OCA on AB Deduction From Tort: Apples From Apples, Macs From Macs, Gala From Gala – Counsel now Fruit Pickers and Sorters
Basandra v. Sforza,  O.J. No. 1749, Ontario Court of Appeal
Personal Injury Lawyer
In a 2008 collision, the jury awarded:
- $55,000 in damages for cost of “past care, medical/rehabilitation and housekeeping”;
- $50,000 in damages for the cost of “future care, medical/rehabilitation and housekeeping”.
The plaintiff received the following from his accident benefits insurer:
- $81,658.67 for medical/rehabilitation benefits (including a 2009 lump sum of $30,000 for past and future medical/rehabilitation benefits);
- $58,271.76 for attendant care benefits (including a 2009 lump sum of $5,000 for past and future attendant care benefits);
- $6,939.84 for housekeeping benefits.
The trial judge reduced the jury’s award for past care, medical/rehabilitation and housekeeping, as well as future care, medical/rehabilitation and housekeeping, to nil, which was upheld by the Court of Appeal.
Justice Lauwers observed that s. 267.8 of the Insurance Act provides pecuniary damages awarded in a tort action “shall be reduced” by payments the plaintiff received for statutory accident benefits. Section 267.8 creates several categories of benefits that must be taken into account as possible reductions from a jury award, including health care expenses (which include attendant care costs) and other pecuniary losses such as housekeeping costs. An award can only be reduced by a corresponding statutory accident benefit, on a benefit-by-benefit basis, meaning an award for housekeeping can be reduced by a housekeeping benefit but not by a medical/rehabilitation benefit. By virtue of the benefit-by-benefit basis of the reductions, these categories must be taken as silos.
For the statutory system to operate properly, “counsel must ensure that any settlement of a statutory accident benefit claim allocates the settlement funds among the heads of collateral benefits applicable in the instant case (emphasis added)”.
Similarly, counsel must ensure the jury questions are structured to permit the trial judge to carry out the reductions on a benefit-by-benefit basis, as required by s. 267.8. There should be a separate jury question for each past and future award in respect of each of the collateral benefits listed in s. 267.8 that may arise in the case.
Separate jury questions for past and future losses are necessary for three reasons:
1.The plaintiff bears different burdens of proof for past losses (balance of probabilities) versus future losses (“substantial possibility based on such expert or cogent evidence”);
2. Pre-judgment interest is granted only for past losses;
3. The division is relevant to the reduction of collateral benefits for each category of benefits listed in s. 267.8 of the Insurance Act.
Counsel must ensure the Settlement Disclosure Notice (or Minutes of Settlement) in an accident benefits claim are appropriately detailed, and similarly ensure the jury questions in the tort action are appropriately particularized, or risk overly-generous deductions.
Generally speaking, defendants do not like particularized jury questions. Following this case, it appears that not only are they mandatory, but the degree of particularization is significantly increased.