Case Citation: Jackson v Cooper, 2024 ABCA 272

In Jackson v Cooper, 2024 ABCA 272, the Alberta Court of Appeal clarifies how to calculate pre-judgment interest (PJI) for automobile accident claims in accordance with section 585.2 of the Insurance Act. PJI should be calculated using the 4% annual rate pursuant to section 4(1) of the Judgment Interest Act up until December 8, 2020. After December 9, 2020, PJI should be calculated using the annual rates prescribed in the Judgment Interest Regulation.

Background

Papa Jackson was in a motor vehicle accident in Edmonton, Alberta on October 21, 2015. The defendant admitted liability. Mr. Jackson was awarded damages based on the injuries he sustained. While Mr. Jackson’s litigation was ongoing, the Alberta Legislature passed the Insurance (Enhancing Driver Affordability And Care) Amendment Act, which received royal assent on December 9, 2020. This amendment added section 585.2 to the Insurance Act reducing PJI rates.

Trial

One of the issues at trial was how to calculate PJI. It was decided section 585.2 of the Insurance Act only applied following the date of assent on December 9, 2020. The defence argued the lower interest rates should be applied from the date of the accident. The trial judge concluded this would amount to a retroactive application of section 585.2 which was unwarranted. The defence had failed to rebut the presumption against the retroactive application of legislation. 

The trial judge defined immediate, retrospective, and retroactive legislation. Immediate legislation only applies to facts that arise after they came into force. Legislation is retroactive if it applies to a situation where both the facts and legal effects have already occurred. Legislation is retrospective if it applies to a situation where the facts have already occurred but the legal effects are still ongoing.  The trial judge determined applying section 585.2 before December 9, 2020 would amount to retroactive application of the legislation.

The trial judge concluded PJI is a substantive right that attracts the presumption against retroactive application of legislation. Substantive rights affect the end result of an action, in this case the judgment received. Procedural rights affect the process of translating a cause of action into a legal outcome. The trial judge found the calculation of PJI does not change “the manner in which a litigant asserts a cause of action” and as such PJI is not a procedural right. The calculation of PJI constitutes a substantive right, as such there is a presumption against the retroactive application of legislation. 

The presumption against retroactive application was not rebutted by the defence. Neither the stated purpose of section 585.2 (ie. to protect the public by reducing insurance premiums), nor the language of the Insurance Act and Judgment Interest Act had the effect of rebutting the presumption against retroactive application.

Based on these factors the trial judge determined section 585.2 only applied to interest calculations after December 9, 2020.

Appeal

Two of the three-justice panel of the Alberta Court of Appeal upheld the decision of the trial judge with nuance. The Court of Appeal determined the legislation was retrospective as opposed to retroactive. The relevant facts arose prior to the enactment of the legislation but the legal effects were still ongoing when the legislation was enacted. The Court of Appeal concluded the facts that entitled Mr. Jackson to non-pecuniary damages were created as a result of the Accident which occurred before the legislation was enacted. The legal effects were still ongoing because the legal action was ongoing when section 585.2 was enacted.

The Court of Appeal stated the defence failed to rebut the presumption against retroactive legislation. The defence tried to argue two points. First, the amendment was introduced as part of legislation intended to enhance insurance affordability by taking “immediate measures to stabilize auto insurance premiums”. Second, no transitional provisions were provided for the amendment, whereas transitional provisions were provided for the other two substantive amendments made at the same time. These arguments did not rebut the presumption. 

The Court of Appeal upheld the trial judge’s decision saying the reduced PJI rates set forth in the Judgment Interest Regulation only apply after December 9, 2020. 

Dissent

The Honourable Justice Grosse dissented and would have allowed the appeal. 

Unlike the majority, Justice Grosse stated the judgment was the fact that gave rise to PJI. Both a judgment and the passage of time is required for PJI. At the time that section 585.2 came into effect, the first factual element required for its application did not exist, as Mr. Jackson had not obtained a judgment. Justice Grosse supported this analysis by noting the language of the Judgment Interest Act grants the Court discretion when awarding PJI. Justice Grosse concluded changing the calculation of PJI would not amount to retrospective application of the legislation and as such there was no presumption against retrospective application.

Justice Grosse further stated the defence had indeed rebutted the presumption against the retrospective application of legislation such that the lower interest rates would apply to the entire calculation of PJI. 

Conclusion

In automobile accident claims, the calculation of PJI still requires 4% for non-pecuniary damages before December 8, 2020. The reduced rates set forth in the Judgment Interest Regulation should be used to calculate PJI thereafter.