On January 1, 2015, new legislation related to the calculation
of prejudgment interest for non-pecuniary losses in actions arising
from the use or operation of an automobile came into effect. The
new legislation is contained in Bill 15, the Fighting Fraud and
Reducing Automobile Insurance Rates Act, 2014 (the
"Act"), passed on November 20, 2014, which
amends various Ontario statutes, including the Insurance
Act, R.S.O. 1990, c. I.8.
The Act amends section 258.3 of the Insurance
Act by adding the following new provision:
(8.1) Subsection 128(2) of
theCourts of Justice Actdoes not apply in respect of the calculation of prejudgment
interest for damages for non-pecuniary loss in an action ... [for
loss or damage from bodily injury or death arising from the use or
operation of an automobile].
The effect of the new provision is that the 5% prejudgment
interest rate for non-pecuniary losses no longer applies. Instead,
the prejudgment interest rate for non-pecuniary losses will be
equal to the prejudgment interest rate for pecuniary losses. The
current rate is 1.3%.
We anticipate that the Courts will consider this new legislation
in the very near future.
It is important to note that this legislative change only
applies to actions for bodily injury or death arising from the
use or operation of an automobile. The prejudgment interest rate
remains at 5% for non-pecuniary losses in all other actions for
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