As a claim professional, the first step on receipt of a liability claim is to make sure that the claim is not statute barred under the Limitations Act. The Act imposes an absolute limitation period of 2 years on most claims, meaning, no legal action can be initiated after the 2nd anniversary of the day when the claim was discovered (and not just when the incident occurred, though both dates may coincide).
In Yelda v. Vu, 2013, the Ontario Superior Court of Justice reiterated the principles surrounding the intent behind imposing the limitation period, as confirmed by the Supreme Court of Canada in Peixero v. Haberman, 1997.
Limitation periods bring finality to litigation which is in the best interests of all parties. As well, limitation periods help prevent prejudice to the parties so that evidence, memories, and witnesses are available and fair trials held within a reasonable time period after the cause of action arose. Defendants are entitled to know at some point that they are no longer facing a claim.
Section 5 of the Limitations Act, 2002, S.O. 2002, c.24, Sched. B states:
5 (1) A claim is discovered on the earlier of,
(a) the day on which the person with the claim first knew,
(i) that the injury, loss or damage had occurred,
(ii) that the injury, loss or damage was caused by or contributed to by an act or omission,
(iii) that the act or omission was that of the person against whom the claim is made, and
(iv) that, having regard to the nature of the injury, loss or damage, a proceeding would be an appropriate means to seek to remedy it; and
(b) the day on which a reasonable person with the abilities and in the circumstances of the person with the claim first ought to have known of the matters referred to in clause (a). 2002, c. 24, Sched. B, s. 5 (1).
In most property damage cases that are relatively straight forward (like burst pipes, fire damage claims), the date of incident, generally speaking, is the day from which the two-year period begins (At least for apparent causes where responsible third parties could be easily identified). For complex claims where it may not be possible to determine the exact day when the incident occurred or when the incident may have occurred and/or where the incident would have manifested over a period of time (Like injuries sustained over a period inhaling toxic substances such as asbestos fibers), there are various “Trigger Theories” that need to be taken into account.
One would imagine that in a Motor Vehicle Accident (MVA), the Limitation Period would begin to run from the day of the accident. Right? Not Really!
In a recent decision by the Ontario Superior Court of Justice, an action was allowed even though the lawsuit was filed outside the two-year period from the date of the MVA.
In St. Marthe v. O’Connor, 2019, a cyclist sued the defendant in July 2015, for an accident that occurred in November 2011.
The facts of the case are quite straightforward.
The plaintiff, 33, a worker in the landscaping business, was en-route to work riding his bicycle in the morning of November 9, 2011 when he was struck by the defendant’s car. He was not wearing a helmet at the material time and was wearing ear-buds that he removed when getting closer to the defendant’s car.
The defendant offered to call an ambulance, but the plaintiff denied the offer and went with his employer who came to pick him up after the accident. The plaintiff however did end up going to an emergency department shortly after the incident, just before the noon of the same day. The emergency department records indicated that the plaintiff complained about the back pain and no other visible injuries were noted. The plaintiff was prescribed with an over the counter pain medication and was discharged.
The plaintiff was first seen by a physiotherapist in December 2011 and underwent 18 physiotherapy and 9 massage therapy treatments until April 2012. His pain alleviated with the treatment he received, showing significant improvement, but with some residual swelling in the area of his back pain. In May 2012, the notes from his massage therapist confirmed that he is not having any back pain and he seems to have healed quite well.
In April 2014, the plaintiff started working as a laborer for a local construction company after staying at home for a year to take care of his newborn. In November, he was laid off as he was not able to carry on with the job duties due to back pain, even though he was very impressive in his work, as confirmed by the employer. Though his record of employment mentioned “shortage of work” as the reason for lay off. He tried manual labor job again in the spring of 2015, after taking some treatment but once again suffered back pain and decided that he could no longer perform manual labor and stopped working in October 2015.
The plaintiff sustained a soft tissue injury to his back that did not heal.
The trial commenced in November 2018 and the defendant admitted liability.
Among other things, the judge focused on the following two issues:
1. Limitation Period
2. Contributory Negligence
The plaintiff relied upon the discoverability principle codified in the Limitations Act.
Hurley J., writing for the Ontario Superior Court of Justice, confirmed under various paragraphs, concluding the claim is NOT statute barred since the plaintiff did not have the requisite knowledge that his injury could be a permanent and serious one until late 2014:
In a personal injury claim arising out of a motor vehicle accident, the plaintiff will not have discovered his claim until he knows that he has a substantial chance to succeed in recovering a judgment for damages. This will involve both a consideration of the statutory deductible under the Insurance Act and whether the plaintiff is aware that he has suffered a permanent and serious injury
The onus is on the plaintiff to establish that the claim was not discoverable within the applicable limitation period and that he acted with due diligence to discover if he had a cause of action.
There is a patent incongruity in the defendant’s legal position. He submits Mr. St. Marthe should have known or, alternatively, with reasonable diligence would have discovered that he suffered a permanent, serious injury before July 14, 2013 but argues, just as forcefully, that he does not have such an injury.
Because of the family decision that he would stay at home and be a “househusband”, I am satisfied he did not become aware that the injury was serious and potentially permanent until he returned to work at Hybrid. It was not until the fall of 2014 that he realized he might be unable to do heavy construction labour because of the pain it caused.
With regards to the Contributory Negligence for not wearing a helmet, the judge confirmed that there has been no causal link proven between the injury and the alleged contributory negligence of not wearing a helmet.
Investigate the claim properly, completing due diligence. Do not try to cut short on expenses by not hiring competent adjusters. Ask the right questions. Do not just rely on employment records and paperwork submitted. Not everything is recorded in paperwork. One needs to be proactive in taking statements from the employers, witnesses etc., making sure the records corroborate with the actual events.
The Discoverability Principle is one of the most debated principles in the Limitations Act and has been subjected to much litigation. From an insurer’s perspective, it may be a wise idea to make sure that this principle has been thoroughly reviewed in analyzing a claim before going to the court. Because, once an action goes to the court, two things generally happen:
Firstly, the claim file gets dragged, incurring unnecessary time and expense, and remains open for a longer period of time, that could have been closed within a few months had insurers acted prudently.
Secondly, unnecessary legal expenses are incurred, and settlements are generally on a much higher end once the case goes to trial. At the end, the insurers may end up paying much more than what they could have settled for had the right steps been taken from day one. It is much easier to settle a claim before a statement of claim is issued.
So next time, before going to the court, make sure above steps have been taken. Happy Adjusting!