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Focus: Can using act compensate for low insurance payouts?

Focus on: Personal Injury
|Written By Judy van Rhijn

As accident benefits decrease and attendant care benefits become optional, family members who are out of pocket for the care of a loved one are increasingly looking to the provisions of the Family Law Act, which allows them to sue for recovery of damages.

“I always say that somebody in a car accident is not the only victim,” observes Steve Rastin, managing partner of Rastin & Associates of Barrie, Ont. “The injured person and their entire family are victimized. The provisions of the Family Law Act are a tool that can be used to help people.”

The relevant provisions are found in Part V of the FLA, entitled “Dependant’s claim for damages.” Section 61(1) gives the spouse, (including common law spouses), children, grandchildren, parents, grandparents, brothers and sisters of a person injured or killed by the fault or neglect of another an entitlement to recover their pecuniary loss resulting from the injury or death.

Rastin points out that this right exists in addition to the accident benefits system, where payouts have been drastically reduced as a result of amendments to the Statutory Accident Benefits Schedule and Insurance Act, following announcements made by the government in the 2015 Ontario Budget.

“I have no doubt that for many people who have a car accident, they find out they are paying money for nothing,” he says. “They are put in the MIG [Minor Injury Guideline] guideline, they get $3,500 coverage, no housekeeping, limited or nonexistent attendant care and income replacement capped at $400. If most citizens knew how little they are getting for how much they pay, they would be outraged.”

Gino Paciocco of Paciocco & Mellow of Windsor, Ont. says the reduction in motor vehicle accident benefits is why people are depending heavily on the FLA. “FLA claims are a way to get around accident benefits now that they are minimized, and optional benefits are not pursued,” he says.

“Just about everyone I see has no optional benefits because they are not told about them by brokers, or they don’t want to pay more.”

Charles Gluckstein of Gluckstein Personal Injury lawyers in Toronto says at one point it was easier to claim the expenses of carers through accident benefits.

“It’s almost impossible now. The changes have added layer upon layer of complexity,” he says. “It’s now easier to make a tort claim under the FLA than through the accident benefits system. It is a loss that has been moved from one side to the other.”

There are two types of claims that can be advanced under the FLA, as outlined in s. 61(2). There are pecuniary claims, being actual expenses reasonably incurred for the benefit of the person injured or killed, including funeral and travel expenses and a reasonable allowance for the loss of income or the value of nursing, housekeeping or other services provided for the person. There are also non-pecuniary expenses, which is compensation for the loss of guidance, care and companionship that the claimant might reasonably have expected to receive from the person. “It’s an archaic way of talking,” says Gluckstein.

“Pecuniary claims are specific to value. Non-pecuniary are non-specific. The relationship has been affected. They are not the same couple or they lost a loved one, which is not an amount you can address.”

Rastin says when you bring a pecuniary claim for actual expenses, you still need to prove it.

“If an individual family member has to give up their job to care for their injured loved one, that’s a huge case. Even if they are on a modest income, it’s a significant financial cost,” he says.

“But many family members provide care around jobs or do shift work because they can’t afford to give it up. So how big is the pecuniary loss?”

In those cases, Rastin says, the family members totally sacrifice their quality of life.

“They give up all their extracurricular activities. It’s not fair if the insurance company says they haven’t lost anything,” he says. “My answer is, before, they had a robust life.” That portion becomes a non-pecuniary claim.

“You’re not allowed to sue for grief, loss and anger, but for loss of care, guidance and companionship,” explains Rastin. “What is the quality of the relationship worth?”

Paciocco says when you present a non-pecuniary claim, it’s “more of an art than a science. You are not able to prove actual expenses.”

To deter people from going ahead with minor non-pecuniary claims, the government introduced a deductible.

“The wording from s. 61 of the FLA is repeated in s. 267.5 of the Insurance Act, which sets out a deductible for auto accident insurance,” says Gluckstein.

“This year, the deductible is $18,692.59. People who want to make minor claims are cut out.”

Paciocco says it makes sense that the deductible wouldn’t apply to pecuniary losses, where you can calculate the loss of income. And Rastin says when the deductible was put in place, it stopped 85 per cent to 90 per cent of FLA claims.

“Now, we open a file in only 8 per cent of cases that come in,” he says.

“People who are legitimately injured are turned off by the deductible.”

Even with all these hurdles, plaintiff lawyers often consider the FLA to be the best avenue for redress, given the current legal landscape. Rastin admits to using the FLA regularly.

“If I fight for a client, even if I get $10,000 net, that’s $10,000 more than they would have got otherwise,” he says.


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