An Insurance Law Update
On January 12, 2009, the Supreme Court of Nova Scotia issued its reasons in Hartling v. Nova Scotia, rejecting the constitutional challenge to the $2,500.00 cap on general damages as per s.113B(1) of the Insurance Act, R.S.N.S. 1989, C.231 (as amended). The Applicants, Helen Hartling, Melissa Gionet, Anna Marie MacDonald and Saquoia McKinnon, submitted that the cap is a violation against the Canadian Charter of Rights and Freedoms on the grounds of gender, physical disability, mental disability, and age. The Applicants further submitted that sections 2(1)(f), (g), and (h) of the Auto Insurance Tort Recovery Regulations, N.S. Reg. 182/2003 are ultra vires the Insurance Act.
On the grounds that the cap is discriminatory against individuals with certain types of pain and discomfort constituting discrimination based on physical disability, Justice Goodfellow held that the Applicants failed to establish on a balance of probabilities that s.113B(1) of the Insurance Act creates stigmatization and stereotyping. Any stigmatization and stereotyping that may exist is on a "reducing basis (education) and its existence pre-dates the insurance cap legislation arising on a limited basis out of the adversarial system". For these reasons, he held that s.113B(1) of the Insurance Act does not infringe section 15(1) of the Charter.
On the issue of gender, Justice Goodfellow held that the Applicants again failed to establish on a balance of probabilities that s.113B(1) of the Insurance Act infringes s.15(1) of the Charter. The Applicants submitted that the Cap discriminates on the basis of sex by disproportionately affecting women with minor injuries as a result of an automobile accident on the grounds that “juries allocate their awards between economic loss damages and non-economic loss damages in cases where gender and age of the Plaintiff could be ascertained”. He further held that s.113B(1) "treats men and women in an identical fashion in terms of their ability to recover pecuniary damages and non-pecuniary damages".
On the issue that sections 2(1)(f), (g), and (h) of the Auto Insurance Tort Recovery Regulations are ultra vires the Insurance Act, Justice Goodfellow held that the definitions "resolves", "substantial interference", and "usual daily activities" are consistent with the objective to control claim costs with automobile accidents, reduction of insurance premiums and the desire to strengthen the consumer protection provisions of the Insurance Act. He commented that automobile insurance for most Canadians is a necessity, and given the rise of premiums all across Canada, it was reaching the point where insurance costs were beyond the capacity of Canadians. He further held that the Regulations were clearly consistent with the legislation and were within the power of the Legislature to make Regulations defining any word or expression used but not defined in the Legislation.
Justice Goodfellow dismissed all of the applications, however commented that what remains outstanding is a determination of the issues as it relates to s.1 of the Charter, which he intends on dealing with as part II of this decision, yet to be issued.
This alert is a general overview of the subject matter and cannot be regarded as legal advice. Please contact Alexis Moulton at firstname.lastname@example.org, Dave Risling at email@example.com, or any other member of our Insurance Law Practice Group for further advice on this or any other insurance law matter.