Part of the secret to defending a personal injury case, isn’t in the defence of the case on its merits itself. Rather, it’s all about trying to find alternative sources of income or benefits which the Plaintiff is entitled to so that that money offsets any potential award. This way, if even if an at fault Defendant or large insurer looses the case; their damages exposure is limited by the amount of collateral benefits which a Plaintiff has received; or which a Plaintiff is entitled to.
The term collateral benefits is often misunderstood by Plaintiffs, or disability claimants. But, it’s a very important term for any Plaintiff in a personal injury case to understand.
Think of collateral benefits as an amount of money (or benefit) which a Plaintiff is entitled to. The Plaintiff may be receiving that money; or they may not. The money might not be coming in because the Plaintiff has not applied, or thought of applying for that benefit. We see this frequently. There is no playbook for getting injured. Nor is there a playbook for what benefits to apply for after a serious accident, injury or disability claim. Many Plaintiffs don’t know that they might be entitled to benefits; or they don’t know how or when to apply for said benefits. Unfortunately neither the law nor insurers care about that. If you are entitled or eligible for said benefit, you should apply even if you didn’t know the benefit existed. The law will treat the Plaintiff as if they knew about said benefit, and as if they were eligible to receive said benefit; even if they didn’t receive it. The set off will be applied irrespective of whether or not the application for the benefit was made or not.
Collateral benefits happen outside the scope of the personal injury case itself. An income replacement benefit or non earner benefit under Ontario’s Accident Benefit Regime following a car accident is not deemed to be a collateral benefit. But, these amounts are still offset in the tort portion of the case. A collateral benefit is considered to be a benefit unrelated to the personal injury case itself; although it may be payable because of the disability or injury at the root of the personal injury or disability case.
A good example of a collateral benefit is a short term or long term disability benefit, or other disability benefit through a private insurer. If a Plaintiff has access to such benefits, they are deemed to apply and to receive them if a case is going to be successful. The amount which is payable under the collateral disability benefit policy will be offset in most cases (car accident, slip and fall, or even long term disability cases). In fact, there are specific provisions contained in the majority of long term disability policies which state that any other disability benefits will be deemed received and offset on the award/benefit payable to the policy holder. A good example of this at play is a Worker’s Compensation Benefit (WSIB) in a long term disability case.
Let’s assume that the disability claimant is eligible for a monthly LTD benefit of $2,000/month. They are receiving $750/month from WSIB in a Worker’s Compensation Disability Benefit. This means that instead of receiving $2,000/month from the long term disability carrier, or $2,750 from the long term disability carrier plus WSIB; the claimant will receive $1,250/month from the long term disability insurer and $750/month from WSIB for a grand monthly total of $2,000. What happens in that example is that the long term disability insurer is able to set off the $750 coming in from WSIB in order to reduce their monthly exposure. They’re able to do this because of the set off wording contained in the long term disability policy as it relates to collateral set off eligibility. Our personal injury lawyers have never seen a long term disability policy which does not contain wording which prohibits the long term disability insurer from making a set off when there are other sources of disability income coming in to the disability claimant.
As you might imagine, these set offs impact a Plaintiff’s potential recovery from then at fault defendant, or the primary insurer. It also serves to make it difficult for Plaintiffs to accept that an at fault insurer can be protected by these set offs when they are deemed to be responsible, or totally at fault. The rationale behind these protections is that tort law and long term disability policies are not intended to be windfalls. They are intended to make the Plaintiff whole; or to compensate them for their losses to the extent of pre-accident way of living (not intended for advancement). The Plaintiff is not supposed to be double dipping (receiving compensation from a tort Defendant plus an additional windfall from a collateral source of income such that they are in a better financial position post accident vs. pre-accident). These ideas are very difficult for Plaintiffs to grasp. In the minds of most Plaintiffs, the Defendant is at fault, and because they are at fault, they should pay at a rate of 100%. Unfortunately, the law doesn’t work this way in many cases. Instead of a Defendant paying 100% for their negligence, they are only paying 50-70% of the damages on account of the availability of collateral benefits. In fact, in car accident cases, the law is structured in such a way that the Defendant only has to payout on 70% of the income loss because that’s the way that the law has been structured. This has always made no sense to Brian Goldfinger (why should a drunk driver get a 30% savings for their gross negligence on the income loss of an innocent accident victim?). Brian Goldfinger is a long standing member of the Plaintiff personal injury bar in Ontario who has been practicing law since 2004. In that period of time, Brian Goldfinger has seen a lot of ups and downs with respect to the treatment of accident victims in the province. The tide has been turning too long in the favour of deep pocketed insurance companies.