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Set Off Law for a Personal Injury Case in Ontario

When someone gets into an accident, we think that the accident victim is automatically entitled to compensation. This seems basic, fair, and like the right thing to do.

Unfortunately, the law is not so simple, nor is it very forgiving.

The law is a donkey. It’s rather stubborn, unyielding, and once you think you have it figured out, it gives you a big kick in the you know what!

Just because you’ve been involved in an accident, even if the accident is NOT your fault; it does not mean that you are entitled to compensation. And even if you are eligible for compensation for your injuries or damages, it does not always mean that you will recover as much as you think you are entitled to.

Insurers and defence lawyers want to know how much money a Plaintiff has received since their accident. Not only that, they want to know how much money a Plaintiff might be eligible to receive even though they have not collected that money.

Why is that and how is how much money I received after an accident relevant to my personal injury case?

It’s very relevant. Insurers want to know this information to save them money.

You see, because the law is so stubborn, unyielding and unrelenting; it’s structured in such a way that any damages awarded to a Plaintiff are not entitled to be a windfall. Personal injury cases are NOT intended to be a lottery winning for a Plaintiff. They are entitled to make the Plaintiff “whole” and put them in the same economic position as they were before the accident.

The law works in such a way as to prevent any sort of double dipping by a Plaintiff. If a Plaintiff was earning $3,000/month pre-accident; then they should be entitled to $3,000/month post accident (not taking into any sort of inflation, raises etc.).

Take the example of a Plaintiff who was earning $3,000 per month, and who has access to long term disability benefits which pay 70% of their earnings ($2,100).

In this example, the Plaintiff is out of pocket $900 ($3,000-$2,100 = $900).

This means that the at fault Defendant is NOT on the hook to pay out the income loss of $3,000 per month. Instead, they are entitled to a set off of the long term disability benefits received resulting in a total owing of only $900 per month. Sounds like a pretty good savings to me for a Defendant who was entirely at fault for putting the Plaintiff on disability.

Take another example of a car accident in Ontario.

There are two cases for each car accident case in Ontario. There is a no fault accident benefit case. And there is a tort case against the at fault

The insurer for the tort defendant rides in a prime position despite the fact that their insured might be 100% responsible for the accident and the Plaintiff’s injuries. The crazy thing is that despite the fact that the tort defendant might be 100% responsible for said accident, they won’t pay out 100% of the damages in the case. Dare I say that the tort Defendant pays a disproportionately low amount of money for the damages which they have inflicted on the innocent accident victim. There are many reasons for this, none of which are entirely fair, but that’s the law we have to deal with in Ontario.

A tort defendant (meaning the at fault party in a car accident) gets to sit back and wait on all the money which flows in from different sources. All (or most) of these dollars or benefits which flow to a Plaintiff after an accident can, and will be set off against a Plaintiff’s award.

Take the income replacement benefit. For every dollar which flows from the accident benefit insurer to a Plaintiff to supplement his/her loss of income; that’s one dollar less than the tort defendant has to pay out of the case. So, if an accident benefit insurer pays $60,000 over the course of a claim to an injured Plaintiff; the tort insurer gets a 100% credit on the money paid. That’s a $60,000 savings to a tort defendant who caused the accident in the first place. Couple that with any long term disability benefits, EI Disability Benefits, CPP Disability Benefits etc. You can see how all for these benefits add up to equal large set offs and savings for a tort defendant.

The same principals apply to attendant care benefits, and med/rehab benefits for past or future care. Every dollar received either from a private insurer, or from the public purse, is one dollar less for the tort defendant to pay out on a claim; more often than not for accidents which are caused almost entirely by that defendant.

It makes you wonder why the law has gone to such great lengths to protect the party who is entirely culpable. It gets even crazier when you know that the degree of culpability is not a consideration for the application of any set offs. That means that a defendant driver who was high on drugs, drunk, who ran a red light, and who has a history of driving offences is entitled to the exact same defences as a driver who made an honest mistake in causing an accident. The law is completely blind when it comes to the application of these laws. Fault does not matter at all. Fault is actually so mute that insurers often don’t contest it in many cases. Don’t get me wrong, there are certainly many cases where there are liability issues. But often the bulk of the arguments between lawyers comes down to an assessment of damages and what set offs a Defendant is entitled to. The more money which a Defendant can establish that a Plaintiff has received, the less money a Defendant believes that they will have to pay out on the claim. And, for the most part, they are correct in that strategy because the law has been set up in this way so as to give a greater variety of protections to an at fault party than to an innocent accident victim.

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