Recent Decision on Impact of SABS Settlement Before Tort Trial

The recent Divisional Court decision in Mikolic v. Tanguay, 2015 ONSC 71(CanLII) sheds light on the credit a tort defendant receives when the statutory accident benefits case (SABS) settles before the tort trial.

At issue was what, if anything, from the SABS settlement was deductible from a jury award at trial of: $20,000 for past loss of income; $30,000 for future loss of income; and $15,000 for future care.

The SABS claim of the Plaintiff settled prior to the tort trial for an all-inclusive amount of $175,000. The settlement disclosure notice included $77,500 under the category of past and future income replacement benefits. The Plaintiff/ Respondent argued that the disclosure notice was only a “notional breakdown” of the settlement and “did not reflect reality.” The Plaintiff/Respondent also argued the all-inclusive settlement included aggravated and punitive damages and costs and disbursements that were not accurately reflected in the settlement disclosure notice.

The trial judge held that because the SABS settlement payments were a lump sum and a compromise, the Defendants were not entitled to a deduction for the income replacement benefits portion of the SABS settlement against the trial award for future loss of income. The trial judge held that he could not determine from the evidence what amounts the Plaintiff had received in the SABS settlement for future loss of income, as the settlement disclosure notice combined the past and future income replacement benefits for a total of $77,500. The Divisional Court disagreed with the trial judge.

Read full ABR Updater article by Carr Hatch:   Recent Decision on Impact of SABS Settlement Before Tort Trial