Subrogation is a key legal principle in Ontario non-motor vehicle accident personal injury cases, where a third party—such as the Ontario Health Insurance Plan (OHIP)—can recover costs for services it has provided due to an injury caused by someone else’s negligence. While this concept ensures healthcare costs are recouped, it can also impact how much of a settlement a plaintiff ultimately receives.
What is subrogation?
Subrogation allows a third party, such as OHIP or a private insurer, to “step into the shoes” of an injured party (the plaintiff) and recover expenses they incurred on behalf of the plaintiff. In the context of personal injury law, OHIP is subrogated to the plaintiff’s right to recover healthcare costs from the at-fault party. This means that if OHIP has covered medical expenses arising from an accident, it is entitled to reimbursement from any settlement or judgment received by the plaintiff.
This right is grounded in section 30 of the Health Insurance Act, RSO 1990, c. H.6, which states that OHIP may recover the cost of insured services provided due to the negligence or wrongdoing of another. This includes costs already incurred and, in some cases, the anticipated future costs of care.
OHIP’s role in personal injury settlements
In personal injury cases, healthcare costs form part of the damages claimed by the plaintiff, along with other categories such as pain and suffering, lost income, and future care needs. When a settlement or judgment is reached, a portion of the recovery that reflects past and future healthcare expenses may be allocated to OHIP.
OHIP’s subrogation claim is typically calculated based on the expenses it has already paid for the plaintiff’s treatment and any anticipated future costs that may fall under its coverage. Importantly, OHIP’s recovery must be fair and proportionate. Courts often reduce subrogated claims where contributory negligence or contingencies (e.g., health risks due to aging) diminish the plaintiff’s damages.
Exception: In Ontario motor vehicle accident cases, the Insurance Act, RSO 1990, c. I.8 and Health Insurance Act restrict OHIP’s recovery.
Practical implications for plaintiffs
For plaintiffs, OHIP’s subrogated claim means a portion of their settlement may be allocated to repay healthcare costs. However, plaintiffs and their legal counsel can often negotiate proportional reductions to OHIP’s claim where causation is uncertain, contributory negligence applies, or future care costs are speculative. The right of subrogation protects public healthcare resources but requires careful management to ensure fairness to plaintiffs. By understanding the legislation and limits on OHIP’s rights, plaintiffs and counsel can navigate settlements effectively, preserving as much of the compensation as possible while meeting statutory obligations.
If you have any questions related to this blog post, contact myself, Joe Gaynor at joe.gaynor@siskinds.com or a lawyer in the Siskinds Personal Injury department.