Laws are periodically revised, amended or replaced. New laws and the revision of existing laws, particularly regulations under Ontario’s Insurance Act, may affect an individual’s personal injury claim and the amount of compensation to which they are entitled.
With any change to a law, a decision must be made whether the change applies to all scenarios, both past and future, or only to events that take place after the change was enacted. A prospective law is one that can be applied only to present issues and cannot affect events prior to its existence, whereas a retrospective law will be applied to all events including those which occurred prior to its existence.
One argument against the retroactive application of a law is that it will interfere with the vested rights of individuals. When a law is changed, the legal standards that affect whether or not changes are to be prospective (applying only to future scenarios) versus retrospective (applying to past and future scenarios) generally pertains to whether the law is deemed to be a substantive versus procedural law. Substantive law are laws or statutes that are written to govern a country and which define the obligations and rights of individuals, and as such, substantive law is generally applied only prospectively so that vested rights are upheld.
Procedural law are the legal steps for upholding substantive laws; procedural law may be different for each individual case as they depend on the application to the facts of the case and cannot interfere with an individual’s substantive rights or the liability of the parties involved. Because individuals do not have a vested right in procedures and also, procedural law is perceived to benefit everyone, procedural laws generally have an immediate effect and can apply retroactively.
The rules and differences between substantive versus procedural law and thus, retrospective versus prospective law lie at the core of the legal dispute between Teresa Davis and her insurer, Wawanesa Mutual Insurance Company. The court's determination on this issue would ultimately affect whether a 2014 change to Ontario accident benefits regulations would result in reduced benefits owed to Ms. Davis from an existing claim.
On November 15, 2013, the plaintiff Teresa Davis was catastrophically injured in a motor vehicle accident, to the point that she required in-home care. Upon leaving the hospital, Ms. Davis moved in with her son, James Lush and his wife, Hilary. Hilary Lush proceeded to take a leave of absence from her job to care for Ms. Davis full time.
In the aftermath of the accident, Ms. Davis successfully filed for accident benefits under the Statutory Accident Benefits Schedule (SABS). The claim was governed under the 2010 SABS, which stated that in the case of a non-professional attendant care provider (e.g. a family member taking time from work to care for the injured individual), he/she had to prove only that they sustained some type of economic loss due to caring for the injured party, to receive the full entitled amount per the required Form 1 document..
However, on February 1, 2014, a new regulation affecting SABS came into effect, which states that the eligible amount for a non-professional attendant care provider is equivalent to their actual economic loss (i.e. the amount of income they would normally have earned) and not the entitled amount per the Form 1, which is capped at $6,000 a month. The new regulation however, did not specify whether or not it applied to claims that arose prior to its coming to effect on February 1, 2014.
After receiving Ms. Davis’ Form 1, her insurer, Wawanesa Mutual informed her that although her claim had been approved per the new regulation, any family member or friend providing attendant care services would be paid only at a rate equivalent to their specific economic loss. In the case of Ms. Lush, this was $4,061.16 a month, the amount she made at her job as a financial analyst.
In David v Wawanesa Mutual Insurance Company, 2015, Ms. Davis challenged Wawanesa’s decision in court, on the basis that the regulation affects an individual’s substantive rights as it relates to accident benefits and as such, should only be applied prospectively. This means that the new regulation should not apply to the plaintiff’s case due to her accident occurring prior to February 1, 2014.
Wawanesa argued that the regulation does not alter an individual’s right to attendant care benefits and as such does not affect an individual’s substantive rights. Rather, the regulation merely clarifies the formula for calculating the amount of benefit to be paid. The insurer argued that the regulation was therefore declaratory or procedural in nature and as such, can be applied retrospectively to an accident occurring prior to the law coming into effect.
Thus, the issue involved in this case, was deciding whether or not the new regulation affects an individual’s substantive rights and by that token, whether or not it could be applied retrospectively.
Justice Quinlan disagreed with Wawanesa’s argument that the regulation merely clarified the attendant care benefits law and concluded rather, that it did in fact change the law. Referencing the Bulletin that accompanied the Regulation, he noted that the following words and phrases were stated, including, “new initiatives” and “new changes”, as well as, the regulation “limiting attendant care benefits.” Justice Quinlan believed these statements all spoke to the law being changed and not merely clarified.
Referencing the interpretation of the 2010 SABS in a Court of Appeal decision in Henry v. Gore, Justice Quinlan determined that the 2010 version did not intend to limit attendant care benefits to the actual costs incurred, but the new regulation does just that. In Justice Quinlan’s view, this new requirement affected the content of the law and therefore, does have a substantive impact on a claimant’s right to attendant care benefits.
Also referencing a number of other legal decisions, including R. v. Dineley, Rajbhai v. State Farm Mutual Automobile Insurance Co. and Westminster City Council v. Haywood, Justice Quinlan ultimately ruled that the new regulation did indeed change the law, meaning it does affect an individual’s substantive rights and as such cannot be applied retrospectively. Therefore, the insurer may not apply the new regulation to any claims that occurred prior to the regulation coming into effect.
Finally, Justice Quinlan noted that if the need to reform the manner in which attendant care benefits were calculated was so pressing, it would have been expressly stated that the law was retrospective and thus meant to be applied immediately to any claims regardless of the time of the accident. However, it did not. Therefore, the court ruled that the new regulation did not apply to Ms. Davis’ claim.
Changes and amendments to laws can impact the compensation a claimant deserves and are are owed. This is one of many reasons that accident victims are best served when seeking representation from a reputable and knowledgeable personal injury lawyer who is well versed in the negligence and insurance laws that can affect the outcome of a claim.
At Rastin & Associates, we specialize in civil lawsuits and insurance law, and have successfully represented many clients in injury claims against insurance companies. If you or a loved one were seriously injured in an accident, call Rastin & Associates for a no-obligation consultation with one of our skilled team of lawyers. We can advise you whether you qualify for accident benefits from your insurance company and/or have a strong case for a negligence suit against the at fault party. If your insurer has denied or delayed your claim, we will fight for your rights to receive deserved compensation. In the vast majority of cases, we can negotiate a favourable outcome for you without going to trial.
You can reach us at 844-RASTIN1 or Rastinlaw.com