In a September 9, 2022 decision, the Court of King's Bench provided the first ruling on pre-judgment interest since Insurance (Enhancing Driver Affordability And Care) Amendment Act, 2020, SA 2020, c 36 (the "Insurance Amendment Act") came into force. 

Background

Historically, interest on non-pecuniary damages was calculated at a rate of 4% per year under the Judgment Interest Act, RSA 2000, c J-1. However, the Insurance Amendment Act added s. 585(2) to the Insurance Act, which provides that "interest in respect of damages for non-pecuniary loss in an action for loss or damage from bodily injury or death arising directly or indirectly from the use or operation of an automobile must be calculated in accordance with section 4(2) of that Act in the same manner as interest awarded on pecuniary damages."

Since its enactment on December 9, 2020, considerable debate has emerged between plaintiff counsel and insurers over whether the Insurance Amendment Act applies before its enactment, especially given that there is no transitional provision.

The Decision

The Plaintiff (Jackson) was injured in a motor vehicle accident with the Defendants (Cooper) on October 21, 2015, more than four years before the enactment of the Insurance Amendment Act. The Court awarded interest on Jackson's non-pecuniary damages at a rate of 4% per year from the accident date to December 9, 2020, and after that, in accordance with s. 4(2) of the Judgment Interest Act. In doing so, the Court noted the following:

• Cooper cited Cobb v Long, an Ontario decision, which made it clear that the interest provision being reviewed was intended to apply retroactively (see para. 177). 
• The presumption against retroactivity applies to substantive provisions (see paras. 183-185). In Alberta, pre-judgment interest is a "statutory and substantive right" which "exists independently of a judge choosing to grant or award it."
• Pre-judgment interest is not a vested right; it only forms after the trial judge has given a decision. However, a "right does not need to be vested to invoke the presumption against retroactivity" (see para 191).
• While the Minister of Finance explained that the changes in pre-judgment interest were to reduce claims costs and insurance premiums, this was not a "good reason to apply the legislation retroactively" (see para 198).

The Minor Injury Regulation

The Court's decision provides a helpful overview of the Minor Injury Regulation. Cooper argued that Jackson's injuries were capped as they had been resolved by May 6, 2016. On that date, a concluding report indicated Jackson had "no remaining symptoms."

The Court, relying significantly on Jackson's expert (Dr. Michael Boucher), rejected Cooper's argument and found that the Minor Injury Regulation did not cap Jackson's claim for general damages.

Takeaway

This decision includes a helpful overview of the Minor Injury Regulation and provides the Court's first ruling on the temporal application of the interest changes set out in the Insurance (Enhancing Driver Affordability And Care) Amendment Act.

Given the sweeping impact of the decision, there is a strong possibility that Cooper will appeal it. For now, Plaintiffs will rely on it and insist on receiving 4% interest for their non-pecuniary damages up to December 9, 2020 and the interest rates specified by s. 4(2) of the Judgment Interest Act thereafter (as set out in the Judgment Interest Regulation). Between January 1, 2021, and December 31, 2022, interest rates were prescribed at 0.2% per year.

Field Law's Insurance Practice Group has significant experience defending bodily injury claims arising from motor vehicle accidents. If you have a question about the application of the Insurance (Enhancing Driver Affordability And Care) Amendment Act or Minor Injury Regulation, please contact Jonathon Austin or any member of the Insurance Practice Group.

Link to decision: Jackson v Cooper, 2022 ABKB 609