Ontario’s Tort Deductible

Many Canadians are still unaware that their claims for general / non-pecuniary damages against at – fault drivers are subject to a tort deductible in Ontario. Non-pecuniary damages would be the category utilized by someone seeking compensation for serious physical, mental, and psychological impairments that they sustained as a result of the negligence of an at-fault driver.

The tort deductible applied to non-pecuniary damages claims was first introduced in 1996 and was originally set at $15,000.00. In 2003, the Ontario government passed Bill 198 which increased the deductible to $30,000.00. Since then, the deductible has been increasing and is adjusted before January 1st of every year and published in the Ontario Gazette. The 2019 Bulletin available on the Financial Services commission website states:

The deductible for non-pecuniary loss when a tort award does not exceed the monetary threshold is adjusted from $37,983.33 [2018] to $38,818.97 in the case of damages from January 1, 2019 until December 31, 2019.

In 2019, there is also a $19,404.49 deductible applied to family law claimants.

These deductible(s) operate to block damages that are awarded under the prescribed limit, and this in turn benefits the insurance company for the at- fault driver because they would have otherwise had to pay. Surprisingly, juries are not instructed about the deductible for fear that the insurance companies (ultimately responsible for paying the awards on behalf of the at-fault driver) would be treated unfairly. In other words, there is a believe that juries would be more willing to award compensation against “faceless” corporations; and would even increase the awards for non-pecuniary damages to surpass the deductible. However, this is troubling because juries who believe that they helped an injured plaintiff by giving an award, have left the plaintiff with nothing because of the application of the deductible.

It is important to remember that you may get other damages even when you are not awarded general/non-pecuniary damages. However, for some injured plaintiffs, general damages form the biggest chunk of a personal injury claim; and are the main reason many plaintiffs start litigation in the first place.

In addition to the deductible, an injured plaintiff must satisfy the threshold test in Ontario – prove that they suffer from permanent serious impairment of an important physical, mental or psychological function: before they will be awarded any amount for general/non-pecuniary damages.

According to Regulation 381/03 Section 4.2 (1):

1. The impairment must,

1. substantially interfere with the person’s ability to continue his or her regular or usual employment, despite reasonable efforts to accommodate the person’s impairment and the person’s reasonable efforts to use the accommodation to allow the person to continue employment,
2. substantially interfere with the person’s ability to continue training for a career in a field in which the person was being trained before the incident, despite reasonable efforts to accommodate the person’s impairment and the person’s reasonable efforts to use the accommodation to allow the person to continue his or her career training, or
3. substantially interfere with most of the usual activities of daily living, considering the person’s age.

As a result of the operation of the deductible and threshold test, Ontario is one of the hardest jurisdictions in North America to bring a claim against an at-fault driver.

Fortunately, there is hope on the horizon. As of January 1, 2020, plaintiffs who are willing to limit their claims to $200,000.00 can take advantage of the new changes to the simplified procedure rules. As part of a compromise, plaintiffs who limit their claims will be allowed to have their trials decided by a judge alone. The incentive is that judges will be aware of the deductible and how to properly assess the category of general damages. Prior to making the decision to limit your claim, you should speak to a personal injury lawyer. Our team at P&M Personal Injury Lawyers is ready to assist you!