In Ontario, when the injured victim of a car accident sues the at-fault driver, the damages awarded are reduced by the no-fault accident benefits paid or available to the injured plaintiff from his or her own insurance company.
In many cases however, the insurance company paying the no-fault accident benefits wrongly refuses to pay for certain benefits, such as medical treatment, income replacement benefits or attendant care. To dispute this, an arbitration must be filed often at considerable expense to the injured victim.
If the insurance company for the at-fault driver can claim a credit for no-fault accident benefits received by the accident victim, then it seems unfair that the injured victim should solely have to pay the costs for disputing these benefits when they are denied.
This issue was recently addressed in the Ontario court decision Carr v. Modi, 2016 ONSC 1300. In this case, the plaintiff’s no-fault accident benefits insurer improperly cut off his income replacement benefits. The plaintiff disputed this termination in an arbitration at the Ontario Financial Services Commission and was successful. At the arbitration the plaintiff was also awarded a sum of money to compensate him for legal expenses to dispute the case. However, this compensation was only a small fraction of the actual legal costs and expenses.
At his trial against the at-fault driver, the plaintiff asked the judge to award him costs to cover the arbitration he had to fight against his own insurance company. The plaintiff argued that the value of the income replacement benefits he won in the arbitration against his own insurance company ($90,000.00) resulted in a significant credit for the insurer of the at-fault driver in his claim for income loss damages.
The trial judge agreed with the plaintiff’s argument. In his arbitration against his own insurance company for income replacement benefits, the plaintiff was awarded approximately $15,435.00.00 for legal fees. This was far less than the $56,000 in actual legal fees that were required to dispute the case. Therefore, in his case against the at-fault driver, the judge awarded the plaintiff an additional $24,218.25 in costs as reimbursement for the fees from the arbitration.
In our view the decision in this case is a fair and just result.
This sort of decision is even more important under the current legal system for Ontario car accidents. After April 1, 2016, the Ontario government changed the law at the request of the insurance lobby. Now, when an accident victim disputes an accident benefits claim with her insurance company, she is no longer entitled to reimbursement for any legal expenses, even if she wins (except in certain limited circumstances).
It is important for personal injury lawyers and injured victims to be aware of the law regarding costs and expenses; and in particular of the right of an injured victims in some circumstances to claim expenses for their accident benefits disputes from the insurance company of the at-fault driver.
If you have been seriously injured in a car or other motor vehicle accident in Ottawa or anywhere else in Eastern Ontario, contact personal injury lawyer Sean Giovannetti for a free consultation: