The "New" Motor Vehicle Legislation

The Ontario Conservative government has given first reading to yet another revision of the Insurance Act in what now seems an endless tinkering with the law as it relates to the compensation of victims of motor vehicle accidents. A brief historical overview is in order.

Prior to June of 1990, a victim of a motor vehicle accident, whether at fault or not, had access to $140 per week loss of income and up to $25,000 rehabiitation expenses (over and above OHIP). An innocent victim could sue for all losses over and above the limited no-fault provisions. In 1990, the then Liberal government brought in the first of the No-Fault schemes. Innocent victims could no longer sue unless their injuries were permanent and serious. However the no-fault provisions were greatly enhanced with up to $600 per week loss of income and virtually unlimited rehabilitation expenses. The NDP government resiled from its promises to allow innocent victims to sue for all their damages. What their Bill 94 did was to remove the requirement that the innocent victim's injuries be permanent. The maximum weekly accident benefit rose to $1,000 and rehabilitation benefits were enhanced. However, innocent victims could no longer sue for loss of income over and above the weekly benefit.

So, what does the new (Bill 59) legislation do?

First, the threshold requirements for pain and suffering have been raised.  The injury must now again be permanent as well as serious before an innocent victim will be allowed to recover. Moreover, the innocent victim must still pay a deductible as in Bill 94.  In fact the deductible is increased to $15,000.  The Court of Appeal has held that "permanent and serious" requires that the plaintiff be significantly disabled in his or her chosen occupation or that there be gross and substantial interference in the victim's lifestyle.

Secondly, the no fault benefits are reduced.  For example, the weekly  income replacement benefit is reduced to the lesser of 80% of net income loss or $400.00.  Medical and Rehabilitation expenses are capped at $72,000 and $100,000 respectively unless the injuries are catastrophic in which case the limits are raised to one million dollars in each case.

On the plus side, innocent victims will now be able to sue for loss of income and other out of pocket expenses without having to worry about a threshold or deductible.  However, there will be a greater recovery for post-trial losses.

There are some procedural quirks in the new legislation.  First victims must notify the at-fault driver within four months of the accident and must apply for accident benefits before they will be allowed to sue.  The problem with this is that  it is almost impossible to form an opinion as to whether the injuries will be permanent and serious until more than six months after the accident.  There is a benefit to proceeding to trial as quickly as possible if you have a loss of income claim.

The new regime came into effect on November 1, 1996.  If you have been involved in a motor vehicle accident since that date, you are obliged to give written notice to the other driver if you intend to make a claim.  You will likely be obliged to send him a detailed Statutory Declaration. 

FOR MORE INFORMATION, see The Motor Vehicle Accident Kit. recently published by HyeKir Press.

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