The Ontario Court of Appeal recently revisited the issue of the deductibility of no-fault accident benefits from an award for tort damages. In Basandra v. Sforza, 2016 ONCA 251, the Plaintiff brought an action for damages arising from injuries he sustained in a car accident. Before the trial of the tort action, he settled his accident benefits claim for the following amounts:

  • $81,658.67 for all medical/rehabilitation benefits,
  • $58,271.76 for all attendant care benefits, and
  • $6,939.84 for all housekeeping claims.

The settlement did not allocate between past and future amounts.

At trial, counsel for both parties agreed to the jury questions, which the trial judge accepted. The jury was not asked to structure its award in a way that reflected the reduction for collateral benefits. Rather, the jury questions lumped damages for medical/rehabilitation, attendant care, and housekeeping together. The jury awarded:

  • general damages of $137,000;
  • past “care, medical/rehabilitation and housekeeping” of $55,000;
  • future “care, medical/rehabilitation and housekeeping” of $50,000; and
  • past loss of income of $45,000.

The trial judge noted that the defence bears the onus of establishing that the deduction of collateral benefits should occur. The trail judge concluded that the collateral benefits received exceeded the jury’s award for the three heads of damages. Accordingly, 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 zero.

The issue for the appellate court was whether the trial judge erred by reducing the jury’s award of $105,000 for past and future attendant care, medical/rehabilitation and housekeeping costs to $0, in the absence of clear evidence about the quantum of each collateral benefit?

Justice Lauwers, speaking for the Court of Appeal, held that the trial judge did not err. He observed that s. 267.8 of the Insurance Act mandates that pecuniary damages awarded in a tort action “shall be reduced” by payments the plaintiff received for statutory accident benefits. He added that 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 and other pecuniary losses such as housekeeping costs. He noted that 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.

Justice Lauwers added that 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”. He further noted that counsel has a responsibility to ensure that the trial judge can perform his or her role, which includes reducing an award to account for collateral benefits as required by s. 267 of the Insurance Act. In this case, Justice Lauwers reasoned that the trial judge was content that the plaintiff was fully compensated for all heads of damages, even though they were lumped, adding that the Plaintiff received about $40,000 more than the jury awarded for those benefits. He concluded that the trial judge’s decision respected both the policy of full compensation, and the objective of avoiding overcompensation or double recovery.