Sued After a Car Accident With No Insurance in Ontario: How It Works

If you have been sued after a car accident with no insurance in Ontario, the worry is usually how much could be owed and how little time there is to react. This guide explains the process in general terms. It is educational information, not advice about your case.

Sued after a car accident with no insurance in Ontario: what it means

When no policy applies, there is no insurer to respond. The person named as defendant is the one who deals with the claim, and any judgment is against that person.

Short definition: a lawsuit after an uninsured collision is a civil claim for money against a driver, an owner, or both, brought because someone says careless driving harmed them.

A vehicle can also count as uninsured even though a policy exists. The Compulsory Automobile Insurance Act treats a vehicle as uninsured while it is driven by a named excluded driver, unless that driver is a named insured on a different policy (s. 1(3)).

Who can sue after an uninsured accident

Under the Highway Traffic Act, the driver of a vehicle is liable for loss or damage someone suffers because of negligence in operating it on a highway (s. 192(1)). The owner is also liable, unless the vehicle was in the possession of someone other than the owner or the owner's chauffeur without the owner's consent (s. 192(2)). Those who are liable under the section are jointly and severally liable (s. 192(6)).

Claimants in these cases can include:

• An injured person, such as another driver, a passenger or a pedestrian.
• The injured person's own insurer. Ontario automobile policies must provide uninsured automobile coverage, which covers amounts the insured person could lawfully claim as damages from an uninsured owner or driver (Insurance Act s. 265(1)). When the insurer pays, it steps into that person's shoes and may bring an action, in its own name or theirs, against those responsible for the uninsured vehicle (s. 265(6)).
• Someone with damaged property, in some situations. The same section covers damage to an insured vehicle or its contents where the owner or driver of the uninsured automobile is identified (s. 265(1)(c)).

That coverage is subject to terms, exclusions and limits set by regulation (s. 265(1)).

What the claim can ask for

A claim for bodily injury must be brought by way of an action (Insurance Act s. 267.9). The Act limits some categories of damages. Damages for non-pecuniary loss (pain and suffering) generally require that the injured person died, or suffered permanent serious disfigurement or a permanent serious impairment of an important bodily, mental or psychological function (s. 267.5(5)). Health care expense damages carry the same threshold (s. 267.5(3)), and income loss damages are partly limited (s. 267.5(1)).

Those protections are written for owners, occupants and people present at the incident. Whether and how they apply to a defendant who had no insurance is a question for a lawyer to review. No dollar figure can be given here, because the amount depends on the injuries and the evidence.

The 20-day defence deadline

A proceeding is commenced by the issuing of an originating process (Rules of Civil Procedure, r. 14.01(1)), which in these cases is typically a statement of claim. Once a defendant is served, the Rules set a deadline to deliver a statement of defence (r. 18.01):

A defendant who intends to defend may also deliver a notice of intent to defend within that same period, which gives ten more days to deliver the statement of defence (r. 18.02(1) and (2)).

Service and other rules can affect these limits, so the deadline for any particular person depends on the facts and should be confirmed with a lawyer immediately.

What happens if no defence is delivered

The process typically runs in steps:

1. Service. The statement of claim is served on the defendant.
2. The response period runs. The times in the table above apply.
3. Noting in default. If no defence arrives in time, the plaintiff may ask the registrar to record the defendant as being in default (r. 19.01(1)).
4. Consequences. A defendant noted in default is treated as having accepted every fact stated in the claim, and cannot deliver a defence or take other steps without leave of the court or the plaintiff's consent, except a motion to set aside the default or any resulting judgment (r. 19.02(1)).
5. Judgment. Depending on the claim, judgment may be signed by the registrar (r. 19.04, for example for a debt or liquidated demand in money) or sought on a motion before a judge (r. 19.05(1)). On such a motion the judge may grant judgment, dismiss the action or order a trial (r. 19.05(3)). Even then, the plaintiff is not entitled to judgment merely because the facts are deemed admitted unless those facts entitle the plaintiff to it (r. 19.06).

A defence may still be delivered at any time before default is noted (r. 19.01(5)). Whether a late defence or a motion to set aside a default is appropriate is for a lawyer to assess.

Where the Motor Vehicle Accident Claims Fund fits

The Motor Vehicle Accident Claims Act continues a government-run account called the Motor Vehicle Accident Claims Fund (s. 2(1)). If an uninsured vehicle in Ontario causes a death, injury or property loss, a person who would have a cause of action against its owner or driver may apply to the Fund for payment (s. 4(1)). Someone who has won a court judgment for that kind of harm may apply for the unpaid part of it (s. 7(1)). That route is subject to s. 8, which treats judgments signed where the defendant filed no defence, or did not attend trial, or consented, differently unless the Minister was given notice and a chance to act (s. 8(1)).

For the uninsured owner or driver, a Fund payment can still lead to a debt. The Minister may pay only if the applicant gives a release and either the owner and driver consent and sign an undertaking to repay the Fund, or the person notified does not reply within thirty days and disputes liability (s. 4(4)). Once the Fund pays, the Minister takes over the applicant's rights and can sue those responsible for the vehicle (s. 4(6)). The driver's licence of the person notified is then suspended until the amount is repaid in full or instalment repayments have begun (s. 4(7)).

Applications under ss. 4 and 7 are capped. For accidents on or after 1 March 1981 the limit is $200,000 for all damages from one accident involving one uninsured vehicle, with property claims limited to $10,000 (s. 23(1)). Those figures are as of the date of this article; confirm the current amount. More detail is in the guide on the Motor Vehicle Accident Claims Fund.

What happens after a judgment, including licence consequences

The Highway Traffic Act contains a licence provision that applies to unpaid motor vehicle judgments. If a final judgment for injury, death or property damage caused by a motor vehicle is not satisfied within fifteen days after it becomes final, the Registrar suspends the driver's licence on receiving the court's certificate of the judgment, after fifteen days' notice of the intended suspension has been sent. The suspension lasts until the judgment is paid or discharged (a bankruptcy discharge does not count), up to the minimum liability limits under the Insurance Act (s. 198(1)). The Registrar is not to use that provision against a person indebted to the Motor Vehicle Accident Claims Fund (s. 198(2)). A judgment debtor may ask the court for permission to pay in instalments, which is in the court's discretion (s. 198(3)). Enforcement is covered in the guide on judgments against you in Ontario.

An uninsured owner's own injury claim

The Insurance Act also affects the uninsured person's own claims. A person who was contravening the compulsory insurance rule in s. 2(1) of the Compulsory Automobile Insurance Act at the time of the incident is not entitled to recover, in an Ontario action, for bodily injury or death losses linked to that automobile's use (s. 267.6(1)). This applies whether or not that person was prosecuted or convicted (s. 267.6(2)). There is also no right of action for damage to an uninsured automobile that the law required to be insured (s. 265(7)).

The separate offence side

Being sued is a civil matter. Driving or permitting an uninsured vehicle on a highway is also a provincial offence (Compulsory Automobile Insurance Act s. 2(1) and (3)). See the companion guide on driving without insurance in Ontario: penalties. For cancelled or lapsed policies, see car insurance cancelled or lapsed before an accident.

When it is worth talking to a lawyer

Advice is often sought when any of the following is present:

• A statement of claim or other court document has arrived, because a response deadline may already be running.
• A notice of default, or a judgment, has arrived.
• An insurer says the policy was cancelled, lapsed or does not cover the driver, and that is in doubt.
• The injured person's insurer has written seeking recovery.
• A licence suspension notice has been received.

What to gather

• The statement of claim and any other papers, with the date and manner each was received.
• The insurance card, policy, renewal and cancellation or non-renewal notices, and payment records.
• Vehicle ownership and registration documents.
• The police report, scene photos, and letters from insurers or adjusters.
• Any offence notice from the same incident.