No-Fault Benefits Versus Fault-Based Lawsuits (Tort Claim)

When you are a victim of an accident, the first question that comes to mind is usually “who is to blame?”  And if it appears that someone else is at fault, the next question is, “how will they be held liable?” 

Ontario has a No-Fault Benefits system, known as no-fault insurance to most, which is commonly misunderstood. Read on to understand No-Fault Benefits and how they differ from Fault-based lawsuits, otherwise known as Tort Claims.

No-Fault Benefits

The Ontario accident benefits system is meant to provide you with peace of mind and fast access to essential benefits when you are injured, regardless of who is to blame for the accident itself – hence they are often referred to as No-Fault Benefits.

These benefits are available to you, the injured person, your spouse and certain other family members if they are traumatized and or debilitated because of your accident and injuries. You and your family can make a claim for disability and rehabilitation benefits.

You have access to these benefits regardless of:

1. Whether you were at fault for the accident;
2. Your legal status in Canada;
3. Whether you were a pedestrian, cyclist or passenger;
4. Whether you were injured in another province of Canada or the United States;
5. Whether the accident involved an automobile, snowmobile, ATV, motorcycle or dirt bike.

You may not be able to claim some accident benefits if:

• You were injured during the course of your employment, unless certain conditions are met. In this case, if you cannot or choose not to claim accident benefits, you may claim benefits through the Workplace Safety and Insurance Board system. Check with a lawyer before you decide under which benefit system you will make a claim for benefits.
• You were a passenger in a car that you knew had no insurance;
• You were a passenger in a car and knew that the driver did not have a license or that the car was being used without the owner’s consent;
• You made or knew of a misrepresentation made to the insurance company about the insurance contract;
• Your use of the car results in criminal charges, or refusal to provide a breath sample. (unless you are later acquitted).

If the insurance company can establish that these exclusions apply to you, you will not receive Income Replacement Benefits, Non-earner Benefits, Education Benefits, Visitor Expenses, or House-keeping benefits. It is important to speak to a lawyer to ensure all your rights are protected. 

HINT: If you have short-term or long-term disability benefits available through your job or a private policy, you should apply for those benefits immediately. That insurance policy is considered the “first payer”, and your car insurance will only cover what your disability policy does not.

Fault-based Lawsuits (Tort Claim)

Just because Ontario has a No-Faults Benefits system, it does not mean that the responsible party cannot be held liable. In addition to the accident benefit claim, you may also sue the person(s) responsible for the accident for the losses caused by their negligence. This is called a tort claim and includes compensation for:

• Your pain and suffering;
• Economic losses such as some of the shortfall between your immediate income loss and the accident benefits you receive;
• Economic losses incurred by family members as a result of the accident;
• The cost of future medical treatment and care;
• The cost of future attendant care;
• The negative effects of your injuries on your future ability to earn money in the job market;
• The cost of housekeeping and caregiving needs;
• Loss of shared family income;
• Out of pocket expenses;
• Loss of care, guidance and companionship suffered by your immediate family.

The legal procedures and the law surrounding a tort claim are very complicated and you should seek the advice of a lawyer. Some of the basic facts of which you should be aware include the following:

1. You can sue for compensation even if you are partially at fault – your compensation will be reduced to take into account your own liability.
2. Over 95% of these lawsuits are settled without going to trial.
3. Your compensation is usually paid for by the insurance company of the at-fault persons, not out of that person’s pocket. If the person at fault has no insurance, your own insurer will pay some or all of the compensation owed to you.
4. In most cases, if you were driving without insurance, you cannot sue, even if you were not to blame at all for the accident. However, you are still entitled to most no-fault benefits.
5. You must prove that you sustained a permanent and serious impairment, to successfully claim for compensation of pain and suffering.
6. Even if you suffer a permanent and serious impairment, there is a deductible to the pain and suffering damages payable. The deductible increases annually by the Consumer Price Index for Canada. For 2023, the deductible is $44,367.24. That means, the first $44,367.24 of any compensation for your pain and suffering will not be paid to you, unless your pain and suffering award exceeds $147,889.59. This was done in an effort to keep costs down for Insurers so that consumers can get the benefit through cheaper insurance premiums. 

As with the accident benefits claim there are strict time limits:

• You must notify the person or people who caused the accident of your intention to sue within 120 days of the accident.
• If the City or municipality is negligent you must notify them within 10 days of the accident of your intention to sue.
• You must sue the at-fault parties within 2 years of the accident.

HINT: You do not have to speak to the insurance company of the other people involved in the accident. As what you say could affect your right to compensation, it is a good idea to have a lawyer with you if and when you decide to provide a statement to them.

For most people, understanding No Fault Benefits and Tort claims can be very confusing. It is highly recommended to choose an experienced law firm like Campisi, as we can advocate on your behalf and arrive at a settlement that is right for you and your family. We will help you navigate through the legal process every step of the way and retain any necessary experts to prove your claim.