Court of Appeal confirms “economic loss” is a threshold requirement

On January 4, 2013, I discussed two key decisions requiring an Accident Benefit Insurer to pay its insured an attendant care benefit based on a Form 1 Assessment of Attendant Care and not the costs associated with obtaining this service or the economic loss suffered by the care provider in doing so.

On July 26, 2013, the Ontario Court of Appeal, in Henry v. Gore Mutual Insurance Company 2013 ONCA 480 upheld the lower court’s ruling that the economic loss requirement contained within the definition of incurred in the post September 1, 2010 Statutory Accident Benefits Schedule is a threshold requirement only and the insurer is bound to pay the attendant care benefit determined by the Form 1 rather than arbitrarily reducing it to equal the amount of the economic loss sustained.

In Henry v. Gore Mutual Insurance Company, the insurer took the position that it was only required to pay Mrs. Henry an attendant care benefit that was the equivalent to her pre-car accident employment earnings. Justice Timothy Ray of the Ontario Superior Court of Justice disagreed with Gore’s position and concluded that establishing an economic loss is a threshold finding and not a means of calculating quantum.

Justice Alexandra Hoy, on behalf of the Court, correctly noted that the purpose of the attendant care benefit is to identify the level of attendant care required based solely on the injured person’s needs and not the actual cost or loss associated with providing the care. Justice Hoy also found that Justice Ray’s interpretation of the incurred requirement is consistent with the legislative intent behind the September 2010 changes which was to implement a system that allowed a “rough check on attendant care costs”. Justice Hoy goes on to conclude as follows:

“Attendant care benefits are only payable in respect of the provision by a family member of care detailed in the Form 1 assessment of the insured’s attendant care needs if the family member sustains an economic loss as a result of providing such care to the insured. If an economic loss is sustained, attendant care benefits are payable with respect to all care detailed in the Form 1 provided by the family member, subject to the maximums in s. 19(3) and various other safeguards, including ss. 42 and 33 of SABS-2010. If no such loss is sustained, no attendant care benefits are payable in respect of care provided by the family member, even if the family member provides care that would otherwise be provided by someone in the course of their employment, occupation or profession and would necessitate the payment of attendant care benefits by the insured. And to the extent that the economic loss sustained by the family member as a result of providing such care to an insured exceeds the maximum attendant care benefits stipulated in SABS-2010, the family member is not indemnified.”

Counsel for Gore urged the Court of Appeal to define the term “economic loss” however the Court of Appeal refused to do so as the fact that Mrs. Henry had incurred an economic loss had been established.