Fifteen Years of Accident Benefits: The Tort-Accident Benefit Collateral Interface

• Author: Stephen E. Firestone
• Pages: 17-70



FieenYearsofAccidentBenets

TheTortAccidentBenetCollateral

Interface

Stephen E. Firestone*

A. INTRODUCTION

InthelatesandscriticismsoftheOntariomotorvehiclecom-

pensationsystemwereripeSomearguedthatthecostofadministering

andmaintainingthetortsystemwasexpensivethatvictimsofmotor

vehiclecollisionshadtowaittoolongtoreceivecompensationandthat

theresultsoftortclaimswereunpredictableSuchcriticismsstimulated

debateinCanadaincludingOntarioinaneorttoredesignamotor

vehiclecompensationsystemthatwouldbeacceptabletobothinsurers

andclaimants

Therstmajoroverhaulwasthepeacefulcoexistenceplanon

JanuaryOriginallyoeredonavoluntarybasisonJanuary

 StephenEFirestoneisapastdirectoroftheAdvocatesSocietyandpastpresident

oftheOntarioTrialLawyersAssociationHewasappointedonDecemberby

theprovincialgovernmenttotheMinistersCommieeontheDesignatedAssess-

mentCentreSystemestablishedundertheAutomobile Insurance Rate Stability Act,

andwasappointedChairofthatcommieeinOctoberforaoneyear

termOnJunehewasappointedbytheprovincialgovernmenttotheCata-

strophicImpairmentAdvisoryPanelHeisthecoauthorwiththeHonourableMr

JusticeAMLindenofOntario M otor Vehicle Insurance Practice Manualaconsulting

editorofPersonalInjuryPracticeManualandauthorof Ontario Motor Vehicle Insur-

ance Law and CommentarypublishedbyLexisNexisCanadaInc

SEF

itwasmadeamandatorypartofallautoinsurancepoliciesInuenced

bythenalReportoftheSelectCommieeoftheLegislativeAssemblyofOn-

tario andthestatisticalstudytitledTh e Report of the Osgoode Hall

Study on Compensation for Victims of Automobile Accidents this reform

providedforlimitedaccidentbenetstobepaidtoallvictimsofauto

crashesonanofaultbasisHoweveritallowedtherighttosueintortto

surviveintactexceptforadeductionofanyamountreceivedfromthe

nofaultplanFollowingafurtherreportbyaSelectCommieenofault

benetswereincreasedasofJulyliabilityinsurancewasmade

compulsoryinandcoverageforunderinsuredandunidentiedac-

cidentswasmandatorilyincludedinthestandardautomobilepolicyas

ofMarchItprovidedbenetsatreasonablecostwithoutinterfer-

ingwiththehistoricrighttosueintort

ThenextaccidentcompensationsystemwaseectiveasofJune

ThisfollowedtwofurtherinquiriesoneunderthedirectionofDr

PhilipSlaterofYorkUniversityandanotherundertheleadershipofthe

HonorableMrJusticeCoulterOsbornewhichwerebothestablishedto

dealwiththeperceivedinsurancecrisisThemainfeaturesofthere-

gimeweretheeliminationofthesmallertortclaimsandtheenrichment

ofthenofaultbenetsTherewerealsosomechangesmadetotheprop-

ertydamageclaimsystemThepurposeofthisreformwastodecrease

rising autoin surance premiumsby reducing tort recovery for smaller

claimsThiswasachievedbycreatingwhathasbeencommonlyreferred

toasthethresholdmoreproperlyreferredtoasthestatutoryexcep-

tionstothegeneralimmunityfromlawsuitsThestatutoryexceptions

createdundertheOntarioMotoristProtectionPlanOMPPallowedtort

recoveryinfatalitycasesinpermanentseriousdisgurementcases

andwheretherehadbeenpermanentseriousimpairmentofanimpor-

tantbodilyfunctioncausedbyacontinuinginjurywhichisphysicalin

nature

ThethirdmajorchangetotheOntarioautocompensationsystem

cameintoeectonJanuaryandiscommonlyreferredtoasBill

 OntarioLegislativeAssemblySelectCommieeonAutomobileInsuranceFinal

ReportoftheSelectCommieeAppointedonApriltoExamineintoandto

ReportonAllMaersRelatingtoPersonsWhoSuerFinancialLossorInjuryAsa

ResultofMotorVehicleAccidentsTorontoLegislativeAssembly

 ALindenThe Re port of the Osgoode Hall Study on Compensation for Vict ims of Auto-

mobile AccidentsTorontoOsgoodeHallLawSchool

 Meyer v. BrightOJNoGenDivadOJNoCA

 InsuranceStatuteLawAmendmentActSOcBill

Fifteen Years of Accident Benefits

Thisplanalteredthenofaultbenetsprovidedaswellastheso

calledthresholdUnderthisschemethereisnorighttorecoverpecu-

niarylossesTortsuitsremainedonlyfornonpecuniarylossincasesof

deathseriousdisgurementorseriousimpairmentofanimportant

physicalmentalorpsychologicalfunctionInadditionthereisade-

ductibleofperplaintiforalltortclaimsthatqualifyunderthe

exceptionssothateverysuccessfultortclaimantwillreceiveless

thantheactualnonpecuniaryloss

Afourthsystemcameintoexistenceforaccidentsoccurringonor

aer  November Underth is scheme referred to as Bill the

thresholdwaschangedtoallowtortclaimsfordeathpermanentseri-

ousdisgurementorpermanentseriousimpairmentofanimportant

physicalmentalorpsychologicalfunctionTherewasalsoadeduct-

ibleofforinjuryclaimsandforclaimsundertheFamily

Law ActAchangewasthatincomelossclaimswhichhadbeenabol-

ishedunderBillforthemostparthavebeenresurrectedbutonly

uptopercentofnetlosspriortotrialandpercentofgrossaer

trialAswellthenofaultbenetforlossofwageswasreducedfroma

maximumofperweektoperweek

OnOctobertherewerefurthernewstatutoryprovisionsand

regulationsenactedthataectmotorvehicletortclaimsandthestatu-

toryaccidentbenetsschemeOnDecemberBilltitledAn

Act to Implement Budget Measures and Other Initiatives of the Government

receivedroyalassentPursuanttothebillvariousstatutoryandregu-

latoryamendmentstotheInsurance Actandchangesinvariousguide-

linesandbulletinsreleasedbytheFSCOhavechangedthemotorvehicle

compensationsysteminOntarioAswelltherehavebeenfurtherregu-

latorychangeseectiveAprilandtheintroductionofnewand

revisedformswhichtookeectMarch

AsofMarchasaresultofvariousamendmentstotheStatu-

toryAccidentBenetsScheduleAccidentsonorAerNovember as

wellastheInsurance ActtheDesignatedAssessmentCentreDAChas

beeneliminatedTheDACregimehasbeenreplacedwithanenhanced

 Insurance Statute Law Amendment ActSOcBill

 Ibid.s

 Automobile Insurance Rate Stability ActSOc

 Ibidsand

 RSOcFFamily Law Act

KeepingthePromiseforaStrongEconomyBudgetMeasuresActSOc

 RSOcIInsurance Act

 OReg