The end of no-fault as we know it
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Ontario’s auto insurance system is shifting from a no-fault safety net to a litigation-first model. Personal injury lawyers at Thomson Rogers LLP dissect the benefits disappearing July 1 and which Ontarians will be left most vulnerable – and how plaintiff lawyers can brace for impact
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A FAMILY from Sault Ste. Marie spent months in Toronto after a car accident left one child dead, another fighting for their life at SickKids, and their mother being treated for serious orthopedic injuries at St. Michael’s Hospital.
The father and his in-laws rushed to be with their family as a long and gruelling recovery began. Visitor expenses ran into the tens of thousands and were fully covered under Ontario’s Statutory Accident Benefits Schedule (SABS). Under the new regime, not one dime would have been recouped.
Welcome to the new world of coverage, starting July 1.
Mandatory no more: from automatic to optional
Post-July, Ontario’s broad safety net for anyone injured in a motor vehicle accident regardless of fault will be gone. The
Thomson Rogers is a highly respected civil litigation firm, serving clients throughout Ontario. Since opening its doors in Toronto in 1935, Thomson Rogers’ lawyers have earned a reputation for taking on the most complex and challenging litigation matters and delivering results. The firm maintains a robust litigation practice across multiple practice areas, including plaintiff personal injury claims, such as disputes related to catastrophic accidents, medical malpractice, product liability, class actions, and family and municipal law.
Value of benefits adjusted for inflation since 1996
Non-catastrophic injuries
“Each and every time there’s upheaval, we quickly adapt our case strategy, and the current reforms are no exception… we will work within them and around them to continue to get the best results possible for our clients”
Robert Ben,
Thomson Rogers
government is gutting nine previously standard benefits with only medical, rehabilitation, and attendant care coverage left standing. Ontarians will now pick and choose coverage from an à-la-carte menu of optional premiums.
The most significant restructuring in years will leave many claimants in free fall. While some of the benefits are relatively modest – the funeral benefit is around $6,000 and the death benefit ranges from $10,000 to $25,000, for example – others carry more weight. Front and centre for Darcy Merkur, partner at Thomson Rogers LLP, are the absence of visitor expenses for immediate family members and the lack of automatic income-replacement benefits.
Merkur has seen the former countless times throughout his career. When a mother moved from the GTA to Kingston, ON, for six months to be with her daughter who suffered a brain injury, the cost exceeded $100,000 and was covered entirely under SABS. In the wake of the changes, that’s largely off the table for accident victims.
As for the latter issue, without income-replacement benefits coming in, “our clients will be in real trouble,” Merkur notes, adding that so will society more broadly.
Curtailing people’s access to support when they’re unable to work translates to enhanced reliance on OHIP and other government-funded systems such as employment insurance.
“There’s a concern about increased pressure on injured people to return to work prematurely,” Merkur says. “That’s going to be challenging for most.”
For now, those with existing direct insurance policies will retain these benefits, but all bets are off at renewal. Robert Ben, also a partner at the firm, says there are cases where opting out makes sense. Some people have adequate coverage through an employer, for example. But for the most part, many people don’t have access to generous short- or long-term disability plans.
“They’re the ones who may find themselves in a situation where they’re not able to work, they didn’t opt in, and they’ll have nothing,” he cautions.
Merkur predicts “many will choose the cheaper option to save a couple bucks without the foresight of some things that can go sideways.”
While that choice could negatively impact drivers in the future, for the approximately 40 percent of benefit claimants who don’t have direct insurance – pedestrians, TTC riders, members of households that don’t own a car – the changes aren’t optional at all. This is a vulnerable group that stands to be blindsided by the fact that even if a driver purchases optional benefits, those benefits extend only to the named insured, their spouse, dependants, or listed drivers.
For associate Allahnah Karmali, the deeper concern is what these changes signal about the system itself – and for the Ontarians who will bear the cost of navigating it.
Under the current no-fault model, benefits flow regardless of who caused the accident. Post-July, that protection is gone. Those found fully at fault are barred from tort recovery entirely, while the contributorily negligent face compensation reduced in proportion to their fault.
“Thomson Rogers notoriously takes on both sides of a case, the no-fault benefit claim and the lawsuit, but in the new world, I anticipate some firms only taking on the lawsuit aspects,” he says. “It’ll be harder for lawyers to get involved with AB claims because there’s very little, if any, remuneration for doing so.”
Another significant consequence of the new regime will be the loss of s. 44 insurer examination reports. Under the current system, tort defendants routinely rely on these
“What we predict is that Ontario’s personal injury system is evolving towards a litigation-first model – where fewer benefits are automatic, more individuals need to commence a tort claim, and the disbursement side of every file gets heavier”
Allahnah Karmali,
Thomson Rogers
“The government applies inflation indexing to the statutory deductible that reduces lawsuit entitlements but refuses to extend the same logic to benefit entitlements.”
Compounding matters further is the question of whether Ontarians understand what they’re giving up. As independent advisors, brokers owe a duty of good faith to their clients. They must explain available coverage, flag material exclusions, and alert customers to gaps in protection.
While the government promised public education on the changes prior to rollout, that campaign has yet to materialize. Ben notes, however, that the Financial Services Regulatory Authority of Ontario (FSRA) has released a communications toolkit for brokers and insurers.
independent medical assessments generated through the accident benefits process to build their defence. Without a live benefits dispute, those reports simply won’t exist. Defendants will be forced to commission their own defence medical examinations earlier and at greater expense or proceed without them entirely.
“What we predict is that Ontario’s personal injury system is evolving towards a litigation-first model – where fewer benefits are automatic, more individuals need to commence a tort claim, and the disbursement side of every file gets heavier,” Karmali says. “The fundamental concept of accident benefits is supposed to be no-fault. When you take away a lot of these key benefits, you’re dismantling the no-fault system Ontarians signed up for.”
Insult to injury: a system already failing The July 1 reforms layer yet another clawback on top of decades of erosion. Amid soaring costs, benefits have largely remained stagnant. In 1996, the combined standard benefits for non-catastrophic injuries sat at $172,000. A 2010 regulatory change slashed that figure to $86,000 – comprising $50,000 in medical and rehabilitation benefits and $36,000 in attendant care. A 2016 change reduced it further to a combined $65,000, a cut of roughly 25 percent. In the same sweep, those with catastrophic injuries saw benefits reduced by half, to $1 million from $2 million.
Inflation, meanwhile, has marched on.
“Adjusted for the Consumer Price Index, that original 1996 benefit of $172,000 would be worth approximately $320,000 today; instead, Ontarians are left with coverage representing just 20 percent of its inflation-adjusted value – a shortfall of more than $255,000, and counting,” Merkur says.
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“Expedited lawsuits will become the norm. We need to race forward, get people compensation right away, and explore efficient resolutions wherever possible. Timing is now everything”
Darcy Merkur,
Thomson Rogers
$350,000
$300,000
$250,000
$200,000
$150,000
$100,000
1996
2010
2016
2026
~$320,000
Non-CAT limit
$50,000
$0
$65,000
~80%
“If adopted and used to meaningfully communicate with customers, it could go a long way in insulating brokers from negligence,” he says, noting that whether a negligence claim ultimately succeeds will always be fact specific, but counselling around optional benefits must be “something more than a mere box-checking exercise.”
“Brokers who ignore guidance do so at their own peril.”
Bracing for impact Without benefits to bridge the gap, the traditional pace of running these cases is no longer viable. Claimants have two years to start lawsuits, and most lawyers wait until the one-year mark. In this new world, especially without income replacement, “we’ll be filing much, much quicker,” Merkur says.
“The only way to force defendants to pay is by way of judgment; if those take five years to obtain, that’s not very helpful,” he continues. “Expedited lawsuits will become the norm. We need to race forward, get people compensation right away, and explore efficient resolutions wherever possible. Timing is now everything.”
Ben agrees, reflecting that Thomson Rogers always finds a way.
“Each and every time there’s upheaval, we quickly adapt our case strategy, and the current reforms are no exception,” he says. “Of course, we don’t think these are great changes. But we will work within them and around them to continue to get the best results possible for our clients.”
The tort reckoning The pending reforms, Karmali argues, are reorienting Ontario’s personal injury infrastructure from the ground up. The core effect is a transfer of financial risk: people who lack optional benefits will have to sue in tort to recover losses no longer covered by SABS.
“There’s going to be fewer set-offs and potentially higher exposure for future income loss,” Karmali explains.
Shifting costs from accident benefits insurers to tort defendants will also lengthen the timeline. No early and ongoing access to benefits throws up roadblocks to recovery, reintegration into society, and re-entering the workforce as the court route can take years. To put it bluntly, “We’re kicking the can pretty far down the road to get our clients a recovery,” Karmali states.
Published June 8, 2026
Catastrophic injuries
$4.0M
$3.0M
$2.0M
$1.0M
$0.0M
1996
2010
2016
2026
~$3.7M
~73%
$1M
CAT limit