Pre-judgment Interest on General Damages After Bill 41
Since 1984, section 4 of the Judgment Interest Act has set pre-judgment interest on non-pecuniary (general) damages at 4% per year from the date of the cause of action until the date of case resolution, and has set PJI on pecuniary (special) damages at a rate that changes annually as set out in the regulation to said Act. Bill 41, passed December 9, 2020, amended the substantive law so that for motor vehicle accident injury claims, PJI on both generals (such as pain and suffering compensation) and specials (like compensation for income loss and out-of-pocket expenses) is at the rates set out in the regulation. As a matter of Alberta law, "pre-judgment interest is a statutory and substantive right," although the Courts retain discretion to vary (up or down) PJI awards, for example if resolution of the claim is unreasonably delayed by a plaintiff's lack of diligence in moving the case along (see Gosche v. Boucher 2009 ABQB 277).
While the legal change to PJI set out in Bill 41 applies to existing but not yet concluded MVA claims, the question is whether this statutory amendment applies retroactively, ie., prescribing that for MVA injury claims, the calculation of PJI on generals even for the period prior to December 9, 2020 is not at 4% per annum but rather is at the various annual rates set out in the Judgment Interest Regulation. For reasons that follow, the better view is that for injury claims where the MVA pre-dates the passage of Bill 41, PJI on non-pecs is calculated at 4%/yr from the MVA date to Dec. 9/20 and at the prevailing regulatory rates thereafter. There is a common law presumption [see for eg. Gustavson Drilling v. MNR 1975 CanLii 4 (SCC)] that statutory amendments do not apply retroactively, as the legislature is presumed not to intend to interfere with rights vested in substantive statutes. This rule of statutory interpretation is codified in the Interpretation Act, which expressly states that an enactment takes effect on the day it comes into force (not retroactively). This differs from new procedural provisions (such as amendments to the Rules of Court, for example the long overdue 2020 inflationary adjustments to Schedule C) which are presumed to have retrospective application [see R. v. Dineley 2012 SCC 58 (CanLii)]. Put succinctly by the Supreme Court of Canada in Angus v. Sun Alliance Insurance (1988) 2 SCR 256 at 262, "There is a presumption that statutes do not operate with retrospective effect. 'Procedural' provisions, however, are not subject to the presumption. To the contrary, they are presumed to operate retrospectively; see E. A. Driedger, Construction of Statutes." The presumption against the retroactive operation of statutory amendments may only be rebutted by clear and unequivocal language in the amendment, expressly stating that the amendment has retroactive effect. For example, a 2019 amendment to the Occupiers' Liability Act reads: "s.12(6) This section applies to any action brought against an occupier by a trespasser on the occupier’s premises in relation to a trespass occurring on or after January 1, 2018, irrespective of whether the action is brought before or after the coming into force of this section." The Judgment Interest Act, a substantive statute, vests injured MVA claimants (barring exceptional circumstances -- see Rooke J. in Pedherney v. Jensen 2008 ABQB 345) with entitlement to interest on general damages awards at 4% per annum from the MVA date to the date of case resolution (or to Dec. 9/20 when the statutory amendment came into force, at which point the interest from that date onwards is calculated by the rates set out in the Judgment Interest Regulation). As there is no express language whatsoever in the Bill 41 PJI amendment stating that it is to have retroactive effect (unlike the recent Occupiers' Liability Act amendment), the proper legal interpretation is that the non-pecs PJI rate change is effective as at December 9, 2020, but does not change interest calculations retroactively (just as the annual rate changes in the Judgment Interest Act's regulation are not retroactive). To interpret the amendment otherwise would not only result in unfairness to innocent injured auto accident claimants, it would unjustly enrich reckless drivers' insurers, corporations that have assessed and collected premiums for years on the assumption of a 4%/annum PJI rate on general damages in MVA cases. A week after the passage of Bill 41, then-Superintendent of Insurance Sherri Wilson (a career health department bureaucrat briefly and temporarily appointed as Superintendent of Insurance) provided an "Interpretation Bulletin" which might be spun to suggest that in her opinion, the 4% PJI rate is retroactively expunged by the Bill for MVA cases. Incidentally, Ms. Wilson was removed from her post soon after this IB was released. In any event, an opinion from the Superintendent's Office is afforded little judicial weight (see for example Moussi v. Dharamsi 2020 ABQB 212). Now ex-Superintendent Wilson's opinion (if indeed it is consistent with how some auto insurance companies are purporting to interpret it) may have been predicated on a reading of Cobb v. Long Estate 2017 ONCA 717, in which that court held that Ontario's Bill 15, which exempted MVA injury claims from the 5%/yr non-pecs PJI rate found in r. 53.10 of that province's Rules of Civil Procedure, had retroactive effect. Of course, unlike Alberta's Judgment Interest statute which is substantive law and thus subject to a presumption against retroactivity, Ontario's Rules of Civil Procedure are, obviously, procedural laws, subject to a presumption in favour of retroactivity. Notably, while the Court in Cobb found that therefore, the presumption of retroactivity of procedural amendments applied to Ontario's non-pecs PJI provision, it nevertheless upheld the trial judge's judicial discretion in awarding PJI at a rate much higher than that set out in the Bill 15 PJI amendment, ameliorating unfairness to plaintiffs whose causes of action occurred before the effective date of the amendment. In conclusion, as a matter of proper legal interpretation, for MVAs that occurred prior to December 9, 2020, PJI on generals is calculated at 4% per annum from the MVA date to Dec. 9/20 and at the prevailing rate set out in the Judgment Interest Regulation thereafter, up to the date of case resolution. For MVAs occurring on or after December 9, 2020, PJI on both generals and specials is calculated as per the JIA’s regulatory rates, from the earlier of the date of written notice of the claim to the insurer or the date of service of the lawsuit, to the date of case resolution.