New PJI Changes Effective January 1, 2015 – Retroactive or Prospective?

by Kaitlyn MacDonell, Associate

Bill 15 came into effect on January 1, 2015.  One of the major changes is that the rate of pre-judgment interest (PJI) on general damages in motor vehicle accidents has been reduced from 5% per annum to a floating interest rate, which is currently 1.3%.

What is unclear is whether this change is retroactive or prospective in operation.  As many plaintiffs’ counsel have already faced, insurers are taking the position that this amendment is retroactive, claiming that it is a procedural amendment.

Plaintiffs’ counsel take the opposite view in that this amendment is substantive in nature.  In Sommers v. Fournier, the Ontario Court of Appeal has ruled that pre-judgment interest is a matter of substantive law.  The Supreme Court of Canada has made it clear that if the amendment is considered substantive, there is a presumption that the change in law does not operate retroactively.

On its face the amendment is silent as to the intention of the legislature.  When there is ambiguity, the Supreme Court of Canada has concluded as a rule of statutory construction that “…there is a presumption that vested rights of an individual are not affected unless the intention of the legislature is clear … this presumption, however, only applies where the legislation is in some way ambiguous and reasonably susceptible of two constructions.”  When amendments to the pre-judgment interest rate have occurred in the past, the Court has treated this amendment as prospective in operation.

Therefore, there is the presumption that this amendment should apply prospectively.  Clearly Plaintiffs whose claim occurred before the change in law have a right to pre-judgment interest at a rate of 5% as the claim vested before the amendment came into force and effect.  However, until the Court definitively rules on this issue, or the legislature clarifies its intention, if insurers insist the rate is as per the new rate, plaintiffs’ counsel should resist strenuously and insist on 5%.

For more information regarding Bill 15 and its impact on accident victim’s rights in general, please contact Kaitlyn MacDonell at 647-260-4498 or

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