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Court weighs in on approach for deducting accident benefits from tort damages Canadian Underwriter

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An Ontario court has ruled that accident benefits should be deducted from tort damages using a “silo” approach rather than a strict matching (“apples-to-apples”) approach.

In a lengthy and complex decision covering a wide variety of legal points, the Court of Appeal for Ontario used the silo approach for deducting Statutory Accident Benefits (SABs) from a tort award in Cadieux v. Cloutier, released Tuesday. The court found that portions of a SABs settlement for past and future medical and rehabilitation benefits, as well as for past and future attendant care benefits, were to be set off against a jury award of $701,809 for an acquired brain injury (ABI) support worker. The specific heads of damage in SABs were deducted under the broad heading of “health care benefits” in the jury award.

Two different methods of deducting statutory accident benefits from tort awards have developed in case law, the court noted in its decision. One approach requires matching of accident benefits to identical heads of tort damages. More recently, a silo approach has been applied, which requires the tort award only to match generally with the broad corresponding SABS categories.

The silos include three broad, general categories:

  • Income replacement benefits. If the person was not employed at the time, non-earner benefits or caregiver benefits (if applicable) would apply.
  • Health care benefits, including medical, rehabilitation and attendant care benefits.
  • Other non-pecuniary loss, including lost educational benefits, expenses of visitors and housekeeping and home maintenance expenses.

The appeal revolves around an incident in September 2006 in which pedestrians Chad Cadieux and Eric Saywell were involved in an altercation near the shoulder of a road. Saywell pushed Cadieux towards the road, causing him to stumble into the path of a truck driven by Susan Cloutier. Cadieux suffered brain damage and became incapable of managing his own affairs.

Cadieux claimed accident benefits from Aviva and started a civil action against Saywell and Cloutier. The SABs settlement with Aviva was for $900,000, including $300,000 for past and future income replacement benefits, $250,000 for past and future medical benefits and $350,000 for past and future attendant care benefits.

After a seven-week trial, a jury awarded Cadieux more than $2.3 million, including past and future loss of income, and future costs of care (part of which was for the ABI support worker).

An issue arose because the jury made no award for the costs of future attendant care, but made an award of $701,809 for the ABI support worker. The trial judge found that the jury award for the support worker was a medical/rehabilitation award and not an attendant care award.

“Relying on an ‘apples-to-apples,’ strict-matching approach, Cadieux argued that this award should only be set off against the portion of the SABs settlement for medical and rehabilitation benefits ($250,000) and not the portion for attendant care ($350,000),” the appeal court wrote in reference to the trial decision. “The defence, on the other hand, advocated a silo approach, arguing that both the health care benefits and attendant care benefits were properly classified as being within the silo of health care and should be deducted from the jury’s award for future costs of care, including the $701,809 in damages for the ABI support worker. The deduction would have had the effect of reducing the tort award for the ABI support worker to $101,809.”

The trial judge adopted the silo approach. Cadieux argued that any other approach than “apples-to-apples” would under-compensate plaintiffs generally and unjustly enrich defendants. In this case, although the attendant care and medical rehabilitation components of the SABs settlement both fall within the health care silo, he submits that the benefits are not overlapping and should not both be deducted from the tort award for the ABI support worker.

The appeal court disagreed. “We do not accept these submissions. Until the decision of this court in Cobb and El-Khodr, the evolution of the treatment of accident benefits in the case law has largely failed to take into account the difference between the statutory schemes that have been in place at various times. The policy rationale that supported the strict matching approach under a former statutory scheme is no longer applicable under the current legislative regime.”

Cobb v. Long Estate and El-Khodr v. Lackie both used the silo approach. “The silo approach is consistent with the statutory language of s. 267.8 [of the Insurance Act], is fair to plaintiffs, defendants and their insurers, and promotes efficiency in motor vehicle accident litigation,” the appeal court said.

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Multiple trucking violations by Humboldt semi driver noted in government report Canadian Underwriter

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MELFORT, Sask. – A Saskatchewan government report says the driver of a semi-truck should not have been on the road the day he flew through a stop sign and caused a crash with the Humboldt Broncos team bus.

The report filed during the sentencing hearing for Jaskirat Singh Sidhu notes 51 violations of federal trucking regulations on drivers’ hours and 19 violations of Saskatchewan trip inspection rules.

It includes the 11 days prior to the April 6, 2018, crash at a rural intersection that killed 16 people and injured 13 others.

The wreckage of a fatal collision, involving a bus carrying the Humboldt Broncos junior hockey team, outside of Tisdale, Sask., is seen Saturday, April, 7, 2018. THE CANADIAN PRESS/Jonathan Hayward

“If Jaskirat Singh Sidhu had been stopped and inspected on April 6, 2018, prior to the incident he would have been placed under a 72-hour out-of-service declaration … preventing him from operating a commercial vehicle,” says the report.

The document is signed by two senior Saskatchewan government officials and is included in the RCMP’s forensic collision reconstruction report.

It expresses concerns about the distances Singh was driving as well as the amount of time he took off to rest.

The report notes that if Singh had accurately documented his time at work on April 1 it ‘would have resulted in the driver being in violation of the maximum on-duty time of 14 hours for the day.”

The report says questions remain about what happened the day of the crash.

“We have strong concerns regarding the timelines of Jaskirat Singh Sidhu’s day on April 6, 2018, as there are unanswered questions as a result of the incomplete log on that day,” it says.

“The identified mileage and distances required to travel to the locations identified in the log and known locations also cause concerns.”

Sidhu had been driving for about a month before the crash occurred.

The owner of the Calgary-based trucking company, Sukhmander Singh of Adesh Deol Trucking, faces eight charges relating to non-compliance with federal and provincial safety regulations in the months before the crash.

They include seven charges under the federal Motor Vehicle Transport Act: two counts of failing to maintain logs for drivers’ hours, three counts of failing to monitor the compliance of a driver under safety regulations, and two counts of having more than one daily log for any day.

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Signs of progress on national flood program for Canada Canadian Underwriter

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Canada is making good progress on a national flood program, pending a final decision by federal, provincial and territorial (FPT) ministers responsible for emergency management.

“What they are looking at is one national insurance solution to improve outcomes for high-risk Canadians across the country,” Craig Stewart, vice president of federal affairs at Insurance Bureau of Canada (IBC) told Canadian Underwriter in an interview Tuesday. “There may be regional insurance pools adapted to local conditions, but it would be nationally coordinated.”

FPT ministers responsible for emergency management have mandated IBC to lead a national working group to take a look at options and what they would look like. IBC provided three options:

  • A pure market approach (like in Germany and Australia) where governments exit disaster assistance
  • A broadened version of the status quo, but with better-coordinated insurance and disaster assistance
  • Deployment of a high-risk pool analogous to Flood Re in the United Kingdom.

The next step is for the working group, which Stewart chairs, to cost out the pool. “The pool needs to be capitalized as it was in Flood Re,” Stewart said. “So, we need to figure out where that money is going to come from. Is it going to come from governments? Is it going to come from insurers? Where is it going to come from?”

A final decision will be made by ministers after the high-risk pool is costed, which Stewart expects to be completed by June. Decisions on eligibility, how to capitalize the pool, and on any cross-subsidization await the results of that costing analysis.

In addition, this spring, the ministers will hold a technical summit on flood data and science. “Our view of the risk many not align with the government’s view of the risk,” Stewart said. “We need to bridge the gap. This symposium is going to focus on essentially the data and science of flood modelling.”

In early 2020, there will be the launch of a consumer-facing flood risk portal. IBC has been working with the federal government to develop the authoritative flood portal, where consumers can discover their risks and what to do about them.

“Elevating consumer awareness of flood risk is key,” Stewart said. “Consumers aren’t going to be incented to protect themselves or to buy insurance unless they know their risk.”

In May 2018, FPT ministers responsible for emergency management tasked IBC to lead the development of options to improve financial outcomes of those Canadians at highest risk of flooding. IBC worked with a wide range of insurers, government experts, academics and non-governmental organizations to produce the three options, which were tabled with ministers last week.

The ministers released the first-ever Emergency Management Strategy for Canada: Toward a Resilient 2030 on Jan. 25. The document provides a road map to strengthen Canada’s ability to better prevent, prepare for, respond to, and recover from disasters.

“In less than two years, Canadian insurers have secured a mandate with every province and territory to finalize development of a national flood insurance solution, have successfully catalyzed a national approach to flood risk information, have secured over two billion dollars in funding for flood mitigation, and have succeeded in securing a funded commitment for a national flood risk portal,” Stewart said.

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Insurers disagree over meaning of ‘household’ in policy language Canadian Underwriter

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A dispute over what exactly constitutes a “household” in a home insurance policy has reached the Court of Appeal for Ontario.

Several members of the Weiner family were sued after a person drowned in 2010 in a vacation home on Lake Eugenia, about 70 kilometres west of Barrie.

The homeowner was Enid Weiner, who had moved to a nursing home in 2008 or 2009 and has since passed away.

The home was insured by Intact. Enid Weiner was the only named insured, but the policy provided liability coverage for relatives of the named insured while those relatives were “living in the same household” as the named insured.

Whether this means Intact is also providing liability coverage for Enid Weiner’s adult son, Scott Weiner, was a source of disagreement among judges and insurers alike.

Scott Weiner, along with his wife and daughter, were named defendants in the drowning-related lawsuit. Also named was the estate of Enid Weiner. Scott Weiner used his mother’s house as a cottage but did not live there permanently.

Scott Weiner’s own insurer, TD Insurance, settled the lawsuit. TD Insurance took Intact to court arguing Intact has a duty to defend the lawsuit.

As it stands, TD has lost its case.

“The mere fact of co-residence is not enough to constitute membership in a household,” wrote Ontario Court of Appeal Justice Bradley Miller in Ferro v. Weiner, released Jan. 28, 2019.

Initially, Ontario Superior Court of Justice Pamela Hebner ruled in favour of TD. In her ruling, released Apr. 12, 2018, she ordered Intact to pay $62,500, or half the cost of settling the lawsuit.

Justice Hebner found that Scott Weiner was in the same household as his mother. He came to the cottage when he wished and took care of it as if it were his own place.

But Justice Miller of the appellate court countered that, at the time of the accident, Enid was living in a nursing home.

“Scott lived with his family in the city and had organized his life around his urban household. Prior to entering the nursing home, Enid lived with Scott’s brother, and not with Scott and his family,” added Miller, citing several court rulings, including Wawanesa Mutual Insurance Co. v. Bell, released in 1957 by the Supreme Court of Canada.

Wawanesa v. Bell arose after Murley Miller was killed in 1955 while driving a Vauxhall car owned by his brother, John Milley.  Other victims of that accident sued Miller’s estate. Murley lived at John’s home in Sarnia.

The court in the 1957 case defined the term “household” in the following way:

“The ‘household,’ in the broad sense of a family, is a collective group living in a home, acknowledging the authority of a head, the members of which, with few exceptions, are bound by marriage, blood, affinity or other bond, between whom there is an intimacy and by whom there is felt a concern with and an interest in the life of all that gives it a unity.”

Members of a household could include domestic servants and distant relatives living there permanently, the court found in 1957.

“Although a household is not synonymous with a family, the existence of a household is evidenced by the extent to which its members share the intimacy, stability, and common purpose characteristic of a functioning family unit,” Judge Miller of the Court of Appeal for Ontario wrote in 2019 in Ferro v. Weiner.

Members of a household “typically share a residence and resources, and integrate their actions and choices on an ongoing and open-ended basis,” added Miller.

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