Judge Says Bill 198 Meant to “Tighten Up” IA Threshold

Sherman v. Guckelsberger was released on December 29, but Ontario auto insurers can be forgiven for thinking that it was meant to have arrived four days earlier.

In this case, Madam Justice Jane A. Milanetti had to decide whether or not a plaintiff’s claim satisfied the “threshold” contained in s. 267.5(5) of the Insurance Act, as clarified by O. Reg. 461/96 (“Court Proceedings For Automobile Accidents That Occur On Or After November 1, 1996”). (The current version of the threshold is often referred to as “Bill 198”.)

The threshold itself has not changed but 2003 amendments to O.Reg. 461/96 created a number of requirements that are supposed to be met in order for an injury to satisfy the threshold. Justice Milanetti held that the plaintiff in this case did not meet the threshold and in doing so, she expressed the view that legislature had meant to “tighten up” the present (Bill 198) version of the threshold from the former (Bill 59) one.

To date, the only analysis of the Bill 198 version of the threshold was that undertaken last year by Madam Justice Joanne Morrisette in Nissan v. McNamee. (We are aware of one other case in which Mr. Justice Hugh R. McLean followed the reasoning of Justice Morrisette. That was a jury case and we have not seen Justice McLean’s reasons on the threshold motion, but we understand that the case is under appeal to the Court of Appeal.) Speaking of Justice Morrisette’s decision in Nissan, Justice Milanetti said: “She concludes, in my view, that the Bill 198 legislative changes do little to change the Bill 59 legislation that predated it. Respectfully, I have a different view of the changes and their ramifications.” Her Honour added, “It is my view, that if the legislators saw fit to amend the legislation yet again-increasing the deductible for claims under $100,000 and making it so much more specific, they did so with a view to tightening it up from the former version“.

In this case, Justice Milanetti held that the plaintiff’s soft tissue injuries did not satisfy the criteria in O.Reg. 461/96. Of the three requirements of “permanence”, “seriousness” and “importance”, she was most troubled by the lack of evidence to establish the last one: “importance”.

In Sherman, liability had been admitted for the 2004 rear-end collision in which the plaintiff was injured. Thus, the only issues were threshold and the quantum of damages. The plaintiff had various soft tissue complaints: headache, neck, shoulder and back pain and some tingling in her fingers.

The plaintiff worked in the office of a family doctor. After being off work for one week after the accident, the plaintiff returned to work on a part-time basis for two weeks and then resumed full-time employment. (For her, that meant four days a week, as her employer did not work on Wednesdays.) In addition, she held a second job, doing bookkeeping out of her home. About two and a half years after the accident, the plaintiff reduced her work hours by about eight hours per week. Still, her income for the years after the accident was higher than it had been before the accident.

Justice Milanetti summarized in detail the evidence of the lay witnesses, who described the plaintiff’s limitation in function both at home and at work. She also reviewed the testimony of a number of a number of medical expert witnesses.

The plaintiff’s main expert diagnosed the plaintiff as suffering from a WAD [“Whiplash Associated Disorder”] level III injury. Other examiners assessed her at a WAD II level.

Justice Milanetti criticized the plaintiff’s own family physician for having become “an advocate for Ms. Sherman [and whose] testimony lacked objectivity and was ultimately less helpful to me than it might otherwise have been”.

At the end of the medical evidence, Justice Milanetti was left to conclude that the plaintiff’s decision to reduce her hours of work had been taken “virtually unilaterally” and that this step had not been recommended to her by any of her treating or assessing doctors.

Counsel for the plaintiffs had conceded that the only way in which the plaintiff could meet the Bill 198 threshold was on the basis of diminished work capacity. She had maintained a relatively high level of function in her day to day life, such that she would admittedly not meet the threshold under the “daily life activities” criteria.

In her analysis of the various threshold requirements now found in O.Reg. 461/96, Justice Milanetti noted that the evidentiary criteria are mandatory. She held that the evidence in this case did not measure up. For instance, there was no evidence of “reasonable accommodations to allow [the plaintiff] to continue her employment”. Justice Milanetti said that “I have difficulty accepting that Ms. Sherman has suffered a substantial interference in her ability to continue her usual employment despite reasonable accommodation efforts.”

But it was the “seriousness” requirement that caused Her Honour the greatest concern. She noted that the plaintiff had been able to continue a relatively active lifestyle and even though counsel for the plaintiff asked the court not to penalize his client for her work ethic, but Her Honour was left to wonder “what function of Ms. Sherman is impaired…she did not tell me of anything she could not do in her work. Rather, I was presented with general description of ongoing pain symptoms the [sic] effectively wore her down.” This, said Her Honour, was at odds with the mandatory requirements of the legislation, that at least one physician explain “the specific function impaired” and “the importance of that function to person”. Such evidence was lacking here and Her Honour’s decision indicates that the omission can be fatal to a threshold claim.

Finally, Justice Milanetti also held that the plaintiff had not satisfied the “permanence” part of the threshold requirements, as amplified by O.Reg. 461/96. She noted that all of these requirements must be satisfied. Even if the plaintiff’s symptoms could be considered “continuous”, she had failed to satisfy other aspects of the regulation (such as participation in recommended treatment).

Thus, even though the trial judge said of that plaintiff that “she is not a fraud. I, in fact, quite liked both she [sic] and her husband”, the plaintiff’s action was dismissed.

The decision strongly suggests that the Bill 198 version of the threshold is substantially higher than Bill 59, contrary to the decision of Morrisette J. last year.

It will be interesting to see the direction taken by future decisions.

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