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Maximizing Personal Injury Settlements: Guardianship and ODSP Planning Before Settlement Approval

Many of the largest personal injury settlements in Ontario involve claims advanced by guardians litigating on behalf of injured plaintiffs. The plaintiffs may be adults who are incapable of advancing their own case or minors whose parents or legal guardians must act on their behalf.

With many moving parts in a personal injury matter, counsel sometimes overlook the importance of engaging guardianship lawyers early in the process. This can help ensure a smooth transition from settlement approval by the Court to access to settlement funds for the plaintiff. It can also allow for timely planning of the Ontario Disability Support Program (ODSP) to maximize the injured plaintiff’s long-term benefits.

This blog post focuses on key guardianship-related issues for personal injury lawyers, encouraging early referrals for specialized advice, before it’s too late.

Timing Is Critical

Personal injury guardianships present unique challenges not typically encountered in standard guardianship applications. Chief among these is timing. It can be frustrating, and potentially harmful, for plaintiffs and their families to reach a long-awaited settlement only to discover they cannot access the funds until a guardianship appointment is finalized.

Unique Challenges

Moreover, the final stages of a personal injury matter often involve ongoing and complex considerations. These may include:

  • accrued services from attendant care and other treatment providers, sometimes amounting to six figures;
  • an urgent need to purchase a suitable accessible home in a changing housing market;
  • pending subrogation claims;
  • the inability to qualify for a guardianship bond; and
  • evolving and complex treatment needs for the plaintiff

Each of these elements could have an impact on the guardianship process. Timely guidance from a guardianship lawyer can help minimize the effect of these complications.

ODSP Planning: A Crucial Opportunity

Beyond the guardianship process itself, one of the most consequential decisions may be how the settlement is structured. With early and thoughtful planning, even plaintiffs with multi-million-dollar awards may be eligible for ODSP. Not only could this include income supplements and housing support, but critically it includes drug and dental coverage. These benefits can have a substantial effect on the suitability of the personal injury settlement achieved.

While damages for pain and suffering are exempt under ODSP rules (meaning they are not recognized as assets of the recipient when determining ODSP eligibility), any income generated from those funds—such as interest on structured settlement payments—is taken into account.  This can create a balancing act for litigation guardians: A larger lump sum may be needed immediately to cover urgent care costs, but this may trigger additional scrutiny from the court, and create the need for a guardianship bond. Conversely, putting a greater portion of the settlement funds in a structure may offer more long-term security, but income flowing from structured payments can erode ODSP eligibility.

A guardianship lawyer with ODSP planning advice can help outline how ODSP rules may interact with the injured person’s immediate care needs, and the long-term sustainability of their financial resources. Without this guidance, plaintiffs risk seeing settlements that look substantial on paper, but ultimately compromise access to essential supports. This can result in the loss of tens of thousands of dollars in lifetime benefits.

Conclusion

Personal injury lawyers should be mindful of the guardianship and ODSP implications in cases that involve incapable plaintiffs or minors. Early collaboration with guardianship counsel can help avoid delays, preserve access to essential benefits, and ensure that the settlement truly serves the best interests of the injured party.