Canadian personal injury claim settlement calculations are not straightforward.
Settlement calculations consider two types of damages, pecuniary and non-pecuniary damages.
Pecuniary Damages vs. Non-Pecuniary Damages
Pecuniary damages include items that are allotted a specific number value such as variations in income due to an injury, physiotherapy costs for treating the injury, medical bills, and costs of prescriptions. Non-pecuniary damages represent the value of items that cannot be quantified such as pain and suffering. Unlike pecuniary damages which are quantifiable, non-pecuniary damages are based on court decisions for personal injury cases.
The Ontario court system strives to calculate personal injury case settlements that will put a person back in the position they were in prior to the accident that caused their injury. It is not an exact science, and every case and calculation related to a Toronto-area personal injury claim is different. The Ontario court system looks to prior cases it has decided where the injury/injuries being claimed by a plaintiff are similar to inform a decision regarding a personal injury claim settlement.
Limits in Canada
Unfortunately, in Canada, there is a limit to the amount of a settlement a plaintiff can receive for non-pecuniary damages. This limit as of today is around $418,000. As such only the most serious and debilitating injuries have a chance of reaping a personal injury settlement in and around this upper limit, such as quadriplegia.
For injuries sustained as a result of Toronto-area automobile accidents, there are other limits on settlements for non-pecuniary damages that are set out by the Insurance Act.
The first has to do with “threshold”. If a plaintiff’s injury/injuries do not reach a threshold as set out below then that plaintiff is not entitled to an award for non-pecuniary damages:
- Permanent serious disfigurement
- Permanent serious impairment of an important, physical, mental or psychological function or
The objective of this threshold is to ensure that only those with serious injuries are awarded settlement monies for non-pecuniary damages. Soft tissue injuries typically fall below this threshold unless there is a chronic pain element to the injury.
The other limit on personal injury settlements arising from automobile accidents is referred to as the statutory deductible. This statutory deductible is taken off the top of any settlement award for pain and suffering or non-pecuniary damages arising from an automobile accident. As of 2022, the statutory deductible is $41,503.50, for settlement awards that are valued above $138,343.86.
After non-pecuniary damages are calculated, the pecuniary damages can be added to that figure which would represent the full settlement amount for your injury.
Get Help for a Personal Injury Claim Settlement
If you hired a lawyer to assist you with your personal injury case, a portion of the settlement amount would also include your legal costs and disbursements, both of which HST would be added. Because of this payment, some people question if they need a lawyer after a car accident or injury, but almost always the amount of the settlement received is larger with the help of an experienced Ontario injury attorney than it would be without their help.
What about Compensation for Pain and Suffering After a Car Accident?
In the case of more severe injuries or the death of a loved one, it may be possible to file a court claim for pain and suffering.
The Supreme Court of Canada has placed a cap on the amount that can be awarded for pain and suffering (non-pecuniary damages). This maximum award changes periodically based on inflation but is generally in the range of $350,000.
Keep in mind the amount mentioned in the previous paragraph is the maximum. The amount actually awarded would depend on precedents. That means that based on similar previous cases, with similar injuries and circumstances, the court would determine what amount of compensation for pain and suffering it considers fair.
In addition, particularly in Ontario, determining if it is worthwhile to make a claim can be complicated. A claim has to reach a certain threshold before going forward. In addition, any amount awarded may be subject to a statutory deductible of approximately $38,000.