Regulation - LGIC
Regulation 461/96 (Court Proceedings For Automobile Accidents That Occur On Or After November 1, 1996) - Consequential Amendments to Vicarious Liability Limit.
Regulation Number(s):
Regulation 461/96
Instrument Type:
Regulation - LGIC
Bill or Act:
Insurance Act
Summary of Decision:
The amendment to O. Reg. 461/96 limits the vicarious liability of motor vehicle leasing companies to $1 million for loss or damage from bodily injury or death involving a leased vehicle operated as a "livery vehicle" transporting passengers for a fee where the lessor and the lessee are dealing with each other at arm's length.
The intent of this amendment is to help ensure that leasing companies are not exposed to unlimited liability as a result of an incident involving a leased vehicle operated as a "livery vehicle".
The intent of this amendment is to help ensure that leasing companies are not exposed to unlimited liability as a result of an incident involving a leased vehicle operated as a "livery vehicle".
Analysis of Regulatory Impact:
The proposed amendments to O. Reg. 461/96, if approved, would help ensure that vehicle financing businesses (including the vehicle financing subsidiaries of auto manufacturers and distributors) are not burdened by unlimited liability regarding the vehicles they finance. This amendment does not impair the ability of a person to seek recourse for loss or damage from bodily injury or death involving a leased vehicle. A person could seek recourse through an automobile insurance policy under which they are an insured person, and retains the ability to pursue damages from an at-fault party through the courts.
The proposed amendments would not increase compliance costs on businesses and key business sectors, and would have no impact on the Broader Public Service or non-profit sectors. There is no cost to government as a result of this proposal.
The proposed amendments would not increase compliance costs on businesses and key business sectors, and would have no impact on the Broader Public Service or non-profit sectors. There is no cost to government as a result of this proposal.
Further Information:
Regulation 461/96
Consultation - Amending O. Reg. 461/96
Proposal Number:
19-MOF008
Posting Date:
September 19, 2019
Summary of Proposal:
In 2005, the Insurance Act was amended to limit the vicarious liability of motor vehicle leasing and rental companies for loss or damage from bodily injury or death involving a leased vehicle to $1 million, in most cases. The intent of this amendment was to help ensure that leasing companies would not be exposed to unlimited vicarious liability as a result of an incident involving a leased vehicle.
This 2005 vicarious liability limit did not apply to leased vehicles that operated as a "taxicab, livery vehicle or limousine for hire".
Many leased vehicles are engaged in ride-sharing services. While leasing companies have no control over how the vehicle is used (i.e., cannot prevent a leased vehicle from being operated for ride-sharing), leasing companies could be exposed to unlimited vicarious liability if a court were to determine that a leased vehicle used for ride-sharing was operating as a "taxicab, livery vehicle or limousine for hire".
Bill 107, the Getting Ontario Moving Act (Transportation Statute Law Amendment), 2019, included amendments to the Insurance Act to extend the Insurance Act $1 million limit on the vicarious liability of a motor vehicle lessor to leased vehicles operated as a "taxicab, livery vehicle or limousine for hire" where the lessor and the lessee are dealing with each other at arm's length.
By helping to ensure that vehicle financing businesses are not burdened by unlimited liability regarding the vehicles they finance, this Insurance Act amendment will help prevent significant increases in the cost of doing business in Ontario for lessors, and as a result help prevent increases in the cost of leasing a vehicle for Ontario consumers.
The Getting Ontario Moving Act (Transportation Statute Law Amendment), 2019 received Royal Assent on June 6, 2019.
These Insurance Act amendments came into force on Royal Assent of Bill 107.
Consequential amendments are required to O. Reg. 461/96 to reflect these Insurance Act amendments.
O. Reg. 461/96 includes that the Insurance Act limit on the vicarious liability of a lessor "…does not apply in respect of a livery vehicle during any period in which it is used to transport passengers for a fee."
This restriction on the application of the lessor liability limit in respect of a livery vehicle requires amendment to reflect the Insurance Act amendments regarding lessor vicarious liability included in Bill 107.
This amendment does not impair the ability of a person to seek recourse for loss or damage from bodily injury or death involving a leased vehicle. A person could seek recourse through an automobile insurance policy under which they are an insured person, and retains the ability to pursue damages from an at-fault party through the courts.
This 2005 vicarious liability limit did not apply to leased vehicles that operated as a "taxicab, livery vehicle or limousine for hire".
Many leased vehicles are engaged in ride-sharing services. While leasing companies have no control over how the vehicle is used (i.e., cannot prevent a leased vehicle from being operated for ride-sharing), leasing companies could be exposed to unlimited vicarious liability if a court were to determine that a leased vehicle used for ride-sharing was operating as a "taxicab, livery vehicle or limousine for hire".
Bill 107, the Getting Ontario Moving Act (Transportation Statute Law Amendment), 2019, included amendments to the Insurance Act to extend the Insurance Act $1 million limit on the vicarious liability of a motor vehicle lessor to leased vehicles operated as a "taxicab, livery vehicle or limousine for hire" where the lessor and the lessee are dealing with each other at arm's length.
By helping to ensure that vehicle financing businesses are not burdened by unlimited liability regarding the vehicles they finance, this Insurance Act amendment will help prevent significant increases in the cost of doing business in Ontario for lessors, and as a result help prevent increases in the cost of leasing a vehicle for Ontario consumers.
The Getting Ontario Moving Act (Transportation Statute Law Amendment), 2019 received Royal Assent on June 6, 2019.
These Insurance Act amendments came into force on Royal Assent of Bill 107.
Consequential amendments are required to O. Reg. 461/96 to reflect these Insurance Act amendments.
O. Reg. 461/96 includes that the Insurance Act limit on the vicarious liability of a lessor "…does not apply in respect of a livery vehicle during any period in which it is used to transport passengers for a fee."
This restriction on the application of the lessor liability limit in respect of a livery vehicle requires amendment to reflect the Insurance Act amendments regarding lessor vicarious liability included in Bill 107.
This amendment does not impair the ability of a person to seek recourse for loss or damage from bodily injury or death involving a leased vehicle. A person could seek recourse through an automobile insurance policy under which they are an insured person, and retains the ability to pursue damages from an at-fault party through the courts.
Contact Address:
Auto Insurance Policy Unit
Financial Institutions Policy Branch
Ministry of Finance
95 Grosvenor Street
Frost Building North, 4th Floor
Toronto, ON
M7A 1Z1
Financial Institutions Policy Branch
Ministry of Finance
95 Grosvenor Street
Frost Building North, 4th Floor
Toronto, ON
M7A 1Z1
Effective Date:
January 1, 2020
Decision:
Approved