Accident benefits not selected are not “available” to an insured; cannot be deducted from past income loss in tort

When an Ontario insured is required by law to select one of three statutory accident benefits, the benefits they do not select are not “available” to them. Therefore, they cannot be deducted from a claim for past income loss in a bodily injury action.
The Ontario Court of Appeal thus overturned a lower court ruling, which found a defendant in a tort case might indeed make such a deduction, in Sutherland v. Singh, released on June 22.
Section 267.8(1) of the Ontario Insurance Act provides that in an action for a loss or damage from bodily injury in an auto accident, the damages to which a plaintiff is entitled shall be reduced by payments for statutory accident benefits that the plaintiff has either received, or that were “available” to them.
The law is intended to prevent “double recovery,” in which a plaintiff recovers from a defendant in tort and also receives accident benefits for a past income loss.
The plaintiff in this case, Derrick Sutherland, was rear-ended by defendant Gurmeet Singh. Sutherland has a wife and three children.
At the time of the accident, Sutherland was employed full-time as a machine operator at Winpack. He claimed he was temporarily unable to return to work and therefore perform caregiving duties for his three children.
Under s. 36(1) of the regulations for the Insurance Act, Sutherland must choose one out of three benefit options for lost income: an income replacement benefit (IRB), a non-earner benefit and a caregiver benefit (CGB).
The non-earner benefit did not apply, since Sutherland was working at the time. He elected to receive the caregiving benefits.
He later issued a statement of claim in which he claimed for past income loss, among other things. The defendants sought to deduct from Sutherland’s past income loss the value of the income replacement benefits that Sutherland did not select.
Even though Sutherland chose to receive the caregiving benefits, the defendants argued, the IRBs were also “available” to the plaintiff at the time of the choice.
A lower court agreed with the defendants, but the Appeal Court overturned the finding.
The defendants’ argument, “ignores the underlying purpose of s. 267.8, which is to prevent plaintiffs from double recovery for their losses,” the Appeal Court concluded. “If the defendants’ argument is correct, they will be entitled to both CGBs, which Mr. Sutherland received, and IRBs, which he never received.
“This would lead to a situation in which Mr. Sutherland is undercompensated and the defendants would receive a windfall. This would not be a fair result and it cannot have been intended.”