Automobile Insurance Rate Stability Act 1996

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Automobile Insurance Rate Stability Act 1996

Third Party Liability Guide 1. Procedural Guide Plaintiff

120 Day Notice Provision

The plaintiff must give the defendant written notice of intention to commence an action within 120 days of the accident. s.258.3(1)

Pre-judgment interest does not begin to run until the notice of intention is served. s.258.3(8)

Within 30 of Service of Notice of Intention

Within 30 days after serving the Notice of Intention to Commence an Action, the plaintiff must provide the defendant with the following information (per regulation):

• the name of the plaintiff's insurer;

• if a lost income claim is being advanced, evidence of the plaintiff's income for the previous 52 weeks;

• in the case of a fatality, consent to obtain a copy of the autopsy report;

and supply the following information no later than the later of 120 days after the incident or 30 days after service of the Notice of Intention:

• a copy of all materials and applications submitted to the A.B carrier or anyone else providing benefits within that period or consent to obtain them;

• a copy of every medical report prepared for the plaintiff within that period;

• a copy of the plaintiff's clinical notes from everyone who treated the plaintiff within that period, or consent to obtain them.

but the defendant must pay the reasonable cost of obtaining the medical reports and clinical notes.

Mediation

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Threshold Motions

Threshold motions are now available only on consent or if ordered by a judge at a pretrial conference. s.267.5(11) and (12)

Defendant

Within 7 days of Accident

Insured must give insurer notice of an accident required to be reported to police within 7 days. s. 258.1

After Notice of Intention

The insured must forward the notice to the insurer within 7 days. s.258.3(2)

The insurer must promptly advise the plaintiff of the liability limits and whether the policy will respond. s. 258.4

The defendant is entitled to:

• defence medicals if requested within 90 days of receipt of Notice of Intention, but must forward a copy of any report received to the plaintiff within 60 days.

s.258.3(7))

• a statutory declaration by the plaintiff of the circumstances surrounding the accident and the nature of the claim.)

• evidence of the plaintiff's identity. s.258.3(1)

The insurer must report the claim to a government anti-fraud database to be set up and provide such information as the regulations require to the Ministry of Community and Social Services to prevent welfare fraud. s. 273.1

Duty to Settle and Mandatory Advance Payments

The insurer is obligated to attempt to settle the claim as expeditiously as possible. s.285.5(1). Where liability for an income loss is admitted, the insurer is obliged to make advance payments with respect to the income loss. s.285.5(2).

Mediation

Either party may demand a mediation and the other party is required to participate. s. 258.6 Threshold Motions

Threshold motions are now available only on consent or if ordered by a judge at a pretrial conference. s.267.5(11) and (12)

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2. Non-Pecuniary Loss a. Threshold

The threshold now applies only to non-pecuniary loss. It protects the owner, occupants and anyone at the scene of the incident (referred to as "protected persons") from liability for non-pecuniary damages, unless the injured party has died or has sustained,

a) permanent serious disfigurement; or

b) permanent serious impairment of an important physical, mental or psychological function. s.267.5(5)

The threshold also applies to non-pecuniary Family Law Act claims.

The Minister has been given the power to clarify the threshold by passing regulations further defining the terms used in the threshold definition and setting out the evidence which may be adduced to determine whether the threshold is met. s. 121(1) paras. 23.1 and 23.2.

b. Deductibles

There is a $15,000.00 deductible for non-pecuniary damages of the person injured, and a $7,500.00 deductible for non-pecuniary losses of F.L.A. claimants. s. 267.5(7). Both deductibles, like the threshold, are applicable only to "protected persons".

N.B. The deductible is to be applied to the damages before apportionment of liability. s.267.5(7)4.

c. Exceptions to the Threshold and Deductibles

The threshold and deductibles do not apply to protect persons insured by out-of-province insurers who have not signed the out-of-province insurers' undertaking. Nor do they apply to such persons as automobile manufacturers, dealers or repairers who are sued for defects in the automobile or municipalities sued for non-repair of the highway.

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3. Pecuniary Loss

N.B. The general threshold and deductibles do NOT apply to pecuniary loss. a. Lost Income

A plaintiff is entitled to his or her income loss in full against defendants who are not "protected defendants". As against protected defendants, there is no entitlement to lost income for the first 7 days after the accident. Thereafter plaintiff is entitled to 80% of his or her net income loss or loss of earning capacity up to the date of trial and 100% of gross income thereafter. s.267.5(1)

Protected persons are not liable for a gross up for tax purposes except in the case of claims for fatalities. s.267.11

"Net income" is defined in the regulations as the person's gross income from employment, less C.P.P., U.I.C. and Income Tax payments.

b. Health Care Expenses

Again there are special defences for "protected persons". Protected persons are not liable for past or future health care expenses unless the injured person has sustained a

"catastrophic injury" as defined in the regulations. s.267.5(3) and (4). (This issue can be determined before trial on a motion if both parties agree.)

c. Other Pecuniary Loss

A plaintiff has an unrestricted right to claim for any pecuniary loss that does not fall under the categories of lost income, lost earning capacity or health care expenses. This would presumably include such things as damage to clothing, home maintenance expenses etc.

4. Collateral Benefits

Collateral benefits with respect to differing categories of loss are now treated separately: a) Income Loss and Loss of Earning Capacity

The claimant's pre-trial income loss claim is reduced by the S.A.B.'s received for income loss, any payments received for lost income "under the laws of any jurisdiction or under an

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income continuation plan", and any sums received under a sick leave plan, other than payments received in respect of the first 7 days of disability. s. 267.7 If there are both protected and unprotected defendants, the protected defendants first get credit for the collateral benefits and the unprotected defendants only get credit for any excess. s.267.7(3)

b) Health Care Expenses

The plaintiff's claim for health care expenses incurred up to the date of trial are reduced by all Statutory Accident Benefits received or available up to trial, and any health care benefits received under a private or government plan. s. 267.7(4)

c) Other Pecuniary Losses

The plaintiff's claim for other pecuniary losses is reduced by any Statutory Accident Benefits received attributable to those losses. s. 267.8(6)

d) Future Collateral Benefits

The new legislation codifies the law as set out in Cox v. Carter (1978), 13 O.R. (2d) 717 and states that the plaintiff holds future collateral benefits in trust for the defendants in

proportion to the damages paid by them. s. 267.8(9) e) Workers' Compensation

There is no deduction for Workers' Compensation payments and these are not considered to be collateral benefits. s.267.8(15)

f) No Subrogation

There is no subrogation available for collateral benefits, except that OHIP can subrogate against defendants other than "protected defendants". s. 267.8(17)

g) Deductions Made After Apportionment of Liability

N.B. It is very important to note that the collateral benefits are deducted AFTER apportionment of contributory negligence. s. 267.8(8)

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Collateral benefits which a person was entitled to but which were not paid by the benefit provider are not deducted unless the reason that the benefits were not paid was some default by the insured. In other words, the insured is not to be put into the position where he or she has to sue both the tortfeasor and the benefit provider to ensure indemnity. s. 267.8(21)

5. Miscellaneous

a) Out-of-Province Accidents

A claimant injured in an accident in the U.S. or in another province basically has the choice of the benefits and liability limits of the Ontario policy or the minimum policy in the

jurisdiction in which the accident happened. s. 45(1) and s. 252(1) b) Out-of-Province Insurers

Insurers not licensed in Ontario cannot avail themselves of many of the protections of the Act (e.g. thresholds and deductibles) unless they have signed an undertaking with the Ministry. s. 226.1

c) Uninsured Owners and Lessees

The owner or lessee of an uninsured motor vehicle cannot bring an action in Ontario for loss or damage arising from a motor vehicle accident. Note that no prosecution is necessary under the compulsory auto insurance act to trigger this defence. Note also that it applies only to the owner and lessee of the uninsured vehicle. The driver of an uninsured vehicle could still bring an action, even though he knew the vehicle he or she was driving was uninsured, as long as the driver was not the owner or lessee of the vehicle.

d) Mandatory Structures

According to the regulations, the court MUST structure an award for pecuniary loss where any two of the following circumstances prevail:

• The award, including prejudgment interest exceeds $100,000.00; • The plaintiff is a minor;

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• The plaintiff has no other means to fund future care;

• The plaintiff is not likely to manage the award in a prudent manner unless there are insufficient insurance funds to structure, or to do so would deprive another claimant from full recovery.