*Since the writing of this blog the decision has been affirmed (not overturned).

In Mandel v. Fakhim, 2016 ONSC 6538, a Toronto-based jury awarded $3,000 in general damages to the Plaintiff (“Mr. Mandel”), for injuries sustained in a 2009 motor vehicle accident.  Counsel made submissions on the verbal threshold while the Jury deliberated.  After the Jury released its verdict, Justice Myers expressed concern about deciding threshold. It would be a “moot point” because the trifling award was eliminated by the $36,540 statutory deductible.  Mr. Mandel was going home not a penny richer.

Justice Myers expressed some misgivings about Jury trials in personal injury lawsuits.  As opposed to giving plaintiffs recourse to be judged by their peers, they were seemingly being used by defendants to minimize damages.  However, he concedes that jury trials are “still the law of the land”, and once a panel is convened, maximal deference should be afforded to its fact-finding role.  If Justice Myers found that Mr. Mandel cleared threshold, he would have necessarily done so by reaching a factual conclusion in direct conflict with the Jury.  He would have to conclude Mr. Mandel suffered most of the injuries claimed, and that they were caused by the accident.  This would seemingly usurp the Jury’s critical function without any good purpose. 

In a motor vehicle Jury trial, section 267.5(15) of the Insurance Act requires a judge to make a threshold determination.  The Jury’s duty is to quantify the damages.   There is considerable overlap between what these two institutions are called upon to decide.  The intent of the legislature must be balanced with the sacrosanct jury trial.  A threshold determination that conflicts with a Jury’s verdict (especially when its view of the facts are known) should only occur in exceptional circumstances .  If the threshold determination has no practical effect (as when damages are wiped out anyways), there is no justification for “emasculating” the function of the jury. 

Justice Myers considered a hypothetical scenario where  deciding threshold would possibly not be moot.  The Insurance Act was amended on August 1, 2015. Before the amendment, it was plausible for a court to award costs on a $3,000 judgement – providing threshold was met.  The amendment closed this door on litigants, requiring that costs clear the $36,540 statutory deductible.  Justice Meyer had to decide whether this amendment applied to Mr. Mandel’s lawsuit, brought before 2015.

Mr. Mandel would have been accumulating costs in his lawsuit for years before the amendment.  It was reasonable he would conduct his litigation based upon the current state of the law (including cost consequences).  If the amendment applied “retroactively” (to the time period before 2015), he  would be unfairly deprived of his “vested right” to recover these costs.  

If the amendment did not apply “retroactively”,  Mr. Mandel could potentially be awarded costs – as there would be no deductible to wipe them out.  It would no longer be moot for Justice Meyer to decided threshold (the only barrier left standing between Mr. Mandel and his costs).

However, Justice Myers rejected this proposition.  He emphasized that cost awards are discretionary – rather than an automatic “vested right”.  The decision to award costs is not made until trial – which in this case (August 2016), was a year after the amendment was enacted.  There was no elimination of a right to costs because it never existed.   Therefore, the amendment applied “retrospectively”, because the decision to award costs happens after the amendment was enacted.   This is true even if the costs themselves were incurred before the 2015 enactment.   

There is no indication Justice Myers’ principled analysis was intended for this case alone.  His view is that costs will be subject to the statutory deductible in all motor vehicle lawsuits in Ontario – regardless of when the claim was issued.  The court system abounds with Plaintiffs who issued claims prior to August 1, 2015.  If this decision becomes settled law, the successful ones will have to scale yet another wall erected by the changes to the statutory deductible – this time to recover costs.

If you have a question about this blog or a similar file, please contact Eric Grossman at 416-777-5222