Wednesday January 18, 2012

New CAP vs. Old CAP Legislation

Posted in: News

Claims for certain types of damages arising out of personal injuries sustained in motor vehicle collisions which occur in Nova Scotia may be “capped” or limited as a result of the provisions of the Insurance Act and the Automobile Accident Minor Injury Regulations, NS Regulation 94/2010.

It must be emphasized that it is only “non-monetary loss” that is capped or limited. The minor injury “cap” does not impact claims for loss of past or future income, diminished earning capacity, past or future medical or other expenses incurred or for loss of valuable services such as housekeeping services. As a general rule, the “cap” for “minor injuries” only applies to a claim for “general non-pecuniary damages” which are awarded for pain, suffering and loss of amenities of life.

Old 2003 “$2,500” CAP (Injuries sustained between November 1, 2003 and April 27, 2010):

Section 113B of the Nova Scotia Insurance Act states the following concerning what constitutes a “minor injury” for accidents which occurred between November 1, 2003 and April 27, 2010:

113B (1) In this Section,

(a) “minor injury” means a personal injury that

    (i) does not result in a permanent serious disfigurement,

    (ii) does not result in a permanent serious impairment of an important bodily function caused by a continuing injury which is physical in nature, and

    (iii) resolves within twelve months following the accident;

(b) “serious impairment” means an impairment that causes substantial interference with a person’s ability to perform their usual daily activities or their regular employment.

The Automobile Accident Minor Injury Regulations, NS Regulation 94/2010 provide definitions for some of the terms used (such as “resolves”, “substantial interference” and “usual daily activities” discussed below), as well as certain exceptions, such as coma’s, amputations of major limbs, a burn resulting is serious disfigurement and chronic pain classified in the American Medical Association Guides to the Evaluation of Permanent Impairment, 5th edition, as moderately severe or severe chronic pain.

The definitions employed in the Regulation place the onus on the Plaintiff to prove, “…based on the evidence of medical practitioners trained and experienced in the assessment of the personal injury” that the injury sustained was not a “minor injury” as defined.

New 2010 “$7,500” CAP (Injuries sustained on or after April 28, 2010):

Section 113E of the Insurance Act provides a new definition of “minor injury” for any accidents that occurred on or after April 28, 2010 that:

113E (1) In this Section,

(d) “minor injury”, with respect to an accident, means

    (i) a sprain,

    (ii) a strain, or

    (iii) a whiplash-associated disorder injury,

caused by that accident that does not result in a serious impairment.

The new definition includes only those injuries that are considered “soft tissue”. Broken or fractured bones, lacerations, and other non-soft tissue damage are excluded from this definition, meaning that these injuries no longer fall under the general damages CAP.

The onus to prove the injury is not “minor” is no longer on the claimant for injuries sustained on or after April 28, 2010. This means the defendant tortfeasor now has to prove the “minor injury” provisions apply in order to limit general non-pecuniary damage claims.

The initial $7,500 “Cap” amount is indexed and will increase each year in accordance with the annual average percentage change for the all-items Consumer Price Index for Nova Scotia.

The new definition of “serious impairment” under s. 113E is found in the Automobile Accident Minor Injury Regulations, NS Regulation 94/2010, at Section 8(2), which provides that:

8(2) In Section 113E of the Act and this Part,

“serious impairment”, in respect of a claimant, means an impairment of a physical or cognitive function that meets all of the following:

(i) the impairment results in a substantial inability to perform any or all of the following:

    (A) the essential tasks of the claimant’s regular employment, occupation or profession, despite reasonable efforts to accommodate the claimant’s impairment and the claimant’s reasonable efforts to   use the accommodation to allow the claimant to continue the claimant’s employment, occupation or profession,

    (B) the essential tasks of the claimant’s training or education in a program or course that the claimant was enrolled in or had been accepted for enrolment in at the time of the accident, despite reasonable efforts to accommodate the claimant’s impairment and the claimant’s reasonable efforts to use the accommodation to allow the claimant to continue the claimant’s training or education,

    (C) the normal activities of the claimant’s daily living,

        (ii) the impairment has been ongoing since the accident, and

        (iii) the impairment is expected not to improve substantially,

Section 8(2) of Regulation 94/2010 entirely omits the requirements for the injury to impact an “important bodily function” and to have been “physical in nature”. This omission would seem to alleviate much of the burden placed on the Plaintiff by Farrell v. Casavant [2009] N.S.J. No. 351 (N.S.S.C.) in having to prove the “important bodily function” component of the cap test for injuries sustained on or after April 28, 2010.

This Regulation retains the components of an inability to perform one’s own occupation and normal activities of daily living found in 113(B)(1)(b), and adds a new component dealing with interference in schooling and education under Section 8(2)(i)(B) of Regulation 94/2010.

It is important to note as well that the wording around the length of time the injury has been an issue for the injured party has been altered by Section 8(2) of Regulation 94/2010. For injuries sustained prior to April 28, 2010, under s.113B (1)(iii), the requirement is that the injury must not have been “resolved” within 12 months of the accident. “Resolved” is defined in the regulation as follows:

(i) does not cause or ceases to cause a serious impairment of an important bodily function which results from a continuing injury of a physical nature to produce substantial interference with the person’s ability to perform their usual daily activities or their regular employment, or

(ii) causes a serious impairment which results from a continuing injury of a physical nature to produce substantial interference with a person’s ability to perform their usual daily activities or their regular employment where the person has not sought and complied with all reasonable treatment recommendations of a medical practitioner trained and experienced in the assessment and treatment of the personal injury;

For post April 28, 2010 injuries, that 12-month resolved standard has been eliminated; as stated in Section 8(2)(ii) and (iii) of Regulation 94/2010, the “serious impairment” must simply have been ongoing since the accident and not expected to improve substantially at the time of trial.

Section 11 of Regulation 94/2010 illustrates the exact method of determining whether or not a Plaintiff’s injury will constitute a “minor injury” and therefore fall within the cap:

11 (1) The determination as to whether an injury suffered by a claimant as a result of an accident is or is not a minor injury must be based on the following:

    (a) a determination as to whether the injury is a sprain, strain or whiplash-associated disorder injury; and

    (b) if the injury is determined to be a sprain, strain or whiplash- associated disorder injury, a determination as to whether the sprain, strain or whiplash-associated disorder injury results in a serious impairment.

(2) For the purpose of clause (1)(b), the determination as to whether a sprain, strain or whiplash-associated disorder injury results in a serious impairment must take all of the following into account

    (a) the claimant’s pre-existing medical history;

    (b) the matters referred to in subclause (i) of the definition of “serious impairment” in subsection 8(2) that relate to the claimant.

Section 11 Regulation 94/2010 makes it clear that the only standard that must be met to prove a soft tissue injury is not a “minor injury” are those found at Section 8(2)(i), (ii), and (iii). This once again illustrates that “important bodily function” and “physical in nature” are no longer part of the test for a “minor injury”.

Section 14 of Regulation 94/2010 governs instances when there have been multiple injuries. It states that:

    (1) In this Section, “non-minor injury” means an injury other than a minor injury.

    (2) If a claimant suffers one or more minor injuries and one or more non-minor injuries as a result of an accident, the assessment of damages for non-monetary loss for all injuries suffered by the claimant is subject to the following rules:

        a. if the non-minor injury or injuries, when assessed separately from the minor injury or injuries, would result in an award for non-monetary loss of not more than the minor injury amount, the total amount recoverable as damages for non-monetary loss for all injuries suffered by the claimant must not exceed the minor injury amount;

        b. if the non-minor injury or injuries, when assessed separately from the minor injury or injuries, would result in an award for non-monetary loss of more than the minor injury amount, the total amount recoverable as damages for non-monetary loss for all injuries suffered by the claimant must be calculated as the total of all of the following:

          i. the amount of damages assessed for non-monetary loss for the non-minor injury or injuries,

          ii. subject to Section 13, the amount of damages assessed for non-monetary loss for the minor injury or injuries.

Under subsection (2)(b), if an individual has a minor soft tissue injury that falls under the CAP, but also has another non-CAP injury, a plaintiff can claim general damages for both individually, and “stack” the claims.

So, if for example a client has a soft tissue back injury that is capped at $7,500 general damages, but also broke their wrist and is entitled to $30,000 in general damages for that injury, we can discuss both separately and then combine them into a total general damage claim of $37,500.

This is subject to subsection (a). It states that, in the event of a CAP and non-CAP injury, if the general damages value of the non-CAP injury is less than the minor CAP injury, a claimant can only claim the minor injury amount.

So, if for example a client has a soft tissue back injury that is capped at $7,500 general damages, and a broken bone that is worth $5,000, the claims CANNOT be stacked, and a claimant can only ask for the $7,500 general damage amount for the minor injury.

The information above has been provided for general reference only. For advice on an actual matter, you should consult a lawyer. For further information please contact one of our Personal Injury Team Members.

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