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Threshold and deductible are two important terms that people involved in a personal injury law suit must know. The threshold and the deductible combined can prove burdensome for victims of motor vehicle collisions and reduce their access to justice.
Often times, personal injury lawyers will speak about an injury case ‘meeting threshold’. In order for there to be a viable tort action for damages or losses that were incurred as a result of a motor vehicle collision, the injured person must have sustained a permanent serious impairment of an important physical, mental or psychological function. This is what is referred to as “verbal threshold” or, more commonly, “threshold”. The requirements for what constitutes as an impairment and what evidence is required to support the claim, is laid out in the relevant legislation. If the judge determines that your claim does not meet threshold, you are deemed to have no right to sue and your case will be dismissed.
For example, if you are involved in a car accident and suffer an injury, and you recover from it, you may not have a right to commence a court action for pain and suffering unless you can show that you suffered losses or a permanent serious impairment of an important physical, mental or psychological function.
Tort settlements less than $100,000 are subject to a $30,000 deductible. Family members who make a claim for the loss of care, guidance, and companionship of a loved one as an FLA claimant face a $15,000 deductible on settlements less than $50,000. This deductible is also known as a ‘vanishing’ deductible because it does not apply to settlements over $100,000 or $50,000 for FLA claimants. The purpose of the deductible is to discourage people from taking minor cases to court. The deductible does not apply in fatality cases.
Threshold requirements and the deductible only applies to motor vehicle accident matters. Where someone has been injured as a result of a slip and fall, they are not subject to those same requirements. The deductible is taken into account for when settlement numbers are discussed and agreed upon; it is not something that the client has to pay back upon receiving settlement funds.