Advance Payments: Getting Paid While You Wait for Your Case to Settle

Bogoroch & Associates LLP strongly believes that victims of motor vehicle accidents are entitled to access to justice.

Becoming injured in a motor vehicle accident can be an overwhelming experience.

An injured victim must contend with the pain and limitations caused by the injury itself and the uncertain duration of the rehabilitation and recovery period.  The physical and emotional sequelae of an injury are bad enough – but it is the financial stress of being unable to work and provide for oneself and one’s family that is often the most devastating consequence of a severe injury.

Anyone injured in a motor vehicle accident in Ontario is entitled to mandatory accident benefits.  The formula for quantifying the income replacement benefit (“IRB”) is now 70% of a person’s gross income; however, the actual IRB for someone who suffers an income loss due to a motor vehicle accident is capped at a maximum of $400 per week.  Although Ontarians can purchase enhanced coverage to increase the basic IRB of $400 per week to a higher amount, few do so.

Moreover, people who are injured in auto accidents are often not aware that since September 2010, there is a $50,000.00 cap on medical and rehabilitation benefits for non-catastrophically injured claimants.  In severe injury cases, this sum can be exhausted within less than one year of the accident.  This often leads to a gap in coverage for accident victims who have sustained severe injuries but who may not meet the definition of “catastrophic impairment” or who are required to wait until their catastrophic status can be assessed.

At Bogoroch & Associates LLP, we understand the degree of financial stress and uncertainty that accident victims face in these situations and have devised a pro-active strategy to address it by bringing motions before the Superior Court Justice for advance payments.  Advance payments are designed to bridge the gap until mediation or trial so that the injured person will not be in financial straits for any significant length of time.

In certain circumstances, advance payments can be obtained in the tort action, which is the case against the at-fault party, from the insurer defending the action for damages brought by the injured plaintiff. Relief is available under the Insurance Act and Rule 20 of the Civil Procedure Rules for partial summary judgment.

Section 258.5 of the Insurance Act requires that insurers shall attempt to settle claims as expeditiously as possible. If the insurer admits liability regarding all or part of a request for income loss, the Insurance Act provides that the insurer shall make payments to the claimant pending the determination of the amount owing.   Despite these provisions, insurers are reluctant to make advance payments.

As such, motions in Court on behalf of injured plaintiffs must usually be brought before insurers will even consider them.  As stated in section 256 of the Insurance Act, the advance payment intends to permit payments to a claimant without prejudice to the defendant or the defendant’s insurer.  This means that if the case ultimately goes to trial, neither the judge nor the jury is told about the advance payment not to influence the problem.

The defendant’s insurer may make the advance payment either as an admission of liability or otherwise.   Although it makes for a more compelling argument for the insurer to make the advance payment if the defendant has admitted fault for the accident, an admission of liability is not required.

In cases where the defendant has been convicted of a driving offense due to the motor vehicle accident or the accident’s facts point to the defendant’s liability, a motion can be brought for the Court for partial summary judgment.  The Court is asked to determine that there is enough evidence to find the defendant liable, at least to the extent of the amount of the advance payment being requested.

We at Bogoroch & Associates LLP feel strongly that insurers be required to make advance payments where the circumstances warrant them and will not hesitate to fight for our clients by bringing motions for advance payments to help them financially until their case is settled or goes to trial.