SABS Loophole Upheld

The Court of Appeal has refused to correct an anomaly in the Statutory Accident Benefits Schedule, despite finding that it resulted from an error made in drafting the Insurance Act regulation. We attach a copy of the decision in Beattie v. National Frontier , released on Friday of last week.

The claimant was seriously injured in an accident and was eventually convicted of dangerous driving. The insurer, National Frontier, took the position that because of s. 30(4) of the SABS, the criminal conviction relieved it of any obligation to pay income replacement and various other types of benefits. Section 30(4) reads as follows:

30(4) If a person sustains an impairment as a result of an accident and,

(a) at the time of the accident, the person was engaged in, or was an occupant of an automobile that was being used in connection with, an act for which the person is charged with a criminal offence; or

(b) the person is charged under section 254 of the Criminal Code (Canada) with failing to comply with a lawful demand to provide a breath sample in connection with the accident,

the insurer shall hold in trust any amounts payable under an income replacement benefit, a non-earner benefit or a benefit under section 20, 21 or 22 until the charge is finally disposed of, at which time the amounts and any income on the amounts,

(c) shall be returned to the insurer, if the person is found guilty of the offence or an included offence; or

(d) shall be paid to the person entitled to the payment, if the person is not found guilty of the offence or an included offence.

The Court of Appeal noted that section 30(4) only deals with the entitlement to benefits from the time that criminal charges are laid against the claimant to the time of the disposition of those charges. So, in this case, the claimant only lost his entitlement to benefits up to the date of his conviction. He was entitled to be paid benefits after that date. This was found to be the case even though the court concluded that the wording of section 30(4) was probably the result of “faulty drafting that has created a lacuna, or gap, in the legislative scheme”.

As the court noted, the regulation has been amended, to close this loophole. However, the amendment that made this change (Regulation 281/03) only came into force on October 1, 2003.

We hope that you find this update to be of assistance.

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