A motor vehicle accident victim must have his COVID-19 employment benefits deducted from a jury’s auto accident award, Ontario’s Superior Court of Justice ruled in a recent decision.
The issue was novel, given there “were no cases directly on point in Ontario,” as Justice Evelyn M. ten Cate summarized in Ferreira v. Hopper, released in late September.
In the end, the court ordered the COVID-19-related benefits to be deducted from his personal injury award, saying the accident victim consistently maintained his time off work was due to the accident and not for any other reason, like the pandemic.
Jason Ferreira was involved in a motor vehicle accident on Oct. 24, 2017, suffering soft tissue injuries to his neck, mid- and lower back. In 2020, he received both the COVID-19-related Canada Emergency Response Benefit (CERB) and the Canada Recovery Benefit (CRB); he also received CRB in 2021.
The issue at hand was whether those COVID-19 benefits were deductible pursuant to s. 267.8(1)2 of the Insurance Act. The court said yes, and the total amount of CERB and CRB — about $19,000 — should be deducted from the jury’s award of $100,000.
In total, a jury returned a verdict of $129,000 in awards following the accident: $100,000 for past loss of income, $4,000 for future medical and rehabilitation, and $25,000 for non-pecuniary general damages.
Against double recovery
The purpose of tort law is to restore a plaintiff to the position he or she would have been in had the negligent act or omission not occurred, “in so far as money can do so,” as ten Cate writes.
“However, a plaintiff is entitled to recover the full extent of his loss, but no more. This is known as the rule against ‘double recovery.’”
In common law, payments received under an insurance policy are not deducted from tort awards, even if it resulted in over-compensation of the plaintiff. But as part of Ontario’s legislative regime to lower auto insurance premiums, various amendments were made. Ontario’s Insurance Act provides that certain collateral benefits are deducted from damages to which a plaintiff is entitled for income loss and loss of earning capacity, thereby overriding the common law.
The relevant portion of the Insurance Act says:
267.8(1) In an action for loss or damage from bodily injury or death arising directly or indirectly from the use or operation of an automobile, the damages to which a plaintiff is entitled for income loss and loss of earning capacity shall be reduced by the following amounts:
… 2. All payments in respect of the incident that the plaintiff has received or that were available before the trial of the action for income loss or loss of earning capacity under the laws of any jurisdiction or under an income continuation benefit plan. (emphasis added)
In order to prove deductibility under 268.8(1)2 of the act, the defendants must establish that CERB and CRB payments are “for income loss or loss of earning capacity” and that they were “in respect of an incident.”
Counsel for the plaintiff conceded CERB and CRB are intended to be income replacement “for income loss or loss of earning capacity” consistent with the Supreme Court of Canada’s reasoning in M.B. v. British Columbia. However, counsel submitted the payments were not “in respect of an incident” and therefore not deductible.
Defence counsel submits the payments were “in respect of an incident” and deductible.
“There are no cases directly on point in Ontario,” ten Cate says.
LAT decision considered
The justice also considered a reconsideration decision at Ontario’s Licence Appeal Tribunal, Foster v. Aviva Gen Ins. Co. In that case, the arbitrator found both CERB and CRB were deductible from the income replacement benefit payable under the Statutory Accident Benefits Schedule. However, the reconsideration was granted, saying it was an error in law for the tribunal to determine that CERB/CRB is deductible under SABS.
But “decisions of the LAT are not binding on this court,” ten Cate wrote.
Ferreira received $14,000 for CERB and $5,000 for CRB, according to his 2020 income tax return. In 2021, he received a total of $19,600 in “other income” comprised of CRB payments.
He was off work from the day of the accident on Oct. 24, 2017 until September 2019. He worked until November 2019 and then went off work again until May 2022. He continues to work to this day.
The jury rendered a verdict for past income loss of $100,000, which covers the entire period from Oct. 24, 2017 until trail commenced on Sept. 9, 2024.
But both CERB and CRB are for those who were directly affected by COVID-19, as the decision notes. “In other words, to qualify and maintain eligibility for these benefits, the plaintiff must have been otherwise able to work during the period for which benefits were available.
“At no point during trial did Mr. Ferreira concede that any portion of his absence from work was due to any reason other than his inability to work because of the car accident,” ten Cate writes. “Given his evidence at trial, he cannot now reframe his theory of income loss post-verdict to avoid deductions.”
Feature image: A new analysis of two government wage-support programs says four out of five people will receive less from employment insurance than they get from a COVID emergency benefit, unless there are changes to the system. The landing page for the Canada Emergency Response Benefit is seen in Toronto, Monday, Aug. 10, 2020. THE CANADIAN PRESS/Giordano Ciampini
