Incurred Expenses: Defining “Economic Loss” in Light of Simser v. Aviva

Changes to Section 3 of the Statutory Accident Benefits Schedule (“the SABS”) were introduced by the Government of Ontario on September 1, 2010. The changes require an insured to prove expenses have been incurred in order to receive attendant care, housekeeping, and med/rehab benefits. Section 3(7)(e) of the SABS states that in order for an expense to be “incurred”, and thus payable by the insurer, it must satisfy the following conditions:

1. the insured person has received the services;
2. the insured person has paid or promised to pay or is otherwise legally obligated to pay the expense; and
3. the person who provided the goods or services:
   1. did so in the course of the employment, occupation or profession in which he was ordinarily engaged, but for the accident; or
   2. the person sustained an economic loss as a result of providing those goods or services to the insured person.

It is the last condition [subsection 3(7)(e)(iii)(B)] that has created much debate amongst automobile insurers, health care providers, personal injury lawyers, and accident victims alike, as the Legislature offered no further definition for the type of “economic loss” the insured needed to sustain in order to qualify the expense as an “incurred” expense.

Recently there have been two decisions that address the application of “economic loss” for the purpose of incurred expenses.

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