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Deductible on pain and suffering (car accident injury) – RECENT NEWS
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Deductible on pain and suffering (car accident injury) – RECENT NEWS

In Ontario, a “pain and suffering” award is only available to people who suffer a ‘permanent and serious physical or psychological impairment or permanent and serious scarring’.  For many of those people that have, through no fault of their own, suffered serious and permanent injury, the insurance company who insures the at-fault driver then gets to apply a “deductible” in many of those cases. For those of you unfamiliar with the idea of a “deductible” on pain and suffering, some background is appropriate.

Background to the deductbile

If you go to trial in a car accident claim, the insurance company of the at fault driver has, for many years, been allowed to deduct the first $30,000 of your damage unless your award is more than $100,000.  So, if a jury awards you $35,000 for pain and suffering, then you are left with $5,000; if a jury awards you $25,000, then you get $0.

This deductible is applied in secret from the jury – after a jury makes what they believe to be a balanced and fair award.  No-one is allowed to tell the jury about the deductible, and the Judge applies it to the award after the jury makes their decision.

To put that in perspective, if a drunk driver who was texting, smashes into an innocent family and causes permanent and serious injuries, $30,000 could be secretly slashed off of the jury’s award for each family member for no reason at all (the family just loses it), while the drunk and texting driver pays no deductible for the injuries and damages to the family and doesn’t pay one red cent for the lawsuit and award.

This has often led to defence lawyers hired by the insurance company appearing in Court and telling the jury to give the plaintiff $25,000-$30,000 for pain and suffering, knowing full well that means the plaintiff gets $0 and that the jury is not allowed to be told.  Also note, that (in most cases) the jury is not allowed to be told that the at-fault driver has insurance.

The recent changes

More recently, Ontario’s provincial government decided that change was needed.  They increased the deductible to $36,540 presently and even more than that in the future.  they also changed it so that you needed to get a jury award of more than $121,799 to avoid the deductible, rather than the $100,000 that was required before.

One of the issues that arose was whether car accidents that happened before these new changes would also have the new $36,540 (or higher) deductible applied, rather than the older lower deductible.

A recent Court decision in Cobb v. Long determined that the new higher deductible amount should not be applied retroactively to older car accident cases.  The decision of Justice Belch on November 13, 2015 was that the deductible was “substantive law” that should not be applied retroactively.  The decision is here:  Justice Belch decision on terms of judgment dated November 13, 2015

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