There is currently a lot of discussion surrounding what the prejudgment interest rate should be for automobile accidents before 2015 – whether it should be kept at the former rate of 5%, or at the current bank rate (which is currently around 1.3%).
This year, the Insurance Act was amended. It now mandates that the prejudgment interest rate for non-pecuniary losses (such as pain and suffering) in motor vehicle accidents will be equal to the prejudgment interest rate for pecuniary or monetary losses (1.3%). The prejudgment interest rate remains at 5% for non-pecuniary losses in all other actions for personal injury. The question is if this change will be applied retroactively to motor vehicle accidents before 2015, and therefore before this amendment.
In one case this year, Cirillo v. Rizzo, it was decided that the change would apply retroactively, while another subsequent case this year, El-Khodr v. Lackie, contradicted the holding in Cirillo. Due to these conflicting decisions, the Ontario Court of Appeal will now decide how this new amendment should be interpreted. In the meantime, personal injury lawyers are left in limbo and many clients may be inclined to litigate as opposed to settle while we wait for some clarity.
So, how does this change affect you? It can mean getting a lot less compensation depending on what is claimed. If a plaintiff has a very large non-pecuniary damages claim, especially in an action that has been going on for several years, this change in interest rate will have a large impact.
We want to make sure that our clients receive all of the compensation due to them, and so we at Himelfarb Proszanski continue to wait with anticipation for the Court of Appeal’s judgment. If you have been involved in an accident and have any questions, speak to a personal injury lawyer to understand your rights by booking a free consultation. For immediate assistance, call 1-855-446-7765. For more information, check out our section on accident law.
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