The Importance of Knowing the “Threshold” and the Statutory Deductible


Citizens of Ontario are involved in car accidents on a daily basis. Unfortunately, car accidents often result in personal injuries. If you have been the victim of a car accident, it is normal to want to seek compensation for your pain and suffering from the at-fault driver(s) involved in the collision. However, before proceeding into a lawsuit, it is important that motorists are made aware of the statutory restrictions that Ontario has put in place on the recovery of damages for pain and suffering in car accident cases.

As per section 267.5(3) of the Insurance Act, R.S.O. 1990, c. I.8, an injured individual cannot recover damages for pain and suffering from a car accident unless he or she has died or, alternatively, sustained:

a) “Permanent serious disfigurement”; or

b) “Permanent serious impairment” of an “important physical, mental, or psychological function”.

The restrictions put in place by section 267.5(3) of the Insurance Act are commonly referred to as the “threshold”.

Numerous judicial decisions have thoroughly discussed what it means for an individual to pass the “threshold”. In general and simplified terms, however, an individual will pass the “threshold” when his or her injuries prevent him or her from participating in employment, social, recreational, familial, and/or household activities to the same extent as before the accident, and this difference in pre-accident vs. post-accident life involves a meaningful difference in function and ability. Given the “permanent” branch of the “threshold”, it is not sufficient to have suffered for only a short period of time after the accident, e.g. a few days or weeks after the accident, before ultimately making a full recovery. Rather, the impairment must be long-standing with no anticipated recovery date.

Notably, a judge has sole authority to determine whether or not an individual passes the “threshold”. This is true even if the trial is in front of a jury. In fact, even if a jury awards a Plaintiff damages for pain and suffering from a car accident, if at the end of the trial the judge determines that the “threshold” was not passed, no recovery shall occur. Although judges do not commonly overturn jury decisions based on the “threshold”, it does occur, particularly when judges deem Plaintiffs to have exaggerated their symptoms. In assessing whether or not an individual passes the “threshold”, the Courts will review an individual’s medical records, post-accident treatment, and the evidence of witnesses, among other things.

Injured motorists in Ontario can be forgiven for thinking that the “threshold” presents an unfair restriction to accident victims being able to receive fair compensation for their pain and suffering. This is particularly so given that car accident victims in Ontario are also subject to a monetary threshold on their pain and suffering claims. As per this monetary threshold, all pain and suffering awards for car accident victims are automatically subjected to a statutory deductible of $38,818.97, unless the pain and suffering award is $129,395.49 or greater (at which point the statutory deductible for pain and suffering awards vanishes). This means that if you are awarded $100,000.00 for pain and suffering damages for your injuries from a car accident by a jury, your net award will be $61,181.03, after the statutory deductible of $38,818.97 applies. Worse yet for accident victims, the statutory deductible and the point at which it vanishes are both indexed to inflation, inching higher every year, with no corresponding increase in accident benefits entitlements to accident victims.

All of this means that if you have been injured in a motor vehicle accident in Ontario, it is important that you speak to a personal injury lawyer to be educated about your rights following an accident and, if you have a viable claim and wish to pursue it, commence a lawsuit.

At Jasmine Daya & Co., we have extensive experience proving threshold claims on behalf of our clients and can help build a strong case on your behalf. If you have been injured in a motor vehicle accident, contact our team of personal injury lawyers. We will meet with you to discuss the details of your case in a free consultation and give you an honest assessment of your legal options. We work on a contingency fee basis, which means that we will not be paid until you case has been resolved. Call us at 416-967-9100 or contact us online to schedule an appointment.