As defence counsel, we are always dealing with what can be deducted from any settlement and award and the recent decision of the Ontario Superior Court provides some direction on the deductibility of the Canada Emergency Response Benefit (CERB) and the Canada Recovery Benefit (CRB) in a motor vehicle accident.
As you are aware, the CERB and CRB were financial support payments to employed and self employed Canadians, affected by the pandemic and COVID-19 and were not entitled to Employment Insurance Benefits (EI).
The Government of Canada had conditions to qualify for the payment including work hours being reduced due to COVID-19 or that one stopped working entirely.
In the decision of Ferreira v. Hopper, 2024 ONSC 5385, the Plaintiff was involved in a motor vehicle accident in 2017. A trial proceeded on damages, as liability was admitted, and the jury returned with a verdict including a past loss of income claim of $100,000.00.
At the onset of the decision, the issue of double recovery was addressed. Double recovery is the issue of someone receiving more compensation that they are entitled to, for a single loss of injury.
As the Plaintiff was awarded a past loss of income, should any payments that he received for the CERB and CRB be deducted to avoid double recovery?
The Insurance Act addresses in s. 267.8 income loss and loss of earning capacity. It is stated that certain collateral benefits can be deducted from damages for income loss and loss of earning capacity. This includes:
2. All payments in respect of the incident that the plaintiff has received or that were available before the trial of the action for income loss or loss of earning capacity under the laws of any jurisdiction or under an income continuation benefit plan.
Were the CERB and CRB payments for loss of income and in respect of the incident, thereby rendering these payments deductible?
Not surprisingly, there are no cases on point in Ontario. Although other decisions were considered out of province and not in a motor vehicle context, they were not found applicable.
It was noted that as per the Plaintiff’s Income Tax Returns, he received $14,000 for the CERB and $5,000 for the CRB and in 2021, CRB payments totaled $19,600.
In this case, the Plaintiff was off work from the day of the accident (October 24th, 2017) until September 2019. He then worked until November 2019 until May 2022. As of the trial date, he was working.
Justice ten Cate found:
To be eligible for the CERB the Plaintiff must have experienced a reduction in hours or stopped working due to COVID-19 as opposed to any other reason, including disability caused by the motor vehicle accident. To continue to receive the CRB, he must represent that he did not quit his job or reduce his hours voluntarily on or after September 27, 2020, unless it was reasonable to do so, again due to COVID-19. In other words, to qualify and maintain eligibility for these benefits, the Plaintiff must have been otherwise able to work during the period for which benefits were available.
At no point during trial did Mr. Ferreira concede that any portion of his absence from work was due to any reason other than his inability to work because of the car accident. Given his evidence at trial, he cannot now reframe his theory of income loss post-verdict to avoid deductions.
Therefore, it was found the CERB and CRB received, were deductible from the Plaintiff’s jury award.
The basis for the decision is logical and avoids the double recovery principle. This decision definitely sets a precedent going forward. Defence counsel should ensure that the CERB and CRB are addressed at examination for discovery to determine its deductibility for any past income loss claim.
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