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How Ontario car accident cases and Pain and Suffering awards work in a nutshell

In law school, lawyers are taught to sue parties with deep pockets.

Suing a Defendant who is without assets will net you a limited or a nil return. You can’t get blood from a stone.

Understanding this concept is important to understanding how car accident cases work in Ontario. But there is much more than meets the eye.

In this “nutshell” series of the Toronto Injury Lawyer Blog, we take a quick examination of how exactly car accident cases w0rk in Ontario, and what to expect.

Ontario has a very strange system of car insurance. When explained to a lay person, Ontario’s no fault accident benefit and tort system for car accident claims sounds backwards:

  1. An injured accident victim in a car accident case has two cases: an accident benefit case and a tort case (already confusing because there are two cases stemming from a single car accident) Not an easy concept for a lot of people to get their heads around
  2. The accident benefit case is against your own insurer. Even if the at fault driver is drunk, while texting and ran a red light; the innocent accident victim still needs to first seek accident benefits from his/her own insurer (this never seemed right to me as it puts the innocent accident victim in an conflicting and often combative relationship with his/her own insurance company who they have loyally paid premiums to for years over a car accident case which was not their fault. This is a sure fire way to sour a relationship between a once loyal insurance premium payer and his/her insurer).
  3. Accident benefits only pay for up to $400/week for income replacement benefits/lost wages! If you were earning $1,000/week and did not purchase optional benefits, then too bad. You’re stuck to just $400/week.
  4. Accident benefits will only pay $3,500 for your physio or other rehab care costs not covered by OHIP if your injuries are deemed by the insurer to fall in to the minor injury guideline. This stinks on two accounts:

a) There is a minor injury guideline which only allots $3,500 in treatment costs for injuries deemed to be minor. This $3,500 will quickly vanish and will result in an additional burden on the OHIP system. The tax payer and the publicly funded OHIP system instead of the large deep pocketed insurer are ultimately on the hook for the recovery costs beyond the $3,500 limit under the minor injury guidelinebanner-box-logo

b) the large deep pocketed insurer gets to act as Judge, Jury and Executioner in deeming which injuries fit in to the minor injury guideline at the outset of the case when funds are most needed for rehab. This puts the insurer in a conflict right out of the gate as it’s in the insurer’s best financial interest to deem all injuries “minor” so as to save them money. The savings is significant as the next level benefits is a combined $65,000! This presents a per claims savings of $61,500.

5. Tort claims are against the at fault driver’s insurance company. If the at fault driver had no insurance, then your insurance company defends, and pays out of the claim if there is a settlement or judgment.

6. Tort claims in Ontario for pain and suffering will only succeed if the injuries are deemed by a Judge to be both “serious and permanent“. If your injuries do not meet this medico legal test, or threshold, then you get ZERO; even if the at fault driver was drunk, texting and ran a red light.

7. The insurance company is entitled to a secret credit. This secret credit is called the deductible. This credit is so secret, that the lawyers aren’t allowed to talk about it in front of a Jury or at trial! This secret credit is also very large! It’s likely larger, or just as large as your net after tax income. Today, the secret credit stands at $37,983.33 and goes up year after year with inflation. This secret credit is described at law as the “deductible”. Where does the $37,833.33 secret credit go after a claim has settled? Does the insurer get to claim it as a business expense? As a credit? As a taxable loss? Your guess is as good as mine…Just as its name implies, the secret credit remains a secret.

8. On the topic of secret credits, the insurance company also gets to claim a secret credit against Family Law Act claims for loss of guidance, care and companionship as a result of the car accident. That secret credit for Family Law Act claims currently stands at $18,991.67. Just like the secret credit for pain and suffering claims, this secret credit too rises year after year with inflation.

9. If your personal injury lawyer makes mention of the secret credit which the insurance company is entitled to at trial, the Judge will declare a mistrial, and may seek to penalize the lawyer or his/her client with a costs penalty against them. None of this seems fair. If a Jury intended to award an injured accident victim $100,000; that award should not be reduced to $62,016.67 at trial after the application of the secret credit. The will of the Jury should be followed. But car accident law in Ontario is not fair. It hasn’t been for the past 20 years.

10. There is a cap on damages for pain and suffering in Ontario, and across Canada for that matter. That cap today sits at around $367,000, give or take, depending on who you ask. If you think that your damages for pain and suffering are over $500,000, good luck to you. A judge would likely reduce them to reflect what the Supreme Court of Canada had to say in a trilogy of cases decided circa 1978 starting with  Andrews v. Grand & Toy Alberta Ltd.

The more you understand about the personal injury system we have in Ontario, and how car accident cases work, the more frustrated you will become. Sometimes, ignorance is bliss. People affected by serious car accident cases quickly realize that the laws in Ontario are written in favour of large deep pocketed insurance companies to “screw” (for lack of a better term) innocent injured accident victims. Having a good personal injury lawyer on your side can help you with the ups and downs of personal injury litigation. But ultimately, the personal injury lawyer is not he legislator and does not pass the laws from Queens Park.




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