If you asked personal injury lawyer what are some of the most common issues they face with car accident cases in Ontario; without a doubt the issue of the threshold and the deductible will be very high on their lists. Likely the number 1 issue which personal injury lawyers face for car accident cases in Ontario.
What are the threshold and the deductible?
Good question, because so few people know what they are, or how they work.
Let’s start with the deductible, because that’s the most concrete of the two concepts. The deductible acts as a secret credit which the insurance company doesn’t want you or the general public to know about. For every pain and suffering case involving a car or motor vehicle; the insurance company which acts for the Defendant is entitled to a LARGE CREDIT for pain and suffering award which falls below $138,343.86. The deductible for 2022 sits at $41,503.50. It’s the $41,503.50 elephant in the room for any car accident case. This means that if a Judge and Jury award an injured Plaintiff $50,000; after the $41,503.50 deductible is applied; it leaves the injured Plaintiff with only $8,496.50 in their pocket. This seems unfair. But that’s the law in Ontario.
The at fault driver could have been drunk, ran a stop light, while texting on his/her cell phone. The extent of fault will not matter. The deductible applies nonetheless regardless of fault.
It would appear that Ontario’s system affords the at fault Defendant with a $41,503.50 security blanket for each car accident. And that $41,503.50 security blanket only grows larger with time. The reason for this is that $41,503.50 figure increases each year with inflation. The deductible sat at $39,754.31 in 2021 and grew to $41,503.50 in 2022. Where will it be in 2030? Near $50,000? Near $55,000? It will only go up. I am not aware of any provision in the legislation which permits for deflation of the deductible. Only inflation.
This idea of granting the at fault driver a secret credit is so hard for Plaintiffs to grasp. Why is an at fault Defendant for as serious car accident entitled to more protections than an injured Plaintiff? It really doesn’t make any sense when it’s explained to them. But since when does it say that the laws are supposed to make sense.
The rationale for the deductible is to keep costs down for insurers. In turn those savings are supposed to be passed along to the consumer in the form of cheaper car insurance premiums. But it really hasn’t played out that way. Have your car insurance premiums gone down in the past 10 years, 5 years or 2 years? Likely not unless you’ve moved from a high premium area (like Brampton) to a lower premium postal code (like outside of the GTA). Even living outside of the GTA in areas like London, Peterborough and Kitchener, car insurance premiums are not only high, but they continue to rise with no sign of slowing down.
The threshold is a medico-legal subjective test decided by a Judge. Think of it as a hurdle. If a Plaintiff fails to clear the hurdle of the threshold, then the Plaintiff’s case for pain and suffering (non-pecuniary or general damages) will FAIL; regardless of fault.
This again means that the Defendant could be drinking and driving, on his cell phone and ran a red light. Nonetheless, the Defendant irrespective of fault is entitled to this second protection under the law. It’s yet another example of the law being crafted in a way to favour insurance companies and the Defendants which they represent at the expense of innocent accident victims.
In examining the threshold, the Judge will want to know whether or not the injury represents a “permanent, serious disfigurement or a permanent serious impairment of an important physical, mental or psychological function.”. This is the test as set out in section 267.5(5) of the Insurance Act.
The test is subjective. This means that there are no hard and fast rules for the Judge to establish whether or not a Plaintiff’s case would meet the threshold or not. A Judge will certainly look at the medical evidence presented at trial, hear what experts had to say, hear what witnesses had to say and also examine precedent case law in making their decision.
But at the end of the day, what establishes the Plaintiff’s injuries as meeting the test for the threshold is up to the Judge. It depends on what evidence the Judge placed the most weight. The Judge may place more weight on the Defence expert’s opinion. The Judge may do the opposite and side with the Plaintiff’s experts. Or the Judge may find the Plaintiff to be more credible and likeable and place weight on his/her evidence to meet the threshold. It’s entirely up to the Judge in this regard.
In our experience, a Plaintiff who is more likeable and who is more credible will stand a greater chance of meeting the threshold as oppose to a Plaintiff who is neither likeable nor credible. A Judge will not want to reward someone who they suspect is a liar, a cheater, a faker or who is out to defraud the system.
Which way will your case go? Nobody knows. Neither personal injury lawyers, nor insurance adjusters or insurance defence lawyers can predict the future. But what all of these industry actors can tell you is that an at fault Defendant will arrive in Court with more protections under the law than the injured Plaintiff. These protections in the form of the deductible and the threshold don’t exist for any other personal injury claims other than car accident or motor vehicle accident cases. That means that for assault cases, slip and falls, dog bites, medical malpractice cases etc., the protections of the threshold and the deductible don’t exist! These protections are only there for insurers and the Defendants they represent in car accident cases. Is that fair? Is that just? Likely not. But nobody ever said that the laws (particularly the fine print of the Insurance Act) needs to be both fair and just.