Province restores $2 million benefit limit for catastrophically injured

The budget also said the government will “work with the Law Society of Ontario to make contingency fee agreements more transparent for injured claimants who choose to hire a lawyer.”

Mike Winward, a partner at Mackesy Smye LLP Barristers & Solicitors in Hamilton and chairman of Federation of Ontario Law Associations, says the change back to a $2 million default benefit limit is a “huge and important improvement,” noting that his clients with spinal cord or brain injuries have often run through $1 million within a few years due to expensive renovations to make their homes accessible, and the need for home attendants and extensive therapy treatments.  

“I think the $2 million restoration would be applauded by most people who practice in personal injury law. Just about anybody who has had a catastrophic case since the limit went down would tell you it’s not sufficient,” he says.

“The $2 million impacts, in the most positive way, the people who have the most serious injuries in car accidents. It impacts them tremendously. The impact to the lawyers is, it certainly  allows us to serve our clients better because we have far more funding to get the services and goods that they need.”

Winward is one of the lawyers that has been working with the law society on making contingency fee agreements more standardized and consumer-friendly.

“Most lawyers representing injured people don’t by the hour, they  charge what’s called a contingency: a percentage of the final settlement. And the existing legislation with respect to how lawyers can charge contingency fees today is very flawed. It’s flawed, and unworkable. To the extent that the provincial government, working with the law society, can come up with a standardized contingency fee agreement, that would be very good,” says John McLeish, founding partner of McLeish Orlando LLP in Toronto.

McLeish also supports the restoration of the $2 million default benefit limit, but notes that the budget did not clarify whether the province would also return to the previous definition of “catastrophically injured,” which was changed to make it much stricter when the limit dropped.

“From a lawyer’s point of view, there is really just more at stake,” says McLeish. “If an insurance company is saying, ‘No, you are not catastrophically impaired,’ and there is a reasonable probability that the injured person will be considered catastrophically impaired, the lawyer will have to fight hard to establish they are catastrophically impaired. To be honest with you, sometimes it requires the lawyers up to $20,000 of their own money on that issue. If the lawyer loses on that issue, that’s gone. That money is not recoverable. So that’s it really. It’s not so much the lawyers that are impacted as the injured people.”

Winward also says more details are required as to whether the $2-million total will be separated into two $1-million parcels for personal care and medical and rehabilitation benefits, as was previously the case.

“Someone with a spinal cord injury, say, quadriplegia, needs a great deal of personal care: to go to the bathroom, get cleaned up, get out of bed, get into your wheelchair, etc.,” says Winward.  “But if you have someone with a very significant brain injury who can walk and doesn’t have a spinal cord injury, that person may need more money for the rehabilitation part of their care: occupational therapy, psychological treatment, rehab support workers…. What you do with $2 million is considerably different, whether you have it combined to use as you need it or as $1 million in each pot.”

The province also said in the budget it would give people “the choice to lower their premiums,” and “make the consumer insurance experience simpler.” Both Winward and McLeish say that it can be very difficult for lawyers, let alone clients, to keep up with all the changing insurance laws.

For example, McLeish says that many people reach for the cheapest auto insurance policy, not realising that it only costs a few dollars more to drastically raise the benefits if they are in an accident.

Winward expressed concerns about a section of the budget that changes settlement options, something he says could create an access-to-justice issue. The budget proposes a program called,  “Care, Not Cash,” “to ensure that a driver’s auto insurance coverage will pay for treatment instead of costly legal fees while giving the driver the option to be eligible to receive cash settlements if they so choose.”

Because insurance disputes come before a tribunal that does not award costs, it can often be more of a win-win for insurance companies and clients to settle in the case of catastrophic injuries, rather than spend the rest of their lives before the tribunal each time there is the need to pay for a new treatment or service that the insurance denies, says Winward.
“People are insured for their catastrophic injuries for life. That means if you can’t settle with your insurance company, you and your insurance company are basically wed for life — unless you blow through your $2 million, and even then you are still ensured for other services,” he says.

“I would be surprised if the insurance industry wants that, because it costs money to keep the file open, that’s why it’s very common for the insurance company to come to the lawyer and say, ‘Let’s settle this case.’ . . . I’m not sure if it’s on this government's radar, but when you combine the fact that you cannot get costs in the license appeal tribunal process, and you cannot settle your accident benefit claim with your insurance company, it creates a huge access to justice problem for people.”

Catherine Wilde, owner of Fleck Law in Point Edward, Ont., says that people may be tempted to choose the “care, not cash” option if it lowers their premiums.

“There is no safeguard there to protect vulnerable plaintiffs who don’t know a lot about the insurance process, and compel the insurance companies to fund prompt and reasonable treatment. Insurers may feel a bit emboldened to deny claims,” she says.

While there are some positive other changes in the budget, such as allowing more litigants to go through simplified procedure trials, Wilde says she is also concerned that other injured clients might be negatively impacted by changes outside the realm of auto insurance. The budget also calls for cuts to Legal Aid Ontario’s budget, restructuring the Criminal Injuries Compensation Board, and changes to the Ontario Proceedings Against the Crown Act.

“When you look at the net impact of all this, I think you really have to look at the victims: the people who have been injured in auto accidents, people who have been assaulted or are the victims of crime, and their access to compensation or treatment and support because of those incidents, is being further restricted by some of these proposals in the budget. There is acknowledgment that catastrophically injured and I think that is a big positive, for sure. But it is those people that aren’t catastrophically impaired that are going to be affected by some of these changes in the budget,” she says.