ONCA Upholds Economic Loss Ruling Under SABS

September 6th, 2013 by Dan Stone

This blog is written by our law summer student, Ira Marcovitch.

This past month, the Ontario Court of Appeal released its decision in Henry v. Gore, unanimously affirming the motion judsge’s decision and, with it, his plain-reading of the ‘economic loss’ requirement under the Statutory Accident Benefits Schedule (“SABS”).

The factual background is rather straightforward. Henry, who was 18 at the time, was catastrophically injured in a car accident in September, 2010. His attendant care needs were assessed at $9,500 per month, a fact that Gore did not dispute. However, the statutory maximum payable under the SABS for attendant care is $6,000 with a lifetime cap of $1,000,000.

Henry elected to have his mother act as his attendant care provider, and she consequently took a leave of absence to care for her son. At the time of the accident, she was working fulltime as an assistant manager at a retail store, making approximately $2,100 per month. Expense forms were submitted for $6,000 per month for the expenses provided by Henry’s mother.

Gore took the position that if the attendant care service provider (Henry’s mother) could show that she sustained an economic loss in providing the services, the expense payable to her would be to indemnify her to the extent of her loss.

ONCA Upholds Economic Loss Ruling Under SABSHowever, instead of paying her lost income or the $6,000 claimed, Gore calculated the attendant care hours required and apportioned them into a traditional 8 hour work day, finding that the amount payable was approximately $2,100 per month. They argued that the only economic loss sustained was during the mother’s would-be work day, and that it wasn’t liable to pay any expenses outside that time, when she would presumably already be home with her son.

Henry took the position that the provider was to be paid in accordance with the Form 1, and he continued to submit claims for the statutory maximum of $6,000 every month.

On application, the judge sided with Henry. He found that, on plain reading, the SABS required an insurer to pay ‘all reasonable and necessary’ attendant care expenses, but required that the expenses be ‘incurred.’ ‘Incurred’ is defined in the SABS to require that the insured has “paid the expense, has promised to pay the expense, or otherwise legally obligated to pay the expense”, and that the person who has provided the service has “sustained an economic loss as a result of providing the goods or services.”

The judge found that, where family members stay home from work to take care of the insured, forgoes income to provide reasonable and necessary attendant care services, and the insured pays, promises or is obligated to pay the expense, then the insurer must pay all reasonable and necessary expenses as outlined in the Form 1.

On appeal, the Court of Appeal agreed with the motions judge. It held that the term ‘economic loss’ should be construed broadly, and in this case, its quantum should not restricted solely to the mother’s 8 hour work day. The Court opined that if the amount of the monthly care benefit were to be calculated based upon the number of hours the family care-giver was unable to work because she was providing care, or the amount of the economic loss sustained by the care-giver, then the SABS would have provided for such. But it didn’t. The Court also held that, though the mother gave up 8 hours of employment, she did so to provide 24 hours of care, and thus limiting her ‘loss’ to her normal workday was improper.

The panel succinctly concluded that, “as long as the care was provided and the family member who provided the care sustained an economic loss in so doing, the amount payable is not reduced only because the number of hours of paid employment forgone by the family member was fewer than the number of hours of care provided pursuant to the Form 1.”

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For the ONSC decision:

For the ONCA decision:

For the full decision:

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