Once a jury renders a verdict in a motor vehicle personal injury action, unless counsel have worked together to agree prior to trial on many of the contentious issues many trial counsel turn their mind to after the battle, the post trial motion before the trial Judge can make or break a jury verdict.
On September 19, 2017, the Ontario Court of Appeal made the confusing journey from jury verdict to judgment a lot less mysterious, providing much needed guidance on several key post trial issues in two decisions: Cobb v. Long and EI-Khodr v. Lackie.
While the specifics of the decisions are discussed below three dominant themes run throughout the two decisions heard and released concurrently which considered three grounds of appeal raised by the plaintiff and three grounds of appeal raised by the defence. Those themes confirm the courts are not going to engage in exercises resulting in double recovery, litigants are no longer immune from economic realities in the private market place and lastly, the courts remain committed to giving force to the Government's effort in reducing auto insurance premiums in the province of Ontario by 15%.
Cobb v Long Estate
Cobb v Long Estate involved a motor vehicle accident that occurred on July 8, 2008. The defendant Long, had plead guilty to impaired driving charges arising from the accident which resulted in a one year suspension of his licence and a fine in the amount of $1,300.00. The plaintiff sued for chronic pain resulting from soft tissue injuries although it was noted, he earned a black belt in karate since the accident. Additional plaintiffs claimed under the Family Law Act but those claims were immaterial to the appeal. The jury trial before Justice Douglas Belch took place over 19 days in 2015. Mr. Long had passed away before trial and the claim continued against his estate.
The issues addressed in the Cobb v. Long Estate decision can be summarized in the chart on the next page.
THE PLAINTIFF'S APPEAL
The plaintiff appealed on three issues. They lost on all three grounds.
How to Determine SABS Deductions from Jury Awards
Historically, collateral benefit deductions were interpreted using the analogy of "apples should be deducted from apples and oranges from oranges" (Bannon v. McNeely (1998), 38 O.R. (3d) 659 (C.A.). The Court of Appeal has officially done away with the "apples to apples" analogy because there is no support of the that interpretation in the current legislative wording of the Insurance Act (s.267.8(1)).
The plaintiff argued that the jury awards may have surreptitiously included money for "bad faith" in one of the other heads of damages and as such, could not be "apples to apples". Justice Jean McFarland, writing for a unanimous panel which also included Justice David Doherty and Justice Paul Rouleau, rejected this argument and accepted the defendant's position that "the attribution of the settlement funds to particular claims is a question of fact on which this court owes deference to the trial judge" (i.e. the person who sat through 19 days of evidence).
The issues addressed in the Cobb v. Long Estate decision can be summarized below.
The Court of Appeal also upheld, in increasing the amount of deductions of SABs benefits from the tort awards that the language of the Settlement Disclosure Notice clearly settled amounts for "all past and future" benefits, making it unclear as to whether the money paid was for past or future benefits or a combination of both. The Release and statutory disclosure notice (SDN) identified heads of damage without addressing compensation arising from bad faith. Furthermore, the Release used all inclusive language in terms of damages "known or unknown at the present time" which supported the conclusion that the trial judge rightfully determined the SDN accurately stated the allocation of the settlement. It was therefore not left to the trial Judge to guess at what was anticipated in the SABs agreement or to seek to allocate the settlement differently.
The Court of Appeal found that the Insurance Act does not differentiate between past and future losses - it simply refers to "all" ... "payments... that the plaintiff has received ... before the trial of the action for statutory accident benefits in respect of the income loss and loss of earning capacity" The statutory text uses the terms "income loss" and "Loss of earning capacity" together as the label for both a single head of damage and a single kind of SAB.
Section 267.8(1) "does not distinguish between amounts that relate to past and to future income loss. It speaks only to amounts received prior to the trial for income loss. Whether those amounts relate to past or future claims is irrelevant for the purpose of deductibility."
For this reason, the Court of Appeal found that, "There can be little doubt on this record that the sum of $159,300 was received by this plaintiff before the trial for SABs in respect of income loss and that amount should be deducted from totality of the award for past and future income loss." The law of damages distinguishes between pretrial pecuniary loss and post-trial pecuniary loss for primarily two reasons; calculating interest and proof of damages.
The new way to calculate income loss at the end of a trial has been confirmed, "s.267.8(1) of the Insurance Act requires deduction of all income replacement SABs, and all payments in settlement of claims for income replacement SABs, that the plaintiff receives before trial from the total of all damages awarded at trial for past and future income loss arising from the same incident".
Should Punitive Damages Be Put to the Jury
The trial Judge refused to put the issue of punitive damages to the jury and the plaintiff appealed based on McIntyre v. Grigg (2006) 83 O.R. (3d) 161. The plaintiff contended that case stands for the proposition that a jury can consider punitive damages in any civil action for negligence arising from impaired driving. The Court of Appeal rejected that reading, favouring the more determinative factor: has punishment already been imposed in a separate proceeding for the same misconduct.
The Court of Appeal distinguished Mclntryre in any event which involved a guilty plea to careless driving (resulting in a $500 fine) versus the guilty plea to impaired driving (resulting in a one year driving prohibition and $1,300 fine. The Court of Appeal also affirmed that they would not second guess or undermine criminal or regulatory proceedings which had already met the objectives of retribution, deterrence and denunciation. McIntyre stands for the proposition that "Where tortuous acts have already been sanctioned by the imposition of a criminal sentence, it is inappropriate to award punitive damages in a civil lawsuit. To do so is to punish twice for the same offence."
In this case, there was no evidence to suggest that the defendant's conviction on the offence of impaired driving and criminal sentence of one-year driving prohibition and a fine of $1,3000 was insufficient to meet the objectives of retribution, deterrence and denunciation.
Pre-Judgment Interest
It has been widely acknowledged among counsel that the change to s.25 8.3(8. 1) of the Insurance Act which came into force on January 1, 2015, abolishing the mandatory 5% interest rate for non-pecuniary losses could be procedural and therefore retroactive or substantial law and therefore not retroactive.
In his reasons in this case, the trial Judge used his discretion under s.130 of the Courts of Justice Act in applying a pre-judgment interest rate of 3%. While the Court of Appeal upheld the trial judge's decision to use his discretion (and the defence had consented to using that rate at the appeal), the Court of Appeal nonetheless confirmed that the change in interest rates is to be applied retroactively.
The Court of Appeal concluded that the amendment to the prejudgment interest rate was intended to have retrospective effect and it applies to all actions that are tried after its commencement. The panel came to this conclusion based on examining the legislative intention and temporal application, the Courts of Justice Act which does not create a vested right to a particular rate of prejudgment interest and the presumption of immediate application of procedural legislation.
In looking at the above three factors, the Court of Appeal acknowledged the fluctuation of interest rates over time and the need for rates to reflect those changes in order to "keep pace with economic realities" and "ensure that plaintiffs are not overcompensated nor undercompensated." The Court of Appeal also considered the legislative history of the Courts of Justice Act, determining it "highly relevant" in concluding the legislative intent was to have the interest regime applied retrospectively.
Perhaps, more importantly, the Court of Appeal emphasized the goals enunciated by the government in the introduction of Bill 15 from Hansard;
In August of last year, we announced our cost and rate reduction strategy, which is targeting an industry-wide average of a 15% reduction in authorized auto insurance rates within two years. The measures proposed in this bill would move forward on our strategy by helping to reduce costs in the system and continuing to fight fraud. Auto insurance rates are directly linked to claim costs. Reducing costs and uncertainty in the system would help reduce rates for Ontario drivers.
The applicable prejudgment interest rate in this case, should have been .5% for non-pecuniary damages, not 5%, as argued by the plaintiff. However, because the defendant accepted that the trial judge was entitled to exercise his discretion under s.130 of the Courts of Justice Act as he did and so the trial decision of interest at 3 % on non-pecuniary damages was upheld.
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Originally published by WP Magazine, February 2018.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
