Canadian Underwriter

Nova Scotia has right to recover nursing home costs against insurer in an auto accident case

January 31, 2011   by

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Nova Scotia’s Department of Health does have a subrogated right to claim against an insurer for nursing home costs arising from injuries sustained in a motor vehicle accident, according to the Supreme Court of Nova

In Slauenwhite v. Keizer, Jean Slauenwhite was 81 years old in Dec. 15, 2004, when she was a passenger in a car driven by Erna Keizer, then 78. Kaizer drove her vehicle off the road into a rock cliff, and Slauenwhite suffered a permanent loss of eyesight. Slauenwhite’s injury meant she was unable to return to her apartment at Musquodobit Harbour. After a lengthy hospital stay, Slauenwhite moved into a nursing home. The province subsidized the costs of the nursing home.

The province claimed the nursing home subsidy from Kaizer’s insurer, citing the Health Services and Insurance Act of Nova Scotia (HSIA). The legislation was amended in 1992, allowing the province to charge an annual levy against the province’s motor vehicle insurers to collect health-related services resulting from motor vehicle accidents.

The court rejected the defendant insurer’s reference to an apparent exclusion contained in Subsection 18(10) of the HSIA. Subsection 18(10) of the act reads: ‘This section applies except where personal injury has occurred as the result of a motor vehicle accident in which the person whose act or omission resulted in the personal injury is insured by a policy of third-party liability insurance on or after the date this subsection comes into force.’

The court noted this subsection was in direct contrast with Subsection 18(6), which states:

‘Where a person whose act or omission resulted in personal injuries to another is insured by a liability insurer, the liability insurer shall pay to the Minister any amount referable to a claim of recovery of the cost of insured hospital services, benefits under the Insured Prescription Drug Plan, ambulance services to which the Province has made payment and insured professional services that would otherwise be paid to the insured person and payment of that amount to the Minister discharges the liability of the insurer to pay that amount to the insured person or to any person claiming under or on behalf of the insured person.’

Noting the apparent discrepancy between the two subsections, the court said the exemption in Subsection 18(10) must be interpreted in the context of the entire legislative scheme. The court goes on to note the legislation’s objective is clearly to impose liability on tortfeasors and their insurers to pay for health costs resulting from personal injuries caused by any wrongful or negligent act or omission, and does not exclude auto accidents.