December 01, 2017, Kitchener, Ontario
Posted by: Robert Deutschmann, Personal Injury Lawyer
16-000915 v Northbridge Personal Insurance Corporation, 2017 CanLII 62158 (ON LAT)
Decision Date: December 13, 2017
Heard Before: D. Gregory Flude
INTERPLAY BETWEEN ACCIDENT BENEFITS AND WSIB: The outcome of the litigation in Newfoundland has no impact on SABs benefits in Ontario
There are two applications before the with some minor. The two matters were heard together and this decision addresses both applications.
In the early morning hours of July 12, 2013, the lives of two young men were dramatically altered when the tractor trailer they were operating was involved in an accident. H. S. was driving. SH was asleep in the bunk behind the driver. H. S. testified that he swerved to avoid a moose on the highway. He lost control of the vehicle and his next memory was waking up in hospital. SH remembers waking up on the roadway being attended by a passerby who had pulled him from the vehicle. As a result of the accident, neither of these young men will walk again.
The accident triggers potential recovery under one of two no fault insurance compensation schemes that provide compensation for, among other things, loss of income and medical and rehabilitation benefits. Since the accident occurred during the course of their employment, SH and HS may seek compensation under the WSIA, and since it was a car accident SH and HS may also seek recovery under the no-fault SABs.
The WSIA the primary source of compensation under the legislation. A consequence of receiving benefits under the WSIA is that SH and HS forego the right to sue in a court action the person or entity who may have been responsible for their injuries. In certain limited circumstances, an injured worker may elect to commence a law suit to recover compensation.
In the current case, SH and HS joined a class action lawsuit, and applied for and received no-fault benefits from Northbridge under the Schedule. When the class action was dismissed, and an appeal of that dismissal was unsuccessful, Northbridge took the position that SH and HS were no longer eligible for no-fault benefits because they had no valid court action. They were therefore required to seek compensation under the WSIA. It is the SH and HS’s position that the statutory test requires an examination of whether the decision to sue was made in good faith and not simply for the purpose of seeking benefits under the Schedule. Therefore, the time to determine eligibility under the Schedule is when the decision to sue is made. In SH and HS’s view, the ultimate outcome of the litigation is an irrelevant consideration.
To determine this matter the Arbitrator examined SH and HS’s election not to seek compensation under the WSIA but to join the class action law suit. If the election passes the legislative primary purpose test, I a determination of whether the outcome of the litigation can nullify that election and require SH and HS to seek compensation under the WSIA scheme.
Having weighed all of the evidence and submissions of the parties, the Arbitrator found no support in the legislation for Northbridge’s position. SH and HS elected to join a court action; they did so after consulting with a lawyer and the legal advice they acted on suggest a good likelihood of success. The legislation does not import a retroactive component. It focusses solely on the period when the election to sue is made and does not contemplate a retroactive impact of the final result of the court action.
- What is the impact of s.61 of the Schedule on the Applicant’s entitlement to accident benefits under the Schedule?
The interplay between the WSIA and the Schedule is set out in s. 30 of the WSIA and s. 61 of the Schedule. The WSIA generally prohibits injured workers from suing co-workers and Ontario-based employers for damages arising out of workplace injuries. There are exceptions; particularly where the potential wrongdoer is outside of the Province of Ontario. Where a worker has a right to sue, s. 30(2) of the WSIA provides that an injured worker must elect to receive compensation under the WSIA or elect to seek compensation through legal action and advise the WSIB of the election.
In s. 61, the Schedule addresses the interplay between it and the WSIA system. The starting point in s. 61(1) is that SH and HS should seek recovery under the WSIA scheme. In this case, SH and HS made an election under s. 30 of the WSIA and s. 61(2) provides that they may claim benefits under the Schedule provided that: “the election is not made primarily for the purpose of claiming benefits under this Regulation.”
Since s. 61(2) directs me to question the primary purpose for making the election to opt out, the Arbitrator considered whether the election was reasonable. In determining what is reasonable there must be a reasonable expectation of success at the time the election was made. Northbridge submits that the Arbitrator must also weigh the ultimate outcome of the personal injury litigation. The Arbitrator was of the view that this is a mistaken approach to the analysis.
Decision to Opt Out
SH and HS were seriously injured on the night of July 12, 2013 in Newfoundland. They were taken from the accident scene to a first response hospital and then airlifted to St. John’s. After a number of weeks in hospital in St. John’s, they were airlifted back to Ontario and began rehabilitation.
SH and HS were angry about their fate and hired Mr. R, a lawyer. Mr. R researched moose/vehicle collisions in Newfoundland prior to his first meeting with SH and HS. He discovered that a class action suit was then underway in that Province seeking to hold the Province liable for failure to take adequate measures to ensure moose did not get on to the highways and cause accidents.
Armed with his research, Mr. R met with SH and HS at the rehabilitation hospital. His recollection is that the meeting took place on September 30, 2013. SH and HS were more vague about the date of the meeting. He asked SH and HS what they wanted to do and described them both as angry and wanting to take steps to ensure someone was held responsible for what had happened to them. They felt that no-one else should suffer their fate.
While there is some disagreement in the evidence about the scope of the discussions on September 30th and the instructions given to Mr. R, he had a junior lawyer with him who speaks Urdu who attended all meetings between SH and HS and Mr. R and who handled other communications with SH and HS. Neither applicant is highly educated, certainly not to the point where they might understand the nuances of the legal system and their abilities to make claims through various claims mechanisms. Both applicants were coming to terms with a major life altering event, treatment, pain medication and rehabilitation. Mr. R, on the other hand, was well versed in all aspects of personal injury law, dispassionate and objective.
Mr. R stated that he discussed the WSIA system with SH and HS. He advised them that they could not sue each other. He advised them that they could not sue their employer. He covered the benefits that might be available to them under the WSIA system. The Arbitrator noted Mr. R’s statements concerning the comparison between the WSIA system and Schedule benefits. In general, the two systems are similar in addressing a range of medical and rehabilitation needs. The WSIA system provides greater compensation because it lacks some of the limits on compensation for loss of income and for medical benefits in the Schedule. Mr. R stated that he would never advise a client to forego WSIA benefits simply to gain access to benefits under the Schedule. Mr. R also advised SH and HS about opting out of the WSIA system and commencing a law suit against the Province of Newfoundland and Labrador. In his view, given the nature of SH and HS’ injuries and their comparative youth, they would likely recover in the upper end of the range for non-pecuniary damages and would recover substantial loss of future earnings and future medical care damages.
SH and HS advised Mr. R that they wanted to sue. He discussed the options of trying to join the class action suit or commencing an action on their own. He pointed out that, as members of the class, their exposure to legal fees and costs would be minimal. In his view the most advantageous course was to see if SH and HS could join the class action law suit and he so advised SH and HS.
While both applicants testified that they instructed Mr. R to join the class action law suit at that first meeting, the Arbitrator accepted Mr. R’s evidence that he undertook to research the issue further, contact the Newfoundland lawyer handling the case and report back to them on the possibility of joining the suit.
The lawyer handling the class action law suit advised Mr. R of the status of the law suit and his expectations of either settlement or success. They reviewed the theories of the case for liability against the Province and the possibilities of SH and HS being made members of the class despite the fact that the class had been defined in 2011. As a result of the discussions, Mr. R felt that the class action suit was viable with a high likelihood of success and was being handled by a lawyer of some standing and ability.
Mr. R advised SH and HS that they would have to retain Mr. Crosby to represent them in Newfoundland if they wished to proceed with the class action option. Mr. R’s role, or more properly the role of his office, was to ensure the flow of information between SH and HS and Mr. Crosby and to manage SH and HS’s claims under the Schedule. SH and HS then retained Mr. Crosby to act on their behalf in Newfoundland. Mr. R represented them in Ontario. SH and HS were successfully admitted as a supplementary class in the Newfoundland class action suit.
Termination of Benefits
Part of the process for making a claim from Northbridge under the Schedule was for SH and HS to file an assignment of benefits with the WSIB and get the assignment approved. Once these formalities were completed, Northbridge began paying SH and HS benefits and continued to do so until the class action law suit had run its course. The suit was dismissed at trial and an appeal was unsuccessful. Following the dismissal of the appeal, Northbridge wrote to SH and HS and advised them that since they no longer had a viable court action, they were not entitled to benefits under the Schedule and must apply to the WSIB. Northbridge terminated the Schedule benefits.
Primary Purpose Analysis
SH and HS argue that they made their decision to opt out of the WSIA scheme based on sound legal advice. Northbridge takes the position that HS was not being truthful when he stated that he swerved to avoid a moose on the highway. Northbridge argues that the existence of a moose is central to HS’s case and in the absence of evidence that there was a moose on the highway, any law suit for damages was lacking in good faith. Northbridge also points to answers given by SH in an examination under oath that he had an antipathy to the WSIA system that coloured his decision to sue making it primarily for the purpose of getting benefits under the Schedule.
The Arbitrator accepted SH and HS’s position. It is clear that the decision to opt out of the WSIA scheme was a considered one and made after consulting counsel. The range of potential compensation from a successful law suit exceeded the compensation available to the applicant’s by continuing to receive WSIA compensation. It includes damages for losses not covered by the WSIA, such a loss of enjoyment of life and pain and suffering. A successful lawsuit also results in a lump sum payment of losses rather than periodic payments for lost income from the WSIA scheme. In serious cases, the recovery can be millions of dollars.
Notwithstanding SH’s stated antipathy to the WSIA scheme, he did not rush headlong into a decision. He took his time and sought legal advice before he acted. His evidence concerning the source of his antipathy was from discussions with co-workers in the construction industry. By the time he made his decision, he had had the benefit of an explanation of WSIA by Mr. R and the ability to weigh the potential results from a law suit and application under the Schedule with benefits from the WSIA scheme. The Arbitrator found no basis to conclude that his decision to make the election was primarily for the purpose of getting benefits under the Schedule.
With respect to the question of whether there was or was not a moose on the highway, Northbridge is incorrect in the assertion that there is no evidence of a moose. There is the evidence of HS. In substance, Northbridge is arguing the Arbitrator should give no weight to H. S.’s evidence because of his self-interest. I am not prepared to do so. This is not a case with a competing version of events. There is only one. Northbridge chose to call no oral evidence.
On this basis the Arbitrator found that the decision to elect to join the class action law suit was not made primarily for the purpose of claiming benefits under the Schedule.
Retroactive Impact of Dismissal of Law suit
Northbridge argues that the election to commence a law suit and collect benefits, even if it may have been made for a proper purpose, is only valid as long as there is a law suit underway. Its position is that as soon as the litigation was finally dismissed then its obligation to pay benefits under the Schedule expired and SH and HS were obliged to seek a remedy under the WSIA. Northbridge argued that this position may be gleaned by the whole legislative intent in the WSIA and the Schedule but did not point me to any specific legislative provision to support that position. The Arbitrator was unable to find any specific provision.
In reviewing s. 30(2) of the WSIA it requires a worker to make an election. The language speaks of election in the singular and in the present tense. It does not contemplate revisiting that election as future events unfold. Having found that the primary purpose was to pursue a civil claim and not to claim benefits under the Schedule, the Arbitrator can find no authority that permits him to vary determination of the primary purpose because of the ultimate outcome of the litigation. The focus of the legislative scheme is the good faith of the election at the time it was made, not at some future date.
Having considered the evidence and submissions of the parties, I find that SH and HS have been entitled to receive benefits under the Schedule since they made their election. The outcome of the litigation in Newfoundland has no impact on that entitlement.