Third Party Motor Vehicle Accident Claim Costs

Policy

The WSIB removes from an employer’s claims experience, part or all of the costs of motor vehicle accidents in Ontario involving a negligent third party who is not covered under Schedule 1.

Purpose

The purpose of this policy is to provide cost relief guidelines for certain motor vehicle accident claims which involve negligent third parties.

Guidelines

Right of action

Before the implementation of no-fault automobile insurance, the WSIB could, on behalf of a worker, sue a non-Schedule 1 third party for negligence for motor vehicle collisions occurring in Ontario. If the legal action was successful, the WSIB used the court award to provide cost relief to the accident employer by adjusting the employer’s experience rating record by the amount of the award.

With the advent of Ontario's no-fault automobile insurance legislation, in most cases, a third party cannot be sued for negligence. Since the WSIB is thus precluded from taking legal action on behalf of a worker against a non-Schedule 1 third party, it must conduct its own investigation to determine the degree of negligence for cost relief purposes.

Cost relief

When the WSIB suspects third party negligence has contributed to a claim, that claim is initially reviewed under 15-01-05, Third Party Rights of Action, since the possibility exists that the WSIB could take legal action on behalf of the worker.

However, in motor vehicle accident claims, the WSIB conducts an investigation, as described in 14-05-01, Transfer of Costs. If third party negligence is determined, the WSIB removes any claims costs from the accident employer’s claims experience according to the degree of negligence attributed to the third party and may also adjust the claim frequency. If the WSIB finds that the third party was

100% negligent, the claim count and all current and future costs are removed from the accident employer’s claims experience,
less than 100% negligent, current and future costs are removed from the accident employer’s claims experience according to the percentage of third party liability. The frequency component resulting from the accident is not adjusted.

Schedule 1 employers

The WSIB applies policy 14-05-01, Transfer of Costs, if at the time of the motor vehicle accident, both parties are covered under Schedule 1 and third party negligence is suspected.

Legal action

In cases where the worker could sue the third party, but elects to claim loss of earnings benefits, the WSIB may then sue the third party for damages in the name of the worker. See 15-01-05, Third Party Rights of Action.

Assignment of benefits

For motor vehicle claims, which require an assignment of WSIB benefits to a third party (e.g., an insurance company), refer to 18-01-06, Redirected Benefit Payments.

Cost relief deadlines

For deadlines on the removal of claims experience for the purposes of employer premium adjustments, see 14-02-06, Employer Premium Adjustments.

For deadlines on the removal of costs for the purposes of experience rating programs, see 13-02-02, NEER (New Experimental Experience Rating Plan) or 13-02-06, Construction Industry Plan (CAD-7), as appropriate.

Application date

This policy applies to all decisions made on or after January 1, 2020, for accidents on or after October 23, 1989.

Document History

This document replaces 15-01-06 dated January 2, 2015.

This document was previously published as:
15-01-06 dated October 12, 2004
11-01-16 dated April 11, 2003.