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Right to Sue Applications Under Section 31 of the Workplace Safety Insurance Act and the Potential for Abuse

Updated: 4 days ago


The current regime for challenging a party’s right to commence a lawsuit under the Workplace Safety Insurance Act may be abused by insurers of defendants for the sole purpose of delaying lawsuits. Delaying lawsuits that arise from motor vehicle accidents is an advantageous strategy for auto-insurers.


Delaying Lawsuits Financially Benefits Auto-Insurers in Two Ways:


First, by delaying the trial of a lawsuit, the 70% rule applying to income loss claims is extended. In Ontario, auto-insurers only need to pay 70% of a plaintiff’s pre-trial income loss. By contrast, 100% of the plaintiff’s post-trial income loss is recoverable. Therefore, the longer an action takes to proceed to trial, the longer the insurer gets a 30% discount on the plaintiff’s income loss claim.


Second, the statutory deductible against awards for general damages for pain and suffering increases each year, as does the minimum amount that a general damage award must meet in order for the deductible to not apply. As of 2024, general damage awards falling under $153,509.40 will automatically be reduced by $46,053.20. In 2025, both the deductible and the minimum amount a party must be awarded for the deductible to not apply (referred to as the vanishing point or threshold) will be higher. Therefore, a general damage award of $153,509.41 in 2024 will not be reduced by $46,053.20. But, if an insurer can delay the trial of the lawsuit by one year, to 2025, the same general damage award will be reduced by at least $46,053.20 to below $107,456.21! Therefore, delaying the action can result in huge benefits to an auto-insurer.


There are also other benefits to auto-insurers in delaying a lawsuit such as putting a Plaintiff through lengthy litigation and delaying compensation, thereby making a Plaintiff more prone to accept a lower settlement offer, which must always be resisted where possible.


Section 31 of the Workplace Safety Insurance Act (WSIA) provides insurers with a mechanism to delay lawsuits. To understand how, it is necessary to understand some basic rules set out in the Act.


The Workplace Safety Insurance Act Prohibits Lawsuits from Being Advanced in Certain Circumstances


In Ontario, generally, the WSIA prevents a person who sustains an injury in the course of their employment from suing other employees or employers who caused the injury but were also in the course of their employment at the time the injury occurs. The injured party’s only recourse will be for WSIB benefits. This rule applies to most industries (construction, auto mechanics, education). For example, if two construction workers are operating separate vehicles on a worksite and collide, their only recourse would be through WSIB, and they would not be able to commence a lawsuit.



The WSIB regime does not necessarily apply to workplace incidents caused by third parties who are not in the course of their employment or are not employed under a listed industry (the WSIB lists industries to which the WSIB regime applies). If a person is injured in the course of their employment by an individual that was not in the course of their employment or does not fall under a listed schedule of industry, then the injured party may elect to forego WSIB benefits and proceed with a lawsuit against that individual. An example of this is where a construction worker is driving to a worksite and is in the course of their employment and is struck by another vehicle being operated by a person who was not in the course of their employment (ie… had a day off) or does not fall under a listed schedule of industry.


Also, executive officers and independent operators (ie... sole proprietors or one-person corporations) not working in the construction industry will still be able to commence a lawsuit against employees or other employers for injuries sustained in workplace incidents unless they have purchased optional WSIB insurance, in which case they will lose their right to sue. If executive officers or independent operators have not purchased optional WSIB insurance, then they will not receive WSIB benefits and will be able to commence a lawsuit.


Challenging the Right to Sue via A Section 31 Application to the Workplace Safety Insurance Tribunal


In many cases, it will be clear when an individual’s lawsuit will be prohibited by the Workplace Safety Insurance Act. For example, the Act will prevent a party from commencing a lawsuit for injuries that occurred in the workplace that are caused by other employees or a condition at the workplace. Again, this rule applies to most industries. An experienced personal injury lawyer should advise an injured party accordingly, and perhaps refer them to a lawyer that specializes in WSIB benefits.


There is an evolving area where the law is becoming less clear. For example, individuals driving to and from work on a lunch break or to run some other personal errand who get into an accident with another employee or employer who is in the course of their employment may or may not be classified as a workplace injury to which the WSIB regime applies.


If a lawsuit is filed in the above situations, then insurers of defendants probably should and probably will file an application under section 31 of the Workplace Safety Insurance Act to challenge an individual’s right to commence a lawsuit arising from a workplace.


However, the lack of procedural requirements for deadlines to file such a section 31 application invites abuse of the WSIB regime.


No Requirements for Timing or Establishing Merit of an Application


There is no deadline as to when a section 31 application under the Workplace Safety Insurance Act may be filed. An insurer, aware of the issue since the start of a lawsuit, could wait years and file the application a month before trial. The result is that the trial will be adjourned until the section 31 hearing is complete. The hearing itself typically takes 1 year and even longer if the insurer decides to launch a reconsideration appeal. If the application fails, then the plaintiff will need to obtain a new trial date, which depending on the region where the action started, could take another year. Since the onset of the pandemic in 2020, trial lists have become quite backlogged.


Additionally, there is no screening procedure for section 31 WSIA applications. As such, an insurer could file an application regardless of its merit. For example, it has long been well established law that an executive officer/sole proprietor of a non-construction one-person business who has not obtained optional insurance will not lose their right to commence a lawsuit arising from a workplace injury. Nevertheless, this did not prevent an auto-insurer from filing an application under section 31 of the WSIA to challenge an executive officer’s right to commence a lawsuit despite the fact he did not obtain optional WSIB insurance. The application was filed in November of 2021, six weeks before the scheduled January 2022 trial, despite the lawsuit having been commenced in February of 2017 and the auto-insurer raising the WSIB issue as early as 2017 (see Langen v. Nandha et al, 2023 ONWSIAT 1672 wherein Eddie Wiley of Hillier & Hillier successfully resisted a section 31 "Right to Sue Application"). The WSIB application resulted in a two-year delay of the lawsuit.


The above case is a perfect example of how an auto-insurer may take advantage of the WSIB regime to delay a lawsuit. Unfortunately, this is not the only case where the late filing of a section 31 application has significantly delayed a lawsuit.


Finally, a more troubling reality is that meritless applications will most likely be filed late. If an auto-insurer has a strong section 31 WSIA application, then the insurer will likely want to file it as early as possible to defeat a lawsuit and avoid additional costs associated with a lawsuit. By contrast, a meritless application may be filed late solely to delay a lawsuit.


Solutions


There are a few solutions that may be implemented to prevent auto-insurers from late-filing applications to delay a lawsuit.


First, a limitation period could be built-in to the WSIA requiring parties to file a section 31 application within 1 year upon discovering the facts giving rise to a potential WSIB-related issue. Discovery of the facts would typically take place at a discovery examination in the lawsuit. Thus, requiring the section 31 application to proceed within 1 year of when the material facts are discovered would curtail delay since cases are typically set down for trial after discovery examination and a trial date not obtained for at least 1-2 years after discovery examination. As such, there would be ample time for a section 31 WSIA application to occur while the claim proceeds to trial.


Second, a screening procedure could be built-in to the WSIA to filter out meritless applications without the need for a full hearing. This would not only save WSIB’s resources by averting unnecessary hearings, but it would also prevent the delay of a lawsuit as meritless applications could be screened out early.



Finally, counsel for Plaintiffs should aggressively pursue heightened costs awards where the defendant has filed a late section 31 WSIA application that has significantly delayed the start of a trial. It remains to be seen how the Courts will respond to such arguments, however one factor a court considers when awarding costs is the conduct of any party that tended to unnecessarily lengthen the duration of an action. Obviously heightened costs should not come into play simply because the Defendants advanced a section 31 WSIA application. Defendants have the right to raise every defence and file a section 31 WSIA application. Enhanced costs awards may be appropriate however when Defendants late-file the application with the result of delaying a lawsuit and prejudicing a Plaintiff’s claim for compensation.


The personal injury lawyers at Hillier & Hillier specialize in personal injury law and can advise how a claimant’s right to commence a lawsuit may be impacted by the WSIB regime. The lawyers at Hillier & Hillier are experienced in successfully resisting section 31 WSIAT applications. Contact Hillier & Hillier at 905 453 8636 to schedule a free consultation by zoom videoconferencing, in person, or by telephone.








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