The Lawyers Weekly - January 15, 2010

GRANT DOW

Ontario’s finance minister recently announced reforms to the statutory scheme of compensation available to persons injured in auto accidents.

The proposed reforms to Ontario auto insurance are unlikely to achieve the government’s goal of less complexity and stable premiums. At issue is whether they satisfy any of the stakeholders, including lawyers.

“The issue of catastrophic injuries will continue
to be the subject of ongoing disputes between
insurers and claimants due to the significant
difference in available benefits...

treatment, which currently is a separate category of benefit, apply against the limit of coverage. This change may dramatically reduce the funds available for treatment, since the superintendent notes in his review report that for every dollar spent on treatment, another sixty to eighty cents was spent on assessments.

Currently, an individual with minor injuries has an automatic right to treatment when the cost of such treatment is less than $2,000. The reforms propose increasing this amount to $3,500.

Catastrophic
impairment benefits

Catastrophic impairment, which provides a higher level of benefits, will now include single-limb amputees.

Currently, a Glasgow Coma
Scale reading of nine or less
allows the individual who is seen
and assessed by an ambulance
attendant or emergency depart-
ment personnel within minutes
of the incident to receive cata-
strophic level benefits, while the
individual who is not seen
promptly and regains conscious-
ness is excluded.

Medical and
rehabilitation expenses

For non-catastrophic injuries, basic coverage for medical and rehabilitation benefits will have a limit of $50,000. The current limit of $100,000 would become an optional coverage available for an additional premium.

The reforms propose that the cost of medical assessments addressing a person’s need for

Housekeeping and
caregiving expenses

Housekeeping and caregiving benefits, which insurers see as widely abused by claimants under the current system, will be moved out of basic coverage, and become available only as optional benefits.

These expenses are already restricted to reflect “actual economic losses,” but has not deterred arbitrators and judges from awarding them in appropriate circumstances.

Income replacement benefits

The reforms will require the quantum of income replacement benefits to be calculated as 70 percent of gross income, rather than the current 80 percent of net income, to bring the benefit in line with most disability policies.

The government rejected the recommendation of the superintendent to have the maximum basic benefit increased to $500 weekly from the existing $400, which has been in place since 1990. Optional coverage paying up to $1,000 weekly will continue to be available.

The reforms also propose capping the amount payable for accounting reports, which are sometimes needed under the current system to calculate the amount of the benefit payable to self-employed persons. While no cap amount was specified, changing the basis of calculation from net to gross income

See Reforms Page 12

Parties in Maple Leaf Foods achieved settlement extraordinarily quickly

Apology
Continued From Page 9

evidence — an implied admis-
sion of liability — in support of
their claims. Others worry about
a possible devaluation of the
moral idea of apology in that
cynical defendants might utter
words of apology for mere tacti-
cal advantage. But most observ-
ers, supported by empirical evi-
dence, point to the potential for
speedier, less expensive resolu-
tion of many disputes in ways
more satisfying to both parties.

“The amount of the settlement, $27 million in total, is remarkably modest for an action involving more than 20 fatalities and numerous other cases of serious illness.

result of consuming contaminated meat products.

The outbreak was traced to a Maple Leaf Foods plant in Toronto, the most likely cause being contaminated slicing machines. In December of 2008, less than four months after the outbreak, Maple Leaf Foods announced it had agreed to settle tort claims for a total of $27 million. On Feb. 2, 2009, the company released details of the settlement. The maximum individual payment for serious and long-lasting illness was to be $125,000. The amount payable in respect of each death was $120,000.

Two things are noteworthy about this. First, settlement was achieved extraordinarily quickly. Claims of this magnitude commonly take years to resolve. Second, the amount of the settlement, $27 million in total, is remarkably modest for an action involving more than 20 fatalities and numerous other cases of serious illness.

These observations are note-
worthy because they represent
significant benefits to both sides
in the dispute. For the defendant
and its insurers, the liability costs
are contained within reasonable
limits. For the plaintiffs, compen-
sation has come promptly, they
have been spared the cost and
uncertainty that comes with pro-
tracted litigation and they can
take at least some satisfaction
from the fact that, having accept-
ed responsibility, the company is
accountable for the loss. In this
sense, the plaintiffs have been
appeased. More generally, an
argument can be made that jus-
tice has been served.

Craig Brown is a professor of law at the University of Western Ontario and counsel to the Toronto firm Thomas Gold Pettingill. He is co-author, with Thomas Donnelly of Thomas Gold Pettingill, of Insurance Law in Canada.