Understanding the Threshold and Deductible in Ontario’s Motor Vehicle Litigation
In Ontario’s motor vehicle litigation, a crucial factor significantly shaping legal proceedings and outcomes is the “threshold,” established in the Ontario Insurance Act. This threshold mandates that individuals prove to a judge they have suffered “permanent” and “serious” injuries to seek compensation for pain, suffering, and healthcare costs, aiming to discourage minor injury lawsuits like whiplash.
The statutory deductible in Ontario, which increases with inflation, is currently set at $46,053.20. This deductible reduces compensation for pain and suffering, ensuring only claimants exceeding this threshold receive such compensation.
The interplay between these elements creates complexities in motor vehicle litigation. Plaintiffs must engage costly medical-legal experts to meet the threshold, leading to increased expenses and prolonged litigation. Insurance companies often use the threshold to reject settlement offers, further extending legal disputes and burdening the court system.
While meeting the threshold is required for healthcare cost claims, it is unnecessary for income loss claims. Efforts to reform Ontario’s motor vehicle litigation often focus on these two factors. Removing the threshold could simplify the process, reduce costs, and expedite trials, as claims could advance more quickly without the need to establish permanent injuries. Alternatively, legislation could be revised to limit healthcare cost claims to those with pain and suffering awards above the statutory deductible, maintaining a balance between access to justice and discouraging frivolous claims.
