Since Nudorra funds both personal injury and divorce cases, we were intrigued by Alexa Turner’s presentation to the Ontario Trial Lawyers Association conference in May 2024.

Research from several countries (Canada, USA, UK, and Europe) indicates that marital separation and divorce rates rise after one spouse suffers a disability, particularly when the wife is disabled.

Ms. Turner, a Toronto-based family lawyer, collaborative practitioner, and Accredited Family Mediator, addressed “Family Law Issues that Can Impact Your Personal Injury Case”, providing personal injury lawyers with:

  • An overview of how a personal Injury settlement or award impacts separation
  • Guidance on how to support a plaintiff client if they separate during the PI retainer
  • Tips about advising clients if they are separating once the PI retainer has concluded.

Damages from a personal injury lawsuit are excluded from the division of net family property so long as those funds are maintained in an account in the plaintiff’s name. The amount in the account at the date of separation would be excluded (not the original award or settlement). If these funds were deposited into a joint account, the exclusion is lost.

While the total sum of the future care cost award is excluded from property, it is considered if the plaintiff is the recipient of spousal support. When assessing their needs-based entitlement to spousal support, the fact that any care services would be paid for from the settlement may reduce their entitlement.

Loss of income awards are used to assess the injured plaintiff’s income for support purposes. The prior loss of income award (if granted) is included as an asset (if not spent) in the plaintiff’s net family property for the purposes of equalization because they are monies that are deemed to represent income earned during the marriage. A future loss of income award is excluded from the division of property, but is assessed for the calculation of income for support purposes. Any interest earned and reported as income from the settlement may also be included as part of their income for support purposes.

If the personal injury lawyer can settle the case, the settlement structure makes a difference. When there is a global settlement, the heads of damages are not specified, and only the total figure is provided, so the family lawyers must guess or make assumptions about how the global settlement ought to be divided.

Ms. Turner prefers the heads of damages be specified because it removes an issue from the family law side, citing an example case. “My client was awarded a global settlement of $900,000. She alleged she could never work again and this was continuing to be confirmed by her physicians during the separation. She did not have any disability insurance. The Statement of Claim included a plea for loss of income. We knew prior to the settlement she worked making $18 per hour and she was 25 years old when the injury occurred. Because we didn’t know how much of the $900,000 was allocated to income, we had to hire an actuary to help us assess what the quantum should be. This added time and cost for the client. It also opened a door for more conflict and disagreement between them.”

When determining income for support purposes, the onus is on the spouse seeking the exclusion to prove it and runs the risk that more of the funds may be attributed to income than otherwise would be under a structured settlement. (See cases Rivard v. Hankiewicz, 2007 ONCJ 180 and Parkes v. Mones, 2001 SKQB 572.)

Ms. Turner suggests:

  • Consider whether a structured settlement may meet the plaintiff’s interests and reduce conflict/process costs.
  • Is there a way to increase future care costs/general damages in a settlement (instead of the income loss damages)?

How clients pursue, settle, and manage their personal injury claim has major implications on their separation – and vice versa. Ms. Turner believes clients should be encouraged to consult personal injury and family counsel in tandem to ensure a comprehensive and aligned approach.