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ARTICLE · 01 SEPTEMBER 2015

Update On Pre-Judgment Interest Calculations In Motor Vehicle Accidents

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On January 1, 2015, the Insurance Act was amended to include a new provision regarding pre-judgment interest.

CanadaInsurance
Stephen Schenke
Stephen Schenke
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On January 1, 2015, the Insurance Act was amended to include a new provision regarding pre-judgment interest.  The effect of the change was that the 5% interest rate under the Rules of Civil Procedure no longer applies to amounts awarded for non-pecuniary general damages.  Rather, pre-judgment interest would be calculated pursuant to the Courts of Justice Act, that is, the bank rate.

Insurers have taken the position that the change to the Insurance Act is procedural in nature and thus applies retrospectively.

The first case that was decided on this amendment, Cirillo v Rizzo, accepted that the changes were procedural and thus applied retrospectively.  The plaintiff in that case appealed the decision but subsequently abandoned the appeal.

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