Determining Catastrophic Impairments After Multiple Car Accidents

Catastrophic impairments are considered the most severe and life-altering injuries that can be sustained in a car accident. According to Ontario’s Statutory Accident Benefits Schedule (SABS), a catastrophic impairment is defined as an injury that results in a marked and sustained loss of function. This means that the injury has a significant and lasting impact on the individual’s ability to perform everyday activities and participate in society.

There are several factors considered when determining catastrophic impairment.  For motor vehicle accidents which occurred prior to June 1, 2016, an accident victim could qualify as a person suffering from a catastrophic impairment if they experienced a marked impairment in any one of the following four categories:

• The activities of daily living
• Concentration, persistence, and pace
• Social functioning
• Adaptation to work or work-like stressors

Post June 1, 2016, the Ontario legislature amended the law to make it more onerous for accident victims to access catastrophic impairment benefits for mental and behavioral disorders. For accidents which occurred after June 1, 2016, three marked impairments are now required.

If an insurer determines that an impairment is catastrophic, the car accident survivor should be eligible for increased policy limits for medical and rehabilitation benefits and attendant care benefits. A catastrophically impaired individual will also be entitled to housekeeping and home maintenance benefits.  Being catastrophically impaired does not affect entitlement to an income replacement benefit.

But what happens if an Ontarian sustains catastrophic injuries after being involved in multiple car accidents? How can an insurer determine whether the catastrophic impairment is a direct result of the most recent collision, or if it can be attributed to pre-existing conditions from a previous accident? A recent Divisional Court decision speaks to this issue. It involves a case involving an appeal relating to a determination as to whether or not an accident victim was catastrophically impaired and whether it was related to the subject accident. The insurance company argued that the victim was catastrophically impaired before the subject accident. The Divisional Court disagreed.

Facts of the Case

After being involved in a car accident in 2013, the Applicant submitted a claim for accident benefits in recognition of the catastrophic impairments due to a mental or behavioural disorder he had sustained in his accident. His Insurer disputed this claim and the matter was taken to arbitration at the Financial Services Commission of Ontario (“FSCO”). The Arbitrator found that the Applicant had, indeed, been catastrophically impaired as a result of his accident.

However, the Applicant had been involved in two previous collisions nearly a decade earlier. Because of the injuries he had sustained in those accidents, when his most recent collision occurred in 2013, the Applicant was already suffering significant, ongoing mental or behavioural problems.

Because of this fact, his Insurer appealed the Arbitrator’s determination of catastrophic impairment to the Director Delegate. The Insurer claimed that the Applicant was already catastrophically impaired at the time of the accident, and so his most recent accident could not have caused catastrophic impairment.

The Arbitrator’s initial findings were overruled by the Director Delegate, who found that the Arbitrator had used the wrong causation test to determine whether the Applicant’s accident-related impairments should be considered catastrophic.

At Issue in the Case

Thiruchelvam v RBC General Insurance Company 2022 ONSC 554 was before the Divisional Court on judicial review, to determine the reasonableness of the decision of the Director’s Delegate of the Financial Services Commission of Ontario that the Applicant, Stalin Thiruchelvam, was not catastrophically impaired.

The Director’s Delegate had determined that at the time of the Applicant’s 2013 car accident, with respect to which he had applied for a determination of catastrophic impairment, the Applicant was already catastrophically impaired from two previous accidents that occurred in 2002 (at paras 22 and 28). In so doing, the Director’s Delegate overturned the decision of the Arbitrator of the first instance, who had held that the Applicant had sustained catastrophic impairment from his 2013 car accident, on the basis that all three accidents materially contributed to the impairments he suffered from (at para 19).

The Director’s Delegate reached his conclusion by applying the “but for” test to the issue of causation, to the exclusion of the “material contribution” test (at para 22). To this extent, his approach was intra vires, insofar as his jurisdiction was limited to questions of law- notwithstanding that the Divisional Court found that his holding as to the inapplicability of the “material contribution” test was legally incorrect (at para 36).

More problematically, however, as Justice Lederer put it, “the Director’s Delegate was acting on the false factual foundation that Stalin Thiruchelvam was already catastrophically impaired”, although “[t]here was never a determination made, through the process the legislative scheme provided , that Stalin Thiruchelvam was catastrophically impaired” prior to the 2013 accident (at para 63; see also: para 22):

The Director’s Delegate went further. He made a critical finding not made by, and inconsistent with those that were made by, the Arbitrator. He found that, at the time of the accident, Stalin Thiruchelvam was already catastrophically impaired. 

The “but for” causation tests asks if an accident survivor would have suffered from certain impairments “but for” the accident in which they were involved. Rather than using the “but for” causation test, the Arbitrator- whose decision was upheld by the Divisional Court- had used the “material contribution” test. The Arbitrator found that, although the Applicant was already suffering from mental or behavioural issues resulting from his first two car accidents, his conditions had been improving in the intervening years. However, because of his third accident, the Applicant’s condition worsened. The injuries sustained in this most recent car accident made a material contribution to his impairments.

In overturning the Director Delegate’s decision, the Divisional Court made two significant legal statements.

The first pertains to causation and when it is appropriate to use the “material contribution test” instead of the “but for test”.  The Court found that the primary test for causation is the “but for” test but when certain requirements are met, the “material contribution test can be used. These requirements are as follows:  “In exceptional circumstances, where (i) the plaintiff establishes that her loss would not have occurred “but for” the negligence of two or more tortfeasors, each of whom could be responsible for the loss; but (ii) the plaintiff is unable through no fault of her own, to show that one tortfeasor is the “but for” cause of her injuries because each tortfeasor can point to the other as the possible “but for” cause of the injury, a plaintiff may establish liability against one defendant if that defendant’s conduct materially contributed to the plaintiff’s risk of injury.”

The second significant legal statement stemming from this decision is that a person can only be found to be catastrophically impaired provided that a determination of catastrophic is made by following the legislative scheme or process.

This case is significant in that it throws into question practical issues about how SABS is applied to cases involving people who have been injured in multiple car accidents. These findings suggest it is entirely reasonable to apply a “material contribution” test to determine catastrophic impairment. The outcome of this case also implies that it is impossible to untangle the cumulative effects of multiple injury-causing accidents to determine which collision (if any one of them alone) is wholly responsible for catastrophic impairments.

What Coverage is Available to Catastrophically Injured Car Accident Survivors?

If an individual has sustained catastrophic injuries as a result of a motor vehicle accident, they should be entitled to enhanced accident benefits to help them cope with their newly acquired, injury-related expenses. While insurance policyholders can decide to purchase additional coverage, all basic auto insurance plans in Ontario include benefits that adhere to the SABS. These benefits include:

• A total of $1,000,000.00 combined for medical, rehabilitation, and attendant care benefits
• Up to $100 per week for life for housekeeping services and home maintenance
• Income replacement payments of 70% of gross weekly earnings (up to a maximum of $400 per week)
• And possibly more

If you have sustained catastrophic injuries in a motor vehicle collision, it can be difficult to know what to do next, or how to go about seeking fair compensation. To review your situation with our accident benefits lawyers or contact us  to schedule your free initial consultation.

This article has been authored by Jeffrey A. Preszler.