'Economic Loss' - Challenged

February 25, 2013

The September 2010 changes to the Statutory Accident Benefits Schedule (SABS) created many uncertainties. For example, the addition of the requirement of 'economic loss' under s.3(7)(e) of the SABS has resulted in many disputes between insurance companies and those injured in accidents. In the FSCO Arbitration, Simser and Aviva (FSCO A11-004610), which took place on January 16, 2013, the insured argued that the definition of 'economic loss' should include 'opportunity cost,' as well as lost time devoted to labour or leisure.

Unfortunately, Mr. Simser's definition was rejected by Arbitrator Lee, who claimed that if this interpretation were accepted it would negate the intent of the amendment made on September 1, 2010 as every provider would meet the definition of economic loss.

SABS Requirements

In order for an expense (for good or services) to be payable, the SABS now requires the following:

the insured person has received the goods or services to which the expense relates,
the insured person has paid the expense, has promised to pay the expense or is otherwise legally obligated to pay the expense, and
the person who provided the goods or services,

did so in the course of the employment, occupation or profession in which he or she would ordinarily have been engaged, but for the accident, or
sustained an economic loss as a result of providing the goods or services to the insured person.

Result

Arbitrator Lee decided that no economic loss was sustained and therefore rejected Mr. Simser's claim for benefits. This decision demonstrates the complexity and challenges present in the current Accident Benefits regime. It demonstrates the need for experienced and dedicated representation.