Further lessons from El-Khodr

Plaintiffs with tort and Accident Benefit claims should prepare for increased reductions in their awards for damages following the recent Court of Appeal Decision in El-Khodr v Lackie, 2017 ONCA 716 (“El-Khodr”). In the decision, the Court determined that the principle established in Bannon v McNeely (1998), 38 O.R. (3d) 659 (C.A.) (“Bannon”), of matching “apples to apples” in regards to the categories of awards and reduction of the same is no longer relevant.

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Plaintiffs Take Another Hit

At long last, the Court of Appeal has spoken.

We have previously discussed changes to s. 258.3(8.1) of the Insurance Act that on January 1, 2015 reduced the pre-judgment interest rate for non-pecuniary damages from 5.0% to the bank rate at the time the proceeding commenced.

In El-Khodr v Lackie, 2015 ONSC 4766 (“El-Khodr”) the Court was asked to determine if this reduction applied to cases commenced prior to the amendment date. The trial judge determined, to the relief of all plaintiffs with personal injury actions commenced before the amendment date, that the amendment did not apply retrospectively. In the absence of express or implied intention, the Court held that the change in pre-judgment interest rate was to be enacted on a go-forward basis, and to find otherwise would be a windfall for insurance companies and cause disadvantage to insured persons. This was a welcome decision to plaintiff personal injury lawyers already battling defendant insurers on the retroactive application of the rate reduction.

As is often the case with law, however, a conflicting decision followed just months later in Cobb v Long Estate, 2015 ONSC 6799 (“Cobb”). The trial judge in Cobb exercised his discretion under s.130 of the Courts of Justice Act and set a pre-judgment interest rate at 3%.

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