Regulatory Changes: The Claim Against The At-Fault Driver (The Tort Claim)

The former Conservative Government recently passed Ontario Regulation 312/03 (amending Ontario Regulation 461/96) which will increase the monetary deductible for pain and suffering awards under the Insurance Act from $15,000.00 to $30,000.00 for persons injured in motor vehicle accidents on or after October 1, 2003. The monetary deductible for claims of family members under the Family Law Act will also increase from $7,500.00 to $15,000.00.

The increase in the deductible will have a significant impact on the rights of persons injured in motor vehicle accidents to claim compensation for their injuries.

In Bill 198, the government proposed a “vanishing deductible”, which meant that the monetary deductibles would not apply to injured people whose pain and suffering damages exceeded $100,000.00 or to Family Law claimants whose claims were valued in excess of $50,000.00. The Government has now proclaimed s. 120 and the vanishing deductible will be in effect for all accidents on or after October 1, 2003.

Further, in Bill 198, the government proposed to change the test for suing for health care from catastrophic to permanent serious impairment of an important physical, mental or psychological function (the “verbal threshold”). For accidents occurring on or after October 1, 2003, s. 120 will be in effect and the right to sue for health care costs will apply to innocent accident victims who pass the verbal threshold.

The Conservative government was considering changes to available coverage that will allow people to “customize” their coverage, by choosing from a number of optional endorsements, at extra cost.

The proposal to customize auto insurance policies is not in the best interests of consumers. People will tend to decline options to keep premiums down. However, they may not realize the extent to which they compromise their interests should they become an accident victim. Consumers will not fully appreciate the rights they are giving up. The real tragedy is that they will only understand what they have given up after they or a member of their family has been injured in an accident and it is too late to purchase the coverage they require. Automobile insurance is compulsory in order to protect the public. Maintaining certain minimum coverage is needed in order to continue to provide this required protection.

The Conservative government has passed a Regulation which defines the current “verbal threshold”. The threshold allows claims to be advanced for pain and suffering where the injured party has suffered a permanent serious impairment of important physical, mental or psychological functions, or serious disfigurement. The new Regulation further defines the verbal threshold by breaking down the essential elements of the definition and defining them. The amendments read as follows:

4.1 For the purpose of section 267.5 of the Act “permanent serious impairment of an important physical, mental or psychological function” means impairment of a person that meets the criteria set out in section 4.2.

4.2 (I) A person suffers from permanent serious impairment of an important physical, mental or psychological function if all of the following criteria are met (highlighting added):

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.
2. For the function that is impaired to be an important function of the impaired person, the function must,
   1. be necessary to perform the activities that are essential of the person’s regular or usual employment, taking into account 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. be necessary to perform the activities that are essential tasks of the person’s training for a career in a field which the person was being trained before the incident, taking into account 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,
   3. be necessary for the person to provide for his or her own care or well-being, or
   4. be important to the usual activities of daily living considering the person’s age.
3. For the impairment to be permanent, the impairment must:
   1. have been continuous since the incident and must, based on medical evidence and subject to the person reasonably participating in the recommended treatment of the impairment be expected not to substantially improve.
   2. continue to meet the criteria in paragraph 1, and
   3. be of a nature that is expected to continue without substantial improvement when sustained by persons in similar circumstances. This section applies with respect to any incident that occurs on or after October 1, 2003.This definition adds the requirement that the impairment be “continuous”, which requirement had originally appeared in the OMPP and did not appear in Bill 59.

Together with the new definition of the verbal threshold, the Regulation sets out the minimum evidence required to prove that the verbal threshold is met. The Regulation reads as follows:

EVIDENCE ADDUCED TO PROVE PERMANENT SERIOUS IMPAIRMENT OF AN IMPORTANT PHYSICAL MENTAL OR PSYCHOLOGICAL FUNCTION

4.3 (1) A person shall, in addition to any other evidence, adduce the evidence set out in this section to support the person’s claim that he or she has sustained permanent serious impairment of an important physical mental or psychological function for the purposes of section 267.5 of the Act.

(2) The person shall adduce evidence of one or more physicians, in accordance with this section, that explains,

1. the nature of the impairment;
2. the permanence of the impairment;
3. the specific function that is impaired; and
4. the importance of the specific function to the person.

(3) The evidence of the physician,

1. shall be adduced by a physician who is trained for and experienced in the assessment or treatment of the type of impairment that is alleged; and
2. shall be based on medical evidence, in accordance with generally accepted guidelines or standards of the practice of medicine.

(4) The evidence of the physician shall include a conclusion that the impairment is directly or indirectly sustained as the result of the use or operation of an automobile.

(5) In addition to the evidence of the physician the person shall adduce evidence that corroborates the change in the function that is alleged to be a permanent serious impairment of an important physical mental or psychological function.

(6) This section applies with respect to any incident that occurs on or after October 1, 2003.

The new definition of the verbal threshold to make the threshold test more restrictive, apparently in response to concerns of the insurance industries. The new definition adds a great deal of uncertainty to the test, such as:

1. What are “reasonable efforts” to accommodate a person’s impairment when assessing whether they can return to work, training for a career or their daily activities?
2. Will the “reasonable efforts” be based on treating practitioner’s views?
3. What will happen when an accident benefit insurer does not agree that a certain accommodation is necessary and as a result the accommodation is not provided? In the tort claim, the tort insurer may argue that all reasonable efforts have not been made to accommodate the person’s injury.
4. Who will decide what are the essential tasks of one’s employment, training or daily activities?
5. What is meant by “continue without substantial improvement when sustained by persons in similar circumstances”? No two people respond to an injury in the same manner. Two people can have virtually the same injury and one person may totally recover whereas the other person may continue to suffer indefinitely. What is going to be the standard by which each injury is measured?
6. How are children’s claims affected by this definition?
7. What will happen with injuries that are expected to become, more debilitating in the future?
8. Might cases previously considered catastrophic fail to meet the verbal threshold?

Thomson Rogers opposes any further restriction of people’s right to sue for serious and permanent injuries. The combination of the increased monetary deductible with any restriction to the verbal threshold is an unjustified and unfair reduction of innocent accident victims’ rights to seek compensation for injuries suffered in automobile accidents. In addition, any further attempt to define serious and permanent impairment will only lead to more litigation over who passes the test and who does not and therefore unnecessarily increase costs.

With the Regulation defining the verbal threshold one can envision claims which may have passed the previous test of “catastrophic”, which would not pass the test under the new proposed definition. Making the test more restrictive is directly contradictory to the Government’s originally stated intention of tightening up the procedure for smaller claims, to enable more access to the seriously injured parties to claim compensation for their injuries.

Thomson Rogers continues to be actively involved in consultations with the government to prevent further restrictions to the rights of innocent accident victims to claim fair compensation for injuries suffered in automobile accidents.

Please note:

1. All of the new regulations can be found on our website at www.thomsonrogers.com/ontario-auto-insurance-changes.
2. Thomson Rogers has presented widely to health care professionals about the effects of the changes and has provided practical strategies to assist health care professionals. Past presentations can be found on our website at www.thomsonrogers.com/ontarioautoinsurancechanges/conference-material-2009 .