A recent Superior Court decision (Economical v.
Northbridge, 2016 ONSC 458) has provided the industry with a
refresh/reset in applying the $2,000.00 statutory deductible in
loss transfer claims.
The deductible in issue is set out in section 275(3) of the
Insurance Act which states:
"(3) No indemnity is available under
subsection (2) in respect of the first $2,000.00 of statutory
accident benefits paid in respect of a person described in that
For twenty years, the prevailing jurisprudence (Progressive
Casualty v. Jevco,  O.J. No. 3152) dictated that the
$2,000.00 deductible applied once and only once and applied to each
"incident", regardless of the number of individual
accident benefits claims in respect of each incident. For
every car full of accident benefits claimants (who may be claiming
from multiple insurers), the loss transfer payor was only entitled
to one deductible.
Applying both a textual and contextual practical analysis, Mr.
Justice Faieta agreed with the reasoning of Arbitrator Samis who
heard the matter at first instance. While Arbitrator Samis
ultimately upheld the single deductible approach, he did so only as
he felt bound by the decision of Mr. Justice Somers in
Progressive Casualty. Mr. Justice Faieta overturned
the Arbitration decision but applied Arbitrator Samis'
reasoning in a call to refresh/reset the application of the
$2,000.00 statutory deductible, namely:
Pragmatic cost avoidance – deductibles are meant to deter
loss transfer claims in minor cases.
Simplicity over complexity – a single deductible would
require distribution among various claims for reimbursement.
Each claimant's fault needs to be separately assessed.
Each claimant's coverage circumstances are different
depending on his or her particular policy.
The prevailing jurisprudence did not appreciate or acknowledge
that "loss transfer is claimant centric".
The language of section 275(3) of the Insurance Act
does not limit the deductible to the named insured.
The words "in respect of" should be read with the
widest, not the narrowest, possible scope.
Just because one judge ascribed an interpretation to a
statutory provision, this does not mean that their judicial
interpretation reflects the legislative intention.
Allowing for a deductible to be applied to each person's
claim would produce a just and reasonable result.
This decision will be of benefit to a number of insurers, not
just those who insure heavy commercial vehicles; consider the
application to off-road vehicles, motorcycles and snowmobiles with
multiple occupants. The refreshed approach is simple,
efficient and expedient, which dovetails with the purpose of the
loss transfer scheme.
With many claims being held in the MIG, the end result
may simply be less of an appetite to pursue loss transfer claims in
the face of a $2,000.00 deductible per claimant.
Under B.C.'s former and current Limitation Act, the limitation period for a Plaintiff's claim can be extended on the basis of a Defendant having acknowledged in writing some liability for the cause of action.
Automobile drivers, like fine wine, tend to get better with age. Older drivers can draw on a wealth of experience from their years on the road to assist them when faced by a variety of dangerous conditions.
The insurance industry will be interested in Ledcor Construction Ltd v. Northbridge Indemnity Insurance Co because of principles the Supreme Court of Canada applied to the "faulty workmanship" exclusion in a Builders' Risk policy.
For the first time in BC, a Court has decided that an insured is entitled to special costs, rather than the lower tariff costs, solely because they were successful in a coverage action against their insurer.
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