A person injured in a car accident is entitled to receive benefits from their own insurer as well as their tort case. However, when an injured person receives an accident benefits settlement for specific benefits, that settlement is deductible from an award in their tort case for past and future benefits. That principle was affirmed in the recent Ontario Court of Appeal case, Basandra v. Sforza.[1] Basandra also stated that a trial judge could parse out the specific benefits from a lump sum jury award if the jury did not separate out the heads of damage.
The law
Section 267.8 of the Ontario Insurance Act[2] states that the damages that a Plaintiff is entitled to are reduced by the amount of collateral benefits that have been received. The purpose of s. 267.8 of the Insurance Act is to avoid double recovery.
These deductions are applied on an “apples to apples” basis. This means that, for example, housekeeping benefits provided by an accident benefits insurer are only deductible from the housekeeping benefits awarded in a tort case.
The reasoning
Basandra was a case involving a motor vehicle accident. The Plaintiff obtained a significant amount of accident benefits in multiple categories: medical rehabilitation benefits, attendant care benefits, and housekeeping benefits. At the end of the tort trial, the jury also awarded the Plaintiff damages under these categories, but lumped them all together so that it was impossible to determine, on an “apples to apples” basis, how much should be deducted from each category. In the end, the trial judge reduced the lump sum jury award without determining how much should be allocated to each individual benefit, effectively reducing the jury award for past and future medical rehabilitation benefits, care costs, and housekeeping to nil.
The court upheld the trial judge’s allocation – even though it was done as a lump sum under multiple benefit categories – because she adhered to the policy objective set out in the Insurance Act of avoiding double recovery. The court in Basandra cautioned counsel to properly structure jury questions so as to allow the trial judge to adequately allocate the deductions.
What this means for your case
The facts in Basandra are not unusual. Therefore, awards for damages are often reduced. If the accident benefits settlement amount is substantial, some of your damages in tort could be reduced to zero.
Although an award in one category can only be reduced by a benefit received in that same category, if a jury awards damages without parsing out the categories, you could be left with less recovery than you are entitled to. For example, if your accident benefits file settles for $40,000 for attendant care and $10,000 for housekeeping, and a jury awards you $50,000 as a lump sum for those benefits, your recovery will be nil. But if the jury separates out the damages to $30,000 for attendant care and $20,000 for housekeeping, your attendant care amount would be reduced to zero, but you would recover $10,000 for housekeeping.
Bogoroch & Associates LLP is experienced and knowledgeable in complicated accident benefit settlements and knows that preparation can make all the difference. For more information, please contact Rachel Letvisky at rlevitsky@bogoroch.com or Heidi Brown at hbrown@bogoroch.com.
[1] Basandra v. Sforza, 2016 ONCA 251
[2] Insurance Act, R.S.O. 1990, c. I.8