Causation In SABS Claims: The Proper Test

The appropriate test for causation in statutory accident benefits ("SABs") matters has been the subject of much confusion in recent years. Fortunately, the Divisional Court has recently provided required clarity, stating that the "but for" test applies, absent exceptional circumstances.

Prior Cases

In Monks v. ING Insurance,1 the Ontario Court of Appeal held that the "material contribution" test applies to statutory accident benefits cases.

However, more recently in Blake v. Dominion of Canada General Insurance Co.,2 the Court of Appeal signalled a shift away from the "material contribution" test towards a general application of the "but for" test in SABs matters.

Nevertheless, despite the shift away from the "material contribution" test, certain decisions at the Licence Appeal Tribunal ("LAT") have often referenced both tests and then reached a determination on causation without specifically stating which one is the default test for causation in SABs matters.3

New Case

Accordingly, clarification on appeal/judicial review was needed. This has now been provided by the Divisional Court in the decision of Sabadash v. State Farm et al.4


In Sabadash, the applicant had various pre-existing injuries prior to the accident and evidence suggested that, as a result of the accident, he suffered a mild traumatic brain injury triggering his ongoing symptoms.

The applicant applied for SABs from State Farm, including IRBs. The insurer completed various insurer examinations and found that the applicant did not meet the test for entitlement to IRBs.

FSCO Arbitration

The matter proceeded to arbitration at the Financial Services Commission of Ontario. The arbitrator granted the applicant's request for IRBs and other benefits.

In so doing, the arbitrator did not "accept State Farm's submission that the 'but for' test endorsed by the Courts in accident negligence cases is to be applied to a determination of causation in the statutory accident benefit context."

Instead, he applied a "material significant factor" standard.

Director's Delegate

The matter was appealed by the insurer to the Director's Delegate on the grounds that the incorrect test was applied by the arbitrator rather than the correct "but for" test.

The Director's Delegate allowed the appeal on the basis that the "but for" test should have been applied.

Judicial Review

The applicant sought judicial review of the Director Delegate's decision.

In the judicial review decision, the Divisional...

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