A staple of every well written Statement of Defence includes the plea for entitlement to the benefits of all insurances provided pursuant to section 267 of the Insurance Act. Where a Plaintiff receives payments for collateral benefits after the trial of an action, those sums are to be held in trust, and paid, to the persons from whom damages were recovered in the action. These amounts are not trivial, nor should they be overlooked. They include all payments received after the trial for:
- Statutory accident benefits (“SABS”) in respect of income loss or loss of earning capacity,
- Income loss or loss of earning capacity;
- A sick leave plan arising by reason of occupation or employment;
- SABS in respect of expenses for healthcare;
- Medical, surgical, dental, hospitalization, rehabilitation or long-term care plan, and/or
- SABS in respect of pecuniary loss, other than income loss, loss of earning capacity, and expenses for health care.
Defence counsel must be cognizant of the obstacles that can arise when trying to obtain these payments, particularly when a tort trial proceeds by jury prior to a settlement of the resolution of collateral benefits. A Defendant may lose the benefit of these payments, as was the case for York Fire & Casualty Insurance Company in Gilbert v. South et al, absent proper planning.
York Fire brought a motion for a ruling on collateral benefits following trial, arguing that the jury's award of damages for “future care costs”, coupled with the plaintiff’s entitlement to SABS for medical and rehabilitation expenses, gave rise to double recovery, triggering the corresponding obligations of trust and payment for future collateral benefits, as found in subsections 267.8(9) and (10) of the Insurance Act.
The competing interests of preventing double recovery and ensuring a plaintiff receives the full compensation they are entitled to, are balanced by only awarding deductions from a plaintiff’s damage award when it is absolutely clear that the plaintiff’s entitlement to such collateral benefits is certain, and that the plaintiff received compensation for the same benefits in the tort judgment. Evidence of “probability” is insufficient to warrant a deduction. A strict onus of proof applies, and it must be “patently clear” that the preconditions for an appropriate deduction have been established.
The first precondition, the certainty of a plaintiff’s entitlement to a collateral benefit, may be out of the defendant’s hands. However, counsel should put their mind to the second precondition, and focus on ways to frame a damage award to establish that compensation was received for the same benefits in the tort judgment.
In Gilbert, there was insufficient certainty regarding whether the plaintiff would be entitled to the benefits to refuse the relief sought. Further, the uncertainties regarding collateral benefits extended beyond entitlement; they raised questions of whether the plaintiff received compensation for the same benefits. These circumstances prevented a determination that it was “patently clear” that the sums awarded by the jury related to the same losses in which Mr. Gilbert has, or will, receive in collateral benefits.
Mr. Gilbert was awarded damages for “future care costs”, which York Fire claimed inherently overlaps with “medical benefits” and ought to be held in trust for their benefit. The jury was not asked to, and did not, indicate the extent to which the future care costs damages was allocated to the time period that Mr. Gilbert may be entitled to medical and rehabilitation benefits. The Court held that this caused uncertainty due to the temporal nature of medical benefits for non-catastrophic SABS claimants. It was not “patently clear” that there would be overlap between the future care costs and medical benefits as some, or all, of the future care costs damages awarded may have been intended to cover the future care needs after the expiry of the SABS benefit.
Further, qualitative considerations prevented reliable assumptions concerning the extent of overlap. The jury was asked to determine a lump sum award for “future treatment, medication, rehabilitation, intervention and aids.” Accordingly, no allocation was made towards any specific category of future care expenditures. As various aspects of future care expenditures are not covered under the SABS, it is not clear which portion of the “lump sum” overlapped, if any.
While the Court recognized that it was likely that most of the future care cost damages were intended to cover the same expenditures to be received in medical and rehab benefits, York Fire was denied entitlement due to uncertainty. However, these uncertainties may have been avoided. More specific questions ought to have been posed to the jury. York Fire counsel provided input into formatting these questions, yet they gave no indication that the plaintiff’s possible entitlement to future collateral benefits may be at issue, or that such issues needed to be addressed. If future entitlement is at issue, it is imperative to think ahead to meet the two preconditions to establish a trust for future insurance benefits. Categorization of specific benefits and temporal considerations ought to be considered. If you don’t “trust” it, you may lose it.
 Insurance Act, R.S.O., 1990, c. I.8, subsection 267.8(9).
 2014 ONSC 3485, [Gilbert].