Jul 08, 2022 in News Personal Injury

Personal Injury: Recent Decisions Bolster Plaintiffs’ Arguments for 5% Prejudgement Interest Rate

In civil claims in Ontario, successful plaintiffs are often entitled to have 'prejudgement interest' added to the compensation awarded to them by the courts. Prejudgement interest is interest calculated from the date of the reason for the court case – the "cause of action" - until the date the court orders that compensation is due. The purpose of the interest is to cover 'the loss of the use of money you would have had if you received the money when the incident occurred,' per the Province of Ontario.

The province's Courts of Justice Act sets out how that interest is awarded, and its Rules of Civil Procedure set the default prejudgement interest rate at five per cent. However, this rate can be adjusted at the court's discretion. As such, it is often subject to dispute in personal injury cases; defendants tend to argue that the rate should be lower than five per cent.

Two recent court decisions, Mansoor v 690981 Ontario Ltd. and Creccal Investments Ltd. and The Estate of Mary Fleury et al. v Olayiwola A. Kassim, have helped bolster plaintiffs' arguments for the full, five per cent prejudgement interest rate. Canadian Lawyer recently covered the decisions in a June 13 article.

"These decisions are beneficial to plaintiffs, especially given the significant delays in litigation and moving cases to trial in the context of the pandemic," one personal injury lawyer told the magazine. "These two decisions … stand for the proposition that 5% prejudgement interest should apply."

In Mansoor, the defence requested that the court set the prejudgement interest rate at 1.3% despite providing no evidence as to market interest rates, per Canadian Lawyer. The court found in favour of the plaintiffs.

In Mary Fleury, Justice Susan Stothart took great efforts to analyse market interest rates. She also considered both inflation and the financial impact of the onset of the COVID-19 pandemic. Based on her analysis, the justice found that the interest should run from the time that Fleury began to experience symptoms of her illness until December 2021, approximately seven years. The average rate of inflation fluctuated between one per cent and 4.8 per cent during that period.

"Having considered the changes in market interest rates, the impact of a global pandemic, and the circumstances of this case the court declines to exercise its discretion to depart from the pre-judgement interest rate for non-pecuniary damages," Justice Stothart wrote in her decision. "Given these very recent decisions, I think plaintiffs have compelling arguments to support a prejudgment rate at 5% per annum for non-pecuniary damages," concluded the personal injury lawyer speaking to Canadian Lawyer.

Contact Neinstein Personal Injury Lawyers

If you or a member of your family has been injured in an accident in Ontario, contact Neinstein LLP today to schedule a free, no-obligation consultation with an experienced personal injury lawyer. We will listen to your claim, assess the viability of your case, and explain the next steps in the legal process.

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