Conflicting decisions on which prejudgment interest rate applies to non-pecuniary damages in motor vehicle cases that occurred before 2015 have created a “stumbling block” when it comes to discussing settlements with opposing counsel, Toronto personal injury lawyer Emily Casey tells Law Times.

The legal publication says that in recent months, Ontario courts have come down on either side of the issue of prejudgment interest following changes in legislation that replaced the former rate of five per cent with the lower current bank rate.

“The issue stems from an amendment on Jan. 1, 2015, that changed the amount of prejudgment interest for some cases,” says the article, noting the Ontario Court of Appeal is now considering whether the rule is retroactive.

“One decision earlier this year, Cirillo v. Rizzo, found the change to be retroactive while another one, El-Khodr v. Lackie, later found that earlier ruling to be wrong. The latter case is under appeal,” reports Law Times.

“They’re both the same level of court and they’re both contradictory,” Casey, an associate with Tkatch & Associates, tells Law Times. “Right now, it’s a stumbling block when you’re talking about settlement.”

In El-Khodr, says Casey, Justice Giovanna Toscano Roccamo noted that insurance companies have been basing their calculations on the old rate of five per cent. Casey tells Law Times the companies had already passed the cost to their customers through their premium payments.

As a result, she says, many plaintiff lawyers suggest a retroactive lower rate is nothing short of a windfall for insurance companies.

This article was originally published on Advocate Daily on October 27, 2015.