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SABS Benefits For Parked Motorcycle Accident

An Ontario Court of Appeal decision was released this week, and upheld an injured person’s entitlement to no-fault benefits.

Hourigan J.A. penned the judgment in this case, indexed as Economical Mutual Insurance Company v. Caughy, 2016 ONCA 226 (CanLII). The plaintiff was injured when he tripped on a parked motorcycle in a campground. He sustained a serious spinal cord injury. The support of no-fault insurance is sure to be much needed in such a case.

The no-fault insurer, Economical, applied to the court for a declaration that the incident was not an accident. The incident was found to be an “accident” involving a vehicle under s.3(1) of the Statutory Accident Benefits Schedule (SABS), which is “an incident in which the use or operation of an automobile directly causes an impairment…”. If an accident does not meet this definition, there is no entitlement to no-fault benefits.

The Court of Appeal applied the test from Amos v. Insurance Corp. of British Columbia, [1995] 3 SCR 405, and related jurisprudence, to determine whether the accident was a SABS-qualifying “accident”:

  1. Did the accident result from the ordinary and well-known activities to which automobiles are put?
  2. Is there some nexus or causal relationship (not necessarily a direct or proximate causal relationship) between the appellant’s injuries and the ownership, use or operation of his vehicle, or is the connection between the injuries and the ownership, use or operation of the vehicle merely incidental or fortuitous?

This two-part test summarizes the case law interpreting the phrase “arising out of the ownership, use or operation of a vehicle”, and encompasses both the “purpose” and “causation” tests posited in the jurisprudence.

Hourigan J. A. emphasized that the fact that a vehicle is parked when it is involved in an accident does not mean that no-fault benefits should not flow. Only where the vehicle is being used in a truly aberrant way should the injured person be disqualified from no-fault benefits. That was not the case here, as motor vehicles are designed to be parked and indeed spend a large proportion of their time parked. The incident also easily met the second step of the test.

The decision was released March 24, 2016, as if to bid farewell to SABS litigation in the ordinary courts. As of April 1, 2016, no lawsuit may be started relating to SABS benefits. Instead, the Licence Appeal Tribunal (“LAT”) will assume responsibility for SABS benefits dispute resolution, taking over from the Financial Services Commission of Ontario (“FSCO”), which formerly handled these disputes. Personal injury lawyers across the province are watching the transition closely as they advocate for injured people. We have tracked the coming transition in previous blog posts.