If you have been injured in a motor vehicle accident, you may choose to pursue a claim against the at-fault driver or their insurer to recover compensation for losses you have suffered. Although the common perception is that this type of claim will involve going to court, the reality is that most personal injury claims are resolved through a settlement.
In a previous blog post, Personal Injury Settlements: Things You Should Know, we discussed some common questions about why to settle and how the settlement and negotiation process works. In this post, we supplement that information by discussing factors that may affect the dollar value of any settlement you might be able to reach with the opposing party.
The Starting Premise
The basic premise of a damage award is that it should aim to put you in the same position you would have been in had the accident not occurred, to the extent that money can do so. Compensable losses include both past and future lost income, out-of-pocket expenses, any costs of care that you may be required to pay as a result of your injuries, as well as non-pecuniary damages for pain and suffering.
At the same time, you are not entitled to receive a windfall – in other words, you should not receive more than you actually lost. A fair damage award is based on the true scope of your losses and should provide you with compensation that reflects the real impact that the accident had on your life.
This may mean that compensation you have received from other sources – besides the at-fault driver and his/her insurer – needs to be factored in to avoid double-recovery. In some cases, the amounts received from these other sources may have to be deducted from your damage award. We discuss some common situations that can arise below.
Disability pension or private disability insurance
Many people who suffer injury in an accident have access to disability benefits from a pension plan or private insurance policy. If you are one of these people, under s. 570 of Alberta’s Insurance Act, some of these benefits may need to be deducted from your damage award. For example, s. 570 states that Canada Pension Plan (CPP) disability pension benefits, or benefits provided under any equivalent legislation of a jurisdiction outside Canada, must be deducted. This was confirmed in Vujicic v. Estate of Loena Donna MacEachern, 2022 ABCA 263, a recent judgment of the Alberta Court of Appeal.
Section 570 also requires that benefits received under certain types of “income replacement” or “income continuation” plans or schemes be deducted from a damages award. This language was added to the Act as a result of amendments that to date have received little treatment by the courts to help clarify their meaning. It is common for defendants and their insurers to take the position that disability payments and income replacement benefits received from employer-paid or private insurance policies should be deducted to avoid double recovery.
However, it is not clear that this is always the case, especially if you have paid the premiums on the policy or deductions toward the premiums have been made from your paycheques. Your lawyer will be able to advise you about the likelihood of these benefits being deductible in your particular case.
Many employees who saw their employment affected by the COVID-19 pandemic received financial assistance in the form of CERB benefits. Recently, the Alberta Court of Appeal found that CERB payments are not deductible from damages in the context of a wrongful dismissal claim (Oostlander v. Cerbus Equipment Corporation, 2023 ABCA 13). The Court found that broader policy considerations favoured non-deductibility, and in that specific context, if a windfall was to result, it seems to better reflect the intention of Parliament that it should go to the worker.
However, it is not clear whether CERB payments fall under s. 570 of the Insurance Act, and consequently whether reasoning similar to Oostlander will apply in relation to claims for injuries resulting from an accident. If you were injured while on CERB, the insurance company may try to argue that your inability to return to work was due to economic circumstances, rather than because of your injuries. Again, your lawyer will be able to advise you about the likelihood of CERB benefits being deductible in light of the circumstances of your particular case.
What if you were unemployed before the accident or were between jobs and on EI?
Typically, a loss of income claim is calculated by establishing your wage at the time of the accident and how much time you were off work because of your injuries. If you were not working at the time of the accident, this determination may be more difficult since there is no established income stream on which to base the calculation.
However, this does not mean that you cannot successfully claim for loss of income. There are other methods for establishing a likely income level, based on your training and experience. For example, an expert may rely on Census (statistical) data, to establish average incomes for people with your occupation and level of education, and make reasonable predictions about what your income might have been but for the accident.
If you were not working at the time of the accident, you will need to show how and when you would have returned to work but for the accident. For example, establishing the jobs you were actively applying for, demonstrating your pattern of employment, or the steps you were taking to retrain may be enough. An experienced lawyer can help navigate the information and evidence required to establish a loss of income claim that is specific to the circumstances you found yourself in at the time of the accident.
What if you were a homemaker or on maternity or parental leave at the time of the accident?
The reason why you were not employed outside the home at the time of the accident may impact the damages you are entitled to claim. Even if you were not engaged in work outside the home, you may be entitled to claim for a loss or impairment of housekeeping capacity, depending on what your household responsibilities were prior to the accident and how they were impacted post-accident.
A Word of Caution
It is important to remember that insurance adjusters are working for the insurance company and its best interests, which may not align with your best interests. You should be wary if you are given promises that your file will be settled, but there seems to be no progress in that direction. As discussed in our previous post, if a settlement cannot be reached, a statement of claim must be filed within two years of the date of your accident or your will lose your right to pursue a claim.
If you are not talking settlement numbers with the adjuster within three to six months of the date when your limitation period is set to expire, it is advisable to consult a lawyer to make sure your rights are protected.
Experienced Edmonton Injury Lawyers
Negotiating a personal injury settlement can be complicated. An experienced lawyer can help guide you through the settlement process and make sure that you are aware of all the compensation you may be entitled to. If you have been in an accident and would like to discuss your options, even if you have already begun communicating with an insurance adjuster, contact our experienced team at CAM LLP.