Or After November 1, 1996 stipulates a plaintiff must (within 30 days of providing notice to the defendant) supply further information including: the name of the plaintiff's insurer; evidence of the plaintiff's income from all sources for the 52 weeks prior to an incident; a copy of all applications for accident benefits and supporting material provided to the accident benefits carrier; a copy of all medical reports and the clinical notes and records of treating health care practitioners available up until the later of when notice is given or 120 days after the incident.

• If either party requests it, the other party is bound to go to mediation on the tort side (s.258.6). The reasonable fee(s), and expenses of the mediator are to be paid by the defendant's insurer (Draft Court Proceedings. Reg.).

• There are also new obligations imposed on defendant's insurers such as: an obligation to confirm coverage and to disclose limits of insurance; to attempt to settle the claim as expeditiously as possible; and if the insurer admits liability it is obligated to make an advance payment: s. 258.4; 258.5. A failure to comply is to be considered in awarding costs.

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Pecuniary Losses

• The right to sue for pecuniary losses is returned but restricted. Income loss is restricted to 80% of net income loss for pre-trial losses. Post trial losses are 100% of gross. There can be no claim for income losses in the first week after the accident. Note: the difference between pre-trial and post trial income loss awards will force plaintiffs to move forward quickly (i.e. no waivers of defence or consents to trial or discovery adjournments) and will undoubtedly lead to disputes when attempting to settle the case-- i.e. when do you presume the trial occurred?

• There can be no claim for "health care expenses" unless the plaintiff has catastrophic injuries. If the plaintiff has catastrophic injuries the plaintiff will be entitled to two million dollars in health care accident benefits (one million for medical and rehabilitation and one million for attendant care). Therefore in reality tort claims for health care expenses will only be for any amounts in excess of two million. There will be a gap in recovery for a plaintiff who has health care expenses in excess of $172,000.00 who has not been catastrophically injured. The reason for this is that the A-B limit for health care expenses (if one is not catastrophically injured) is $172,000.00 ($100,000.00 for med/rehab and $72,000.00 for attendant care) and there is no right to sue for health care expenses in the tort side unless the plaintiff is catastrophically injured.

• Note however there is apparently some debate on the issue of the actual restriction in tort on the right to recover health care expenses". This arises from the definition (in s.224 (1)) of: "health care" includes all goods and services for which payment is provided by the medical, rehabilitation, and attendant care benefits provided for in the Statutory Accident Benefit Schedule. The argument being advanced is that the restriction in tort is for the advancement of claims for "health care" expenses and since "health care" expenses are defined as those expenses provided by the A-B carrier then if the expenses are not provided by the A-B carrier then they are recoverable in tort.

• This is clearly not what was intended by the drafters. The counter argument is that the definition of "health care" states that it includes those expenses provided by the A-B carrier. The definition is not exhaustive. The normal meaning of the words "health care" must also be considered. Therefore all expenses that would meet the definition of heath care in its normal sense and as expanded by s. 224 are non recoverable in tort unless the plaintiff has suffered a catastrophic injury.

• Neither the threshold nor the deductible apply to pecuniary tort losses.

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Non-Pecuniary Losses

• The threshold is for general damages only. The threshold is the Bill 164 threshold with the re-inclusion of the word "permanent". The threshold cannot be used to the benefit of any insurer who is not licensed in Ontario unless the insurer has filed an undertaking.

• The deductible is $15,000.00 for the main plaintiffs and $7,500.00 for F.L.A. Deductible applies to F.L.A. claims only with respect to loss of care, guidance and companionship but not to pecuniary F.L.A. losses.

• Note that the deductible only applies to protected defendants.

• It is clear now that damages are to be calculated, then reduced by the deductible, and then any liability split is to be taken into account: s. 267.5(7)4. This is to stop the situation where the liability split is taken into account first and then the deductible is applied (this results in a much lower award).

• There now will be threshold motions both for non-pecuniary losses and health care expenses. Threshold motions are only on consent of parties or by order of the pre-trial judge). Threshold motions are fully binding on the trial judge. If not dealt with by way of threshold motion the trial judge must make a determination on both of the threshold issues (basically the same procedure as Bill 164 but very different from O.M.P.P. where the defence can bring the motion any time before trial and again at trial).

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Collateral Benefits

• Collateral benefits are now divided between pre and post trial collateral benefits. All pre-trial collateral benefits are statutorily required to be deducted but this is done on the basis of a strict matching system. That is, benefits are deducted only against the like damage award (i.e. deduct income benefits from income loss claims). Benefits are to be deducted if they are received or available to the plaintiff before trial. A benefit is deemed not available if the plaintiff has applied for them and been denied so long as the plaintiff has applied and acted in good faith (not too late etc.).

• All future losses are payable by a defendant despite the availability of collateral benefits.

• The statute requires plaintiffs to hold in trust all future collateral benefits and pay those benefits over to the tortfeasor (s.267.8(9)). The Act does not state that the trust provision relates only to the amounts of future benefits required to pay back the tortfeasor for the amounts paid in satisfaction of the plaintiff's future pecuniary damage award. However, it would be clearly inequitable to allow a defendant to receive more money in future collateral benefits than it paid out with respect to future pecuniary damages This is especially true where there is a split in liability which would affect the tort recovery and not the right to collect future A-B's. As such I believe a court would imply a term of the trust to be that the plaintiff would only have to hold in trust for the benefit of the tortfeasor those amounts necessary to indemnify the tortfeasor for amounts it paid out in damages for future pecuniary losses.

• The Act provides a court with the alternative option of awarding a tortfeasor an assignment of the plaintiff's future collateral benefit rights (267.8 (12)). The plaintiff in this situation is statutorily mandated to co-operate with the tortfeasor in the future recovery of these benefits. The court is statutorily entitled to impose such conditions on the assignment that it considers just. Therefore the above concern of the defendant getting over compensated can be dealt without a court having to resort to implying terms into the statutory trust.

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Miscellaneous

• A person may not bring a tort action if that person was in contravention of the Compulsory Automobile Insurance Act in respect of the automobile that was involved in the accident.

• The Act also deals with the issue of joint and several liability as between protected and unprotected persons (s.267.7). It appears that a protected person (an owner, occupant or any person present at the incident) will be held jointly liable for all of the plaintiff's pecuniary and other losses if there is an unprotected defendant who is at fault. This means the protected person can be required to pay the full amount of the judgment which will include amounts that the protected person would not be otherwise liable for (i.e. general damages below the threshold or the deductible). The protected person retains the right to recover from the unprotected person that person's share of the damages.
  
  It has now specifically been made an offense to make false or misleading statements to an insurer respecting entitlement to benefits and there are very stiff penalties associated with contravention.

• There are no rights of subrogation by the third party benefactors (those who paid the collateral benefits). The exception to this is OHIP who maintains a subrogated right against anybody other than a protected person.

• The Act precludes an award for gross up for income tax. The only exception is for wrongful death cases.

• The Act stipulates that accident benefits paid with respect to wage loss are to be deducted from an uninsured motorist coverage claim.

• The definition of "accident" in the S.A.B.S. is now much more restrictive than before: (" an incident in which the use or operation of an automobile directly causes an impairment"). It is also now more restrictive (under inclusive) than the no-fault principle and indemnity (coverage) provisions. Therefore there will be cases where no A-B's are payable and yet the plaintiff will be subject to the threshold, the pecuniary loss restrictions, and the deductible.

• The Act requires that those attending at a mediation or an arbitration have the power to bind a party, or the mediator or arbitrator will adjourn the proceeding.

• There is a new dispute resolution mechanism (for A-B claims) called a neutral evaluation. This is available if mediation fails. The parties may go to a neutral evaluation which will be like a pre-trial at which the evaluator will indicate what the probable outcome of a court proceeding or arbitration will be. The neutral evaluation will be conducted if the parties agree or the mediator orders it.

• The Act now permits an insurer to recover its costs at an arbitration. Previously, only insureds could get costs.

• Note the post 2 year test to receive weekly A-B benefits is tougher than under O.M.P.P. Post 104 weeks benefits are now available only if the insured
  
  "is suffering a complete inability to engage in any employment for which he or she is reasonably suited by education, training, or experience ... "
  
  [note the inclusion of the words "complete inability" whereas in O.M.P.P. it was "continuously prevents an insured from engaging in" ...]

• Note no minimum income loss benefit for the first 104 weeks (note under O.M.P.P. the insured was entitled to a minimum of $185.00 if the insured had a job at time of accident). There is however a minimum ($185.00) for the post 104 week income benefits for those who qualify.

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Revised November 15, 1996

© Rogers Partners LLP - 1996

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