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O ntariomotorvehiclecom-

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

andma intaining the tortsystem wasexpen sivethat victims ofmotor

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

theresultsoftortclaimswereu npredictableSuchcriticismsstimulated

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

vehiclecompensationsystemt hat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pas tdirectoroftheAdvocatesSoc ietyandpastpresident

oftheOntarioTrialLaw yersAssociationHewasappoi ntedonDecemberby

theprovincia lgovernmenttotheMini stersCommieeontheDesignatedA ssess-

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

andwasapp ointedChairofthatcom mieeinOctoberforaone year

termOnJunehewasappoi ntedbytheprovincialgover nmenttotheCata-

strophicImpairm entAdvisoryPanelHeisthecoaut horwiththeHonourableMr

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

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

ance Law and Commentarypublish edbyLexisNexisCanadaI nc

SEF

itwasmadeamandatorypar tofallautoinsu rancepoliciesInuenced

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

tario andthestatistica l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a mountreceivedfrom the

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

benetswere increased asof Julyliabil ityinsu rancewas made

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

cidentswasmandatorilyi ncluded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compen sationsystem waseect iveas of June

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

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

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

dealwith theperceived insurancecr isisThemai nfeatures ofthe re-

gimeweretheeliminationofthesmallertortclaimsandtheenr ichment

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ac hievedbycreat ingwhathasbe encommonlyreferred

toas theth resholdmoreproperlyreferr edto asthe statutory excep-

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

created undertheO ntarioMo toristProt ectionPlanOMPPallowedtort

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

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

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

nat ur e

The third majorcha ngeto the Ontario autocompensation system

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

 OntarioLegislat iveAssemblySelectCommieeonAutomobileInsu ranceFinal

ReportoftheSelec tCommieeAppointedonApriltoExami neintoandto

ReportonAllMaersRelat ingtoPersonsWhoSuerFina ncialLossorInjur yAsa

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

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

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

 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

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

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

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

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

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

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

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

thantheactua lnonpecuniaryloss

Afourt hsystem camei ntoexistence foraccidents occurring onor

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

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

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

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

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

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

ishedunder Billfor themostpa rt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clai msand thestatu-

toryacc ident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var iousguide-

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

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

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

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

AsofMarcha s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A ssessmentCentreDAChas

beenelimi nated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St rongEconomyBudgetMeasuresActSOc

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

 OReg