Court of Appeal Confirms Payment of $ 385,000 to Northbridge Arising from Assignment of Canadian Underwriter Accident Benefits


The Ontario Court of Appeal recently ruled in favor of Northbridge Insurance in a motor vehicle liability claim that involved a dispute over the portion of the plaintiff’s accident benefits to be paid to the liability insurer.

Kossay El-Khodr got caught from behind while driving a tow truck. He sued and got $ 2.85 million in 2015. At the same time, El-Khodr filed for accident benefits with RSA, his accident benefits insurer.

In Ontario, an injured claimant is not expected to get both first party accident benefits from their own insurer and damages for the same loss by suing the offending motorist. This is considered a “double recovery”, which the courts generally try to avoid. Thus, when a claimant presents both accident benefits and a tort claim, the awarded accident benefits are normally deducted from the tort benefits.

But there is debate about whether to take an “apple” or “silo” approach to determining and calculating deductions. This has given rise to several different disputes arising both from the accident that injured El-Khodr and other motor vehicle bodily injury lawsuits in Ontario.

Northbridge purchased liability insurance for the defendant who was sued by El-Khodr. To avoid double recovery, a court ordered that some of the RSA accident benefits be awarded to Northbridge. Northbridge and El-Khodr disagreed on the exact amount El-Khodr must pay Northbridge from El-Khodr accident benefits in order to avoid a double clawback.

In 2017, the Ontario Court of Appeal ruled that a “silo” approach should be followed. In the case of El-Khodr, this means that jury prizes for future drugs and assistive devices – as well as professional services – are to be awarded to Northbridge as the liability insurer. Under a silo approach, which the appeals court ruled is now law in Ontario, a court does not necessarily match the same damage counts when deducting accident benefits from tort benefits. .

Originally, in 2015, after El-Khodr received $ 2.85 million, a judge ruled that any money El-Khodr received from RSA for housekeeping benefits should be allocated. in Northbridge until the amount received matches the amount of the Jury Prize. At the same time, the judge ruled that Northbridge could not be awarded accident benefits related to future professional services and medications and assistive devices.

In the 2015 decision, overturned in 2017, Judge Giovanna Toscano Roccamo used the “apples” approach, meaning that the liability insurer could only deduct future benefits without fault if the jury award “Reflects” the performance without fail.

In 2017, the appeals court ruled that El-Khodr should instead award benefits for drugs and assistive devices (up to a total of $ 82,429) and certain professional services (up to a total of 424 $ 550) at Northbridge. This uses the silo approach, where large damage counts are matched.

Meanwhile, ahead of the release of the 2017 appeal decision, El-Khodr struck a deal with RSA and Northbridge. A dispute over that settlement resulted in a 2020 Ontario Superior Court of Justice ruling in favor of Northbridge, a decision upheld by the Ontario Court of Appeal in a decision released on June 21, 2021.

In that settlement, RSA, Northbridge and El-Khodr agreed that El-Khodr would pay $ 385,000 to a law firm that would be held in trust. If Northbridge won on appeal (which it did in 2017), the $ 385,000 would go through the law firm’s trust in Northbridge. If Northbridge lost the appeal, then the $ 385,000 would be returned to El-Khodr.

In Kossay El-Khodr v. Northbridge Commercial Insurance Company, released in 2020 by the Ontario Superior Court of Justice, Justice Heather Williams ordered that the $ 385,000 be paid out of the law firm trust in Northbridge.

This decision was confirmed in the decision of the Court of Appeal issued on June 21, 2021.

On appeal, El-Khodr argued that no one anticipated the 2017 ruling. Among other things, he argued that in order for the settlement to be triggered, all of his future medical and rehabilitation benefits should have been attributed to Northbridge.

El-Khodr further argued that the term “medical and rehabilitation benefits” can only refer to this entire category of benefits, and that it would be unfair for Northbridge to receive the full settlement amount of $ 385,000. when the Court of Appeal granted the assignment of some, but all of the medical and rehabilitation benefits.

Specifically, El-Khodr argued that the 2017 appeals court decision did not result in Northbridge being awarded a “rent subsidy”, estimated at around $ 50,000, which El -Khodr claims RSA for accident benefits.

El-Khodr received and paid $ 82,429 for future drugs and assistive devices and $ 424,550 for professional services in 2015, before the settlement was reached. These amounts exceed the settlement amount by $ 385,000.

In her 2020 decision, Judge Williams found that El-Khodr knew when he signed the settlement notice that the winner of the 2017 appeal would receive the full $ 385,000 in the settlement. The Ontario Court of Appeal accepted.

When assigning drugs and assistive devices and professional services to Northbridge up to the amount of the jury’s prize in 2017, the Ontario Court of Appeal recognized that a plaintiff was fully compensated. for her loss when a jury prize was paid, Justice Julie Thorburn wrote on behalf of the Ontario Court of Appeal in her decision of June 21, 2021.

In its 2021 decision, the appeals court agreed that a claimant would be overcompensated if there is an assignment of accident benefits for losses that were also paid by the liability insurer as a result of a decision of the jury.

Feature image via iStock.com/alexsl



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