The Motor Vehicle Accident Claims Fund in Ontario

What is the Motor Vehicle Accident Claims Fund in Ontario?

The Motor Vehicle Accident Claims Fund (the MVACF, or "the Fund") is a fund that the Motor Vehicle Accident Claims Act continues (s. 2 (1)). It is aimed at situations where a person is injured or loses property in a collision and no insurer stands behind the vehicle that caused it.

A fee is paid to the Fund whenever a driver's licence is issued or renewed (s. 2 (2)). The Act sets out who can be paid and how much. The Ontario government's Fund page lists the forms used in practice, such as the Application for Payment (Form 3).

What counts as an uninsured vehicle under the Act?

The Act defines an uninsured motor vehicle simply as one that is not an "insured motor vehicle" (s. 1 (1)). One twist matters in practice: a vehicle that does have a policy is still treated as uninsured while an excluded driver is operating it, unless that driver is a named insured on a different policy (s. 1 (2)).

Who can claim from the Motor Vehicle Accident Claims Fund?

The route into the Fund depends on what happened.

The first route is open to a person with a legal claim, in law, against the uninsured vehicle's owner or driver, other than someone entitled to use the judgment route, on a form approved by the Director (s. 4 (1)). The judgment route has its own conditions: the action must have been brought against everyone reasonably liable (s. 7 (3)), and special rules apply to judgments signed after a missed defence, a missed trial or discovery attendance, or consent, unless the Minister was given notice (s. 8 (1)).

For accident benefits, the Insurance Act sets an order of insurers to look to first, and the Fund is last, only when recovery is unavailable at each earlier step (s. 268 (2)). A person's own policy may also cover damages from an uninsured or unidentified automobile (s. 265 (1)). The Fund is not a substitute: a Fund claim cannot be sought in place of a claim an insurance policy would pay (s. 22 (1)).

What does the Fund pay, and what is the limit?

The Act sets ceilings per uninsured vehicle and per accident. They apply to payments on applications under ss. 4 and 7 and to judgments against the Director.

1. For accidents on or after 1 March 1981, the Fund pays no more than $200,000, not counting costs, for all injury, death and property damage combined (s. 23 (1)).
2. Property claims get priority up to $10,000 and the Fund pays no more than that sum in total for property loss from one vehicle in one accident (s. 23 (1)).
3. A property loss is paid only to the extent it is above $100 (s. 4 (2)).
4. The Fund does not pay interest on a judgment or on costs (s. 23 (6)).
5. Where money is recovered from another source toward a judgment debt, the ceiling is reduced by that amount, and an overpayment can be recovered by the Minister through an action (s. 23 (5)).

The Ontario government's Fund page says the Fund does not compensate for damage to vehicles. These limits are as of the date of this article; confirm the current figures.

How a claim moves forward

For the application route, the Minister sends a notice of the claim by registered mail to the owner and driver of the uninsured vehicle (s. 4 (3)). The Minister may then pay whatever amount seems proper in the circumstances, but only if the applicant gives a sealed release of all claims arising from the accident (s. 4 (4)). In addition, one of two things must be true (s. 4 (4)):

• the owner and driver consent to the payment and sign an undertaking to repay the Fund; or
• the person notified does not reply within thirty days, by mail or in person, and "disputes liability" to the applicant. How that clause applies in a given case should be confirmed with a lawyer.

After paying, the Minister steps into the shoes of the person who was paid and may sue anyone responsible for the vehicle's use or operation (s. 4 (6)).

For lawsuits, the Limitations Act, 2002 sets a basic two-year period from discovery of the claim (s. 4); how it applies depends on the facts and should be confirmed with a lawyer immediately.

Hit-and-run accident compensation: unidentified vehicles

When death or injury results from a vehicle whose identity, driver and owner cannot be established, the Act allows an action against the Director, alone or alongside other defendants (s. 12). A similar action exists when a vehicle was taken without the owner's consent and the person in possession cannot be identified (s. 15).

These actions are tried by a judge without a jury (s. 14), and the court must be satisfied that the parties other than the Director made all reasonable efforts to identify who was responsible (s. 17). A judgment against the Director is paid from the Fund, subject to the $200,000 cap (s. 19 and s. 23 (4.1)).

If you owe money to the Fund: recovery and licence consequences

The Act gives the Fund several ways to recover what it pays.

Application route (s. 4). Once a payment is made under s. 4 (4), the Registrar suspends the driver's licence of the person notified under s. 4 (3). No reinstatement, licence or renewal follows until the amount is repaid in full or instalment repayments begin (s. 4 (7)). If someone who has started paying is ten days in default, the Registrar suspends the licence again after the Director gives notice (s. 4 (8)).

Judgment route. The judgment creditor must first assign the judgment to the Minister (s. 9 (1)). When the Fund pays, the judgment debtor's licence is suspended on the same repay-or-instalments basis (s. 10 (1)), unless the debtor's insurer was a designated insurer when the accident happened (s. 10 (2)).

Unidentified-driver route. If a judgment is entered against the Director, the Director may later ask a judge to declare who owned or drove the vehicle (s. 20 (1)). Once that declaration is made, the Minister is deemed to hold a judgment against that person for everything the Fund paid, with all of a judgment creditor's rights (s. 20 (2)).

Settlement and instalments. The Minister may negotiate a settlement of an amount owed (s. 11.1). If the Director notifies the Registrar of a settlement, a suspended licence is reinstated (s. 4 (9) and s. 10 (3)). The Act allows regulations on restoring licences and owner's permits for people repaying in instalments, including conditions such as proof of financial responsibility (s. 11 (1) and (2)). A ten-day default leads to suspension of the licence and permits once the Director gives notice (s. 11 (3)).

The Highway Traffic Act has a separate unsatisfied-judgment licence suspension, which the Registrar is not to use against a person indebted to the Fund (s. 198 (2)). For ordinary judgment debts, see the guide on judgments, enforcement and licence suspension in Ontario. Separately, an owner or lessee needs insurance to operate a vehicle on a highway (Compulsory Automobile Insurance Act, s. 2 (1)); see car insurance cancelled or lapsed before an accident.

False statements and changes in circumstances

It is an offence to knowingly make a false or misleading statement about entitlement to a payment, or to wilfully fail to report a material change in circumstances within 14 days (s. 29 (1)). The maximum fine is $100,000 on a first conviction and $200,000 on each later one (s. 29 (2)).

When it is worth talking to a lawyer

• Someone was injured by an uninsured or unidentified driver and it is unclear whether a policy, another insurer or the Fund is the place to claim.
• The Fund has objected to, delayed or refused a claim, or the Minister has given notice of an objection to a judgment application (s. 7 (2) allows thirty days).
• Court papers mention the Director or the Fund.
• The Fund has paid a claim, a licence has been suspended, or a payment has been missed.
• The injuries are serious, there has been a death, or the amounts exceed the Fund's limits.

What to gather

• The police report and any collision report number.
• Medical records, photos, repair estimates and invoices.
• Insurer letters about coverage, cancellation or exclusion of a driver.
• Every notice or demand from the Fund, with dates and any registered-mail envelope.
• Court documents, including any judgment.
• Proof of income and expenses if instalments or a settlement are being discussed.