What is a "Cold Case"?

Ontario auto insurance law establishes time limits to take certain steps when you have been injured in a car accident. Failure to comply impacts your rights and entitlements or can permanently deprive you of these rights. For example, you must let your insurer know that you were injured within 7 days of the accident. Once you receive an application package, you must apply for accident benefits within 30 days. If you miss either of these deadlines, you will have to fight to receive any benefits, and provide a satisfactory explanation for the delay. Most importantly, if your insurer reduces, cuts off or denies a benefit, you have two years to start an application disputing the decision with the Licence Appeal Tribunal (LAT). Generally, missing these deadlines acts as a bar to challenging the decision.

The general rules governing your entitlement to accident benefits and right to challenge a denial or unfair settlement are often presented as written in stone and impossible to challenge. Thankfully, this is not the case – several exceptions exist and can be argued successfully, no matter how long ago you were in the accident. If you were seriously injured in a car accident and continue to suffer from your accident related injuries but believe you do not have access to necessary accident benefits, you might still qualify under one of the exceptions listed above.

Rescission of Full and Final Settlement

When you agree to settle your no-fault accident benefits claim, the law requires your insurance company to give you specific information in writing, to ensure that you fully understand the terms of the settlement and your rights. They must provide:

• A description of the benefits you might receive.
• An explanation of how the settlement affects your rights, including any limits on disputing the settlement.
• A statement that you can cancel the settlement within two business days by sending written notice.
• Information on how the settlement might affect your taxes.
• An estimate of the present lump sum value of your available benefits, including how this value is calculated.
• Advice to seek independent legal, financial, and medical advice before finalizing the settlement.

If the insurance company does not meet these requirements, you can cancel the settlement agreement at any time by providing written notice, even after the two-day "cooling-off" period. This is also called rescinding the agreement, or rescission. 

The law recognizes that insurance companies have the upper hand when negotiating with accident victims. Therefore, our courts strictly enforce these requirements against insurers, and insist that they are provided in clear, straightforward language that can be understood by everyone. 

For example, a plaintiff was seriously injured in two car accidents. She eventually settled her no-fault claims for $60,000. Years later, she tried to rescind the settlement, claiming her insurance company did not provide enough information about her available benefits or their potential value. The insurer claimed that it had met these requirements because it gave the plaintiff a copy of the regulations. The court agreed with the plaintiff and rescinded the settlement. The judge explained that the required information must be clear and simple enough for someone without legal knowledge to understand. Simply attaching a long and complex legal document did not meet this test. The judge also confirmed that there was no time limit on rescinding accident benefits settlements when these requirements are not met. Therefore, the plaintiff was allowed to pursue further no-fault claims.

Clear and Unequivocal Denial

If you are seriously injured in a car accident and one or more of your accident benefits is denied or reduced, you have two years to appeal the decision to the Licence Appeal Tribunal (LAT). In the interest of fairness (similarly to the “rescission” example above), your insurance company must give you this denial in clear, straightforward language, explaining why your benefit was denied including the medical and other reasons supporting their decision, and how you can dispute it. If the notice is unclear, ambiguous, or otherwise inadequate, the two-year limit for appealing does not start.

In one leading case, an injury victim received a letter from her insurance company stopping her Income Replacement Benefits (IRBs) because she had returned to work. The letter said she could restart her IRBs if she stopped work again because of to her injuries and her doctor submitted an updated medical form called a Disability Certificate. After she was forced to stop working again, she submitted the form and requested ongoing IRBs. The insurance company denied her claim, arguing that she was out of time, since more than two years had passed since they sent the denial letter. At trial, the plaintiff explained that she did not understand from the letter that she must provide her insurer with a new Disability Certificate within two years. Instead, she believed that she could restart IRBs at any point after the new Disability Certificate was submitted. The court agreed, finding that the letter was not a proper denial – it was unclear and could be interpreted in different ways. As a result, she was allowed to pursue her claim.

In both examples, the courts emphasized the requirement that insurance companies must provide clear communication to help their insured accident victims make informed decisions about settlement, after understanding their rights and the steps they need to take. 

If you or a loved one continues to suffer from car accident injuries - after settling your no-fault accident benefits claim, or the two years to dispute a denied benefit have expired – we are pleased to offer a free, no-obligation consultation to review the circumstances and discuss your options going forward. 

We are pleased to offer a free, no-obligation consultation to discuss these matters with you. Trust the experts at Campisi LLP – Champions with heart.