As Ontario's July 1 auto insurance reforms leave more injured people without accident benefits, a growing number are expected to turn to tort litigation to recover what they've lost, making a little-known deduction embedded in the province's court system more consequential than ever, according to Jay Ralston (pictured), president of the Ontario Trial Lawyers Association. The mechanism means injured people who win a lawsuit over a serious car accident routinely collect tens of thousands of dollars less than a jury actually decided they deserved, and the jury is never told why.
The mechanism is known as the statutory deductible, Ralston said, and it applies specifically to pain and suffering awards in tort claims arising from motor vehicle accidents. To even reach that stage, an injured person has to prove their injuries meet a demanding legal threshold, showing that the harm they experienced is both serious and permanent, and that it impairs an important physical, mental, or psychological function, not simply an inconvenience or a temporary setback.
Once a case gets to trial and a jury lands on a dollar figure, most people reasonably assume that number is what the injured person actually walks away with. That assumption, Ralston said, is wrong, and the gap between what a jury awards and what a victim actually collects can be substantial.
"They say, we're going to give you $100,000 in pain and suffering for what you've experienced," Ralston said. "Well, the first $48,000 you don't get to collect, and the jury never hears about that. So even though they believe you suffered $100,000 in pain and suffering, you're only going to walk away with about half of it, and the insurance company gets the credit."
The deductible resembles a standard insurance deductible in structure, but operates at a dramatically larger scale, and with one crucial difference that Ralston said makes it especially unfair. In a normal deductible situation, such as vehicle damage coverage, the policyholder is the one who personally absorbs that upfront cost before an insurer pays the rest. Here, nobody actually pays it. The at-fault driver isn't billed the difference, and the insurer isn't required to pay it out either.
"The driver that caused the pain doesn't pay that $50,000," Ralston said. "Nobody pays it. It's just a complete bonus to the insurance company that they don't have to pay out half of the pain and suffering that their insured caused."
Compounding the issue, Ralston said, is that the identity of who is actually paying the award is deliberately kept from the jury deciding the case in the first place. At the conclusion of a tort action, it's the at-fault driver's auto insurer, not the driver personally, that pays whatever damages are awarded. Jurors, however, are never told this, and the proceedings are structured in a way that leaves them believing the individual defendant is the one covering the cost.
"You're not allowed to know that it's an insurance company that's paying," Ralston said. "They make it pretend like it's the actual defendant driver."
The deductible currently sits at $47,913.01 for this calendar year, and it isn't a fixed number set once and left alone. It's indexed to inflation and increases automatically every January 1, meaning the amount insurers are effectively permitted to withhold from injured claimants grows larger each year, without any fresh legislative debate or public scrutiny of the increase.
That dynamic is likely to affect more people going forward, Ralston said, since the July 1 changes have already reduced the accident benefits available to many injured Ontarians, particularly pedestrians, cyclists, and those without their own auto insurance policy. With fewer no-fault benefits available upfront, more injured people may have no option but to pursue a tort claim to recover their losses, putting more claimants directly in the path of a deductible most have never heard of until it's already reduced what they collect.
That structure creates a particularly outsized impact for people whose damages fall within a specific range, since the deductible only disappears entirely once a jury's award climbs high enough to exceed a separate statutory threshold. Below that point, claimants are left absorbing a meaningful chunk of whatever a court decides they're owed, a dynamic that hits mid-range awards, ones large enough to reflect real, lasting injury but not catastrophic enough to clear the threshold, hardest of all.
Ralston framed the deductible as more than a technical quirk buried in the fine print of Ontario's tort system. In his view, it functions as a structural feature that quietly benefits insurers in the overwhelming majority of serious injury cases that go to trial, at the direct expense of the people those cases exist to compensate in the first place.
"It's the insurance companies that are getting this windfall of almost $50,000 for the vast majority of tort cases," Ralston said.
That windfall, he said, persists year after year largely because so few people, including many jurors sitting in judgment on these very cases, are even aware the deductible exists.
