Court Clarifies Income Replacement Benefit Test

Under the Statutory Accident Benefits Schedule (SABS), a person injured in a car accident in Ontario is entitled to receive a weekly income replacement benefit for two years if he or she is unable to perform his or her own occupation. after two years, the injured person is only entitled to receive an ongoing income replacement benefit if the injured person is completely unable “to engage in any employment for which he or she is reasonably suited by education, training or experience.”

In the recent decision of Burtch v. Aviva Insurance Company of Canada, the Ontario Court of Appeal was asked to articulate the proper test for income replacement benefits more than two years after an accident.  Specifically, it was asked to consider whether an injured person is considered able to engage in employment if there is a job that the injured person is not currently qualified for but is capable of qualifying for.

The Court of Appeal held that it is not necessary for the injured person to the formally qualified and able to begin work immediately for alternative employment to be considered a reasonably suitable alternative.  A job for which the injured person is not already qualified may be a suitable alternative so long as “substantial” upgrading or retraining is not required.

The injured person in the case before the court, Mr. Burtch, was 29 years old and had been working as a general labourer before he was injured in a motor vehicle collision.  His job required him to do some heavy lifting, to be able to drive a vehicle and to receive instructions and communicate with his employer and others.  Mr. Burtch was assessed by a vocational counsellor, who concluded that Mr. Burtch had the best chance of success in the field of long-haul truck driving.  In order to obtain such a position, Mr. Burtch needed to complete a truck driving course at a cost of about $4250 and to obtain a waiver card to enable him to cross the border into the United States.  Mr. Burtch testified that he was willing to give long-haul trucking a try.

At trial, the trial judge found that there were job opportunities available in long-haul trucking, that it paid a similar amount to Mr. Birch’s past employment, and that there were trucking jobs within Canada that would not require Mr. Burtch to cross the border.  Importantly, the medical and vocational evidence indicated that Mr. Burtch could perform the duties of a long-haul truck driver.

Based on those findings by the trial judge, the Court of Appeal concluded that “long-haul trucking was clearly a suitable alternative for [Mr. Burtch], even though he lacked formal qualifications for it”.  As a result, the Court held that Mr. Burtch was not entitled to receive a continuing income replacement benefit under the SABS.

Though the Court was only considering the SABS test for income replacement benefits, tests for benefits under most disability insurance policies contain similar wording.  As a result, it is likely that the test articulated by the Court of Appeal in Burtch v. Aviva will apply to short-term disability and long-term disability insurance policies.

This means that an insured person who has the ability to retrain in another field has an obligation to pursue such retraining, so long as the cost and the time required to retrain are not prohibitive.

Patrick Brown

Patrick Brown

Principal Partner

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