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Repeal law defining ‘serious impairment’ of ‘important function’ in auto lawsuits, Ontario lawyers’ group says


April 3, 2014   by Canadian Underwriter


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The Ontario Trial Lawyers’ Association is calling on the Ontario government to repeal an auto insurance regulation that defines “permanent serious impairment of an important physical, mental or psychological function” for the purpose of lawsuits for health care costs resulting from injuries from vehicle operation.

“OTLA seeks to have the defining regulation, which offends fundamental principles of justice and equality as recognized in our Charter of Rights, repealed in its entirety,” OLTA stated in its submission to the Ontario Auto Insurance Three-Year Review. “This can be achieved through an amendment to the Insurance Act.”

Submissions to the Financial Service Commission of Ontario (FSCO)’s three-year review were due March 31. These will be used to prepare a report FSCO plans to release later this year.

The “defining regulation” OLTA is referring to is contained in Ontario Regulation 381/03, which amended Ontario Regulation 461/96, which pertains to court proceedings for auto collisions that occurred after Nov. 1, 1996.

Essentially, for lawsuits arising from such collisions, vehicle owners and occupants are not liable for health care expenses resulting from bodily injury unless the injured person either has a “permanent serious disfigurement” or a “permanent serious impairment of an important physical, mental or psychological function.”

Ontario Regulation 461/96 further defines serious impairment, important function and permanent.

“This Insurance Act regulation was amended in 2003 to further define and restrict the term ‘serious’ in the threshold,” OLTA stated. “One of the tests for determining whether the injuries are ‘serious’ applies to those who work. A different, more onerous (and therefore discriminatory) test applies to those who do not work.

“For employed people to be compensated for their pain and suffering, they must prove that their ability to do tasks at work has been compromised. Meanwhile, those outside of the workforce, such as homemakers, children, the elderly and the disabled, must prove that they cannot carry out most of their usual activities, before they are permitted to sue for non-pecuniary damages for their pain, suffering and loss of enjoyment of life.”

OLTA added there was “no guidance from our courts” on applying the defining regulation until Madam Justice Johanne Morissette of the Ontario Superior Court of Justice rules in 2008 that an auto accident victim, Janet Nissan, did “not have an impairment that substantially interferes with most of her usual activities of daily living.”

In her ruling, Justice Morissette noted the regulation “essentially defines three terms contained in the threshold.  It defines which impairments are serious, what functions are important, and what permanent means.

“She found that the defining regulation created a more onerous test for the right to sue than had existed under the original threshold language,” OLTA noted of Justice Morissette’s 2008 ruling in the Nissan case.

With the current threshold, a permanent impairment is only serious if it meets one of three criteria. It must either:

– “Substantially'” interfere with a victim’s “ability to continue his or her regular or usual employment, despite reasonable efforts to accommodate the person’s impairment and the person’s reasonable efforts to use the accommodation to allow the person to continue employment;”

– Substantially interfere with their “ability to continue training for a career in a field in which the person was being trained before the incident, despite reasonable efforts to accommodate the person’s impairment and the person’s reasonable efforts to use the accommodation to allow the person to continue his or her career training;”

– Or substantially interfere with “most of the usual activities of daily living, considering the person’s age.”

In order to meet the threshold, the function that is permanently seriously impaired must fall into one of four categories:

– Be necessary to perform the activities that are essential tasks of the person’s regular or usual employment, taking into account reasonable efforts to accommodate the person’s impairment and the person’s reasonable efforts to use the accommodation to allow the person to continue employment;

– Be necessary to perform the activities that are essential tasks of the person’s training for a career in a field in which the person was being trained before the incident, taking into account reasonable efforts to accommodate the person’s impairment and the person’s reasonable efforts to use the accommodation to allow the person to continue his or her career training

– Be necessary for the person to provide for his or her own care or well-being

– Or be important to the usual activities of daily living, considering the person’s age.