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As an Ontario driver, if you are injured in a car crash, your auto insurance company should provide medical, rehabilitation, and lost wage benefits. If the car crash was not your fault, you could also sue the at-fault driver for compensation. In Ontario, a lawsuit and a claim for benefits are meant to provide an injured person with adequate compensation for injuries and losses suffered in a car crash. 

Once started, you can settle your claim for benefits or your lawsuit without having to settle both proceedings. However, settling your claim for accident benefits can impact the remaining claim for compensation in your lawsuit. 

This impact was felt by Yolanda Girao in her lawsuit for compensation from a 2002 car crash. Ms. Girao settled her benefits claim with her own auto insurer and continued her lawsuit against the driver who caused her injuries. 

The settlement of her accident benefits claim was then used as part of the legal strategy of the at-fault driver’s lawyer to defeat Ms. Girao’s lawsuit. The lawyer for the at-fault driver used Ms. Girao’s accident benefits settlement, and the fact that Ms. Girao had received a sum of money from her own insurer, to attack Ms. Girao’s credibility, attack her reliability, and suggest that the accident benefits settlement was undeserved. At the conclusion of the trial, Ms. Girao received no compensation from the lawsuit, and was ordered to pay the at-fault driver’s legal fees.

Ms. Girao appealed. The Ontario Court of Appeal, Ontario’s highest Court, set aside the trial decision and ordered a rehearing of the issues. In its ruling, the Court of appeal reviewed the legal principles regarding settling a claim for benefits:

  • Ontario’s hybrid motor vehicle accident compensation system, (1) claims for benefits and (2) lawsuits, has as its primary concern the adequate compensation of injured persons.
  • Permitting a benefits settlement to undermine the claim in the lawsuit can expose the injured person to unfairness.
  • The jury instructions should carefully explain how the motor vehicle accident compensation system in Ontario functions, including the fact that the injured person was entitled to insurance benefits.
  • The jury should be instructed not to reduce the award of damages because it believes that the benefits have compensated the plaintiff adequately for the accident.

In ordering a rehearing of the issues, the Court of Appeal decided that the accident benefits settlement had been improperly used at trial and that the trial had not been properly conducted.1 

As in Ms. Girao’s case, settling a claim for accident benefits can impact a claim for compensation in a lawsuit. An accident benefits settlement could be used as part of the defence strategy, it could be used as evidence at trial, and it could delay the resolution of a lawsuit.

Understanding the legal principles involved and the potential consequences of a settlement is critical if you are considering settling your claim for accident benefits. Seeking legal advice in such a situation is a reasonable precaution and may preserve your right to adequate compensation.    

If you have further questions about an accident benefits settlement, you can contact Maciek Piekosz for more assistance at maciek@siskinds.com or 519-660-7718.


1 Girao v. Cunningham, 2020 ONCA 260 https://www.ontariocourts.ca/decisions/2020/2020ONCA0260.htm

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