by LAWPRO

As of July 1, 2026, Ontario’s accident benefits coverage is changing significantly, and some injured persons may have little or no accident benefits coverage even if they are not at fault.

Certain accident benefits that were previously mandatory as part of the auto insurance policy will become optional in Ontario.

Even if the auto policy holder chooses to purchase optional benefits, the coverage under the policy may only apply to certain individuals, and not everyone injured in or by an auto accident.

Why this matters for lawyers

After July 1, some injured parties will need to pursue a tort claim to recover benefits, such as income replacement or death benefits that were previously mandatory. Stakes and pressures in the tort claim will become much higher and clients may be under greater financial pressure.

As a result, lawyers may see increased exposure to allegations involving:

  • delay in advancing claims;
  • missed limitation periods;
  • inadequate investigation of damages, income loss, or expenses;
  • failure to retain appropriate experts;
  • communication breakdown; and
  • allegations of improvident settlements.


Managing client expectations

Lawyers should not assume clients understand what accident benefits coverage is available or the realities of tort litigation. Clients dealing with injuries and financial hardship may become frustrated by delays, costs, uncertainty, and outcomes that they don’t understand.

Clear oral and written communication early in the retainer, and throughout the file, can help reduce misunderstandings and manage client expectations.

Thorough investigation

Before accepting a retainer, lawyers and paralegals should ensure they understand the applicable limitation periods and the financial recovery options and assess whether they are comfortable taking the file.

A thorough investigation should include:

  • determining what accident benefits coverage exists;
  • confirming whether optional coverage was purchased;
  • identifying other potential sources of coverage, such as workplace or disability benefits;
  • assessing the nature and extent of the client’s damages; and
  • understanding the client’s financial pressures.

These issues may significantly affect litigation strategy, timing, expert retention, and settlement discussions.

Keeping clients informed

Frequent communication helps reassure clients that the matter is progressing and has not been forgotten, especially since litigation can be slow moving.

Documentation

Maintain clear and thorough documentation in your file in case the lawyer needs to defend against allegations of negligence. Good documentation that includes notes detailing client conversations, expert reports, letters, and emails may help mitigate exposure even when an error or omission has occurred.

Lawyers should carefully document:

  • advice provided;
  • risks and uncertainties explained to the client, including recommendations;
  • expert recommendations;
  • settlement discussions;
  • client instructions; and
  • decisions regarding litigation strategy.

Practice management considerations

Lawyers handling auto vehicle litigation may want to consider reviewing and updating:

  • intake questions and procedures;
  • checklists;
  • retainer agreements and non-engagement letters;
  • calendar and tickler systems and processes;
  • interim and client direction practices; and
  • interim and final reporting letters.

Under the new regime, the tort claim may become an injured person’s primary or only source of compensation. Careful investigation, clear communication, strong documentation, and proactive file management will become even more important risk management tools for lawyers handling auto vehicle claims after July 1, 2026.

This article is by Safiyya Vankalwala, PracticePRO Manager and Counsel at LAWPRO