Personal Injury Law: New ruling establishes that any financial outlay is an economic loss

A recent Financial Services Commission of Ontario arbitration decision has confirmed that any financial outlay by a service provider can qualify as an economic loss within the meaning of the definition of “incurred” in subsection 3(7)(e) of the Ontario statutory accident benefits schedule.

In the arbitration decision of Futrell v. State Farm Mutual Automobile Insurance Co., arbitrator James Newland determined that even parking and mileage expenses incurred by a retired husband in providing needed attendant-care services to his injured wife qualified as an economic loss and warranted payment by the accident benefit insurer for the services provided.

The Ontario Court of Appeal had previously determined in Henry v. Gore Mutual Insurance Co. that the magnitude of an economic loss was irrelevant to the quantum of entitlement, but questions remained about what might constitute such a loss.

To address the Henry interpretation, the Ontario government revised the benefits schedule, effective Feb. 1, 2014, to expressly make the extent of the economic loss relevant by amending the legislation to entitle providers to compensation only up to that level.

Accordingly, Futrell really only affects claims associated with accidents before Feb. 1, 2014, although the breadth of the decision allowing all financial outlays to qualify as an economic loss may amplify the magnitude of proven losses after that time period.

The Futrell decision will serve to resolve a number of ongoing disputes with insurers about the scope of the term economic loss. If a mere parking or mileage expense qualifies as an economic loss, then virtually any financial outlay by a care provider will qualify within the meaning of incurred and thereby open the door to full payment by accident benefit insurers to family members providing attendant-care as well as housekeeping and home-maintenance services.

Darcy Merkur is a partner at Thomson Rogers in Toronto practising plaintiff’s personal injury litigation, including plaintiff’s motor vehicle litigation. He’s a certified specialist in civil litigation and creator of the Ontario personal injury damages calculator.

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