“Congratulations to our Partner Steven Carlstrom in his recent success at the Superior Court of Ontario!
The plaintiffs brought a motion pursuant to Rule 21 of the Rules of Civil Procedure to determine whether the defendant in the tort action was entitled to a deduction for the settlement funds received by the plaintiff from an action against the accident benefits insurer for damages including long-term disability benefits.
The Court endorsed a common-sense approach in determining whether an amount was deductible rather than the older practice of complying with strict labels because the economic reality was that the settlement was mostly if not entirely for income replacement. The Insurance Act contains provisions designed to prevent double recovery, which reflects the principle that victims should be fairly compensated, but not over-compensated. The defendant was entitled to deduct the settlement amount from tort damages.”