In October 2003, the Ontario government passed Bill 198, significantly changing automobile insurance claims. In particular, Bill 198 raised the threshold for non-pecuniary loss claims in tort … While the new threshold permits insurers to attempt to deny more claims for non-pecuniary losses, once the appropriate experts are marshalled, causation is established and the impact of the accident on the plaintiff’s life has been fully explored, the Regulation may have little practical effect, other than to increase the number of ‘threshold motions’. Until the Courts consider the new threshold, its impact will not be known.
While the new threshold permits insurers to attempt to deny more claims for non-pecuniary losses … the regulation may have little practical effect other than to increase the number of “threshold motions.”
By Richard M. Bogoroch and Tripta S. Chandler
The Lawyers Weekly
March 25, 2005
In October 2003, the Ontario government passed Bill 198, significantly changing automobile insurance claims. In particular, Bill 198 raised the threshold for non-pecuniary loss claims in tort.
The threshold rule has existed in various incarnations since the implementation of the Ontario Motorist Protection Plan (“OMPP”), on June 22, 1990 and limits claims by imposing a standard of severity of injury to be met for a plaintiff to be entitled to non-pecuniary (general) damages.
Ontario Regulation 381/03 modified the threshold for general damages claims for accidents after October 1, 2003. Although the wording of the threshold test has changed, the essential elements remain the same. However, instead of leaving the interpretation of the elements of the test to the Courts, the legislation defines them and introduces new evidentiary requirements. Further, it confuses the former distinction between the threshold test and the test for loss of income by making the inability to work a condition of almost all general damages claims.
Tripta S. Chandler Under Bill 198, a “permanent serious impairment” is one that substantially interferes with the person’s ability to continue her usual employment or to continue training for a career or substantially interferes with most of her usual activities of daily living, considering her age. An “important function” is one that is necessary to perform the essential tasks of the person’s employment, to continue training for a career, or to provide for her own care, or important to her usual activities of daily living, considering her age. A “permanent impairment” is one that has been continuous, is not expected to substantially improve, meets the criteria for “permanent serious impairment” and is expected to continue without substantial improvement when sustained by persons in similar circumstances.
In addition, a plaintiff must adduce evidence from a qualified physician explaining the nature of the impairment, its permanence, the specific function that is impaired and the importance of that function and establishing a causal link between the injuries and the accident. Additional evidence is also required to corroborate the change in function.
The new legislation measures a plaintiff’s entitlement to general damages by her ability to work or care for herself. However, it ignores other significant impairments that may be equally important to those who do not fit within the traditional work model: for example, those who are not employed outside the home, or whose ability to work is not compromised, but have suffered reduced enjoyment of life or undergone extensive medical procedures. Seriously injured plaintiffs, including retirees, homemakers, stay-at-home parents, students and children may have difficulty meeting the threshold. The legislation suggests that, unless a plaintiff is unable to work, his claim will not ‘cross’ the threshold.
The reference to impairment of a plaintiff’s activities of daily living, “considering his age”, is vague and uncertain. The legislation fails to address degenerative changes which may not immediately interfere with a plaintiff’s activities but may worsen with age. Further, it is not clear whether one must consider only those activities the plaintiff performed prior to the accident, or whether one may consider future plans (e.g., marriage or child rearing) which might have been contemplated?
Further, the requirement that the impairment would be expected to continue without substantial improvement when sustained by persons in similar circumstances attempts to impose a wholly inappropriate element of ‘objectivity’. Aside from the practical difficulties of locating such individuals, there are no criteria for identifying them. The term “similar circumstances”, is so vague as to be utterly impractical and is useless as an indicator of the severity of an injury. The legislation fails to consider factors such as pre-existing vulnerabilities, personality type, background and social supports which may affect recovery. General damages are intended to compensate for loss of an individual’s enjoyment of life, amenities of life and quality of life. The introduction of an ‘objective’ component based on the reaction of a theoretical individual in “similar circumstances” is wholly inappropriate and impossible to apply in any sensible way.
While the new threshold permits insurers to attempt to deny more claims for non-pecuniary losses, once the appropriate experts are marshalled, causation is established and the impact of the accident on the plaintiff’s life has been fully explored, the Regulation may have little practical effect, other than to increase the number of ‘threshold motions’. Until the Courts consider the new threshold, its impact will not be known.
However, reviewing Court decisions under previous legislation may assist in determining how Courts will interpret the new threshold. In Meyer v Bright, the Court of Appeal stated that the threshold test cannot be considered using objective criteria, but must be decided on individual facts, and held that the potential impact of an injury on others is irrelevant. The Courts have consistently applied Meyer in determining whether an individual’s impairments ‘cross’ the threshold.
Historically, Courts have distinguished between a plaintiff’s ability to work and the threshold and have accepted general damages claims advanced by plaintiffs who are not employed, including elderly or previously disabled plaintiffs and unpaid caregivers. Since the imposition of the OMPP threshold, Courts have taken a liberal, fact-specific approach. Whether this will continue under Bill 198 remains to be seen, but plaintiffs’ counsel have ample grounds to promote the fact-specific test heretofore supported by Courts.