Motor vehicle accident law: what’s driving for litigants and lawyers

While cars collide and claims are filed, the road from accident to fair compensation is rarely straight. This is because the motor vehicle accident law has a way of slowing that journey down, sometimes to a stop. For instance, in Ontario, two legal mechanisms called the verbal threshold and the statutory deductible sit squarely in the way of non-pecuniary damages. Understanding how they work, and how Bill 198 reshaped them, is what separates a well-prepared personal injury lawyer from one caught off guard at trial.

How does motor vehicle accident law limit personal injury claims?

Ontario’s auto insurance system operates on a layered structure. When someone is injured in a motor vehicle accident, two parallel tracks open up:

• accident benefits, and
• tort claims or personal injury claims

Below are discussions when it comes to these two.

Accident benefits under the motor vehicle accident law

Ontario’s Statutory Accident Benefits (SABS) are no-fault benefits paid by the injured person’s own insurer, regardless of who caused the crash. They can cover several items, such as:

• income replacement
• medical and rehabilitation costs
• attendant care
• housekeeping expenses

One important catch: SABS received before trial are deducted from the tort award to prevent double recovery. Since the SABS changes effective July 1, 2026, only medical, rehabilitation, and attendant care benefits are mandatory under new policies. Income replacement, caregiver, and housekeeping benefits are now optional. Any client who did not add those options to a policy issued after that date may have a significantly smaller safety net — and a greater need for a strong tort result.

Here’s a quick video on the recent changes under Ontario’s SABS:

Check out our article on “Personal injuries proceedings act: Limits, notices, and traps” to learn about the factors that lawyers and litigants should not miss in these cases.

Tort claims under the motor vehicle accident law

Tort claims are lawsuits against the at-fault driver for damages beyond what accident benefits cover:

• non-pecuniary damages or general damages
• pecuniary damages or special damages
• future care costs
• Family Law Act (FLA) claims by immediate family members

There is also Direct Compensation Property Damage (DCPD), which covers vehicle repair costs through the claimant’s own insurer when another driver is at least partly at fault. As of January 2024, Ontario drivers can opt out of DCPD using Ontario Policy Change Form 49 (OPCF 49). However, doing so also waives collision coverage and removes any right to recover vehicle repair costs from any party.

What are the thresholds and deductibles for personal injury awards?

Here is where motor vehicle accident law gets uncomfortable for claimants.

Under s. 267.5(5) of the Insurance Act, a plaintiff cannot recover non-pecuniary damages unless their injuries meet the verbal threshold. The injury must involve:

• permanent serious disfigurement, or
• permanent serious impairment of an important physical, mental, or psychological function

The three-part test for this was established in Meyer v. Bright, 1993 CanLII 3389 (ON CA). The court asked three questions, all of which must be answered yes:

• Is the impairment permanent?
• Is the impaired function important?
• Is the impairment of that function serious?

In addition, the burden of proof rests entirely on the plaintiff.

Amounts of statutory deductible under motor vehicle accident law

Even when the threshold is cleared, the statutory deductible takes another bite, which is adjusted annually by the Financial Services Regulatory Authority of Ontario (FSRA).

For 2026, these deductibles are:

• non-pecuniary deductible: $47,913.01
• deductible vanishes when the award exceeds $159,708.71
• FLA deductible: $23,956.52
• FLA deductible vanishes when the award exceeds $79,853.70

In practice, a $100,000 pain and suffering award nets the plaintiff roughly $52,087. Juries are not told about the deductible when they deliberate; the judge applies it afterward.

The result is a double filter: plaintiffs must clear the verbal threshold, then survive the deductible. If the award falls below $47,913.01, the plaintiff receives nothing for pain and suffering, even after proving a qualifying injury.

More on these changes under Ontario’s insurance and motor vehicle accident law are explained in this video:

Check out Canadian Lawyer’s Special Report on Canada’s Best Personal Injury Law Firms for a list of the country’s leading personal injury boutiques and firms.

What is Bill 198 and why does it matter for personal injury lawyers?

Bill 198 took effect October 1, 2003 as Ontario’s successor to Bill 59. For motor vehicle accident law, this Bill brought the most substantive changes to the personal injury tort landscape since the Ontario Motorist Protection Plan (OMPP) launched in 1990.

Key changes under Bill 198 would include:

• the deductible rose from $15,000 to $30,000 (FLA: from $7,500 to $15,000), but became a “vanishing deductible,” which means it disappears when the non-pecuniary award exceeds $100,000 ($50,000 for FLA), and that threshold has since been indexed to its current level
• Ontario Regulation 381/03, the regulations governing court proceedings for automobile accidents, codified the definitions of “permanent,” “serious,” and “important function,” terms previously shaped entirely by case law going back to Meyer v. Bright
• future care costs in tort were extended to all plaintiffs who clear the verbal threshold; under Bill 59, only catastrophically injured plaintiffs could claim future care in tort
• the employer vicarious liability gap exposed by Vollick v. Sheard, 2005 CanLII 13777 (ON CA), was closed through s. 267.5(10.1) of the Insurance Act

What is the evidence needed to clear the threshold in soft-tissue and psychological injury cases?

When it comes to motor vehicle accident law, these are the cases where threshold motions are most often brought, and most often won by defendants. Soft-tissue injuries and psychological impairments lack visible markers, so the evidentiary record carries nearly all the weight.

What the motor vehicle accident law requires

The formal requirements are set out in s. 4.3 of Ontario Regulation 381/03. The plaintiff must produce evidence from a qualified physician who will explain the following:

• the nature of the impairment
• its permanence
• the specific function impaired
• the importance of that function to the plaintiff
• a causal link between the accident and the impairment

This physician should be trained in assessing the type of impairment alleged. In addition, corroborating evidence of the change in function is also required. This means that an opinion based solely on the plaintiff’s self-report will not be sufficient.

What the courts expect from the pieces of evidence

Recent decisions show how closely courts examine evidentiary quality and consistency:

• Lisa Aileen Davis v. Wayne NG, 2024 ONSC 6159: the threshold was met because credible medical evidence aligned with lay testimony showing permanent restrictions that substantially interfered with daily and vocational activities
• Ingratta v. McDonald, 2024 ONSC 371: on the other hand, the threshold was not met in this case, since the pain was genuine but unsupported by evidence of serious and ongoing functional limitation
• Trieu v. Aubin, 2025 ONSC 1141: here, the court found the impairment was permanent but not serious, as the chronic symptoms did not substantially interfere with important life functions

Practical preparation checklist

Below are some practical considerations for a counsel building a soft-tissue or psychological injury file:

• establish the elements: secure physician reports addressing all three elements, i.e., permanence, importance of function, and seriousness of interference
• ensure continuous treatment: this because the gaps in care suggest recovery and it weakens the element of permanence
• obtain corroborating evidence: these can come from arm’s-length witnesses, such as co-workers or neighbours, as they carry more weight than family members
• important documentations: it may include missed work, social commitments, and family activities; also, employer or school records can be used to confirm absences and accommodations
• use medical evaluations: functional capacity evaluations and psychological assessments can be considered for complex chronic pain or psychological injury files
• inconsistencies are fatal to credibility: the plaintiff’s account must align across their medical records, insurer dealings, and anticipated court testimony

More importantly, counsels must be reminded that the threshold motion is decided on the evidence, and not on sympathy.

Motor vehicle accident law: keeping the engine running

Motor vehicle accident law may not move at full speed, but that does not mean plaintiffs have to stall. While the system built around DCPD, SABS, the verbal threshold, and Bill 198 was designed to limit the volume and cost of non-pecuniary claims, it was not designed to be airtight. The lawyers who do the most for their clients understand exactly where the gaps are: which benefits are now optional, what the deductible will cost in real dollars, and how to build a record a court will trust. The road to fair compensation runs straight through the evidence file.

Bookmark Canadian Lawyer’s Personal Injury page for more news, articles, and updates for Canadian legal professionals, including discussions on the motor vehicle accident law.