A Superior Court judge has allowed an appeal in a loss transfer matter considering the "weight" of a vehicle for loss transfer purposes.

In Republic Western v. Economical, the claimant was driving a 4-door Toyota insured with Economical when she was struck from behind by a U-Haul Ford El-G truck insured with Republic Western. She applied for and received accident benefits from Economical, which then sought loss transfer indemnification from Republic Western. But Republic Western denied that the U-Haul was a heavy commercial vehicle (i.e., a vehicle with a gross vehicle weight of at least 4,500 kilograms).

According to an investigative report, the truck, which was empty at the time of the accident, would have weighed approximately 3730 kilograms. The arbitrator determined that the truck would not have come close to weighing 4,500 kilograms at the time of the accident. The capacity of the truck, according to the manufacturer, was 4989.5 kilograms.

The arbitrator determined that “gross vehicle weight” meant capacity weight, not actual weight at the time of the accident. The crux of the arbitrator's reasons for choosing the capacity weight was that it made good business sense: He found that using capacity weight would make business dealings simple, direct, and comprehensive. He found that weighing a vehicle after an accident to determine actual weight might be problematic or impossible, such as after a vehicle fire.

This meant that Republic Western, the insurer of the truck, had to indemnify Economical pursuant to section 275 of the Insurance Act.

On appeal, the judge held that the arbitrator erred in using the capacity weight instead of the actual weight at the time of the accident. The judge held that if the objective of the loss transfer scheme is to allocate accident benefit payouts in a more equitable way, then using actual weight would account for damage actually, rather than theoretically caused by heavy commercial vehicles that might not actually weigh more than 4,500 kilograms. The judge also held that it would make no sense to adopt a definition of “gross vehicle weight” for the purposes of one specific portion of the Regulation that is at odds from the definition used in a case that has been specifically approved by the Court of Appeal and in three statutes concerned with closely related regulatory matters.

So it appears that in less obvious cases we will continue spending time at truck weigh stations to determine the weight of smaller trucks, where available.

See Republic Western Insurance v. Economical Mutual Insurance, 2012 ONSC 5952 (CanLII)