Tomec v. Economical Mutual Insurance Company, 2019 ONCA 882
The Court of Appeal recently clarified the applicable deadlines for disputing accident benefit claims. Tomec favours victims of motor vehicle accidents, particularly those who have found their condition deteriorate over time. In Tomec, the Court of Appeal held that the two year-limitation period to dispute an insurer’s refusal to pay benefits begins to run from the date that the insured’s right to claim the benefits is discovered.
In 2018, the Licence Appeal Tribunal (“LAT”) and the Divisional Court determined that a hard limitation period applied to disputing the denial of accident benefit claims, which proscribed the appellant from asserting her claim before she was legally entitled to make the claim. This decision effectively required the injured party to dispute her entitlement to attendant care and housekeeping benefits under the catastrophic impairment limits before she received catastrophic impairment designation.
Why the Court of Appeal Decision
The Court of Appeal determined that a hard deadline is inconsistent with purposes of the Statutory Accident Benefits Schedule (“SABS”) as consumer protection legislation. The purposes of the SABS are to reduce the economic hardship of motor vehicle accident victims, particularly for victims suffering from serious lasting health impacts.
A hard limitation period is inconsistent with the consumer protection legislation designed to provide fair compensation and minimize economic disruption in the lives of accident victims. A hard deadline potentially bars creditable claims based on current evidence. The Court of Appeal unanimously agreed that:
[T]he hard limitation period puts the appellant in an impossible situation, where the time for claiming a benefit commences when she is ineligible to make such a claim. This is an absurd result. To choose it, as the LAT did, is unreasonable.[1]
Applying the Supreme Court of Canada’s test in Pioneer, the Court of Appeal held that the limitation period is subject to the rule of discoverability because it is directly tied to the cause of action that an insured person can assert when denied benefits. The principle of discoverability applies to the two year limitation period to dispute an insurer’s refusal to pay benefits in the Insurance Act and SABS. The Supreme Court of Canada set the test for determining whether the principle of discovery applies when the limitation period is contingent on the accrual of a cause of action or some other event that can only occur when the plaintiff has knowledge of his or her injury to ensure the plaintiff had knowledge of his or her legal rights before they expire.[2]
The Effect On Accident Benefit Claims
The Court of Appeal concluded that a hard limitation period runs contrary to policy rationales for limitation periods and would lead to absurd results. By extending the deadline to dispute accident benefit claims to the date of discovery, injured victims are no longer held to a “hard” deadline fixed to a known event (i.e. a denial date of benefits). Insured persons can be assured they will not be barred from seeking an elevated level of statutory accident benefits should they reach “Catastrophically Impaired” (“CAT”) status two years after their insurer’s denial of benefits.
For more information on accident benefit claims, or any other legal matter, please contact Bogoroch & Associates LLP. We offer free consultations and would be honored to help you.
[1]
at para 52.
[2]
2019 SCC 42 at paras 34-35