Since the implementation of the Ontario Motorist Protection Plan in 1990, automobile insurance claims in Ontario have been limited by a statutory threshold prescribed in the Insurance Act. Claimants must show that they have suffered an injury of a certain severity before they are entitled to recover non-pecuniary damages. What is required to meet the threshold has changed over time. Bill 198 was brought in to effect by Ontario Regulation 381/03 for accidents on or after October 1, 2003 and raised the issue of whether a higher threshold had been implemented by the Legislature. The recent decision of Sabourin v. Dominion of Canada General Insurance Co. suggests that Ontario courts will proceed to adopt a higher and stricter threshold in future decisions.
Nissan v. Mcnamee (2008) was the first reported decision to tackle the threshold under Bill 198. In this decision, Justice Morissette engaged in a detailed analysis of the changes brought about by Bill 198 and concluded that Bill 198 was a codification of existing case law. Her Honour emphasized a presumption that the Legislature does not intend to change existing law or to depart from established principles, policies or practices and concluded:
O.Reg. 381/03 did not change anything already found in O.Reg. 461/96 or the Insurance Act, but rather added definitions… efforts to reframe the broad approaches that have been applied since [Meyer v. Bright] should be resisted.
Justice Morrisette also found that Regulation 381/03’s definitions of “serious”, “important” and “permanent” were consistent with the interpretations of the terms in the 1993 landmark case of Meyer v. Bright, the only identifiable difference being the use of the word “most” in the new Regulation. For an injury to be “serious”, claimants must experience substantial disruption in “most” of his or her daily activities and this means that there “must be a full consideration of the import of the activities that have been interfered with.” However, it was determined that this difference was not significant enough to establish a higher threshold.
More recently, the court concluded that Bill 198 does in fact subject claimants to a higher threshold. In December, 2008, the decision of Sherman v. Guckelsberger determined that the main purpose of no fault legislation was “to limit claims for pain and suffering to seriously injured individuals, thereby reducing insurance premiums paid by Ontario motorists.” This legislative intent combined with the increased specificity of Bill 198 prevented the court from concluding that the threshold had not changed.
In April, 2009, the same position was adopted in Sabourin v. Dominion of Canada General Insurance Co. The decision cited neither Nissan nor Sherman but Justice Valin held that Bill 198 reflected the Ontario Legislature’s intent to “tighten up the threshold by reducing the number of litigants to sue.” His decision directly quoted a White Paper issued by the Ministry of Finance in July, 2003, prior to the enactment of Bill 198, which set forth proposals and policy rationales for a higher threshold. The White Paper stated:
During recent consultations, a number of respondents commented that the current threshold has been interpreted by the courts in such a manner that has lowered the threshold to a level at which claims for injuries that were originally not intended to proceed to court and lawsuits that were expected to be prevented by the threshold, are in fact proceeding.
One proposal for streamlining such costs is to reduce the number of individuals who could sue by changing the threshold in the Insurance Act to reflect the original intent . . .
An alternative way to address rising costs associated with the current serious and permanent threshold is to have it more clearly defined in a new regulation… Enactment of a definition to which courts could look when determining whether a person has sustained a serious and permanent injury would be another means of addressing rising costs by reducing the number of individuals able to sue.
The White Paper made it sufficiently clear to the court in Sabourin that the introduction of Bill 198 effectively raised the threshold so that the regime would be more consistent with the Legislature’s original intent to limit claims. Justice Valin also concluded that prior case law remained “instructive”.
Until appellate guidance is received, the effect of the threshold under Bill 198 remains unclear. However, the decision in Sabourin provides insurers with a compelling argument that Bill 198 must necessarily be interpreted to tighten up the threshold in accordance with the legislative intent.