Personal Injury Compensation following a Car Accident

Introduction

Following a serious injury in a car accident, one of the most common questions we encounter is: what kind of compensation can I expect? 

Is the system “fair”?

The current system is based on fairness to all participants, which includes those who pay premiums (the uninjured) who want their payments to be as low as possible; the insurance companies, which are private corporations who want to maximize profit for shareholders; and injured people who want to be made whole for their losses and receive protection without limits, caps, deductions and other restrictions.

My belief is that most injured people see the system as unfair.

The Previous System

In the 1980’s (before "no fault" was implemented) we had a system in which the injured were divided into "at fault" and "victims".  The "at fault" party was entitled to close to nothing from their own insurance company and had no right to sue.  Victims, on the other hand, received negligible assistance but could retain lawyers pursue damages claims.

The No Fault System

In Ontario we have had a "no-fault system" for many years and it has undergone significant changes.  This does not mean that lawsuits are not allowed.  We actually have a hybrid system which provides some limited no fault benefits but also some limited rights to sue at fault drivers.

No fault was introduced on the basis that it was better for all Ontarians that all injured people (“at fault” and “victims”) receive income protection and rehabilitation.  These benefits became available through your own insurance company and were available regardless of fault.

In exchange for no fault coverage the right to sue has been limited to those with "serious and permanent injuries" and damage awards are subject to a deductible.

Since its introduction, most legislated changes have scaled back and limited the amount of no-fault benefits payable.  Severe caps have been placed on the amount of rehabilitation available and income replacement benefits.  These benefits have been so restricted that they are insufficient for many people to support a family or cover  pre-accident debts (eg. mortgage payments). 

These changes have also been accompanied by changes which have tightened the definitions of "serious" and "permanent".

In order to succeed in a lawsuit, the accident must be the fault of the other driver and the injuries must meet “the Threshold” and be:

• "serious" as defined by law; and
• “permanent" as defined by law.

Damages

Once the Threshold is met, the injured person’s “pain and suffering” will be assigned a value between $1.00 and $350,000 based on other similar cases across Canada.  This assessment will be made once the injury plateaus and should only be made by an experienced lawyer.

In addition claims for all financial losses can be advanced including loss of income and earning capacity, out of pocket expenses and other expenses.

Deductible

The law then provides that personal injury awards below $100,000 will be subject to a deductible of $30,000.  Most people find this the most difficult to understand, because they have already met the threshold of being “victims” with serious and permanent injuries.

Conclusion

Our insurance system balances the rights and interest of all participants.  It is very difficult to determine whether an injury will meet be “serious and permanent”.  It is important to consult an experienced lawyer who will work with medical professionals to make this determination.

It is only by working closely and directly with a lawyer that he or she will understand how and why and injury will be serious to you and value your claim properly.

The purpose of having insurance is so that if we cause an accident there will be some financial assistance available to the injured person. 

A good lawyer will work within the system to obtain a fair amount of compensation for the injured person.

 

Prepared by Faith Kenneth of Faith Kenneth Lawyers

(416-777-4016).