Appeal court widens door to non-earner benefits

Accident benefits claimants who return to work after their motor vehicle accidents may find it easier to obtain non-earner benefits following a ruling by the Ontario Court of Appeal last week.

In its July 24 decision in Galdamez v. Allstate Insurance Co. of Canada, the Court of Appeal overturned the motions judge's finding that the plaintiff couldn't qualify for non-earner benefits because she was working, regardless of whether or not she had a complete inability to carry on a normal life.

Writing for the appeal court, Justice Janet Simmons stated that, "although I consider it unlikely that persons who can work at their pre-accident jobs following an accident will often meet the disability standard for non-earner benefits, I do not rule out such a possibility."

The decision closes the gap that existed for people who didn't qualify for income replacement but met the tough test for non-earner benefits by having a complete inability to carry on a normal life despite the fact they had returned to work.

The ruling allows for a greater possibility that claimants will be able to receive either income replacement or non-earner benefits.

"You can't just say if you can work, your life is not affected enough," says Michael Henry of Howie Sacks & Henry LLP. He suggests the courts have to look at the quality of the applicant's life.

The case involves a plaintiff, Hayfa Galdamez, who was in a motor vehicle accident on Oct. 26, 2002. After the accident, she returned to work on modified duties and hours and continued to work until Jan. 19, 2004, when she went on maternity leave.

She hasn't returned to work since. She initially applied for income-replacement benefits but was unsuccessful in part because she was working. She then applied for non-earner benefits. Her insurer denied those benefits as well.

Charles Gluckstein of Gluckstein & Associates LLP notes that the test for non-earner benefits is pretty stringent. But he adds that technically, there's no bar from applying for the non-earner benefit if a person is able to meet the test.

Under s. 12 of the statutory accident benefits schedule that applied at the time of the accident, a person qualifies for non-earner benefits if he or she suffers a complete inability to carry on a normal life as a result of, and within two years of, the accident and if the person doesn't qualify for an income replacement benefit.

The section doesn't say people can't qualify for non-earner benefits if they work.
On the underlying motion, Justice James Ramsay stated that "a person who can work at his or her own job cannot be said to suffer a complete inability to carry on a normal life. Such a person has the ability to lead a normal life at least in part."

He added: "There is no situation in which a person who was employed at the time of the accident could be so disabled as to qualify for non-earner benefits but not income replacement benefits."

The appeal court disagreed, noting that "a claimant's status as an employed person does not, in itself, establish that the claimant is ineligible for non-earner benefits."

It indicated it's only necessary that the person be continuously prevented from engaging in substantially all of the activities that he or she ordinarily engaged in before the accident and added that "substantially all" doesn't mean all.

"Most people will want to have the [income replacement] benefit if they are qualified," says Henry. While he notes that for the most part, people who can work won't get the non-earner benefit, he says that not allowing them to receive it is too restrictive an interpretation. In his view, the legislation is "to be interpreted broadly and to the benefit of the accident victims."

Terrence Hill, who was defence counsel on the case, says that in theory, if people don't qualify for income replacement benefits, they can be eligible for non-earner ones.

However, he doesn't believe the case will open the door to many claimants. He suggests, "it would be a unique set of circumstances" where a person is capable of carrying out regular employment but is also disabled enough to qualify for a non-earner benefit.

Darcy Merkur, a partner at Thomson Rogers, agrees that there won't be many cases that fall into this area but says this decision may open the door to more discussion about how claimants can attempt to return to work while still being able to advance a weekly benefit claim.

"I think the plaintiff personal injury lawyers will consider this an option in more cases," he says.

Henry notes there could be circumstances where a person's quality of life is affected longer than his or her ability to work, a situation in which the non-earner benefit may help. "It just opens up the opportunity for the victim to choose the benefit they think is most applicable to them."

But Gluckstein also notes the decision may not have far reach. Noting the government tightened up the statutory accident benefits schedule on Sept. 1, 2010, he says s. 35 now requires the applicant to elect either income replacement or non-earner benefits subject to provisions dealing with catastrophic impairment.

A claimant cannot switch between the two. As a result, Gluckstein says s. 35 "would impact the reach of this decision."

However, Gluckstein says that as the plaintiff in Galdamez never qualified for income replacement benefits, she should be able to bring a fresh application for non-earner ones. "If you are denied one benefit, it doesn't preclude you from trying for another," he adds.

"It's open to someone who is denied an income benefit to subsequently apply for a non-earner benefit," says Gluckstein. But that person "would still have to see how s. 35 is interpreted with this type of decision."

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