On Sept. 19, 2017, Ontario insurers took home two big wins from the Court of Appeal. The judgments, from two separate cases collectively dubbed Khodr & Cobb, will result in significant changes to the damages side of MVA tort cases.
Click here to read the full El-Khodr v Lackie, 2017 ONCA 716 decision.
Click here to read the full Cobb v Long Estate, 2017 ONCA 717 decision.
Khodr & Cobb deal with the statutory deductible, pre-judgment interest rate, collateral benefit deductions, assignment of future collateral benefits, Rule 49 offers, and costs. Topics that might make a layman’s reader’s eyes droop, but certainly cause a civil litigator’s ears to perk up. And rightfully so. They are fundamental to every MVA-related damage analysis.
What is all the fuss about you ask? Well, the Court of Appeal, among other things, has ended a two-year long debate between the insurance defence bar, plaintiff bar, and Superior Court judges with respect to whether the 2015 amendments the Insurance Act have retrospective effect. Spoiler alert: they are.
In a nutshell, the Court of Appeal in Khodr held the following:
The strict matching approach for collateral benefits may no longer be good law due to distinguishability and dated policy rationales.
Plaintiffs should present their claims according to the categories demarcated in s 267.8 of the Insurance Act to minimize trial courts’ difficult in matching and deducting collateral benefits:
Past and future income losses;
Past and future health care expenses;
Past and future pecuniary losses that have SABS coverage; and
Past and future pecuniary losses that lack SABS coverage.
Juries should not be instructed to award any sum for drug benefits after the plaintiff reaches the age of 65 because the Ontario Drug Benefit Program covers this expense.
In a nutshell, the Court of Appeal in Cobb held the following:
The below 2015 amendments to the Insurance Act have retrospective effect:
The pre-judgment interest rate for non-pecuniary damages; and the increase to the statutory deductible.
Offers to Settle with escalating costs provisions are valid Rule 49 offers.
Costs must be proportional to the damages awarded.
The above holdings are ground-breaking for insurers and their legal counsel because they lower the pre-judgment interest rate, increase the statutory deductible, and reduce the likelihood of double dipping between SABS and tort damage awards.