So What Does “Economic Loss” Mean, Anyway?

By Pace Law | February 5, 2013

Toronto Personal Injury Lawyer Albert Conforzi Back in the fall, I reviewed a decision regarding the meaning of the word “incurred” as used in the Statutory Accident Benefits Schedule (SABS). That decision, Henry v. Gore Mutual, held that once the threshold decision of finding an economic loss had been made, there was no necessary correlation between the economic loss sustained and the amount of attendant care benefit to be paid.

An arbitration decision was recently released, Simser v Aviva Canada, which reviewed whether individuals had sustained an economic loss as a result of providing attendant care, housekeeping and home maintenance services to the injured applicant. Under the SABS, certain conditions must be fulfilled before an expense can be considered as “incurred.”

In this case, the examination revolved around whether the persons had sustained “an economic loss as a result of providing those goods or services to the insured person.” The applicant submitted an expert opinion from a professor of economics, who opined that there are various types of economic loss, with a loss of income being just one of them. Loss of time devoted to labour or leisure is another type of economic loss, in the nature of a loss of opportunity.

The insurer argued that the words “economic loss” must be given their ordinary everyday meaning by applying the modern principle of statutory interpretation. That is, reading the words in their grammatical and ordinary senses. They also referred to a law dictionary definition of economic loss as “a monetary loss such as lost wages or lost profits…” The arbitrator found that the insurers’ suggested interpretation was closer to the ordinary everyday meaning of the words.

From a factual standpoint, there were two individuals who provided attendant care, housekeeping, and home maintenance services to the applicant. The first one, JS, alleged that while continuing to work at her normal job, she would go home from work early or leave at various hours to provide services to the injured person. As a result, she said she sustained economic loss. Unfortunately, she provided no detail in terms of documentation to prove the number of hours and overtime lost and was found by the arbitrator to be a vague historian. She produced no documentation to prove any losses whatsoever.

The second individual, KS, did not attend to testify. The only evidence offered was that she lost time from her schooling. Again, no evidence was provided that any loss had been sustained.

I’m not sure whether this is a case of bad facts making bad law or not.
Clearly, the arbitrator did not find the two service providers had made
credible claims.

A further argument was made by the applicant. He argued that the insurer had explicitly recognized an economic loss by paying for some out-of-pocket expenses accompanied by receipts. The receipts were comprised of miscellaneous fuel charges, parking fees and restaurant bills incurred while apparently traveling from her home to the hospital where Mr. Simser was initially convalescing. The applicant argued that pursuant to the Henry decision, because some out-of-pocket expenses had been incurred and recognized by Aviva, the threshold for economic loss had been met and therefore the totality of the economic loss claim was payable.

The arbitrator found that if he were to accept this argument “every service provider would be able to circumvent the amended regulations by purchasing a single meal in a restaurant, a tank of gas or, as suggested by counsel, by paying one cent on a bus ticket…The Legislature would then have spoken needlessly and repetitively…Therefore I do not find that the mere payment of approximately $50 for gas, parking and restaurant invoices is sufficient to trigger the full payment of the attendant care.”

I’m not sure whether this is a case of bad facts making bad law or not. Clearly, the arbitrator did not find the two service providers had made credible claims. On the other hand, the regulation does provide that an attendant care benefit would be payable if the individual providing the benefit had sustained “an economic loss.” It doesn’t say “an income loss.” Why shouldn’t gas, parking receipts, restaurant invoices or bus tokens be considered an economic loss?

This “incurred expense” requirement was a new concept introduced in the September 2010 amendments. It just might be that the drafters did not adequately define what was intended by “economic loss.” If they meant income losses only, then they should have said so.

The case has been appealed, and we will have to wait to see whether the original arbitration decision is upheld.

Albert Conforzi is a personal injury lawyer with Pace Law Firm in Toronto. His posts generally appear on Mondays. Pace’s personal injury lawyers have been helping accident victims since 1980.