Category: Deductibility of Statutory Accident Benefits

In this post-trial ruling, the court considered the deductibility of past and ongoing LTD payments from the plaintiff’s trial award for loss of income. Justice Corthorn held that the defendant was entitled to deduct any tax withheld from the LTD provider from the loss of income award, and the defendant was entitled to a “top up” on each future LTD payment (i.e. the defendant is entitled to receive the gross LTD payment, even though some is withheld as a holding tax, and the plaintiff only ever received in her pocket the net LTD payment). The date of the assignment of future benefits was effective the date of the trial verdict (as opposed to the date of the Court’s Order or after appeals were exhausted).  The plaintiff was, however, entitled to a deduction for the “reasonable costs incurred by her to preserve her rights to payments for LTD benefits” between the date of the assignment and the payment of the jury’s award. Finally, the Court ordered that the plaintiff co-operate with the defendant in respect of any mediation, litigation, or arbitration required to recover LTD payments.

The plaintiff was struck by a motor vehicle as a pedestrian. He received Statutory Accident Benefits (SABs) from his no-fault insurer and also brought a tort action for damages against the driver of the vehicle that struck him and the individual who pushed him into the vehicle’s path. At trial, the jury awarded the plaintiff damages in excess of $2.3 million, including $700,000 for future care costs of an ABI support worker, which related to medical/rehabilitation benefits and not attendant care benefits. On a post-trial motion, the plaintiff argued that an “apples to apples” approach should be applied, and that only the SABs settlement for medical/rehabilitation benefits ($250,000) (and not the portion of SABs payments related to attendant care ($350,000)) should be deducted from the future care costs award. The moving defendant argued that both medical/rehabilitation and attendant care benefits are captured within the silo of healthcare expenses, and are both properly deductible from the jury’s award for future care costs. The trial court accepted the defendant’s “silo” approach, holding that SABs deductibility under s. 267.8(4) of the Insurance Act should be interpreted by applying the definition of “health care” under s. 224(1), which includes payment provided by medical, rehabilitation, and attendant care benefits under the SABs. The five-judge panel of the Court of Appeal unanimously upheld the trial judge’s decision.