MacDonald v MacVicar, 2018 NSSC 272 provides judicial guidance on s. 113BA(1) of the Insurance Act, RSNS 1989, c 231 (“Act”), holding that future loss of income damages for plaintiffs injured in motor vehicle accidents should be calculated on a gross, rather than net basis. Background In MacDonald v MacVicar, 2018 NSSC 271, the court […]read more
To Order an Advance Payment to a PEI Motor Vehicle Accident Plaintiff – or Not – That Was the Question
In Fraser v. Runighan 2018 PESC 261, Chief Justice T. L. Clements of the Supreme Court of Prince Edward Island considered, for the first time on PEI, a motor vehicle accident plaintiff’s motion2 for an advance payment under Rules 20.10 – 20.12 (now Rule 22.1) of PEI’s Rules of Civil Procedure.
Pursuant to Rule 20.10 (now Rule 22.1) of the PEI Rules of Civil Procedure, a plaintiff claiming tort damages may bring a motion3 on affidavit material or other evidence before damages are assessed for an order requiring the defendant to make an advance payment on all or part of the pecuniary damages suffered, incurred or to be incurred by the plaintiff as claimed in the action. Before doing so, however, the plaintiff has to ensure the defendant has admitted liability for some or all of the plaintiff’s damages or the court has determined the defendant’s liability on a motion for summary judgment.
In determining the amount of the advance payment, the court has wide discretion and may consider “any circumstances that the judge considers relevant”, including:
- any special damages incurred (or likely to be incurred) before damages are assessed;
- any counterclaim of the defendant;
- any contributory negligence of the plaintiff;
- any failure by the plaintiff to mitigate special damages;
- the plaintiff’s needs and resources; and
- the defendant’s means, including insurance to indemnify the plaintiff.
The court may order an advance payment to be made:
- by lump sum;
- by instalment;
- as ongoing expenses are incurred; and/or
- directly to third parties.
The plaintiffs Veronica and Barry Fraser were involved in a January 12, 2012 motor vehicle accident with an oncoming vehicle. The Frasers sued the insured owner and driver of the oncoming vehicle for damages relating to injuries allegedly suffered.
After discoveries, the Frasers brought an uncontested motion for summary judgment. At the same time, Ms. Fraser brought a motion for an advance payment of past4 pecuniary damages:
- past loss of income, past care/treatment costs, and past valuable services ($210,067); and
- disbursements ($18,298.13).
Ms. Fraser achieved some success on her motion, in that, the court:
- awarded roughly half (i.e. $117,607 of the $228,365.13 ) of the advance payment sought for past loss of income, past care/treatment costs and past valuable services, having found Ms. Fraser will “more likely than not” prove an entitlement to such damages at trial; but
- refused to order an advance payment for disbursements as the court was not satisfied that disbursements were captured by Rule 20.10 (now Rule 22.1).
In coming to this conclusion, the court considered evidence5, the wording of Rules 20.10 – 20.12 (now Rule 22.1) of PEI’s Rules of Civil Procedure and took “significant guidance” from the New Brunswick Court of Appeal’s finding in Smith v. Agnew,  N.B.J. No. 282, the appeal of a motion for an advance payment under New Brunswick’s substantially similar (but not identical) advance payment regime6.
In short, the court determined the loss of income the plaintiff will “more likely than not prove at trial” and adjusted it significantly downward, in this case, for the real or substantial possibility that the defendants’ defences and offsets would find favor with the trial judge.
Lessons for Insurers
For insurers, the Fraser v. Runighan case offers, for the first time, some guidance on how advance payment requests will be dealt with by PEI courts.
It should also prompt insurers to:
- consider the risk of an advance payment motion when admitting or effectively conceding liability, particularly in the absence of an agreement to keep the claim “within limits”;
- recognize that the court will likely treat the advance payment regime as remedial legislation and thereby give it a “fair, large and liberal construction and interpretation as best ensures the attainment of that objective”;
- consider cross-examining the moving plaintiff and leading cogent responding evidence (including expert evidence and surveillance) relating to, inter alia, complete/partial defences to the action/motion (e.g. issues of proof, unreliability of evidence, causation, failure to mitigate, exaggeration of injuries/symptoms, malingering, etc.) and available statutory offsets;
- observe the court’s warning that a motion for an advance payment is a balance act based on limitations that exist at this stage and should not be allowed to morph into a mini-trial;
- keep in mind that an order for an advance payment is not a final determination of the extent of the plaintiff’s claim – but rather receipt of the advance payment constitutes a release of the defendant to the extent of such payment;
- make formal Rule 49 offers to settle motions for advance payments, where appropriate, for beneficial cost consequences and resulting release; and
- consider what remedies are available if the advance payment exceeds the plaintiff’s judgment, if any, at trial.
1 Also see: Erratum to Decision at Fraser v. Runigham, 2018 PESC 26 err.
2 As part of this lengthy motion, the court also considered the Plaintiffs’ uncontested motion for summary judgment (on liability) and four consequential issues including plaintiffs’ counsel’s disclosure of the defendants’ settlement offers relating to the motion and without prejudice communications, the possibility of judicial recusal, defence counsel’s right to cross-examine on original supporting affidavits later replaced by amended versions and the sufficiency of the plaintiffs’ pleadings re: psychological injuries.
3 A plaintiff may bring multiple advance payment applications during an action.
4 Ms. Fraser sought an advance payment for past losses only, notwithstanding that Rule 20.10(1) (now 22.1(1)) contemplates an advance payment for both past and future pecuniary losses.
5 The evidence included, among other things, affidavit evidence (including, among other things, untested medical evidence and expert reports, loss of income, costs of care and actuarial reports), cross-examination evidence of Ms. Fraser and surveillance.
6 Unlike PEI, New Brunswick’s advance payment regime relates to requests for advance payments of “special damages” (not “pecuniary damages”) and arises from two different authorities: Rule 47.03(3) of the New Brunswick Rules of Court and s.265.6 of New Brunswick’s Insurance Act, R.S.N.B. 1973, c. I-12.