Law Times

Page 8 August 21, 2017 • LAw times www.lawtimesnews.com Ruling on CPP a win for accident victims BY MICHAEL MCKIERNAN For Law Times A Supreme Court of Canada decision that ruled the Canada Pen- sion Plan is not a policy of insurance is a win for accident victims across the country, says a Toronto lawyer. In Sabean v. Portage La Prairie Mutual Insurance Co., a unanimous seven-judge panel of the nation's top court ruled the insurer could not deduct a Nova Scotia man's CPP disabil- ity payments from his excess in- surance payments according to the province's standard SEF 44 endorsement. The endorsement, also known in other provinces as a family protection endorsement, is meant to cover drivers when they're injured in a crash caused by an underinsured driver, but it allows insurance companies to deduct future payments from a "policy of insurance providing disability benefits." The insurer claimed this should include the CPP, but Su- preme Court Justice Androm- ache Karakatsanis, writing for the court, said that laypeople reading the endorsement "would understand a 'policy of insur- ance' to mean an optional, pri- vate insurance contract and not a mandatory statutory scheme such as the CPP. "Thus, future CPP disabil- ity benefits do not reduce the amount payable by the insurer under the Endorsement," the judge added. Deanna Gilbert, partner at Toronto personal injury firm Thomson Rogers Lawyers, says the decision has significance na- tionwide, since provinces with private insurance systems use virtually identical wording in excess coverage policies. That in- cludes Ontario, where its version of the family protection endorse- ment is known as OPCF-44R. "It's not one of the Supreme Court's more complex decisions, but it is a very important one be- cause of its wide applicability," Gilbert says. Ontario accident victims should be especially grateful for the decision, she says, since it bucks recent trends in the personal injury field. "In the last few years, we've seen more and more barriers put in front of accident victims seeking fair compensation," Gil- bert says, pointing in particular to controversial changes to the accident benefits system en- acted last year. Since June 2016, catastrophically injured victims have seen their combined atten- dant care and medical and reha- bilitation services limited to $1 million, down from the previous cap of $2 million. Non-catastrophically injured victims, meanwhile, also saw their maximum combined ben- efits significantly cut. "There's less and less money available to injured folks these days, so I think the Supreme Court made the right decision removing this hurdle," Gilbert says. The Supreme Court case dates back to a 2004 motor vehicle crash in Bridgewater, N.S. that left Andrew Sabean with injuries. Nine years later, a jury awarded him $465,000, but the at-fault driver only had enough insur- ance coverage to pay $382,000. Sabean turned to his own insurer to make up the $83,000 difference, but he resorted to the courts when he was told Portage La Prairie considered CPP a pol- icy of insurance for the purposes of its family protection endorse- ment and that the insurance company intended to deduct his future disability benefits pay- ments from the total. A Nova Scotia Supreme Court judge sided with Sabean, relying in part on a 2010 New Brunswick Court of Appeal de- cision that found CPP disability benefits were not deductible un- der that province's version of the endorsement. However, the appeal court in Nova Scotia reversed the rul- ing, putting it at odds with the approach of its Maritime neigh- bour's most senior judges. Scott Campbell, a partner at Stewart McKelvey in Halifax, who acted for Portage La Prairie before the Supreme Court, says the ruling resolves the conf lict- ing authorities, although he ad- mits he was hoping the justices of the top court would go the other way. "I obviously respect the Su- preme Court decision, but I was disappointed with the result," he says. Still, the judgment offers in- surers one possible option for insurers to get their way, accord- ing to Campbell: explicitly stat- ing that legislated CPP benefits are deductible from excess pay- ments. "Had the contract done so, an average person would have known exactly what they ap- plied for as insurance, and what was and was not covered by the premiums paid under the En- dorsement," Karakatsanis wrote in her decision. "It is open to the industry to take the steps it needs to in order to add that degree of clarity to the policy, but I don't know if it's something that's being pursued," Campbell says. Ben Irantalab, a lawyer with Oatley Vigmond Personal Inju- ry Lawyers in Barrie, Ont., says the decision could offer further joy to accident victims further down the road because of the justices' approach to contract interpretation in cases involving industry-standard terms. Because individual drivers cannot realistically negotiate with an insurer, they are left with a "take-it-or-leave-it" prop- osition when presented with an endorsement such as the one in Sabean, the judgment explains. "Insurance companies have an advantage because they know all the legislation and ju- risprudence much better than the average consumer," Iranta- lab says. To level the playing field in such cases, "the overriding prin- ciple is that where the language of the disputed clause is unam- biguous, reading the contract as a whole, effect should be given to that clear language," accord- ing to the Supreme Court. LT FOCUS ON Pensions Law Deanna Gilbert says a recent Supreme Court of Canada decision has significance nationwide, since provinces with private insurance systems use virtually identical wording in excess coverage policies. FOCUS canadianlawyermag.com/surveys Survey is open August 8 - September 11 What's your biggest challenge managing in-house? Growth of your organization? Recruiting? Legal costs? Weigh in on these and other issues. The annual Canadian Lawyer Corporate Counsel Survey Untitled-2 1 2017-08-11 2:30 PM

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