Basandra v. Sforza, a recent decision by the Court of Appeal, revisits the issue of the deductibility of no-fault accident benefits from an award for tort damages.1
Following a three-week Trial, the jury found that the Defendant was negligent and awarded the Plaintiff damages. However, the jury questions, as negotiated between Trial Counsel and accepted by the Trial Judge, did not oblige the jury to structure its award of damages in a manner that reflected the requirements of section 267.8 of the Insurance Act, R.S.O. 1990, chapterI.8. As a result, an issue arose as to how to account for the payment of no-fault accident benefits already paid to the Plaintiff by the Insurer.
Section 267.8 of the Insurance Act, provides that pecuniary damages awarded in a tort action "shall be reduced" by payments that the Plaintiff received as collateral benefits, such as statutory accident benefits including payments for health care expenses and other pecuniary losses.The Trial Judge is therefore required to reduce jury damages awards for pecuniary losses by the amount of collateral benefits paid to the Plaintiff.
Since the Defendant benefits from the deduction of collateral benefits, the onus is on the Defence to show whether and how the reductions should be made.
In that case, the jury awarded the following damages to the Plaintiff:
- damages for pain and suffering in the amount of $137,000;
- damages for the cost of "past care, medical/rehabilitation and housekeeping" in the amount of $55,000;
- damages for the cost of "future care, medical/rehabilitation and housekeeping" in the amount of $50,000;
- damages for past loss of income of $45,000.
As the jury questions unfortunately lumped together damages for medical/rehabilitation, attendant care, and housekeeping, it was impossible for the Trial Judge to parse the jury's award in order to make the necessary statutory reductions on a "benefit-by-benefit" basis.
As a result, the parties moved before the Trial Judge for an Order determining whether and how the lumped-up jury awards of $55,000 for "past loss of care, medical/rehabilitation and housekeeping" and $50,000 for "future care, medical/rehabilitation and housekeeping" should be reduced under the provisions of the Insurance Act to account for the statutory accident benefits received by the Plaintiff for healthcare and housekeeping.
The Trial Judge accepted the Plaintiff's evidence that he had received a total of $81,658.67 for medical rehabilitation benefits, $58,271.76 for attendant care benefits, and $6,939.84 for housekeeping benefits for statutory accident benefits. These amounts included a 2009 lump sum settlement that allocated $30,000.00 for past and future medical rehabilitation and $5,000.00 for past and future attendant care. The Trial Judge noted that the 2009 settlement did not set out the respective proportions related to past and future costs. This led the Trial Judge to the conclusion that the jury's awards for past and future attendant care, medical/rehabilitation, and housekeeping costs should be reduced from $105,000.00 to nil.
The Plaintiff appealed; however, the Court of Appeal dismissed the Appeal.
The Court of Appeal found that the Trial Judge made no error in reducing the award to zero. The Court further held that the Trial Judge's decision took into account the objectives of full compensation and avoiding "overcompensation."
The Court of Appeal reiterated that Trial Counsel must ensure that jury questions are structured to permit the Trial Judge to carry out the reductions required by section267.8 of the Insurance Act, where that is an issue in the action. Specifically, the Court noted that there should be a separate jury question for each past and future award in respect of each of the collateral benefits listed in section267.8 of the Insurance Act that may arise in the case. According to the Court of Appeal, "anything less would impair the trial judge's ability to discharge her responsibilities under the section."
In this case, the Trial Judge was faced with a mandatory statutory direction to deduct collateral benefits under section267.8 of the Insurance Act. By comparing the quantum of benefits awarded to the Plaintiff by the jury with the benefits that he had already received, she found that the Plaintiff had been fully compensated for the applicable heads of damage, even though they were "lumped up".
The decision highlights the importance of clearly delineating between "apples" and "oranges" when calculating damages in a tort action. While one policy objective of the statutory scheme is full compensation, another objective is to avoid double recovery. If the specific breakdown of the amounts paid in terms of a lump sum settlement are not entirely clear, the Plaintiff runs the risk of having the entire amount deducted from the damages awarded to avoid over compensation.
1 (2016 ONCA 2514 (CanLII)).
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