What is the connection between a tort claim and accident benefits claim?

Discover the relationship between these two types of lawsuits

A MVA file involves two lawsuits, a) the tort claim and b) the accident benefits claim.

If a person is injured in a MVA (except on public transit vehicles), they are entitled to certain accident benefits regardless of whether or not they are at fault.

There are strict timelines for accident benefits claims. First, it is necessary to claim from the accident benefits insurer before commencing a tort claim against the at-fault driver. Second, it is necessary to notify the accident benefits insurer of the intention to apply for accident benefits within seven days of the MVA.

Once the accident benefits insurer receives the notice of intention, it will send the application package which generally must be completed and submitted within 30 days of receipt.

An important concept in accident benefits is that of a minor injury, defined by the Minor Injury Guidelines (or “MIG”) as a sprain, strain, whiplash associated disorder, contusion, abrasion, laceration or subluxation. The cap for the amount of accident benefits for a minor injury for medical costs and rehabilitation is $3,500.

Examples of non-MIG injuries include, but are not limited to, a broken bone, a psychological injury or a chronic injury.

There are two main ways that an accident benefits claim can affect the tort claim. First, the accident benefits claim often settles before the tort claim and so, if the injured party did not attend or continue to attend treatment in the duration of the accident benefits lawsuit, the evidential foundation for the tort claim may be lacking. Second, if the accident benefits insurer classifies the injured party as having a minor injury, it may be more difficult to persuade the tort insurer or court that the injured party meets the threshold for a tort claim (either a permanent serious disfigurement or a permanent serious impairment of an important physical, mental or psychological function).

Given these two ways in which the lawsuits affect one another, it is important for the injured person to build up their tort claim from the very beginning by seeking rehabilitation (such as physiotherapy), visiting their family doctor (such as follow-ups), getting recommended examinations (such as X-Rays) and possibly getting a medical expert report.

Since the tort claim and accident benefits claim are interrelated, it is advantageous to have them both handled by the same lawyer. This helps prevent miscommunication or handling of one of the files in a way that is detrimental to the successful outcome of the other.

Lastly, the rule against double recovery prohibits the overlapping of the tort award and accident benefits (Insurance Act, s. 267.8). The way that this rule is applied is that the tort insurer will be entitled to a setoff or deduction for any amount that the injured party either received or should have received from the accident benefits insurer.

But the rule against double recovery is also subject to the matching principle. Collateral benefits can be deducted only from the tort award for the corresponding head of damage. For instance, income replacement benefits (or “IRBs”) can only be deducted from damages for income loss.