What are General Damages in Personal Injury?

Navigating the aftermath of a motor vehicle accident in Ontario involves understanding the complexities of compensation, particularly concerning general damages—commonly known as non-pecuniary damages or compensation for pain and suffering. Recent annual increases to statutory deductibles for motor vehicle accident cases has made obtaining adequate compensation increasingly challenging, especially for injuries that don't exceed the "disappearing deductible" threshold.

What are General Damages?

General damages refer to non-economic losses resulting from an injury. Unlike tangible losses such as medical expenses or lost income, general damages encompass intangible detriments like pain and suffering, diminished quality of life, and emotional or psychological distress, making them more challenging to quantify.

Criteria for Recovering General Damages in Ontario

To recover general damages after a motor vehicle accident in Ontario, two key criteria must be met:

1. Threshold Test: section 267.5(5) of the Insurance Act, R.S.O. 1990, c I.8 obligates all those injured in car accident to prove, on a balance of probabilities, that their injuries are both permanent and serious. The legal definition for the type of impairments that exceed the threshold, and the factors the trial judge considers on a threshold motion, are set out in sections 4.1 to 4.3 of Court Proceedings for Automobile Accidents that Occur on or After November 1, 1996, O. Reg 461/96.
2. Statutory Deductible: even if an injured person proves their damages meet the threshold, their claim for general damages may be subject to a deductible prescribed by section 267.5(7) of the Insurance Act. The jury is not told about the deductible and will not know it applies. This deductible also applies to claims for "loss of guidance, care, and companionship" under the Family Law Act, R.S.O. 1990, c F.3, albeit at a lower amount. However, the deductible does not apply if your general damages exceed a specific monetary threshold. 

The Ontario government adjusts the statutory deductibles and monetary thresholds each year. For instance, in 2023, the statutory deductible was $44,367.24, with a monetary threshold of $147,889.59. In 2024, these amounts rose to $46,053.20 and $153,509.39, respectively. The most recent updated adjustments to the deductible and monetary thresholds can be accessed from the Financial Services Regulatory Authority of Ontario here. 

Implications of Increasing Deductibles

Juries decide many personal injury trials arising from car accidents. Under Ontario law, the trial judge is not to instruct the jury about the existence of the threshold, deductible, or monetary threshold. Without knowing of the threshold, deductible, or monetary threshold independently, juries render verdicts unaware of how they impact your net recovery. In other words, the jury might award amounts they perceive as fair, not realizing that post-deduction, the injured party receives substantially less than intended. This lack of awareness can result in plaintiffs receiving compensation that doesn't accurately reflect their suffering and losses.

Consider a scenario where a jury awards $50,000 in pain and suffering to an individual seriously and permanently injured in a car accident. After application of the 2024 statutory deductible of $46,053.20, the injured person only gets to recover $3,946.80 from the jury’s award. This significant reduction underscores a critical issue in the compensation process.

The Role of Thresholds & Statutory Deductibles

The permanent serious threshold and statutory deductibles aim to discourage lawsuits for minor injuries by inserting risks of either $0 recovery or a significantly reduced recovery. The dynamic therefore provides a significant benefit to insurance companies while deterring otherwise legitimate claims, particularly in cases where plaintiffs suffer from conditions like chronic pain and anxiety without accompanying economic losses.

Navigating the Legal Landscape

Given these complexities, it's crucial for individuals involved in motor vehicle accidents in Ontario to seek knowledgeable legal counsel. An experienced personal injury lawyer can provide guidance on navigating the statutory thresholds and deductibles, ensuring that injured parties pursue the compensation they rightfully deserve.

Personal Injury Lawyer Toronto

Knowing the importance of trial experience is important. Many personal injury lawyers imply that they have it when they don’t. They may state that they “appear” at various court levels, but that doesn’t mean they went to trial. They may say they “fight” or that they are “tough,” but if they have never gone to trial for their clients in the past, what exactly did they fight, and just how tough are they?

We invite you to review our trial report card for further review. 

**Please note that the contents of this blog should not be relied upon as legal advice or medical advice, but only for information and reference purposes. You should always follow the advice of your doctors and treatment providers with respect to your diagnoses and what health and medical steps you should take to best recover. If you wish to obtain legal advice, please contact our office and arrange for a free consultation with one of our lawyers.**