Accident Benefits & Limitation Periods

Limitation periods relating to accident benefits are subject to the rule of discoverability. This idea comes on the heels of the Ontario Court of Appeal's decision in Tomec v. Economical Insurance Company, release​d late last year. In Tomec v. Economical Insurance Company, Ontario's most authoritative court concluded that it was unreasonable to construe the limitation period in s. 281.1(1) of the Insurance Act and s. 51(1) of the Statutory Accident Benefits Schedule – Accidents On or After November 1, 1996 ("SABS") as a hard limitation—one that runs upon the happening​ of a fixed or known event irrespective of the claimant's knowledge of a potential claim. For those unfamiliar with the case, the claimant in Tomec was struck by a motor vehicle while walking and received statutory accident benefits for attendant care and housekeeping benefits as compensation for her injuries. Aware that she was only eligible to receive those benefits for 104 weeks following the accident, Economical Insurance Company notified the claimant on August 26, 2010 that she would not receive benefits beyond the 104-week time frame. Five years after the accident, the appellant's condition deteriorated to the point that she qualified for Catastrophic Impairment ("CAT") status. As a result, further attendant care and housekeeping benefits were in order, but the claimant's application for those benefits was ultimately denied. In support of this denial, Economical Insurance Company cited s. 51(1) of the SABS and s. 281.1(1) of the Insurance Act, which required disputes over benefits to be brought within two years of the insurer's refusal to pay those benefits. The claimant had been denied benefits on August 26, 2010 and from Economical's perspective, she had exhausted the time frame allotted to her to bring a claim. Economical ignored the applicability of the discoverability rule, which generally suspends the running of the limitation period (the time in which a claimant must bring a claim) until the claimant realizes or ought to realize that she has a claim. In Tomec, there was no claim to bring on August 26, 2010 because the claimant had only been denied benefits on account of her CAT designation several years later. The issue was addressed by the License Appeal Tribunal and later by the Divisional Court. Both bodies surprisingly held that the rule of discoverability did not apply to the limitation period at issue in Tomec. According to the Divisional Court, the insurer's refusal on August 26, 2010 was the fixed or known event that triggered what it characterized as a hard limitation period. In fairness to the LAT and Divisional Court, both bodies approached the Tomec case without the benefit of the Supreme Court of Canada's decision in Pioneer Corp. v Godfrey, which provided guidance on when a limitation period should be construed as a hard limitation. Pioneer Corp. was released after the Divisional Court's ruling in Tomec, and served as the basis for the Ontario Court of Appeal's allowing the appellant in Tomec to proceed with her application for attendant care benefits and housekeeping and home maintenance benefits. In the Court of Appeal's view, the question was not whether the limitation period was tied to a fixed event, as the Divisional Court believed. Rather, it was whether the limitation period was related to a cause of action or the plaintiff's knowledge. The Supreme Court of Canada specifically held in Pioneer Corp. that discoverability applies "where a limitation period is contingent upon the accrual of a cause of action or some other event that can only occur when the plaintiff has knowledge of his or her injury". The Supreme Court then went on to say that discoverability does not apply "where a statutory limitation period runs from an event unrelated to the accrual of the cause of action or which does not require the plaintiff's knowledge of his or her injury" In Tomec, the respondent's refusal to pay the benefits was a prerequisite to the appellant's ability to make a claim for mediation or an evaluation under the material provisions in the legislation. In other words, the refusal and the ability to make a claim were inextricably intertwined in the cause of action. For this reason alone, the rule of discoverability applied. Other reasons for not construing the limitation period in Tomec as a hard limitation were that it was difficult to reconcile with the remedial purpose of the SABS, that it led to absurd results, and that it was inconsistent with policy rationales underlying limitation periods. Although s. 281.1(1) of the Insurance Act and s. 51(1) of the SABS have been repealed or modified since the time of the appellant's accident, the Tomec decision will likely inform future interpretations of other provisions setting out time frames in the accident benefits context. At the very least, the Tomec decision ensures that individuals who have exhausted their entitlement to accident benefits will be free to claim those benefits should their injuries worsen over time. And in this regard, the Ontario Court of Appeal got it right.