Restricted access to justice

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Most of the discussion concerning automobile insurance in Ontario focuses on premiums, fraud and no-fault accident benefits.

No doubt those are important issues, but there seems to be little discussion concerning restrictions on access to justice for those injured in automobile accidents.

Negligence laws permit lawsuits against those who negligently cause harm to others.

But under Ontario law only people suing to recover damages for injuries suffered in automobile accidents are subject to two laws that restrict access to justice.

The first is what lawyers term the verbal threshold.

It was introduced in 1996 and amended to render it more difficult to satisfy in 2003.

Under this law injured people cannot succeed in lawsuits against negligent drivers unless they can establish that they suffer “from permanent serious impairment of an important physical, mental or psychological function”. To meet this threshold various stringent conditions must be met.

The threshold also has a discriminatory impact since satisfying it is more difficult for those not in the workforce, such as the elderly and the disabled.

Having a threshold restricts access to justice by preventing injured people from recovering damages for serious injuries that do not meet the threshold.

It also complicates litigation by forcing both plaintiffs and defendants to obtain expert medical evidence on the threshold issue.

In the 2007 Civil Justice Reform Project, Ontario’s former chief justice, Coulter Osborne, pointed out that “one direct beneficiary of the verbal threshold regulation is the medical profession that provides medical-legal reports on the threshold issue.” Of course this serves to increase costs to both plaintiffs and insurance companies.

The second restriction is a deductible that applies only to lawsuits against negligent automobile drivers.

It was increased from $15,000 to $30,000 in 2003 and applies to damages for pain and suffering of $100,000 or less.

The deductible was also raised from $7,500 to $15,000 on claims by family members for loss of care, guidance and companionship.

The purpose of the deductible is identical to the purpose of the threshold: To reduce negligence lawsuits and to keep smaller cases out of court.

As a corollary, both also serve to put money into insurance company coffers.

They also reduce access to justice for injured people who either won’t commence litigation to recover compensation for their losses, or will receive no or substantially reduced compensation.

Imagine injured people with claims worth about $50,000.

It makes little sense to commence a lawsuit when people know they first have to introduce complex medical evidence to satisfy the threshold.

If they fail to meet the threshold they lose and if they are successful in meeting the threshold they will see their awards reduced by the $30,000 deductible.

By applying the deductible to claims of $100,000 or less, people with the misfortune of suffering injuries in an accident and having their damages assessed at $100,000 will see their award reduced to $70,000 while those whose damages are assessed at $100,001 will not suffer any reduction.

That’s absurd.

The Ontario Trial Lawyers Association has recommended that the threshold be repealed.

This can be accomplished by a simple regulation by Cabinet.

The OTLA has also recommended the deductible be reduced to pre-2003 levels and made applicable only to awards less than $100,000 (and awards less than $50,000 for claims by family members for loss of care, guidance and companionship).

These recommendations make sense.

Having both a threshold and a deductible is redundant and only serves to harm accident victims and benefit insurance companies.

Eliminating the threshold will simplify and shorten automobile negligence claims resulting in cost savings for both sides.

Reducing the deductible will allow more injured people to recover the damages they deserve.

No other negligence claims operate under either a threshold or a deductible.

There’s no valid reason why automobile accident victims should have to suffer under both.