What Constitutes “Economic Loss”

The Ontario Superior Court of Justice has recently clarified the issue of what constitutes “economic loss” in the context of entitlement to payments for attendant care benefits as part of an Accident Benefits claim.

In Henry v. Gore Mutual Insurance Company (2012 ONSC 3687), the plaintiff, an eighteen year old victim of a motor vehicle collision, was receiving attendant care assistance from his mother, who took a leave of absence from work to provide the care. Under his Accident Benefits claim, the plaintiff’s monthly attendant care benefit was assessed at $9,500 (capped to the statutory maximum of $6000 per month).

This case is also one of the first to add clarification to the issue of “incurred expenses”, a recent amendment to the rules governing Accident Benefit expenses which came into effect September 1, 2010. In order for an expense to be incurred, the insured person must have 1) received the good or service to which the expense relates; 2) the insured person must either have paid the expense or be legally obligated to pay it, and 3) the person who provided the goods or services must have done so either in the course of their ordinary employment, or, they must have sustained an economic loss as a result of providing the goods or services.

Typically, individuals who are injured cannot afford to hire a service provider for expenses such as attendant care. Instead, they turn to family members to assist them. Insurers have typically taken the position that no work by a family member is compensable unless that family member has sustained an economic loss to perform the work. Moreover, they typically require that the family member demonstrate a loss of earnings from time taken off work in order to satisfy the definition of “economic loss”.

In the Henry case, the insurer took the position that the plaintiff’s mother could only receive compensation for providing attendant care that was equal to the actual amount of wages that she lost for providing the care (calculated at $2,100 per month for the time at work that she missed). The plaintiff took the position that since the mother was performing services that were agreed to be worth $6,000 per month, as assessed by an occupational therapist, she should receive $6,000 per month.

The court reviewed the legislation and came to the conclusion that, so long as a service provider is sustaining some level of economic loss, they are entitled to be compensated for the full amount of services that they are providing. Here, the mother was performing services worth $6,000 per month. She was therefore entitled to receive $6,000 per month for providing the services. What this case tells us is that the amount of economic loss does not have to equal the value of the services provided in order to receive full compensation for the services provided. It is only necessary that some economic loss is suffered.