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Limitations on Accident Benefits Claims - Smith v. Co-Operators
On March 28, 2002, the Supreme Court of Canada released a decision which is expected to help improve the lives of persons injured in automobile accidents in Ontario and Ontarians injured in automobile accidents anywhere. Under the Insurance Act, injured persons regardless of whether they were at fault or not at fault for the accident are entitled to certain benefits known as No Fault Benefits if they meet the criteria set out in the Act. Depending on when the accident happened, these benefits include Income Replacement Benefits, Caregiver Benefits, Non-Earner Benefits, Education Disability Benefits, Attendant Care Benefits, Medical, Rehabilitation and Attendant Care Benefits, Payment of Other Expenses such as Visitor expenses and Death and Funeral Benefits.
Bernadette Smith was the victim of a motor vehicle accident that occurred on April 14, 1994. She claimed and received No Fault Benefits from the Co-operators Insurance Company who ceased paying those benefits on May 8, 1996. Ms. Smith went to a failed mediation on August 11, 1997 but she did not commence her lawsuit until September8, 1998. Under the Insurance Act, an injured person has two years from "the date of refusal to pay benefits" to mediate and then arbitrate or sue their insurance company for payment. The Co-operators argued that Ms. Smith could not continue her suit because she did not commence her suit within two years after the Co-operators ceased paying benefits.
The Supreme Court of Canada disagreed with the Co-operators' argument and concluded that Ms. Smith could continue with her lawsuit. The Supreme Court found that the two year limitation period does not begin to run until the insurer gives the injured person a proper refusal to pay. In giving a proper refusal to pay, the insurer must provide information in straightforward and clear language, directed towards an unsophisticated person. The information should include a warning in writing that the injured person has only two years from the date of refusal to commence a lawsuit. The Co-operators had only told Ms. Smith that she had a right to mediate and did not advise her of any time limitations to commence a lawsuit.
The Supreme Court decision in Smith v. Co-operators Insurance Company will provide great relief to those persons who are still suffering the effects of automobile accident injuries from many years ago. Those persons who thought that their No Fault Benefits files were closed can now proceed to have their cases heard and to get the benefits that they are rightfully entitled to.