With the pending changes to the SABS, tort adjusters will
undoubtedly be called upon by Plaintiff counsel to make advance
payments to cover such things as medical expenses, lost wages and
attendant care. Seriously injured Plaintiff's facing a
combined $65,000 limit for medical, rehabilitation and attendant
care benefits will start looking for funds from the tort defendant
in advance of a settlement or trial. With a five year limit
set to be imposed on non-catastrophic Plaintiffs to access these
benefits, it is conceivable that many Plaintiffs will have either
used up, or no longer be entitled to receive such funds, before
their cases get to trial.
The benefits of an advance payment from the defendant's
perspective may not be obvious. Traditionally, there has been
reluctance to consider such requests, unless there is a proven
shortfall in AB funding along with a documented need for further
funds. The notion of an advance payment generating "good
will" with the Plaintiff and fostering a more
"co-operative relationship" between the parties is rarely
a convincing argument for a tort adjuster.
A more compelling reason to make an advance payment is to assist
in the recovery. Faced with a situation where AB funding is
running out, or the 5-year anniversary of the accident is fast
approaching, a tort adjuster might consider making an advance
payment to offset ongoing medical costs. Medical support in
the form of treatment recommendations, along with invoices and
receipts evidencing ongoing attendance, must always be
sought. Efforts made to help an injured Plaintiff
further rehabilitate could lead to a reduced general damages
assessment and a quicker return to work.
There are situations where advance payments are statutorily
required. The legislative framework in Ontario requires an insurer
to make an advance payment for income loss in certain
circumstances. Subsection 258.5(2) of the Insurance
Act provides "if the insurer admits liability in respect
of all or part of a claim for income loss, the insurer shall make
payments to the person making the claim pending determination of
the amount owing". Subsection 258.5(3) explains that the
amount of the advance payment is to be based on the insurer's
estimate of the amount owing in respect of the claim for income
loss. Accordingly, provided that liability has been admitted
and the plaintiff is advancing a claim for income loss, tort
adjusters are statutorily mandated to make advance payments to an
injured plaintiff; failure to do so is considered in awarding
In summary, advance payments need to be based on a realistic
appraisal of a plaintiff's case. Responding to requests
for advance payments should be made after the case can properly be
assessed. At a minimum, this will require documentary and
oral discoveries to have taken place. Advance payment
requests by plaintiff counsel can also serve as a stepping stone to
meaningful settlement dialogue. It is anticipated that such
requests will start to be the norm, as opposed to the exception,
given the pending changes to the SABS.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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