Darryl Legal Musings

Toronto Police Service announced on March 22^nd that it would no longer dispatch officers to the scenes of minor accidents. While the definition of “minor” is not entirely clear, it appears to mean where there is minimal damage to the vehicle and/or there are no individuals with significant injuries. It is foreseeable that other GTA-area police forces will implement similar policies. This will mean more use by individuals of the collision reporting centers, and more need for diligence by motorists at the scene of an accident. While the collision at the time may appear to be minor, injuries sustained by individuals may not become immediately apparent. Often the body and mind are in a state of shock at the accident scene Unless there are broken bones, you may not realize that you have suffered injuries that will linger for months or even years. For example, you may have suffered soft tissue injuries to your neck and spine. These injuries appear to be minor and you will be told if you visit a doctor that the pain will go away in several days. In fact, what I see regularly in my personal injury practice is that soft tissue injuries are often the most insidious. While you will know immediately if you have broken a bone or suffered severe injures, soft tissue injuries may not crystalize for days or even weeks. Further, while broken bones will generally heal, soft tissue injuries often result in chronic physical pain, and the effect of this quite frequently leads to depression and anxiety. Thus, you may not decide until weeks or even months post-accident that you have injuries sufficient to warrant a lawsuit. As there may no longer be a police report containing the other driver’s information and the details of the accident, you need to be proactive at the scene of the accident. Here is a handy checklist of things to do if you are involved in an accident and the police do not attend (or even of they do):

1. i) Obtain from the at-fault driver his or her driver’s licence and insurance information. In this day and age of cell phones, if you do not have a pen and paper, simply take a photo of the driver’s licence and pink slip. Obviously, you will allow the other driver the same opportunity to gather your information.

1. ii) Make a note or photograph the make, model and licence plate of the vehicle.

iii) Take photographs of any damage on both vehicles. Don’t forget if any part of the car, such as a bumper, has detached and is lying on the road, take a picture of that as well.

1. iv) If there are independent witnesses to the accident, obtain their names and telephone numbers.

1. v) If you feel any pain at all on the day of the accident or within several days or weeks thereafter, immediately attend at your family doctor, emergency room, or walk-in clinic, to document the injuries. Make sure to tell the doctor the details of the accident and how these injuries arose.

1. vi) Contact your insurance company and provide them all the details, including details of any injuries, so there is a written record of the accident.

vii) When you go home, while your memory is fresh, write a detailed paragraph about how the accident occurred and what injuries you have. Make notes about whether you were wearing a seatbelt, had anything to drink, if you were using a cell phone at the time, the weather, when you first saw the other vehicle, and any other details of the accident and your injuries.

viii) Make a note of any conversation you had with the other driver.

1. ix) If your injuries re ongoing, keep a regular daily or weekly journal of the nature and progress of your injuries, including your daily pain on a scale of 1 to 10; a list of tasks you need help with; whether or not you missed work or other events; and whether or not (and how) your pain affects your relationship with those closest to you.

Too often I see prospective clients who have no proof that the accident even occurred, have no medical record of any injuries, and may not even know the party they need to sue. Even if you have the basic information, and have been to the doctor, at some point two or more years after the accident, you will be asked as part of the litigation process, under oath, for your recollection of the details of how the accident happened and the specific nature of your injuries over the years. By taking the appropriate steps at the time the event occurs, you will enhance your credibility in the context of the lawsuit, and increase the likelihood that I can settle or win your case.

If your plaintiff is an undischarged bankrupt for any period of time during a tort action, you will be required before disbursing settlement funds to obtain a release from your client’s trustee in bankruptcy.

This article provides a simple overview of the interplay between tort personal injury settlements and the Bankruptcy and Insolvency Act (BIA).

First of all, there is no need to worry about the impact of the bankruptcy on your legal fees or disbursements. It is by this point trite law that the amount of the settlement or award to be calculated, if any, in the bankruptcy context is net of legal fees, disbursements and HST.

Section 67 of the BIA requires that the bankrupt’s assets (property) vest in the trustee for the benefit of the creditors. Sec. 68 of the BIA sets out a scheme dealing with “income,” specifically for the payment of “surplus income” earned during the period of bankruptcy.

Surplus income is defined in Sec. 68 of the BIA and more particularly calculated through the directive published by the Superintendent in Bankruptcy.

The actual calculation of surplus income is based on location, family size, and certain other obligations of the bankrupt. Using the metrics prescribed by Sec. 68 and the directive, a maximum allowable income to be earned without being fettered by the trustee is determined for the bankrupt. Beyond that, the amount is considered surplus, generally half of which is payable to the trustee.

It is well settled law that general damages in a personal injury action for pain and suffering are neither “property” nor “income” of the bankrupt and thus nothing on account of generals has to be paid to the trustee.

Similarly, the Ontario Court of Appeal in Conforti (RE) [2015] ONCA 268 held that settlement proceeds for housekeeping and future care costs are akin to general damages in that they are monies which are personal to the plaintiff and as such are neither income nor property under the BIA.

This leaves for discussion the important characterization of proceeds of settlement for income loss, loss of future earning capacity and loss of competitive advantage.

The determining factor of whether any of the lost income settlement (past or future) is payable to the trustee will depend on the time period for which the income is notionally payable. To the extent that the time period and the bankruptcy overlap, that portion of the lost income settlement which falls into the period of the bankruptcy will be payable as surplus income to the trustee.

The issue arose in Conforti (RE) and was fleshed out over three decisions. Initially, the trustee sought to have the lost income settlement characterized as “property” of the bankrupt, which would mean that all of the proceeds would vest in the trustee. At Conforti (RE) [2012] ONSC 199, Justice Wilton-Siegel determined that while the settlement was not “property,” it was indeed “income” pursuant to Sec. 68 of the BIA.

The issue of allocation of lost income to the trustee then went before Spence J. Conforti (RE) [2012] ONSC 2656. The trustee sought to have the entire lost income portion of the settlement declared as income in the year it was received, which would thus open the entirety of those proceeds to exposure of the trustee.

Justice Spence disagreed with the trustee and held that the proper allocation was to determine what portion of that lost income was attributable to the years of the bankruptcy.

The Court of Appeal Conforti (RE) [2015] ONCA 268 upheld the reasoning of Spence as to the apportionment but tinkered with his calculation to more precisely line up with the actual period of the bankruptcy. The cumulative result of these decisions provides a method by which to calculate the amount of a lost income settlement that will be attributable to income of the bankrupt.

Simply put, this is done by pro-rating of the years of the bankruptcy against the total number of years for which the lost income is payable.

In Conforti, the plaintiff was being paid future lost income for a notional period of 15 years — the date of the settlement until age 65. The period of this that overlapped with the bankruptcy was two years (post-accident date of bankruptcy to date of discharge). Therefore, the Court of Appeal took a practical approach and allocated for the benefit of the trustee a pro-rated amount of 2/15 of the lost income amount which was be plugged into the surplus income calculation and thus available to the trustee.

It should be noted that awards for loss of competitive advantage will be treated the same as loss of future income claims.

Clever personal injury lawyers, wanting to maximize the recovery for their clients, might be tempted to allocate in the minutes of settlement all of the money for general damages. While this may work in certain instances, the reality is that Justice Wilton-Siegel found, and the Court of Appeal endorsed, a purposive approach to treatment of the monies.

It is not what the words of the settlement say, but what they actually mean. If your client has never returned to work since the accident and is unlikely to in the near future, then it would be difficult for a court not to consider some allocation of the award as lost income.

Darryl Singer is a Toronto-based litigation lawyer at SINGER Barristers Professional Corporation, with experience in both bankruptcy and personal injury matters.

Ontario courts are in the process of considering the security and treatment of “after- the-event” legal cost indemnities and insurance. These products allow litigants to protect themselves from the risk of a cost order, giving them the security to proceed to trial. They can also be provided as a blanket policy for a law firm that needs protection for its disbursements. While still relatively new in Ontario, a view is emerging that there is a duty on lawyers to advise clients of the availability of this protection.

In the last few years, there has been some attention given to litigation cost insurance as an access to justice tool, with most products available as “before-the-event” (BTE) blanket coverage. There are now several companies in Ontario who are offering “after-the-event” (ATE) insurance or indemnities that people can purchase once a case has been instigated. Law firms can purchase it on behalf of clients and recover the cost from them later or maintain it as an expense for the benefit of the client, as a marketing exercise.

In other parts of the world, ATE insurance is a mature mainstream product, most notably in the United Kingdom. In Ontario, it has only entered the market in the last two or three years. In fact, there are two types of product — after-the-event insurance and adverse-cost indemnities.

Legal expense insurer DAS Canada offers such products and believes it has an upper hand in the embryonic market because it is a regulated insurance company, as opposed to other financial companies offering adverse-cost protection or settlement loans. “It’s a comfort knowing that insurance companies have huge requirements to have enough capital to cover all risks,” advises David Smagata, vice-president and chief legal officer of DAS Canada. His colleague, Nick Robson, manager, ATE & Special Initiatives, points out that the Trial Lawyers Association of British Columbia has placed some restrictions on the providers of settlement loans and cost-protection indemnities, and that the Ontario Trial Lawyers Association is drafting a code of conduct in relation to the use of indemnities.

With an ATE insurance policy, the policyholder is always the litigant. The firm can be delegated to accept certain risks to get standard coverage of $100,000, which can then be changed as litigation progresses. Smagata explains that it is not an intrusive product in terms of directing the litigation. “You don’t have to worry that someone’s going to come in and tell you how to run your case. It is not heavy-handed.”

Darryl Singer of Singer Barristers of Markham, Ont. has chosen to use the indemnity product from BridgePoint Indemnity Company. He has a blanket policy that covers every personal injury file he opens. “I pay $200 to cover up to $10,000 in disbursements with a rider that allows me to increase coverage to $50,000 without any review. If I decide that I am going to trial in a couple of weeks and the $50,000 is not enough, I can increase it to $100,000 or higher.” He knows of firms with a higher blanket policy. “My practice has a high volume of small files. Some firms have blanket coverage of $50,000 to $60,000.”

The indemnity covers the adverse costs, including defence legal fees and the plaintiff lawyers’ disbursements. It does not cover the plaintiff lawyer’s legal fees. John Rossos, chairman and CEO of BridgePoint, explains that because legal fees are on a contingency basis, in a downside case the court could say that you shouldn’t get a contingency fee because the lawyer has essentially borne no risk.

Rossos refers to the situation in the U.K. “In 1999, the Access to Justice Act mandated a situation that where ATE insurance, as it is known in the U.K., is purchased, a defendant had a duty to pay the premium. It then became ubiquitous in the legal community and evolved to be a standard of care. If counsel is not advising their clients that it is available, they are negligent.”

Rossos believes that a similar phenomenon is occurring here. “It is becoming the standard of care for personal injury lawyers launching a lawsuit to advise claimants of the products’ availability. If an unprotected client subsequently finds out about protection, the next question to the lawyer will be, ‘Why didn’t you advise me about it?’”

Rob Findlay, a Hamilton personal injury lawyer, agrees that there is a standard of care concern. “In our regulations, we are mandated to talk to clients about cost exposure. You’re certainly going to include this in that discussion. If it becomes routine enough in everyday practice and the client goes to trial and is hit with $100,000 costs, they may be looking for a pocket to recover from.”

Singer thinks the importance of the product weighs in at the negotiation stage. “After-the-event insurance has levelled the playing field for plaintiffs who might not otherwise be able to risk an adverse costs award by going to trial. Cases which would not settle at mediation because the plaintiff would be intimidated by potential costs consequences now stand their ground and get the case resolved. In addition, cases that would get dropped on the eve of trial by the plaintiff can now proceed to trial.”

Singer recalls that, in a typical scenario, before DAS and BridgePoint came on the scene, the insurer or the mediator or the judge would remind clients that they might win, but if they don’t, a two-week trial can cost $100,000. “The clients would fold like a pack of cards. This allows me as a lawyer to sit there, slap the certificate on the table, and say, ‘You don’t care if you lose and have to pay costs. Well, neither do we.’ Now the single biggest leverage they’ve got is off the table.
It has taken a major weapon away from the defence side.”

There are now several court decisions addressing the use of the products. Recently, a master ordered a plaintiff to purchase ATE insurance instead of paying into court, finding that the policy would provide sufficient security. There have also been several cases where a pre-existing policy has been raised as a defence to a security for costs motion, sometimes successfully and sometimes not.

The more vexed question is whether a successful plaintiff can claim the premium as a disbursement.Markovic v. Richards, rendered on Dec. 12, 2015 by the Ontario Superior Court of Justice, produced a finding that the premium paid for ATE is not payable by the insurer. James Greve of Camporese Sullivan Di Gregorio of Hamilton, Ont., who represented the insurer, says this is the first case in Canada to consider the issue, but he does not expect it to be the last. “My argument was that it is not consistent with the rules of civil procedure relating to the cost consequences of failing to accept offers to settle. It would insulate parties from that risk.”

Findlay, who represented the plaintiff, points out that the decision was not based on the representations of either party, which were minimal, and refers to the wrong product. He takes issue with the judge’s finding that the product was purchased as a voluntary option and did nothing to advance the litigation. He refers to the obligations imposed by the Automobile Insurance Rates Stability Act to try and affect resolution and encourage settlement. “How is it not consistent with that? If you have insurance, it will prolong efforts at resolution and make it more likely….”

Personal injury professionals have expressed much consternation of late about the drastic changes to the Insurance Act and the statutory accident benefits schedule. Paralegals, who for years have derived a nice living from accident-benefits work, are expressing worry about their livelihoods, as are the clinic owners, chiropractors, assessment companies, and, of course, the tort lawyers who all line up to take a piece of the personal injury pie.

Those discussions are focusing misguidedly on how the new personal injury playing field affects us. But lost in all of the concern is the important fact that victims of motor vehicle accidents have less opportunity for fair recovery today than ever before.

The provincial government’s focus for years has been to buy into the insurance industry’s rhetoric about how it could contain both high insurance premiums and skyrocketing legal costs if only it would help the companies stop all of the fraud. Yet the government’s response, which is to severely reduce available no-fault accident benefits and increase the tort deductible, is akin to bringing a bazooka to a pocket-knife fight.

This one-two punch of a government passing legislation that’s beneficial to the insurance industry at the same time as the companies make blanket corporate decisions to pay out less money to accident victims on the tort side leaves a gaping hole in consumer protection.

In fact, if the government really wanted to help accident victims, it could implement a consumer insurance bureau as is already the case in the Nordic countries. The consumer insurance bureau would have a mandate to assist consumers with regard to their rights and benefits after they have been in a motor vehicle accident and also, not incidentally, to act as a sort of special consumer ombudsperson to petition the Ontario government about insurance issues from the consumers’ perspective. A yearly surcharge of $1 per vehicle registered in Ontario could fund such a body.

So why hasn’t the Ontario government made such a decision on behalf of the Ontario electorate it represents? That same electorate pays insurance premiums from which the insurance companies fund the Insurance Bureau of Canada. The insurance bureau spends millions of those dollars a year to train insurance representatives on how to restrict payouts and, most significantly, lobby the Ontario government about insurance issues from the insurance industry’s perspective.

One of the authors of this article, Peter Cozzi, first presented the concept to the province about 10 years ago at a Financial Services Commission of Ontario bar dispute group meeting at which a government representative was present to hear the proposal. Nothing happened.

As plaintiff lawyers, we can only work to achieve results for our clients within the legal and regulatory framework that the government has provided. When the government circumscribes that framework to the point that thousands of worthy cases languish due to legislative changes, it’s time for it to invoke some corrective balancing.

Understandably, the insurance industry’s powerful lobby does not want to see legislative changes that would possibly put the plaintiff lawyers in the driver’s seat.

Admittedly, that might be too much of a correction. The idea proposed here for a consumer insurance
bureau that would educate the public, provide input to the government on consumers’ behalf, and possibly implement an internal regulatory regime to keep minor but deserving disputes out of court places the power in the hands of neither the insurers nor the lawyers but rather the consumers. In a province with one of the best consumer protection regimes in North America, that is a natural addition.

So will the Ontario government support consumers’ rights to proper representation in the motor vehicle insurance debate? In our view, the answer is unlikely given the Ontario government’s disinterest in the proposal 10 years ago and the current legislative climate that has leaned in favour of the insurance industry.

Do the province’s actions signal its disinterest in accident victims or is it that the significant revenue contribution from the HST charged on the millions of dollars paid by consumers in insurance premiums in conjunction with the taxes paid by those insurers and their tens of thousands of employees is the critical factor for a government concerned about fiscal responsibility?

Those factors are relevant to a provincial government concerned about revenue to offset a deficit, but the province’s actions surely do little to enhance fairness to the consumers it represents in the legislative process governing insurance.

To correct that by creating a consumer insurance bureau will cost the Ontario government very little and go a long way in protecting the public.

While the monetary difference between old and new prejudgment interest rate rules isn’t substantial, the overall issue for insurance companies is, Toronto personal injury lawyerDarryl Singer tells Law Times.

The Ontario Court of Appeal is currently considering whether a rule that replaced the former prejudgment interest rate of five per cent with the lower current bank rate is retroactive, reports Law Times.

The legal publication says in recent months, Ontario courts have come down on either side of the issue of prejudgment interest following changes in legislation that replaced the former rate of five per cent with the lower current bank rate.

“The issue stems from an amendment on Jan. 1, 2015, that changed the amount of prejudgment interest for some cases,” says the article.

“One decision earlier this year, Cirillo v. Rizzo, found the change to be retroactive while another one, El-Khodr v. Lackie, later found that earlier ruling to be wrong. The latter case is under appeal,” reports Law Times.

Singer tells Law Times he agrees with El-Khodr, but he understands the reasoning in Cirillo.

“It can’t possibly be fair for them to, many years later, take advantage of the legislative change,” says Singer. “It’s an important issue for the personal injury bar.”

The plaintiff personal injury business is more competitive than ever. Thus, when meeting with a potential personal injury client for the first time, you may well be tempted to make representations as to what you think the case is worth or how quickly you can settle it. I can only assume from the number of times I hear potential clients telling me about their consultations with other firms that this desire to make promises to the clients is rampant.

I am urging you to resist the temptation to make such comments, as your clients will surely be disappointed at the end of the day, which will lead to other headaches (fee disputes, Law Society complaints, negative social media reviews, etc.)

The two most common questions I am asked by potential new personal injury clients (and my answers) are:

1. How much money is my case worth? (I don’t know).
2. How long will it take until we settle? (I don’t know).

You may be tempted, knowing the client is shopping around, to land the client then and there by telling them what they want to hear, or what you may actually believe to be the case. I will tell you, however, that you would be wrong to do so. This is simply because at the initial client interview it is impossible to know.

At the outset of the case, you will only have the client’s perspective. You will not have yet heard the position of the adjuster for the target insurer. You will not have reviewed the medical records of your client’s pre- or post-accident treatment. You will not have yet had the benefit of their income tax returns or other supporting documentation.

Oftentimes, at the time the client signs your retainer, you may not even have the police report of the accident available. And as in all litigation, what your client tells you is less important than what the actual documents prove.

There are many factors that go into determining the value of a personal injury case. Quantifying damages in a personal injury case is more art than science; oftentimes abstract art at that.

Here are just some of the factors at play in determining the value of your client’s lawsuit:

• The nature and extent of the injuries. Under the Insurance Act in Ontario, not all injuries are compensable. Recent case law from the Superior Court of Justice indicates that the bar to meet the statutory threshold is on an upward trend. This is good news for insurers, but bad news for you. If your potential client shows up at your office and thinks his sore neck and back pain is worth six figures, and you either by representation or omission, allow him to leave thinking he might get something near what he has in mind (remember that what is in his mind is not grounded in the realities of the law but rather his emotion and sense of moral certainty), you are setting the stage for a disgruntled client before the case is even underway.
• What your client’s own medical practitioners write in their notes about her injuries. For example, your client may tell you that she is in constant pain, but her family doctor may use words such as “minor” in her clinical notes or, worse, treat the client’s injuries dismissively. This will definitely hurt your case.
• How often your client attends for treatment. Many clients stop going to doctors and rehab clinics after a few months either because (i) the treatments are no longer effective; (ii) they simply do not have time; or (iii) they can no longer afford to cover the out-of-pocket cost of non-OHIP covered treatments, such as physio and massage therapy. Their failure to continue treatments for whatever reason may impact what an insurer has to pay at a later stage in the proceeding. Yet, whether or not they continue to attend and at what frequency are factors out of your control.
• If your client has a potential claim for lost income, the amounts on which they filed and paid tax in previous years or can actually prove through source documents. This is especially acute if they are in the service industry, as a large portion of their real income is derived from tips, yet their income tax returns rarely reflect this; similarly with self-employed small business owners (or those who work in “cash” businesses”) where true income loss is significantly more than would appear from the pre-accident income tax returns.
• The statutory deductible. The Insurance Act mandates a $30,000 deductible on general damages on motor-vehicle-accident-related personal injury cases. This amount is actually increased north of $36,000 as of Aug. 1, 2015). Since the majority of soft tissue injury cases are worth less than $75,000 for the pain and suffering component, you can see how this deductible has a very real impact, often to the point of deserving parties obtaining nothing more than a negligible amount. Moreover, clients generally do not understand this.
• The client’s own evidence at examination for discovery or trial or in statements given to doctors or insurers, which experienced (jaded) personal injury lawyers know is often very different than what the client has told us at the time we are retained.

Also keep in mind that what you think of as the value of the case is usually the amount of the cheque the insurer will write, while the client is really only concerned with the net in their pocket. From whatever amount you obtain, you will deduct legal fees of about 30-35 per cent (plus HST). In addition, disbursements incurred by you are over and above the fees. It is not unusual for me to incur $5,000 for a case worth only $20,000. Thus there is often a significant gap between the amount of the settlement and the actual dollars going into the client’s jeans.

Then there is what I call the wild cards. These have nothing to do with your client’s injuries, the state of the law, or for that matter your legal acumen.

1. The target insurance company. Some insurance companies have taken a very hard line on all soft tissue injury cases that do not have significant provable lost income attributable to the injuries. I have been told more than once in mediations with a certain insurer that they “would rather spend $100,000 on legal fees before paying a plaintiff $10,000.” They have been successfully following through with this threat for several years now. The days of insurers paying a little to save a lot are gone.
2. The particular adjuster who is responsible for deciding how to handle the file. Even “good” insurance companies, who settle early and often, employ certain adjusters who take a more aggressive approach.

As for the length of time, no matter how fast your office works to move a case forward, you will inevitably be stymied by the bureaucracy of a large insurance company, lawyer’s schedules, your own schedule if you are running a high-volume practice, not to mention the inherent systemic delays of our court system. Accordingly, you should not suggest a time frame in which a case may settle.

For all those reasons, it is almost impossible to give a client an accurate picture of how their case will shake out when you first meet. As such, resist the urge to lure clients with promises of golden tickets and the chocolate factory tours. Instead, focus on empathizing with your client’s situation while leaving them with the indelible impression that you have the knowledge, skills, and experience to give them the right advice at the right time.

If personal injury law is not within your areas of expertise and experience, you are best to refer the file to a lawyer who does have that experience. If you do not regularly practise in personal injury law, you likely lack the requisite knowledge to properly advise the client, understand the process (which has its own conventions and rules of thumb amongst the bar), or properly assess the case.

Further, a personal injury lawyer’s ability to get small- to mid-size cases settled is predicated as much on his or her relationships with the adjusters and defence lawyers as with that lawyer’s skills. At the end of the day, this is a people-driven industry and reputation counts. Being an unknown entity is a further disservice to your clients. You also may not understand the lay of the land at various insurers and how they operate, knowledge integral to a lawyer’s ability to take on the right files and obtain a decent result for the client.

Fortunately, in personal injury cases, there is incentive for non-injury lawyers to refer to experienced injury lawyers. Referral fees are the norm. So save yourself and do the right thing for your client by referring the file on. You will be rewarded at the end of the day without having done the hard work or laying out the disbursements.

And for those of you who are like me and handle large volumes of personal injury files, there really is enough business to go around. There is no need to try and get business in the door by making promises you cannot live up to, and potentially open the door for negligence claims and Law Society investigations.

When I teach practice management courses to lawyers and law students, I always say that the law part of being a lawyer is easy. If you can get clients in the door, and manage their expectations, you’re 80 per cent of the way home. The initial client interview is when you set the tone for your client’s expectations. I would rather have a new intake walk out the door than get their signature on the retainer only by promising them what they want to hear.

Unlike other types of litigation in Ontario, personal injury actions arising from motor vehicle accidents are stacked against plaintiffs from the beginning. Sections 267.5(5) and (7) of the Insurance Act, coupled with ss. 4.1 and 4.2 of Ontario Regulation 461/96, work to minimize the risk that insurance companies for the at-fault driver will have to pay out for injured victims in tort claims. Here are five ways that plaintiffs face an uphill battle from the get-go.

Statutory threshold

Merely being injured in an accident caused by someone else does not automatically entitle one to sue for pain and suffering. The injuries must meet what is called the “threshold.” The plaintiff must have suffered a “permanent serious impairment of an important physical, mental or psychological function.” Most of my personal injury cases involve an argument over whether or not my client meets the threshold. 

As an example, let’s take a typical case I would deal with, where my client suffers from neck and back pain, occasional headaches, and some concomitant psycho-emotional stresses, all of which disrupt her sleep. During the day she is fatigued. The constant pain and fatigue causes frustration leading to minor depression. But she does not miss work and life goes on, for the most part just as it did before. To my client, her pain is real, yet no objective diagnostic tests confirm this. As such, the threshold question is a live issue. I regularly rely upon the Court of Appeal for Ontario decision in May v. Casola [1998] O.J. No. 2475, which states that an individual who returns to normal life but does so with “permanent symptoms including sleep disorder…headaches, dizziness” meets the threshold, and other cases following therefrom (such as one for $100,000 for the soft-tissue injuries of a plaintiff who returned to work and some of his pre-accident activities, but did so in constant pain, in Whilby v. Redhead [2010] O.J. No. 1819). Yet two recent decisions of the Superior Court — Ayub v. Sun [2015] O.J. No. 1415, and Malfara v. Vukojevic [2015] O.J. No. 44 — appear to foreshadow a trend that will make it more difficult for injured parties to recover by seemingly moving the line the threshold must cross.

Threshold motion

While I will run the trial in front of a jury, section 267.5(15) of the Insurance Act allows the trial judge to determine the threshold question regardless of the jury’s determination and award. This gives the insurer two kicks of the can at the same trial. If I am able to persuade the jury that my client’s injuries entitle her to a significant award of general damages, which would appear to determine the threshold question, the judge can decide the question differently and strike the jury award.

Statutory deductible

Section 267.2(1) of the Insurance Act sets out a deductible on general damages for pain and suffering. Presently this deductible is $30,000 on all awards under $100,000. Whatever amount the jury awards will be reduced by $30,000. When a typical soft-tissue case is worth less than $50,000, it is easy to see how the deductible has such an impact. Moreover, the jury is not told about the deductible, which can cause juries to return what they feel is a generous verdict only to result in the plaintiff being shut out.

Insurer not named defendant 

The lawsuit pits my client against a defendant whose vehicle is responsible for causing the accident. The actual defendant is only remotely involved in the defence of the action. It is the defendant’s insurer insurance company who hires and pays the lawyer, and ultimately any award of damages. The jury is not told that an insurer is the de facto defendant. Thus, jurors may seek to balance their desire to help my client with their empathy for the named defendant.

Costs

The loser of a trial will pay a significant portion of the winning party’s legal costs. Costs awards exceeding $100,000 for a typical personal injury jury trial are commonplace — no big deal for the insurance company, but a very large risk for my clients. In fact, it is such a large risk that very deserving injured plaintiffs who are pushed to the eve of trial will often walk away for fear of losing their home or having their wages garnisheed.

These five factors demonstrate how the system is stacked against innocent injured victims of motor vehicle accidents. One large insurer has been so successful in exploiting these inequities that many plaintiff lawyers now routinely refuse to take on clients where that particular insurer indemnifies the at-fault driver. The impact on access to civil justice is that a great many deserving plaintiffs cannot find representation, and many more who do are denied fair compensation for their injuries.

It should be noted that due to recent amendments to the Insurance Act, for all accidents which occur on or after August 1, 2015, the $30,000 deductible referred to above will now be $36,540. Likewise, the $100,000 mark which must be hit to avoid the deductible will be $122,799 for post-August 1, 2015 accidents. These amounts are subject to annual inflation rate increases. This almost under-the-radar legislative change only serves to underscore the opinions expressed in this commentary.

A recent decision by Superior Court Master Donald Short raises an interesting advocacy opportunity based upon a little-known and fairly recent piece of Ontario legislation, the Apology Act.The aim of the act was to allow a potential defendant to express remorse or regret without fear of such comments precluding a defence on the merits and with no impact on a determination of liability. The legislature thought it might encourage emotional bridge building between aggrieved parties that could have the positive effect of either preventing or circumscribing litigation. the master reviewed the principles enunciated in the Apology Act. In Simaei, the plaintiff wished to plead in her statement of claim that her former employer’s apology arising from the termination of her employment was an admission of fault or wrongdoing. As such, the plaintiff wished to use the apology as a quiver in the arrow of her case. The defendant’s lawyers argued the court should strike that part of the statement of claim as being prejudicial to her in addition to being vexatious and an abuse of process. None of the allegations have been proven in court.Short agreed, citing the provisions ot andate that a party cannot use an apology made in good faith (unless made in the context of an on-the-record discussion as part of the litigation) against the other side in the context of the litigation. The master went even further and suggested the court must by necessity strike the portion of the pleading referring to the apology since a party, under the Rules of Civil Procedure, “cannot plead facts that go nowhere.In light of the wording of the Apology Act, pleading the apology goes nowhere because the provisions state that a party cannot use the apology in the litigation as an admission of liability. Further, the trier of fact cannot consider it in any determination of fault. Thus, even pleading the fact that there was an apology by the defendant offends the principles of pleading and potentially prejudices the defendant at the trial. Additionally, if the apology remains a part of the pleading, it becomes a live issue on discovery.While the case on its face appears to provide some practical advice on the principles of pleading, it is the discussion of this relatively unknown statute that is the real lesson for lawyers to draw from the decision. Specifically, the act essentially allows a client in any potential civil case where a putative plaintiff feels aggrieved or possesses a level of moral superiority to strategically issue an apology in an attempt to diffuse the situation. The master, in obiter, underscored the virtue of a strategic apology when he noted: “My personal involvement in mediation, arbitration has provided me with examples of the value of an apology in reaching a mutually acceptable out-of-court resolution.”I concur with Short. My own experiences over 22 years of litigation are that a properly timed and genuine expression of remorse can avert a lawsuit or mitigate the eventual cost to the defendant of settling the lawsuit. As lawyers, we think of the facts of a potential case in emotionally detached and almost clinical terms. But to the clients sitting in front of us, if we listen closely, mixed with their explanations of how they suffered economic losses by the proposed defendant will be expressions of moral indignation about how someone could do something so bad to them. Settling or avoiding lawsuits involves understanding more than just the law. It involves trying to get inside the head of the opposing party to empathize with its perspective. Plaintiffs often just want someone to hear and understand them. As counsel for a potential defendant or for you if you are dealing with an unsatisfied client, Short reminds us that the Apology Act gives us a very useful tool. Used effectively and, most importantly, with authenticity and compassion, an apology may save thousands of dollars. It did not have that effect for the defendant in Simaei, but the plaintiff will not be able to use an ostensibly heartfelt expression of regret against her in the civil action.