Motor Vehicle Accidents


Well, it depends. In Canada, if you were injured in a car accident and wish to sue the negligent driver, you must issue a statement of claim against that driver in court. Personal Injury Lawyers not paralegals who do that. The negligent driver’s insurance company will have its own lawyer defend the action. In most cases the Statement of Defence will claim that the accident was your fault and your lawyer will have to prove on proper evidence that it wasn’t. In Canada we have an adversarial system, which translates to the party seeking compensation is treated adversely by the party from whom the payment is sought.

In Ontario, in the past two decades, the laws have been changed (mainly through the heavy lobbying of the Insurance Industry) by the successive Liberal governments several times — curtailing who can sue and for how much. It is ultimately the insurance company of that negligent drunk driver or distracted driver that pays out on the settlements or court awards.

To receive any money, the injured person must prove through objective evidence that he or she suffered a permanent and serious injury. There are complicated legal test that outline what constitutes “permanent and serious impairment of an important physical or mental function” under section 267.5(7), Insurance Act. If the injured person proves that he or she meets this threshold, a $30,000 deductible is then applied which reduces his or her pain and suffering award. The insurance company that insured that negligent driver keeps that $30,000 as a deductable.

As of August 1, 2015 the Ontario government raised the amount of this deductible to $36,540.

Does the new deductible apply to all pending accident claims or only those that occurred after August 1, 2015?

In the new case decision Vickers v Palacious, 2015 ONSC 7647, the Ontario Superior Court of Justice held that the new 2015 deductible applies to all motor vehicle accident claims that occurred prior to August 1, 2015. The judge provided two reasons for this decision based on (1) the legislative wording of the deductible and (2) the quantification of damages as procedural law.

Legislative Wording of the Deductible

In 2003 the insurance deductible on pain and suffering money awarded by civil jury (who were not allowed to know about the deductable) was doubled from $15,000 to $30,000. The Legislature stated that the deductible would apply “in respect of incidents that occur on or after October 1, 2003.” However, the Legislature left out an equivalent provision when it introduced the 2015 deductible. Based on the lack of wording in the new provision, the Court reasoned that the Legislature intended the new deductible to apply to all accidents regardless of when they occurred. Furthermore, it was not logical for the Legislature to introduce a deductible that was only applicable for accidents that occurred after August 1, 2015 if the deductible would be in effect until December 31, 2015, since most of these accidents would not be resolved by the year’s end.

Quantification of Damages as Procedural Law

The Court recognized that entitlement to damages is substantive while quantification of damages is procedural law. So, the statutory deductible is a measuring or quantifying device. The Court relied on Somers v Fournier, [2002] OJ No 2543 (CA) that cited the statutory deductible as a tradeoff for the availability of a no-fault accident benefits regime and this reason why a limit on damages is procedural law.

Pre-judgment Interest

As of January 1, 2015, section 128(1), CJA replaced Rule 53.10 to govern the pre-judgment interest rate on non-pecuniary damages. The Court held that for accidents that occurred prior to January 1, 2015, the prejudgment interest rate will be determined on the basis of Rule 53.10 until December 31, 2014, and thereafter pursuant to section 128(1), CJA. The Court reasoned that pre-judgment interest is a matter of substantive law and therefore it is a right that the claimant is entitled to. Existing rights cannot be retroactively taken away by legislative amendments. Specifically, “pre-judgment interest should be viewed as part of the compensatory package provided to the person.”


To summarize, the Court held that the legislative wording of the 2015 deductible and the limit on damages as procedural law to mean that the new deductible applied to accidents that occurred prior to August 1, 2015. Furthermore, any accidents that occurred before January 1, 2015 are entitled to pre-judgment interest under Rule 53.10, and thereafter to interest under section 128(1), CJA.

Saskatchewan Court Punishes Insurance Company

Insurance companies owe a duty of good faith to those who are insured under their contract of insurance. The court now ruled that they must conduct themselves with good faith in the manner that they evaluate and assess claims. They must do so fairly and must not deny coverage as a strategic ploy to weaken the insured’s negotiating position. Where an insurer has failed to uphold this duty, the insurer is guilty of bad faith and may be subject to a claim for punitive damages, over and above its contractual obligation to pay benefits pursuant to the policy. The purpose of punitive damages in Canada is therefore to discourage insurance companies from taking advantage of their insured’s when they are most vulnerable and from engaging in malicious and offensive activities by punishing the insurer.

The Saskatchewan Court of Queen’s Bench has sent a warning of “enough is enough” to the insurance industry across Canada with its recent decision in Branco v. American Home Assurance Company, 2013 SKQB 98. The Court awarded $4.5 million in punitive and exemplary damages to the claimant for suffering from the hands of the insurance company. This is thelargest award of its kind in Canadian legal history. It took the claimant 10 years to bring his dispute with his insurers, American Home Assurance Company (AIG) and Zurich Life Insurance Company, to a court decision.

In his landmark decision, The Honourable Justice Acton characterized the insurers’ conduct as “calculated and abhorrent” and “cruel and malicious”.

Natalie Clarke’s Notes On This Decision:

The insurers denied Mr. Branco’s long term disability benefits, despite the fact that he was clearly unable to work on account of two workplace injuries to his foot in 1999. Justice Acton found that the insurers failed to disclose to Mr. Branco for seven years that his claim had been approved; they terminated and/or withheld benefits without rhyme or reason; and they coerced him to enter in to an unfair settlement because of his financial struggles. This behaviour, as well as other actions on the part of the insurers, led to a finding of bad faith.

While most insurers would not stoop to this type of behaviour, it is hoped that that this decision will influence those other insurers to never again engage in the sort of conduct identified by the Saskatchewan Court of Queen’s Bench as deserving of significant punitive damages.

Natalie Clarke would be happy to speak with you to discuss your potential lawsuit related to insurers’ denials of your disability benefits and how the pursuit of punitive damages may be appropriate for your claim.


The Toronto Sun published a column about the delay & deny tactics used by a Disability Insurance company.


Disability insurance: More delay and deny benefits tactics

Penncorp Life Insurance Company has a mission statement. According to its website, Penncorp “provides financial security by specializing in simplified, personal disability insurance and financial solutions that fit the unique needs of Canada’s self-employed, skilled tradespeople and other individuals who do not have easy access to traditional insurance and financial products.”….More

I would like to complement the Toronto Sun on taking the lead in the media by shedding light on the despicable and highhanded actions of the insurance companies in the Province of Ontario towards their insured policy holders. People often pay for years to have an insurance policy in the event they become disabled. The Ontarians are in the dark about how the large insurance corporations, often from the U.S.A., treat claimants. Many of the insurance companies routinely deny claims to injured individuals without proper basis for it. These corporations seem to be more concerned about corporate welfare and revenues then paying out on the claims. As the task of making these large corporations accountable for their highhanded conduct rests solely on the shoulders of each individual claimant (often financially drained) — these corporations keep getting away with paying much less thank the true value of the claim. And even when the claimant succeeds in reaching the steps of the courthouse (at an exorbitant costs), the court’s punishment for the highhanded conduct has historically been low in Canada and is more of a slap on the wrist to these insurance giants. There is very little risk to these companies financially to deter them from breaching their insurance contracts with their insured claimants and from failing to abide by their contracts. The articles written by Alan Shanoff on insurers’ conduct are invaluable in bring the truth to the public.


The Toronto Sun published two columns about the deregulation of the auto industry excerpted below. Natalie Clarke wrote a letter to the editor on the issue.

Deregulate the car insurance industry

Ontario NDP Leader Andrea Horwath is demanding lower auto insurance rates, an issue she’s prepared to take to the polls. Horwath wants a 15% cut in Ontario car insurance rates as part of Finance Minister Charles Sousa’s first budget. If not, she says, Premier Kathleen Wynne’s Liberal minority government will fall…Read More

NDP seek auto insurance rate cut, home care guarantee

TORONTO – Ontario New Democrats have put a 15% cut in auto insurance rates and a five-day home health-care guarantee at the top of their priorities for the coming legislative session…Read More

I agree that the auto insurance needs to be changed. It is heavily regulated to protect the insurance industry billion dollar profits and not the Ontario consumer. Ultimately, it is the Ontario tax payers, who end up paying the bill for the recovery of the injured ones. The accident victims are routinely denied rehabilitation by the insurance companies, which make the process unbearable. While the insurance industry escapes paying for the rehabilitation, the accident victims end up utilizing the underfunded and overburdened OHIP system. The OHIP itself underwent extensive cuts, and is not equipped to address the rehabilitation needs of accident victims, nor should it. In many cases, accident victims never get the funding for the treatment they need and never regain the same level of functioning as prior to the accident. If the insurance doesn’t cover their treatment, many of the victims have no other choice but to live with pain and be less productive and hence, less employable. This translates into hours of missed time from work and, in some cases, loss of a job, and loss of competitiveness in the free labour market. We should look into the true cost to Ontarians of the inadequate insurance regulations. The auto insurance industry is more adversarial than responsive to the circumstances of the injured. The procedural regulations have become so complex that even the most experienced litigation lawyers have a hard time interpreting and understanding them. It is a shame that the vulnerable ones in our society are so ill protected.

Natalie Clarke

Personal Injury Lawyer

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