The Statutory Deductible and How the “Deck is Stacked” Against Plaintiffs

April 1, 2024

By: Jordan Sharpe

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If you are injured in a motor vehicle collision in Ontario, you have the legal right to sue the at-fault parties under the Insurance Act, which governs motor vehicle claims. Under the Act, any amount awarded for pain and suffering in court or settlement negotiations is subject to a statutory deductible. The legislative purpose of the deductible is to reduce motor vehicle litigation by deterring claims with modest injuries. This, of course, results in injured plaintiffs, thinking twice, before starting a claim for which they have a right to be compensated for.

The legislated deductible applies to:

  1. Damages for pain, suffering, and loss of enjoyment of life; and
  2. Claims advanced under the Family Law Act for loss of guidance, care, and companionship.

There are two exceptions in which the deductible does not apply:

  1. Where the award for pain and suffering has met or surpassed the statutory monetary threshold noted below; or
  2. Where a claim is advanced under the Family Law Act which involves a fatality.

As of January 1, 2024, the general damages deductible for those injured in car accidents in Ontario reached $46,053.20 if assessed at $153,509.39 or less. By comparison, the deductible, in 2023, was just above $44,000.00. This means that if a lawsuit reaches a trial and a judge or jury awards a plaintiff any amount less than the statutory deductible, the award is zero, regardless of who is deemed at fault for the accident. To make matters worse, Judges are not able to instruct juries on the deducible, which is precisely why insurance companies are almost always the ones who file a jury notice at the pleadings stage of litigation. Should a lawsuit not resolve, the statutory deductible, as of the year of trial, will apply.

More and more often insurance companies are taking the position that a plaintiff will not pass the statutory deductible and that their case is “threshold defensible.” In other words, the damages assessed for pain and suffering will be a net zero when taking into account the statutory deductible. To pass the threshold, a plaintiff must prove that his or her injuries are both “serious” and “permanent” under the Act. More often than not, insurers often take this position when a plaintiff has suffered soft tissue injuries that have resulted in some form of chronic pain. This is far less the case when a plaintiff has sustained an orthopedic injury, for example.

While seemingly unfair, it is salient for plaintiffs to understand what the statutory is and how best to beat it, so to speak. Early and consistent medical attention that creates a linear and credible account of your injuries and recovery process will go a long way.

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