Loss Transfers and Delays for Accident Victims

Toronto Personal Injury Lawyer Albert Conforzi: A recent decision from the Ontario Court of Appeal has provided some further guidance to insurers on the issue of Loss Transfer.

Loss transfers exist between insurers of different classes of vehicles for accident benefit payments. For example, between a motorcycle and a car, or a car and a heavy commercial vehicle. The insurer of the motorcyclist who is responsible for paying accident benefits to that motorcyclist is entitled to reimbursement "in relation of benefits paid" from the car insurer. It's like a ladder: you can claim that reimbursement from any insurer involved in the accident on a rung above you.

In the Wawanesa v. Axa decision, Axa refused to pay for the cost of medical assessments incurred when they were determining entitlement to benefits as part of loss transfer. The case went through three levels of decision makers, and at all levels it was decided that Wawanesa could not recover those expenses, notwithstanding that the various decision makers all agreed that it was unfair. Based on the wording of s. 275 of the Insurance Act such expenses were not recoverable.

It is not unusual for delays to happen in payment to accident victims because of disputes between insurers in the handling of the loss transfer.

Only Blair J. of the Court of appeal disagreed that the section was not capable of being interpreted in the manner argued by Wawanesa. Because of the split decision in the Court of Appeal, it is at least possible for Wawanesa to ask for leave to appeal to the Supreme Court of Canada, although it is unclear whether they will try to do so.

In matters where injured victims are claiming accident benefits, and the insurer is seeking loss transfer for payments made, it is not unusual for delays to happen in payment to accident victims because of disputes between insurers. These delays shouldn't happen, as this loss transfer system is supposed to occur behind the scenes. Frequently, though, the first party insurer delays payments to victims while they are awaiting reimbursements back from the second insurer.

If your lawyer understands the loss transfer system and where to apply pressure in the event of a disruption in benefits payments, you as a victim stand a much better chance of not having to live through such disruption.

Albert Conforzi is a personal injury lawyer with Pace Law Firm in Toronto. His posts generally appear on Mondays.