Change in Pre-Judgment Interest Rate
There has been a change in the interest rate that applies to non-pecuniary damages (general damages or damages for pain and suffering and loss of enjoyment of life and damages under the Family Law Act) as of January 1, 2015. This rate was reduced by the Province of Ontario from 5% to 1.3% no doubt as a result of the efforts of the insurance lobby.
This signals a change in philosophy. The pre-judgment rate was kept artificially high by the government while interest rates were falling in general in order to incentivize insurers to deal fairly with injured victims. It was, in effect, used as a means to redress the imbalance of power between insurers and car accident victims and to ‘level the playing field’. This is yet another setback for accident victims in Ontario.