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HomeNews & ArticlesHow Your SABS File Works Your Tort Claim and Builds Your Special Damages
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How Your SABS File Works Your Tort Claim and Builds Your Special Damages

January 31, 2011  |  By:  Oatley Vigmond

Introduction

Statutory accident benefits (“accident benefits”) are a type of no-fault insurance coverage attached to every automobile insurance policy in Ontario. The law which governs accident benefits is a regulation made under the Insurance Act.[1] The law governing accident benefits was amended for motor vehicle accidents occurring on or after September 1, 2010. These amendments resulted in a dramatic reduction in available accident benefits in cases that do not involve a catastrophic impairment. All references in this paper are to the current legislation. All accident benefits described assume that the insured person has not purchased any optional coverage.[2]

Do the recent amendments to the accident benefits system mean that lawyers and law clerks should put less effort into building an accident benefits file? No they do not. In cases where the injured client also has a tort claim the accident benefits file can be very useful in increasing the size of the tort claim thus increasing your client’s total recovery.

This paper will briefly summarize how a person qualifies for accident benefits and what benefits are available. The paper will then summarize the tort system and review different methods by which a law firm can use the accident benefits file to increase the recovery for a client in tort.

How does a person qualify for accident benefits?

If a person in Ontario suffers an impairment[3] that is directly caused by the use or operation of an automobile[4] then that person will be entitled to apply for accident benefits. This is true regardless of whether or not the injured party was an insured person or the spouse or dependent of an insured person under a policy of auto insurance.[5] This is also true even if the motor vehicles involved in the accident were uninsured or fled the scene of the accident.[6]

What benefits are available?

There are three categories of injuries under the current SABS. These are the minor injury guideline (“MIG”), catastrophic impairment claims (“CAT”) and all other claims.

For accidents occurring on or after September 1, 2010, the following benefits are available to an injured party who meets the applicable tests but are not CAT or MIG:

  • A maximum of $50,000 in medical and rehabilitation benefits payable over 10 years following the accident[7];
  • Attendant care benefits to a maximum of $3,000 per month (up to a maximum of $36,000).  This benefit is only payable for the first 104 weeks following the accident or until $36,000 is exhausted, whichever is earlier;
  • An income replacement benefit of a maximum of $400 per week or 70% of weekly pre-accident gross income, whichever amount is lower. These benefits are payable up to age 65 with a reduced benefit thereafter but the test to qualify for the benefit becomes stricter after 104 weeks[8];
  • Lost educational expenses of up to $15,000;
  • Visitor expenses for 104 weeks following the accident[9];
  • A non-earner benefit of $185 per week[10] if the injured party was not working at the time of the collision and now suffers a complete inability to carry on a normal life. There is a six month waiting period before you can qualify for this benefit. This benefit is payable up to age 65 with a reduced benefit thereafter; and,
  • Reimbursement for damaged clothing, glasses, hearing aid, etc.

In the event of a death – the following benefits are available:

  • a death benefit of $25,000 to a spouse, $10,000 to each dependent and one benefit of $10,000 to be split amongst the persons in respect of whom the deceased was a dependant at the time of the accident[11];
  • a funeral benefit of $6,000.

MIG claims

Section 40 and Section 18 of the SABS sets out that if a person sustains an injury that is “predominately” a minor injury[12] that person is limited to a maximum of $3,500 in medical and rehabilitation benefits and is not eligible for any attendant care benefits. Injured people who fall under this guideline are still eligible for income replacement benefits if they meet the applicable test in the SABS.

 CAT claims

If the insured person suffers an impairment which rises to the level of catastrophic impairment[13] then the available medical and rehabilitation benefits increase to $1,000,000 payable over the insured person’s lifetime and the available attendant care benefits increase to a maximum of $6,000 per month payable over the person’s lifetime or until $1,000,000 has been exhausted.

In addition, insured people with catastrophic impairments are eligible for a housekeeping and home maintenance benefit of $100 per week for life and are eligible for a caregiver benefit of $250 per week for the first person in need of care and $50 per week for each additional person in need of care.  The caregiver  benefit is payable for the first 104 weeks of disability unless as a result of the accident the insured person is suffering a complete inability to carry on a normal life in which case it is payable for life.[14] Case management services are also available to people who have suffered a catastrophic impairment. The cost of case management is payable out of the medical and rehabilitation limits described above.

In addition, the following benefits apply:

  •  An income replacement benefit of a maximum of $400 per week or 70% of weekly pre-accident gross income, whichever amount is lower. These benefits are payable up to age 65 but the test to qualify becomes more strict after 104 weeks[15];
  • Lost educational expenses of up to $15,000;
  • Visitor expenses for life[16];
  • A non-earner benefit of $185 per week[17] if the injured party was not working at the time of the collision and now suffers a complete inability to carry on a normal life. There is a six month waiting period before you can qualify for this benefit. This benefit is payable up to age 65 with a reduced benefit thereafter; and,
  • Reimbursement for damaged clothing, glasses, hearing aid, etc.

It is important to note that even though an insured person may qualify for more than one weekly benefit (i.e. income replacement benefit, caregiver benefit or non-earner benefit) the insured person must elect to receive only one of these weekly benefits and in most circumstances cannot re-elect.

The interplay between tort and accident benefits

The tort system is designed to put the not at-fault client in the financial position that he or she would have been if the injury had not occurred. In addition to damages for pain, suffering and loss of enjoyment of life[18] the not at-fault
client is entitled to compensation for virtually all of his or her economic losses arising from the injury. This includes past and future loss of income[19], past and future health care expenses[20], past and future housekeeping and home maintenance expenses and any other out of pocket expenses.

In a motor vehicle accident case the tort defendant is entitled to a credit for money received before trial from other sources including accident benefits, Canada Pension Plan Disability Benefits and/or Long-Term Disability Benefits.[21] For future losses the tort defendant must pay the entire award at the time of Judgment. The tort defendant then gets a trust or assignment of the collateral benefits going forward until the amount paid under the various heads of damages is repaid or until the collateral benefits are exhausted.[22]

How to build up your tort claim using the accident benefits file

One of the most important elements of the accident benefits claim is that it allows you funding to put a treatment team in place. The treatment team usually consists of an occupational therapist (“OT”) and a physiotherapist. Depending on your client’s injuries the team may also include a social worker, chiropractor, speech language pathologist, massage therapist, psychologist, rehabilitation support worker and/or a personal support worker. In CAT cases a case manager is also involved as the leader or quarterback of the team.

On non-catastrophic cases the OT usually acts as the quarterback of the treatment team. The OT will go in and assess the client and determine what type of care the client needs and whether they need any assistive devices.  The occupational therapist will usually fill out the Form 1 – Assessment of Attendant Care Needs Form.  It is important to get this form done early so that the monthly attendant care benefit can be assessed as high as possible. If this form is not submitted on a timely basis the accident benefits insurer may send in its own OT to complete the form. The amounts on insurer funded Form 1’s are invariably lower than those done by independent OTs.

By involving the right professionals at an early stage you will document the client’s impairments and their need for various treatment and services. For example, if your client needs attendant care at the rate of $6,000 per month but is only receiving $3,000 per month from the accident benefits insurer you can claim that shortfall as part of the tort claim. If your client exhausts his or her attendant care money in one year but the need continues all of those future attendant care costs will fall on the tort defendant’s shoulders. If the need for attendant care from the date of loss is not documented it is very difficult to get the tort defendant to pay for attendant care in the future.

The same concept applies to medical and rehabilitation needs. For example, assume your client receives treatment and services and exhausts the available $50,000 in medical accident benefits in eighteen months, this is a negative in terms of an accident benefits cash-out but it is a positive for your tort claim. It is a positive because you have strongly documented that the need for this treatment exists and you will have a much stronger case against the tort defendant than you would if those services had never been provided.

Even though your non-CAT clients are now unable to claim for housekeeping and home maintenance expenses as part of the accident benefits file they can still claim one hundred percent of these losses as part of the tort claim. In addition a housekeeping and home maintenance tort claim is not subject to a threshold or a deductible. In our office, we use the treatment team to document the client’s need for housekeeping and home maintenance services. For an additional fee, funded by the law firm, the treating OT will assess the client’s need for housekeeping and home maintenance expenses at the same time as he or she assesses the client’s other needs. This housekeeping and home maintenance report should be updated periodically until the tort file settles. By having a first-hand assessment done by a treating professional regarding the difficulties that your client faces in doing their pre-accident housekeeping and home maintenance tasks you will create a very solid case against the tort defendant under that head of damages.

It is also very important to have the clerk on the file ensure that the law firm is collecting receipts for all out of pocket expenses and keeping a schedule of all of those costs. In some cases these expenses can be submitted to the accident benefits insurer. However if the out of pocket expenses are not payable by the accident benefits insurer or if the applicable category of benefits has been exhausted these losses are payable by the tort defendant as long as they were caused or contributed to by the defendant’s negligence.

Conclusion

The accident benefits file can be a valuable tool in building up your tort claim. If the clerk who is working on the accident benefits file is aware of the many ways in which he or she can assist the lawyer in building a tort claim the result will be a larger recovery for the client, a happy law clerk and a happy lawyer.


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[1] O. Reg. 34/10 – Statutory Accident Benefits Schedule – Effective September 1, 2010 (hereinafter “SABS”)

[2] For an additional premium, policy holders can buy optional coverage that increases the income replacement benefit maximum to $600, $800 or $1,000 per week. They can also buy optional dependent care coverage and optional indexation of future benefits coverage. In addition, optional medical and rehabilitation benefits are available to increase medical and rehabilitation coverage to $100,000 in non-catastrophic cases or, for a larger premium, $1,000,000 in non-catastrophic cases and $2,000,000 in catastrophic cases. Optional attendant care coverage increases the total amount available to $72,000 in non-catastrophic cases or, for a larger premium, $1,072,000 in non-catastrophic cases and $2,000,000 in catastrophic cases. An insured person can also purchase coverage that allows for housekeeping and home maintenance benefits and caregiver benefits in non-catastrophic cases. Lastly, an insured person can purchase a death benefit that increases to $50,000 for the spouse and $25,000 for the dependants and $8,000 for a funeral benefit. The optional benefits are further described in section 28 of the SABS. It is important to check with your clients on every file to confirm whether they purchased optional coverage on their policy.

[3] Impairment is defined as a “loss or abnormality of a psychological, physiological or anatomical structure or function” in Section 3(1) of the SABS

[4] Surprisingly the word “automobile” is not defined in the SABS. However the word automobile is  defined as “a motor vehicle required under any Act to  be insured under a motor vehicle liability policy, and a vehicle prescribed by regulation to be an automobile.” in s. 224 of the Insurance Act, R.S.O. 1990, c. I.8.  so as long as the vehicle was deemed to be an automobile by a regulation (e.g. snowmobile) or the vehicle required insurance under any relevant statute at the time of the accident then it will be considered an automobile for SABS purposes.

[5] The only restrictions on benefits available related to the circumstances of the accident are contained in section 31 of the SABS. In a nutshell, this section sets out that income replacement benefits, non-earner benefits, visitor expenses, lost educational expenses and housekeeping and home maintenance benefits are not available to the driver of the vehicle if he or she was driving at the time of the crash without a valid licence or without valid insurance or without consent of the owner. In addition, if the driver is convicted of certain criminal offences relating to the accident then the above noted benefits are taken away. Medical and rehabilitation benefits and attendant care benefits are not effected by this section.

[6] In which case accident benefits will be paid by the Motor Vehicle Accident Claims Fund. For more information please visit: http://www.fsco.gov.on.ca/en/auto/mvacf/Pages/faq.aspx (visited July 20, 2011)

[7] Section 20(1)(b) of the SABS sets out that if the insured person was under 15 years of age at the time of the accident the medical/rehabilitation benefits are payable to the insured person’s 25th birthday

[8] 6.  (2)  (b)  after the first 104 weeks of disability, unless, as a result of the accident, the insured person is suffering a complete inability to engage in any employment or self-employment for which he or she is reasonably suited by education, training or experience.

[9] See section 22 of the SABS. These expenses are only payable for spouse, children, grandchildren, parents, grandparents, brothers and sisters of the injured party as well as an individual who was living with the insured at the time of the accident, a person who has a settled intention to treat the injured person like a child or a person who the insured person has a settled intention to treat like a child.

[10] In certain situations this can increase to $320 per week. See s. 12(3) of the SABS

[11] See section 26 of the SABS. Other benefits are available.

[12]           a) minor injury means a sprain, strain, whiplash associated disorder, contusion, abrasion,         laceration or subluxation and any clinically associated sequelae. This term is to be interpreted to apply where a person sustains any one or more of these injuries.

b) sprain means an injury to one or more tendons or ligaments or to one or more of each, including a partial but not a complete tear.

c) strain means an injury to one or more muscles, including a partial but not a complete tear.

d) subluxation means a partial but not a complete dislocation of a joint.

e) whiplash injury means an injury that occurs to a person’s neck following a sudden acceleration-deceleration force.

f) whiplash associated disorder means a whiplash injury that:

(i) does not exhibit objective, demonstrable, definable and clinically relevant neurological signs, and

(ii) does not exhibit a fracture in or dislocation of the spine.

See: http://www.fsco.gov.on.ca/en/auto/autobulletins/2010/Pages/a-10_10.aspx (visited July 20, 2011)

[13] Section 3(2) of the SABS:

For the purposes of this Regulation, a catastrophic impairment caused by an accident is,

(a) paraplegia or quadriplegia;

(b) the amputation of an arm or leg or another impairment causing the total and permanent loss of use of an arm or a leg;

(c) the total loss of vision in both eyes;

(d) subject to subsection (4), brain impairment that results in,

(i) a score of 9 or less on the Glasgow Coma Scale, as published in Jennett, B. and Teasdale, G., Management of Head Injuries, Contemporary Neurology Series, Volume 20, F.A. Davis Company, Philadelphia, 1981, according to a test administered within a reasonable period of time after the accident by a person trained for that purpose, or

(ii) a score of 2 (vegetative) or 3 (severe disability) on the Glasgow Outcome Scale, as published in Jennett, B. and Bond, M., Assessment of Outcome After Severe Brain Damage, Lancet i:480, 1975, according to a test administered more than six months after the accident by a person trained for that purpose;

(e) subject to subsections (4), (5) and (6), an impairment or combination of impairments that, in accordance with the American Medical Association’s Guides to the Evaluation of Permanent Impairment, 4th edition, 1993, results in 55 per cent or more impairment of the whole person; or

(f) subject to subsections (4), (5) and (6), an impairment that, in accordance with the American Medical Association’s Guides to the Evaluation of Permanent Impairment, 4th edition, 1993, results in a class 4 impairment (marked impairment) or class 5 impairment (extreme impairment) due to mental or behavioural disorder.

(3)  Subsection (4) applies if an insured person is under the age of 16 years at the time of the accident and none of the Glasgow Coma Scale, the Glasgow Outcome Scale or the American Medical Association’s Guides to the Evaluation of Permanent Impairment, 4th edition, 1993, referred to in clause (2) (d), (e) or (f) can be applied by reason of the age of the insured person.

(4)  For the purposes of clauses (2) (d), (e) and (f), an impairment sustained in an accident by an insured person described in subsection (3) that can reasonably be believed to be a catastrophic impairment shall be deemed to be the impairment that is most analogous to the impairment referred to in clause (2) (d), (e) or (f), after taking into consideration the developmental implications of the impairment.

(5)  Clauses (2) (e) and (f) do not apply in respect of an insured person who sustains an impairment as a result of an accident unless,

(a) in the case of an impairment that includes a brain impairment, a physician states in writing that the insured person’s condition is unlikely to cease to be a catastrophic impairment;

(b) in the case of an impairment that is only a brain impairment, a neuropsychologist states in writing that the insured person’s condition is unlikely to cease to be a catastrophic impairment; or

(c) two years have elapsed since the accident.

(6)  For the purpose of clauses (2) (e) and (f), an impairment that is sustained by an insured person but is not listed in the American Medical Association’s Guides to the Evaluation of Permanent Impairment, 4th edition, 1993 is deemed to be the impairment that is listed in that document and that is most analogous to the impairment sustained by the
insured person.

[14] See section 13 of the SABS.

[15] See footnote 8.

[16] See section 22 of the SABS. These expenses are only payable for spouse, children, grandchildren, parents, grandparents, brothers and sisters of the injured party as well as an individual who was living with the insured at the time of the accident, a person who has a settled intention to treat the injured person like a child or a person who the insured person has a settled intention to treat like a child.

[17] In certain situations this can increase to $320 per week. See s. 12(3) of the SABS

[18] For Ontario motor vehicle accident claims in tort, the injured party can only collect damages for pain, suffering and loss of enjoyment of life and future care costs if they meet the threshold level of “permanent serious impairment of an important physical, mental or psychological function” set out in Ontario Regulation 381/03. There is also a $30,000 vanishing deductible on pain, suffering and loss of enjoyment claims that vanishes if the amount awarded for this head of damages exceeds $100,000.

[19] In motor vehicle cases s. 267.5 (1)2(ii) of the Insurance Act limits tort recovery for past loss of income to 70% of gross before trial. Future loss of income is payable at 100% of gross.

[20] See Footnote 18.

[21] See s. 267.8 of the Insurance Act.

[22] See 267.8 (9) of the Insurance Act.


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Oatley Vigmond

Personal injury law is all we do. Our skilled team of personal injury lawyers and accident benefits specialists are committed to securing the best possible outcome for those with catastrophic...

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