Ounce of Prevention…

When Justice Neil Wittmann of the Alberta Court of the Queen’s Bench issued his long-awaited decision in the controversial and politically charged case Morrow v. Zhang, the stroke of his pen struck like a dagger into the heart of the province’s Cdn$4,000 cap on soft-tissue injuries. Wittmann effectively eviscerated the cap along with the province’s minor bodily injury regulation (MIR). To make matters worse for the industry, Wittmann refused the application of a stay that would have at least allowed the industry to staunch the bleeding after the elimination of the cap.

In the meantime, the Alberta decision has caused the industry to turn its gaze to the east, where three provinces, Prince Edward Island, New Brunswick and Nova Scotia, prepare to hear challenges to their respective caps on minor bodily injuries as well. Murmuring around industry water coolers prevails about the potential influence Wittmann’s decision may yield on these cases.

Plaintiff lawyers hope the Alberta decision will lend their arguments strength. The defence bar, on the other hand, believes the legislation in Alberta differed greatly from those in the Atlantic provinces, shedding a ray of hope on the defendant’s case.

As the industry tenses in anticipation of the political battles about to be fought in the East Coast courtrooms, it prepares for the worst and hopes for the best. A cone of silence surrounds the issue, with lawyers on all sides not wishing to prejudice their legal cases by arguing them first before the court of public opinion. Judges tend to look askance at such tactics. But public documents, including both statements of claim and defence, have been filed, and shed some light on the facts and legal arguments at stake in the Atlantic Coast litigation.

The linchpin of the Alberta case was the Charter challenge to the cap which held that the cap discriminated against those with injuries listed in the MIR. In making his decision, Justice Wittmann wrote that the cap “is demeaning to [the party suffering a soft tissue injury] because it suggests that their pain is worth less than that of other injury sufferers, in particular, members of the comparator group. It also confirms prejudices that soft tissue injuries are generally faked or exaggerated.” And so the big question is, is there any difference in what’s being argued on the East Coast?

PRINCE EDWARD ISLAND

As of press time, information as to when the case of Waite v. Richard and Richard would be heard was unavailable. A statement of claim filed in the provincial court in January 2007 outlines the events.

The plaintiff, Lisa Waite, alleges that Peter Richard in 2005 rear-ended her vehicle when she stopped at an intersection in Summerside, P. E. I.. Among her claims, which have not been proven in court, is that Richard drove on a highway without due care and attention, operating a vehicle without brakes adequate and effective to stop the car. The statement of claim says Richard failed to stop, slow down, swerve, honk his horn or manage his vehicle in order to avoid an impact when he saw or should have seen that the collision was about to occur.

According to Waite’s statement of claim, as a direct result of the collision, Waite “sustained permanent serious impairment of an important bodily function caused by continuing injury which is physical, mental, or psychological; the particulars of which include, but are not limited to, the following injuries: pain and discomfort to her neck; pain and discomfort to her left shoulder; pain and discomfort to her lower back; pain and discomfort to right trapeziues, general loss of flexibility, strength and endurance as well as straining, spraining and tearing of the muscles, tendons, ligaments, nerves and vessels throughout the body.”

The injuries, says the statement of claim, have caused Waite “severe pain and suffering. She has sustained, and will continue to sustain pain and suffering, loss of enjoyment of life, and loss of amenities.”

Waite’s claim goes on to say she has not be able to participate in those recreational, social, household, athletic, employment activities, and numerous activities of daily living to the same extent to which she did before being in the accident. She goes on to outline the continuing need for medical treatment, treatment expenses, as well as loss of income.

But Paragraph 10 of the statement of claim is perhaps of the most interest to insurers. Essentially, it reads that P. E. I.’s “threshold legislation” is contrary to s. 7 and s. 15 of the Canadian Charter of Rights and Freedoms, Constitution Act, 1982,”and that as such the province’s threshold legislation is unconstitutional and inoperative.”

Waite has served the Attorney General of Prince Edward Island and the Attorney General of Canada with a notice that she intends to “challenge the constitutional validity and the operation of the aforesaid threshold legislation.”

As of press deadline, it could not be confirmed whether the Attorney General had filed a statement of defense as an intervener in the case. But a statement of defense filed by counsel representing Richard rejects the argument in Paragraph 10 of Waite’s claim. Richard’s counsel maintains the province’s threshold legislation “is not contrary to the Canadian Charter of Rights or Freedoms or unconstitutional or inoperative.”

The actual wording of P. E. I.’s threshold legislation reads:

“minor personal injury” means an injury that does not result in

i) permanent serious disfigurement, or

ii) permanent serious impairment of an important bodily function caused by continuing injury that is physical in nature.

As far as P. E. I. is concerned, serious impairment “means an impairment that causes substantial interference with a person’s ability to perform his or her usual daily activities or his or her regular employment.”

Unlike Alberta’s legislation, which specifically points to “i) a sprain, ii) a strain, or iii) a WAD injury caused by that accident that does not result in serious impairment,” the definition of a minor injury in P. E. I. does not specify the nature of an injury and focuses instead on the impact of the injury on the person’s life.

In Alberta, it was successfully argued that people suffering from whiplash injuries are treated unfairly, because a Cdn$4,000 cap applies to them but not to members of an equivalent comparator group who are not subject to the cap. But it remains to be seen what happens when no specific injury is identified in P. E. I.’s cap legislation.

In Waite’s description of her injury, she points specifically to ongoing ailments and a decrease in the quality of her life post-accident. It therefore remains open for lawyers in the P. E. I. case to argue she did not in fact suffer a minor injury, and thus the cap does not apply in her situation.

NEW BRUNSWICK

More than 150 challenges to the MIR have been filed with the Court of Queen’s Bench in this province, but none of them have yet to be heard. One of the challenges, Martin v. J. W. Bird and Company Limited, was scheduled to be heard in April 2008, but was delayed at the last moment. Counsel are still waiting for the court to set a new date.

In this particular motion, the defendant, Mitchell Bye, worked for J. W. Bird and Company. His duties included driving a company-owned cube van. In February 2006, Bye was on duty making a delivery to the plaintiff’s, Glen Martin’s, place of work. Bye backed the cube van up to a storage shed, stopped the vehicle, got out of it and started to unload supplies from the back of it. At the same time, Martin stood behind the van and picked up the supplies. “Suddenly and without warning, the defendant vehicle started to back up and violently struck the plaintiff, pinning him between the defendant vehicle and the storage shed, and causing him significant injuries,” a statement of claim filed with the court says.

Martin’s statement of claim cites a numb er of injuries. The primary injury is a fractured ankle that Martin says led to a loss of flexibility, strength and endurance, as well as the straining and tearing of muscles, tendons, ligaments, and nerves throughout his left foot.

Like Waite, Martin is arguing that New Brunswick’s “threshold legislation” (and therefore the injury regulation) are contrary to s. 7 and s. 15 of the Charter of Rights and Freedoms. He goes on to argue that should his Charter challenge fail, the courts should nevertheless find that he has sustained a “soft tissue injury” instead of a “minor personal injury,” and such an injury has caused him a “permanent and serious impairment of an important bodily function caused by continuing injury which is physical in nature.”

This leads to the province’s definition of “minor personal injury,” contained within its Insurance Act. Here the definition of a “minor personal injury” is identical to that contained in P. E. I.’s definition (noted above).

Once again, unlike the definition in Alberta’s MIR, no specific injuries such as “soft-tissue” injuries are specified in New Brunswick’s cap legislation. It remains to be seen what impact this might have when it comes time for the court to compare two groups for the purpose of assessing discrimination. What would the comparator group to the minor injury class be in New Brunswick?

Again, similar to the case in Prince Edward Island, it remains open for the New Brunswick court to find that the plaintiff’s injuries will continue to affect the quality of his day-to-day life. In this case, the court might rule the injuries are not in fact minor but catastrophic, in which case the province’s Cdn$2,500 cap on minor injuries would not apply.

The statement of defence filed by the provincial government and the attorney

general says that, with respect to s. 15 of the Charter, “the threshold legislation and injury regulation do not subject the plaintiff to differential treatment to any relative comparator group.”

Alternatively, the statement of defence argues, “the threshold legislation and injury regulation do not subject the plaintiff to differential treatment on the basis of any enumerated or analogous ground of discrimination under s. 15 of the Charter.”

Moreover, it continues, “even if the threshold regulation and injury regulation constitute differential treatment of the plaintiff on an enumerated or analogous ground, such differential treatment does not constitute substantive discrimination under s. 15 of the Charter.”

Finally, as argued in Alberta, even if the cap breached the Charter under s. 7 and s. 15, the attorney general “states that any such violation is a reasonable limit prescribed by law, demonstrably justified in a free and democratic society” under s. 1 of the Charter.

NOVA SCOTIA

Nova Scotia may be the province to watch in the coming months, since its challenge seems to be the furthest down the litigation path of the three provinces. The test case in this province, Hartling v. Nova Scotia, is set to be heard in the Supreme Court of Nova Scotia in October 2008.

Also, the province’s definition of a minor injury has an interesting wrinkle to it: it contains a very specific time period as part of the definition of a minor injury.

In this case, according to a 2006 Supreme Court of Nova Scotia motion, the applicants allege they have been discriminated against on the basis of physical disability and sex by the province’s definition of a ‘minor injury.’ The definition causes them to be subject to a cap on their injuries of Cdn$2,500, the plaintiffs argue, a threshold they must cross before their injuries are

deemed to be something other than ‘minor injuries.’ In this way, the cap economically disadvantages them, they argue.

In addition, they allege their s. 7 Charter rights are breached in that “the liberty and security of the person is violated by the cap by denying them the right to make fundamental personal choices,” Nova Scotia Supreme Court Justice Margaret J. Stewart noted in a consideration of the plaintiffs’ 2006 motion. “They say the definition of minor injury in s. 113B (1) of the Insurance Act discriminates or affects their rights because it caps them.”

In this particular case, two of the plaintiffs, Helen Hartling and Anna Marie MacDonald, suffered injuries that had yet to be classified as minor by their respective insurers. The court therefore deferred consideration of their Charter challenge on the grounds that doing so without a determination of the injuries by the insurers would be mere ‘speculation.’ Nevertheless, Stewart granted the challenge standing on the argument that Hartling and MacDonald had already been “directly and significantly” affected by the MIR, regardless of the eventual outcome of their claims.

“They argue the very existence of the legislation impacts on them in a very real and direct sense and affects their ability to present their claims,” Stewart wrote. “Their claims have been prolonged or delayed due to the uncertainty as to whether the cap will apply to restrict their claims. They have experienced financial costs of accumulating medical opinions to establish that their injuries cross the minor injury threshold established by the legislation. If the legislation is struck, they will no longer need to seek to establish, by medical evidence, that they fall outside the scope of the cap.”

Nova Scotia’s definition of a minor injury is identical in all but one respect to the definitions of minor injuries in P. E. I. and New Brunswick. For this reason, it is a live issue whether or not plaintiffs’ counsel will be able to find a suitable comparator group in aid of proving their clients suffered discrimination.

But Nova Scotia’s cap legislation contains a twist, which may or may not have a bearing on the case. In Nova Scotia, a minor injury is one that “resolves within twelve months following the accident.” It thus gives a clear time frame by which to define the plaintiffs’ injuries. If the ailments persist beyond 12 months, then the injury is not considered minor; once again, the cap does not apply.

THE PRIMARY DIFFERENCE

Reading through the various challenges and cases before the court in the Maritimes, it becomes clear that the length and impact of an injury — and not necessarily the type of the injury — may play a key role in the outcomes of the Charter challenges there. In a “Client Update” by the legal firm Stewart McKelvey, it’s noted that “under Alberta’s MIR, an injury had to first be a sprain-, strain-or whiplash-associated disorder to even potentially fall within the cap, with the analysis under the MIR then moving to consideration of factors such as the injury’s impact upon the particular individual’s employment or activities of daily living.” With this in mind, the report continues, “the Alberta scheme was more conducive to the argument that it had an impermissible ‘targeting’ effect.” This may just be the hinge that the cap challenges turn on.

But, like the rest of the insurance industry right now, we will have to wait and see…