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Court weighs in on approach for deducting accident benefits from tort damages


December 6, 2018   by Jason Contant




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An Ontario court has ruled that accident benefits should be deducted from tort damages using a “silo” approach rather than a strict matching (“apples-to-apples”) approach.

In a lengthy and complex decision covering a wide variety of legal points, the Court of Appeal for Ontario used the silo approach for deducting Statutory Accident Benefits (SABs) from a tort award in Cadieux v. Cloutier, released Tuesday. The court found that portions of a SABs settlement for past and future medical and rehabilitation benefits, as well as for past and future attendant care benefits, were to be set off against a jury award of $701,809 for an acquired brain injury (ABI) support worker. The specific heads of damage in SABs were deducted under the broad heading of “health care benefits” in the jury award.

Two different methods of deducting statutory accident benefits from tort awards have developed in case law, the court noted in its decision. One approach requires matching of accident benefits to identical heads of tort damages. More recently, a silo approach has been applied, which requires the tort award only to match generally with the broad corresponding SABS categories.

The silos include three broad, general categories:

  • Income replacement benefits. If the person was not employed at the time, non-earner benefits or caregiver benefits (if applicable) would apply.
  • Health care benefits, including medical, rehabilitation and attendant care benefits.
  • Other non-pecuniary loss, including lost educational benefits, expenses of visitors and housekeeping and home maintenance expenses.

The appeal revolves around an incident in September 2006 in which pedestrians Chad Cadieux and Eric Saywell were involved in an altercation near the shoulder of a road. Saywell pushed Cadieux towards the road, causing him to stumble into the path of a truck driven by Susan Cloutier. Cadieux suffered brain damage and became incapable of managing his own affairs.

Cadieux claimed accident benefits from Aviva and started a civil action against Saywell and Cloutier. The SABs settlement with Aviva was for $900,000, including $300,000 for past and future income replacement benefits, $250,000 for past and future medical benefits and $350,000 for past and future attendant care benefits.

After a seven-week trial, a jury awarded Cadieux more than $2.3 million, including past and future loss of income, and future costs of care (part of which was for the ABI support worker).

An issue arose because the jury made no award for the costs of future attendant care, but made an award of $701,809 for the ABI support worker. The trial judge found that the jury award for the support worker was a medical/rehabilitation award and not an attendant care award.

“Relying on an ‘apples-to-apples,’ strict-matching approach, Cadieux argued that this award should only be set off against the portion of the SABs settlement for medical and rehabilitation benefits ($250,000) and not the portion for attendant care ($350,000),” the appeal court wrote in reference to the trial decision. “The defence, on the other hand, advocated a silo approach, arguing that both the health care benefits and attendant care benefits were properly classified as being within the silo of health care and should be deducted from the jury’s award for future costs of care, including the $701,809 in damages for the ABI support worker. The deduction would have had the effect of reducing the tort award for the ABI support worker to $101,809.”

The trial judge adopted the silo approach. Cadieux argued that any other approach than “apples-to-apples” would under-compensate plaintiffs generally and unjustly enrich defendants. In this case, although the attendant care and medical rehabilitation components of the SABs settlement both fall within the health care silo, he submits that the benefits are not overlapping and should not both be deducted from the tort award for the ABI support worker.

The appeal court disagreed. “We do not accept these submissions. Until the decision of this court in Cobb and El-Khodr, the evolution of the treatment of accident benefits in the case law has largely failed to take into account the difference between the statutory schemes that have been in place at various times. The policy rationale that supported the strict matching approach under a former statutory scheme is no longer applicable under the current legislative regime.”

Cobb v. Long Estate and El-Khodr v. Lackie both used the silo approach. “The silo approach is consistent with the statutory language of s. 267.8 [of the Insurance Act], is fair to plaintiffs, defendants and their insurers, and promotes efficiency in motor vehicle accident litigation,” the appeal court said.