Income replacement benefits must be deducted from the total quantum of damages.
Under Ontario law the deduction of income replacement benefits pursuant to section 267(1) of the Insurance Act, must be made from the total quantum of damages. The deduction is not to be made after the award has been reduced for contributory negligence.
Tthis case was originally summarized by Sarah Swan and originally edited by David Pilley.
Here is the case citation: Cummings (Litigation Guardian of) v. Douglas [2007] O.J. No. 3378. Ontario Court of Appeal. R.J. Sharpe, E.A. Cronk, and S.E. Lang JJ.A. August 31, 2007.
Here is a link to the deciison.
At trial, a judge held that a deduction for income replacement benefits was to be made from the global award, prior to the application of the deduction for contributory negligence.
The Ontario Court of Appeal disagreed, and held that on a plain reading, section 267(1) of the Insurance Act, which provided for the reduction of the “damages awarded to a person” must mean the amount actually awarded, not the quantum of the total damages assessed before the application of contributory negligence.
