Crash course on claims

The car insurance regime in Ontario has undergone extensive and significant changes over the past several years. Prior to 1990, Ontario had a “pure tort” system.  Under this system, an accident victim was entitled to make a claim for compensation for damages against the negligent driver who was at fault for the accident.

Damages included pain and suffering, loss of income, medical expenses and any other losses caused by the accident.  Under this system, there were very modest no-fault “accident benefits” available from the injured party’s own insurer.

Following 1990, Ontario introduced a “no-fault” system. Although the right to sue a negligent driver was retained in some circumstances, it was taken away for all “minor” injuries. For pain and suffering claims, no claim was available unless the accident victim suffered “serious permanent impairment,” referred to as the “threshold.” To meet the threshold, the injuries suffered in the accident had to result in an impairment that was both serious and permanent. In order for an impairment to be serious, it had to materially impact the accident victim’s work, social or recreational activities. The injured party could still claim for any loss of income, medical expenses and other economic loss caused by the accident, regardless of the severity of the injuries suffered in the accident.

Since the no-fault system was introduced, there have been many other changes to Ontario’s car insurance regime. Most of these have restricted the injured party’s entitlement to compensation. For example, an accident victim is only entitled to claim for a portion of their actual loss of income. In addition, their claim for pain and suffering is reduced by a “deductible” which is currently about $37,000.

The no-fault accident benefits to which an accident victim is entitled have also been restricted. Entitlement to no-fault benefits involved various tests, such as “substantial inability to perform the essential tasks of [their] employment” and “complete inability to carry on a normal life.”

These tests are as baffling to most health-care providers as they are to accident victims.  

Accident victims are now presented with a complex array of rules and regulations governing their claims arising from car accidents. It is difficult for an injured patient to know what compensation they might be entitled to from the at-fault driver or what no-fault accident benefits they might be eligible for from their own insurer.

Similarly, many doctors and other health-care providers are uncertain as to the tests for entitlement to compensation that might apply to their patients who have been injured in a car accident.

It has become increasingly essential for accident victims to get legal advice from a lawyer who is knowledgeable and experienced in personal injury claims. In any case where injuries have been caused by the accident, the accident victim should find out at an early stage what benefits and compensation they may be entitled to. A lawyer can help the accident victim understand the applicable tests that must be met. The lawyer can then work with the client’s health-care providers to ensure that the client’s injuries are properly documented, and that the client’s medical documentation addresses the applicable legal tests.  

Most lawyers will not charge an injured accident victim for an initial consultation. This gives the injured party an opportunity to determine whether they are likely to have compensable injuries as a result of an accident, and whether the compensation they are likely to receive justifies the time and expense involved in pursuing a claim.

Most lawyers will act in personal injury matters on a contingent fee basis, so that the client will not have to pay any legal expense if there is no recovery. The client will generally not be required to provide the lawyer with an up-front monetary retainer. This will enable the accident victim to pursue a claim, even if they are unable to work as a result of the accident and even if their financial situation would not enable them to hire a lawyer otherwise. A typical contingent fee is a quarter to a third of the amount recovered, depending on the complexity of the case and whether there is a dispute about liability.

There has been considerable discussion in the news media recently about contingent fees, but they are almost universally chosen by accident victims as the preferred method of retaining counsel. Notwithstanding the impression that the news articles have created, most personal injury lawyers comply with all guidelines relating to fees, and ensure that the fees charged to the client comply with all applicable rules and regulations.

The patient’s health-care providers will continue to play a significant role in the accident victim’s claim. The patient’s medical records will be required to support the claim. Generally, medical reports will be required describing the patient’s injuries and impairments and expressing medical opinions as to their severity and likely longevity. The reports should address the legal tests, which will apply to the patient’s claim and the doctor and lawyer should work together to ensure that there is a clear understanding of the legal tests to be addressed by the doctor.

Health-care providers are entitled to a reasonable fee for preparing a report or providing copies of their records. Hourly rates are often set out by the applicable college or provincial association. If a lawyer is involved on behalf of the patient, the lawyer will generally pay these expenses, which will be reimbursed to the lawyer when the patient’s claim is settled. The lawyer will usually pay the doctor for any time spent discussing the patient’s claim, which again will be reimbursed to the lawyer when the claim is settled.

Many health-care professionals are reluctant to become involved on behalf of a patient who has a personal injury claim as a result of an accident. However, there is no reason for the doctor to be apprehensive. A general understanding of the Ontario compensation scheme will reassure them that they can play an effective role in helping their patients obtain the full compensation to which they are entitled.

This article does not constitute legal advice and should not be relied upon by the readers as such. If you require legal assistance, please see a lawyer. Each case is unique and a lawyer with good training and sound judgment can provide you with advice tailored to your specific situation and needs.

Marc Spivak is a lawyer with Devry Smith Frank LLP in Toronto. He has practiced personal injury law for over 25 years. Marc offers free initial consultation to any patients who have been injured in a car accident. He can be reached at marc.spivak@devrylaw.ca