Lower Prejudgment Interest Rates Apply Retroactively In Motor Vehicle Accident Claims

Cirillo v. Rizzo, 2015 ONSC 2440

In a decision released on April 15, 2015, the Ontario Superior Court of Justice addressed the impact of a recent amendment to the Insurance Act for the first time. The amendment provides that the 5% prejudgment interest rate for non-pecuniary losses in actions arising from motor vehicle accidents no longer applies. Rather, prejudgment interest for non-pecuniary losses is to be calculated using the rate applicable to pecuniary losses. The amendment came into force on January 1, 2015, and the Court has now held that the new rates apply retroactively.

In Cirillo v. Rizzo, the plaintiff sought damages for injuries sustained on October 1, 2005 when he was hit by a motor vehicle operated by the defendant. He served the Statement of Claim on January 29, 2007. On March 24, 2014, the defendant made an offer to settle for $50,000 for all claims, plus prejudgment interest. On January 26, 2015, some three weeks after the amendment to the Insura