CPP Disability Benefits & Loss of Income Claims

The Supreme Court of Nova Scotia in Tibbets v Murphy, 2015 NSSC 280 recently considered whether Canada Pension Plan (“CPP”) disability benefits are deductible from loss of income and earning capacity claims.

Tibbets v Murphy involved a collision between a motorcycle and a truck, operated by the Plaintiff and Defendant respectively. The vehicles were travelling in opposite directions on a gravel road with no marked centreline. The Plaintiff’s motorcycle collided with the Defendant’s truck near a bend in the road, and both parties claimed not to have seen the other until immediately before the collision occurred. Though there was no marked centreline, the Court concluded from all of the evidence that the collision occurred at or near the centre of the road.

The Plaintiff was an inexperienced motorcyclist who had recently received her license. When the collision occurred, the Plaintiff was in a better position to see the Defendant’s vehicle; however, the Plaintiff was focused on the gravel surface and potholes in the road, and was not looking forward for oncoming traffic. As a result, the Court found that the Plaintiff was primarily responsible for the collision and apportioned two-thirds liability to the Plaintiff and one-third to the Defendant.

As a result of the collision, the Plaintiff suffered fractures to her left hip, tibia, and fibula – which required multiple surgeries. The Plaintiff required assistance with basic functions and personal care for several months.

Seven months after the collision, the Plaintiff returned to her pre-collision employment, but she worked only three days before her doctor put her off again. The Court found that the Plaintiff was able to return to her pre-collision employment, which was largely sedentary, but she would be unable to more physically demanding work in the future. The Court assessed her loss of earning capacity at $40,000, to be adjusted based on the apportionment of liability.

When the Plaintiff was unable to work, she received CPP disability benefits. The Plaintiff argued that the disability benefits should not be deducted from her loss of income claim. The Defendant relied on section 113A of the Insurance Act which provides that damages in an action for bodily injury resulting from the use or operation of an automobile are reduced “by all payments in respect of the incident.”

The Court concluded that CPP disability benefits were received “in respect of the incident” and were on account of lost earning capacity. As such, disability benefits were deducted from damages for loss of income while the Plaintiff was unable to work. Further, future disability benefits would be deductible from damages awarded for lost earning capacity. The Court ordered the Plaintiff to remit any future disability benefits received until the Defendant was fully compensated for the amount of damages for loss of earning capacity.

Please note that this article is meant to provide information only and is not intended to confer legal advice or opinion. If you have any further questions please consult a lawyer. Please note as well that many of the statements are general principles which may vary on a case by case basis.