by Ryan KirshenblattSNOW…AND ICE, ICE, BABY
All right, stop, collaborate and listen…
Snow arrived much earlier than many of us expected. It isn’t 12 Inches of Snow just yet, but it is a seasonal reminder to many AB claims examiners that a flurry of OCF-1s may soon appear on their desks.
Consider this blog posting your Informer about snow, ice, and the SABS definition of “accident”.
Both the “purpose test” and “causation test” need to be met in order to establish an “accident”. The purpose test (whether the automobile was being put to an ordinary and well-known use) is usually easier to meet. The “causation test” considers “but for” causation, intervening events and the dominant feature (time, proximity, activity and risk) of the incident. The causation test is predominantly where these cases succeed or fail.
In snow and ice fall cases, the trend from the LAT seems to be that these cases are more likely to be put on ice.
In R.M. v. Certas, the applicant started the process of opening her car door and even had her hand on the door handle when she fell on ice next to her car. Ice, not use or operation of an automobile, was the dominant feature and it was held at first instance, and on reconsideration, that the incident was not an “accident”.
In another case, J.D., a jogger, stopped at the sidewalk’s edge. A car stopped and startled J.D. when it advanced. J.D. slipped on ice beneath her. She was held in J.D. v. Certas not to be involved in an “accident”. Again, ice was considered the dominant feature of the incident. Admissions contained within early hospital and medical records referring to ice as the cause of her fall were key for the defence.
In yet another case, 18-003463 v. Certas, C.S.’s car was parked outside Walmart, engine off, and locked when she took a few steps away from her car and fell. She denied any contact with her car. Ice was held to be an intervening event. She was held not to have been involved in an “accident”. Note in this case the applicant argued that because Certas had paid the claim up until raising the “accident” issue it should be prevented from taking that position later. The LAT held that an insurer’s decision to pay benefits does not constitute a waiver of its right to dispute entitlement at a future date.
The applicant in B.Y. v. TD (18-001537) told slightly different stories about whether his hand was touching his car when he fell on black ice. It didn’t matter. The black ice was held to be an intervening event regardless of whether he had contact with his car.
Slush can also knock someone’s claim off its feet. In D.M. and Certas (17-000180) the Applicant was walking back from a store and went to clean the snow from her side mirror. She fell on slush and was held not to have been involved in an “accident”. Note in this case that D.M.’s case failed the “purpose test” before the adjudicator addressed the “causation test” that found the slip and fall itself to be the dominant feature of the incident. The adjudicator relied on several prior decisions including Banos and Jevco (FSCO A14-004846), a case I successfully argued several years ago.
TAKEAWAYS:
- Falls on ice may help control a new SABS claim early on;
- Don’t be deterred by a claimant’s “reach” for accident benefits by stating he or she had their hand on the car when they fell;
- Look for key admissions in records generated soon after the incident – hospital and family physician records are often helpful; taking statements that document the sequence of events, or using an EUO to pin down the facts, can also be helpful control measures;
- Don’t be deterred by having paid the claim previously – the insurer can later change its position upon whether the incident was an “accident” and still defend.
by Neil Colville-ReevesGetting Paid to Sleep? Professionally Designated Spouses Can Now Be Paid for Overnight Supervisory Care.
The decision in E.E v Aviva Insurance Company, 2018 CanLII 76415 (ON LAT) deals with a request for reconsideration by the respondent of parts of the decision issued by the Tribunal, including the finding that the applicant was entitled to attendant care benefit (including 24 hour supervisory care) alleged to have been provided by his wife, a registered PSW and RPN. At reconsideration, Associate Chair Stephen Jovanovich, agreed with the Tribunals analysis of “incurred”, and found that the test was satisfied under section 3 (7)(e) of the Schedule.
With regard to whether the care was provided during “the course of the employment, occupation or profession in which he or she would ordinarily have been engaged”, Associate Chair Jovanovich found that despite the fact that the applicant’s wife did not contract with private clients and was employed by a healthcare agency, it was not necessary for the applicant to tender his wife’s services through her employer.
With regard to “but for the accident” the respondent submitted if the evidence of the applicant’s spouse were taken at face value, then “but for the accident” the only periods she would have been working as a nurse was from January 2013 to June 2014 and from June 2015 to December 2016. The remainder of the time, the applicant’s spouse was on maternity leave, and according to the respondent she would not have been actively working during those time frames in any event. Associate Chair Jovanovich disagreed with the respondent and found that if this position were correct, then any time a spouse who is providing needed services is on any type of leave, the ACBs would not be payable. In Associate Chair Jovanovich’s view, this was not the correct interpretation of the relevant sections of the Schedule.
With regard to whether the applicant had paid “the expense, had promised to pay the expense or was otherwise legally obligated to pay the expense”, Associate Chair Jovanovich agreed with the adjudicator’s conclusion that, based on the evidence of the applicant, his spouse and the Attendant Care Confirmation of Expenses for Services Provided, in which the applicant certified that he promised to pay his spouse for the service, the condition in section 3(7)(e)(ii) of the Schedule was satisfied.
With regard to whether the adjudicator erred in allowing payment for overnight supervision, the respondent submitted that there was no evidence that such overnight supervision was part of the applicant’s spouse duties at her place of employment. The respondent relied on the decision in Y.D. and Aviva Insurance, 2017 CanLII 43883 (ON LAT), where certain personal services were provided by the insured’s spouse who was a physician practising as a fertility specialist. In the Y.D. and Aviva Insurance decision, the adjudicator wrote that the test to be applied was whether the spouse/physician was providing services to his wife in the same manner as he was providing in his normal employment, not what he may have been otherwise qualified to do.
However, in Associate Chair Jovanovich’s view, the case involved very different circumstances that could not be applied to the present matter. According to him, the applicant’s spouse was qualified to provide attendant care, a component of which is providing basic supervisory care. The fact that she may not have actually done so on an overnight basis in the course of working for her employer was irrelevant. He further found that it was reasonable for the adjudicator to find that 24 hour supervisory care was necessary based on the evidence presented.
Overall, Associate Chair Jovanovich upheld the original decision supporting the attendant care claim and indicated that it would “… seem odd, as a matter of public policy, to mandate that insureds with a trained professional in their direct families who care for them be obligated to arrange equivalent support services from outside the family in order for it to be compensable”.
After having articled at Samis + Company, Gurpreet was honoured to join the firm as an Associate in July of 2018. During her time with Samis, Gurpreet has gained valuable experience in various areas of ligation work including: tort law, statutory accident benefit claims, subrogation, priority disputes, and estates law. One of the things Gurpreet enjoys most about being a part of the Samis team is the opportunity to have a diverse and dynamic practice that allows her to continually build on her strengths as a litigator. Gurpreet regularly speaks to matters at the Small Claim Court and the Superior Court of Justice level.
by Kevin MitchellShould you indemnify? You better you better you bet.
With tension like The Who’s iconic song, the July 17, 2018 loss transfer private arbitration award of Fred Sampliner in State Farm v. Economical dealt primarily with a dispute over the quantum of State Farm’s claimed indemnity and included issues. Economical admitted 100% liability for the February 4, 2010 accident. A confounding issue was the fact there was a live SABS claim from a prior January 22, 2008 accident, which was not loss transferable. Both claims, on the verge of trial, were settled together in April 2016. The onus shifted to Economical to show gross negligence or bad faith handling once State Farm proved the payments had been made. Depending upon the quantum at issue, this can be a costly and/or time consuming exercise for any Applicant.
Economical primarily took exception to the manner in which State Farm settled the second claim via lump sum. It also rejected various medication expenses, which were similar to those prescribed in respect of the first accident. Economical enjoyed success only with its third argument respecting repayment of hourly rates for OCF-18s paid by State Farm above the rates contained in the Professional Services Guidelines. Only one OCF-18 was clearly in excess of the posted rates. For the other five impugned OCF-18s, it involved the hourly rate for a psychiatrist, which is not subject to the Guidelines. Economical argued the rate for a psychologist should inform the decision. The arbitrator disagreed, noting differences between the two disciplines, but in accepting OHIP’s hourly rate of $176.25 still found State Farm had overpaid, which rose to the level of gross negligence but not bad faith.
In an indemnity claim of just shy of $275,000.00, less than $10,000.00 was disallowed. State Farm was awarded interest, albeit reduced in duration, and required to equally fund the arbitrator’s account, presumably as part of the umbrage felt by the arbitrator over State Farm’s agreement before the hearing to accept less than it had paid for the OCF-18s. Unfortunately, his ‘brinkmanship’ comment and the noted exceptions seem a bit out of balance when compared to State Farm’s relative success and the fact that had it settled in advance it would have achieved an indemnity recovery of about 50% rather than the 96.4% it now enjoys. The issue of costs was reserved. Neither party intends an appeal.
Without authority/evidence to support paying a psychiatrist more than OHIP does, you better bet your life a loss transfer Respondent will cut you like a knife.
Kevin is a Partner of Samis+Company. Throughout his career, he has practiced almost exclusively in the area of accident benefit and bodily injury matters arising from motor vehicle accidents. He has also defended various non-motor vehicle bodily injury claims. Kevin carries on a robust practice involving privately arbitrated disputes between insurers in both priority and loss transfer matters.
by Kevin MitchellAre they spouses? To live together, or not to live together, that is the question.
kin to the controversy unleashed by Claudius’ usurpation of the Denmark crown, the July 10, 2018 endorsement of Justice Morgan in Royal v. Desjardins, 2018 ONSC 4284, relates to judicial review of Shari Novick’s February 24, 2017 priority private arbitration award in favour of Desjardins.
On February 24, 2014, Desjardins’ insured driver struck the claimant who was a non-occupant. Her claim for accident benefits was made to Royal as the insurer of the claimant’s ‘spouse’. Definitions for that term are contained in s. 3 of the SABS, under “insured person”, and in s. 224 of the Ontario Insurance Act, “spouse”. The pertinent part of the latter definition refers to two people living together conjugally outside of marriage continuously for at least three years.
Despite dating since 2008, the claimed spouses had actually only resided in the same household for one year pre-accident. The question was, whether a literal or expanded definition of ‘lived together’ was the proper interpretation? His Honour found it to be a question of mixed fact and law to which a reasonableness standard applied. Royal preferred the literal construction. Desjardins preferred the more global view, considering features of the couple’s life together having ‘notionally’ lived together for the requisite time. It appears the arbitrator only looked to family law authorities concerning spousal support to aid in her interpretation of the legislation.
The Court of Appeal’s judgment in Economical v. Lott (1998), 155 DLR (4th) 179, was referenced, which found the contexts of the Family Law Act and Insurance Act schemes to be different despite the use of similar words. Justice Morgan found that the arbitrator erred in finding family law policy applicable to insurance law without related discussion and articulating her reasons. My view is that the arbitrator purported to choose the family law context by reason of the literal similarity between the definitions in the differing legislation. When contrasted with Justice Morgan’s opposite finding, it may be a distinction without a difference. Without further consideration of why she chose one context over the other may well have been unreasonable. But it was upon the expanded review of the couple’s life that she decided they were spouses and in favour of Desjardins. At paragraphs 25 & 27, Justice Morgan found that the outcome was unreasonable on the same basis but, more importantly, also found nobler the literal interpretation of the Insurance Act provision. Presumably, any arbitration awards equating the old s. 224 definition of ‘cohabited’ (interpreted broadly) with ‘lived together’ (altered in 2005) are now in vain. Accordingly, a declaration issued that the couple were not spouses and that Desjardins stood in priority and was required to indemnify Royal.
Will Desjardins recover the crown? It is too early to tell if it will suffer the slings and arrows of a leave application to the Court of Appeal.
Kevin is a Partner of Samis+Company. Throughout his career, he has practiced almost exclusively in the area of accident benefit and bodily injury matters arising from motor vehicle accidents. He has also defended various non-motor vehicle bodily injury claims. Kevin carries on a robust practice involving privately arbitrated disputes between insurers in both priority and loss transfer matters.
by Mauro D'AgostinoFailure to Provide Notice to the Insured within 90-days is not Fatal to Priority Dispute
In the decision ofThe Dominion of Canada General Insurance Company v. Unifund Assurance Company, the Court of Appeal has confirmed that the standard of review applicable in priority disputes is reasonableness.
The decision primarily deals with whether the failure to provide notice to an insured within 90-days of receipt of the OCF-1 precludes the insurer from proceeding with a priority dispute. In this matter, notice was provided to the insured after the priority arbitration had commenced (beyond the 90-day period) but before the arbitration hearing.
At the preliminary issue hearing, Arbitrator Novick decided that the 90-day notice period did not apply to insureds, only to insurers giving notice to other insurers. The Arbitrator held that, while insurers should ideally provide notice to insureds at the same time as notice is given to the other insurer, late notice to an insured is permitted, as long as it provides the insured with the opportunity to participate in the process.
The appeal of the preliminary issue decision was heard by Faieta J. of the Superior Court, who concluded that the applicable standard of review was correctness. He held that failure of the insurer to provide notice to the insured within the same 90-day notice period was fatal to the priority dispute.
A three-judge panel of the Court of Appeal reversed the decision of Faieta J. and restored the decision of the Arbitrator. A reasonableness standard was applied. The Court noted that the Arbitrator was a specialized decision-maker engaged in interpreting her home statute and regulation.
In determining the Arbitrator’s decision was reasonable, the Court of Appeal found that the failure to give notice to the insured within 90 days did not ignore the policy objectives of the Regulation. It did not affect the insured’s right of prompt receipt of accident benefits, nor did it affect the insured’s participation rights in priority disputes, held to be procedural rights. In addition, the late notice had no impact on the rights of the second insurer in the priority dispute.
The Court determined that it was up to the Arbitrator to determine whether the notice to an insured was given too late in order for the insured to exercise their participation rights. In the case at hand, the Arbitrator found that as the insured received notice before the actual arbitration hearing commenced and did not object to the transfer of the claim, the late notice was not fatal to the priority dispute. The Court ultimately concluded the Arbitrator’s decision was reasonable – although the notice was late, the lateness was not an impediment to the priority dispute, and the proceeding could continue.
This case is significant because the Court of Appeal has determined that notice to an insured of the priority dispute in excess of the 90 days is not necessarily fatal to a proceeding. The analysis is now whether the lateness of the notice to the insured precludes their ability to participate in the priority dispute.
by Neil Colville-ReevesLAT Holds Attendant Care is not Payable before the Submission of a Form 1
At issue in Applicant and Aviva (2018 Can LII 13190) was whether attendant care was payable for the period of time before the Claimant submitted a Form 1.
The Claimant was injured in a July 1, 2014 accident and sought attendant care expenses in the amount of $1,424.24 per month for the period July 14, 2014 to March 30, 2015. The Claimant Form 1 was not provided to the insurer until October 31, 2014. The Insurer agreed to fund the attendant care for the period after the Form 1 was submitted, but refused to fund the attendant care for the time period before the Form 1 was submitted. Aviva submitted that entitlement arose when it received the Form 1.
The Adjudicator found in favour of Aviva and determined entitlement arose the date the Form 1 was received on the basis of Section 42(5) of the SABS. The Adjudicator noted that the Claimant had opted to provide no submissions refuting Aviva’s position and did not provide any evidence indicating the Form 1 was received earlier. He indicated that incurring attendant care treatment does not automatically entitle an Insured to attendant care benefits. Pursuant to section 19 of the SABS, it is the reasonableness and necessity for attendant care services which entitle an insured to the benefit.
by Kevin MitchellBiblical proportions: Divining King Solomon (or Geddy Lee?) in the determination of priority disputes.
[et_pb_section bb_built=”1″][et_pb_row][et_pb_column type=”4_4″][et_pb_text _builder_version=”3.9″]In this January 5, 2018 priority dispute private arbitration award of Ken Bialkowski, the main issue was principle dependency; a construct of the definitions contained in s. 3(7)(b) of the SABS. The definition of ‘insured person’ in s. 3(1) of the SABS ties in the ‘dependant’ definition to the authorizing section for priority disputes: s. 268(2) of the Insurance Act. RBC, in respect of two claimants injured in an auto accident on April 4, 2015, sought to have TD assume handling of the SABS claims and indemnify it for benefits it had to date expended.
The elder claimants were both passengers in the RBC insured auto at the date of loss and, by s. 268(5.2), RBC would be the highest priority insurer if the two were found dependent upon their younger son. At a minimum, however, they were insured persons of RBC, based upon occupancy alone, and that is likely the reason their OCF-1s were sent to RBC in the first place. Notwithstanding, it was argued the claimants were dependent upon either of their two sons, each of which were the named insureds of the parties to the dispute.
The arbitrator started by defining the duration of the time period pre-loss to be considered that would give the best indication of the situation that existed as of the date of loss. This inquiry largely surrounded where they primarily resided. His review of the case law confirmed the preference by our Superior Court for the statistical LICO methodology over the mathematical one. The arbitrator astutely noted the mathematical approach was rooted in a criterion for dependency, which was rejected by the Ontario Court of Appeal back in 1986 in the seminal Miller v. Safeco case. RBC argued a third methodology, the plural approach. This approach is meant to determine upon whom a claimant is dependent when that claimant provides less than half of their own needs and one, of at least two individuals, provides a financial amount in excess of the claimant or anyone else who is also contributing. It, however, would appear to go against the established, and in my opinion inaccurately named, ‘51% rule’. To be accurate mathematically, it should be named the ‘50% + 1’ rule. Its distinct departure from the 51% rule is that the individual upon whom the claimant is said to be dependent contributes less than 50% of the claimant’s needs (not more) but more than the claimant or anyone else involved.
In this case it was argued by RBC the majority contributor was the eldest son; TD’s named insured. Even if RBC hadn’t admitted dependency upon its named insured (albeit not the greatest contributor), it still had the onus of proof in the dispute since it, at a minimum, was liable to pay benefits, per s. 268(3), based upon mere occupancy. The arbitrator found the sons to be equal financial contributors to their parents so, although they were each not independent, they were not considered principally dependent upon any one individual. RBC was found to be the priority insurer for both claimants and responsible for TD’s partial indemnity costs and the arbitrator’s account. The arbitrator thereby skirted support for what was said to be the genesis for the plural approach; the January 2013 award of arbitrator Scott Densem in Economical v. Aviva, which was not appealed, while yet paying homage to the 51% rule. It is too early to tell if this award will be appealed. However, with the standard of review still reasonableness, although requested to be revisited by the Court of Appeal in a pending decision where our firm was counsel, I doubt RBC will be so inclined.
[/et_pb_text][/et_pb_column][/et_pb_row][/et_pb_section]by Neil Colville-ReevesDisabling Impairment Not Causally Related to Accident
[et_pb_section bb_built=”1″][et_pb_row][et_pb_column type=”4_4″][et_pb_text _builder_version=”3.9″]The Ontario Superior Court recently released a decision finding an injured Plaintiff did not meet threshold on the basis that a “disabling” impairment to the left shoulder was not causally related to the accident.
In Grieves v. Parsons, the Plaintiff was injured in a motorcycle accident on July 24, 2012. The Plaintiff sought past and future income loss and general damages for pain and suffering and loss of employment of life. The Defendants had previously admitted liability.
The primary issue was whether the Plaintiff’s impairments were caused by the accident or by other medical conditions that would have developed even if the Plaintiff had not been injured in the accident.
While the jury was deliberating, the Defendants brought a “threshold motion” for a declaration that the Plaintiff’s claim for general damages was barred on the basis that the Plaintiff had failed to establish that, as a result of the accident, he had sustained a permanent, serious impairment of an important physical, mental or psychological function.
After hearing the evidence, the jury awarded $61,000.00 for past income, $90,000.00 for future loss earnings (substantially less than the $738,000.00 to $866,000.00 that was claimed by the Plaintiff) and $50,000.00 for general damages. With respect to the threshold motion, Justice Charney considered the fact that the jury verdict reflected a result much closer to the position advanced by the Defence than to the position of the Plaintiff
Both parties presented expert evidence with respect to causation and threshold. The Plaintiff’s expert testified the Plaintiff’s ongoing symptoms were attributable to the accident and that the Plaintiff had sustained a permanent, serious impairment. However, Justice Charney preferred the evidence of the Defence’s expert that the Plaintiff ongoing symptoms were not related to the index accident.
Ultimately, Justice Charney concluded the Plaintiff did not meet threshold, stating that the evidence supported the Defence’s position that the Plaintiff stopped working in May 2017 because of pain in his left shoulder and that that pain was the result of left shoulder osteoarthritis that first presented itself prior to the index accident.
See: https://www.canlii.org/en/on/onsc/doc/2018/2018onsc26/2018onsc26.html?resultIndex=3
[/et_pb_text][/et_pb_column][/et_pb_row][/et_pb_section]by Neil Colville-ReevesOverpayments – Recovery, Timing and Notice
[et_pb_section bb_built=”1″][et_pb_row][et_pb_column type=”4_4″][et_pb_text _builder_version=”3.9″]The year 2016 was not all that bad: The Superior Court finally provided some much needed guidance on whether an insurer can recover an overpayment made to an insured under the SABS. Justice Perell in Intact Insurance Company v. Marianayam shed some light on this ambiguous area of law.
Overpayments commonly occur when an insured person is paid an income replacement benefit and subsequently receives Long Term Disability benefits (LTD) or Canada Pension Plan benefits (CPP), which are deductible under the SABS.
The recovery of overpayments is governed by section 52 of the SABS-2010 (see section 47 of the SABS-1996). It provides that an insurer may recover benefits that were paid to an insured in error or if the insured was disqualified from receiving benefits. This is, of course, only if the overpayment is not a result of willful misrepresentation or fraud. One of the most controversial aspects of this law is subsection 52(3) of the SABS-2010 (section 47(3) of the SABS-1996), which requires the insurer to give notice of the amount that is required to be repaid.
The notice requirement was introduced in the 1996 amendments to the SABS. Subsequently, a body of case law has developed around the timing and content of this notice.
With respect to timing of notice, the Superior Court in Marianayam has helped clarify this area of law by upholding the Director’s Delegate decision in Pries v. Economical Mutual Insurance Company 2, and confirming that an insurer can only recover an overpayment made within 12 months of giving notice. In Pries, Economical took issue with the term “payment” in s.47 (3) of the SABS, and with the phrase, “within the 12-months after the payment was made”. Economical argued that they should be able to recover the full amount of the overpayment. However, Directors Delegate Evans was not persuaded and ultimately held that an insurer can only recover an overpayment made within 12-months of giving notice and awarded Economical 12 of the 16 months of overpayments. To put it another way, the amount of the repayment is capped at one year before the demand and there is no recovery for any payment made more than 12 months before the repayment notice was made.
The Superior Court in Marianayam also weighed in on what constitutes proper notice under the SABS. In doing so, Justice Perell upheld the controversial decision of Knechtel v. Royal SunAlliance, where Arbitrator Sampliner held a valid notice letter must contain:
- The name of the specific benefit(s) the insurer claims has overpaid;
- A statement of the appropriate weekly/monthly or lump sum amount sought;
- The payment date of applicable time span of the specific benefit(s) it has paid and seeks repaid; and
- Calculation of the total repayment claim;
Justice Perell stated that the amount claimed in the insurer’s notice letter “need not be perfectly correct but should be substantially correct.” While this may sound simple enough, Justice Perell determined that Intact’s first two notice letters failed comply with the Knechtel requirements.
In Marianayam, Intact claimed reimbursement for overpayments made to the Claimant between 2007 to 2015 as a result of the Claimant’s receipt of retroactive LTD benefits and CPP benefits.
Intact’s first letter sought $69,000 or 170 weeks of IRBs although the applicable statute provided for repayment of only 12 months (52 weeks). Justice Perell stated that Intact should have only indicated in their letter a demand for 12 months of payments. As a result, Justice Perell found the amount requested was not substantially correct; it was grossly incorrect. Therefore, the first notice was not considered proper notice and could not be relied upon.
Intact’s second letter indicated its legal position and advised that an accountant had been retained to calculate the quantum of the repayment. Justice Perell found that this letter also failed to satisfy the notice requirement, as the amount of the repayment was left undetermined.
Finally, Justice Perell accepted a subsequent letter that enclosed Intact’s accounting report as a proper notice. Justice Perell accepted the letter and report as notice, since it came close to calculating the correct amount of the overpayment and only erred by making a claim for 14-months of overpayments rather the limit of 12-months.
Interestingly, Justice Perell did not order repayment of CPP amounts. Intact’s accounting report included the CPP benefits in its overpayment calculation; however, Intact’s letter did not specifically request repayment of CPP benefits. Therefore, Justice Perell found Intact was not entitled to the CPP payments.
Given that Justice Perell did not define “perfectly correct” and “substantially correct”, we are left guessing when a particular notice falls on the spectrum between perfect and substantially correct. Nevertheless, it is fair to say that the evolving jurisprudence regarding overpayments has made it more difficult for insurers to recover overpayments. However, the Marianayam decision has provided much needed guidance on how to recover overpayments successfully. When faced with an overpayment situation, insurers must act quickly to identify and provide notice of any overpayment within 12 months or they may lose the right of recovery. Insurers must also ensure their notice contains the Knechtel requirements and the amount sought must comply with the statute.
See Intact Insurance Company v. Marianayam , 2016 ONSC 1479
[2] Pries v. Economical Mutual Insurance Company, FSCO A11-002004, September 21, 2012; Economical Mutual Insurance Company v. Pries, FSCO Appeal P12-00036, July 8, 2013 [/et_pb_text][/et_pb_column][/et_pb_row][/et_pb_section]
by SamisOn-Coverage Still Means On-Claims
[et_pb_section bb_built=”1″][et_pb_row][et_pb_column type=”4_4″][et_pb_text _builder_version=”3.9″]A FSCO arbitrator has confirmed that the first insurer that receives a completed application for accident benefits is required to adjust and pay the claim, even if the insurer is taking an off-coverage position.
Overview
In Cankaya v. Intact / Cankaya v. Unifund, the claimant was working on the engine of a 2001 BMW vehicle he was about to repair at his mechanic shop. The cooling fan or other part of the BMW broke apart and flew into his face. He sustained multiple injuries. He was acting in the course of his self-employment as a garage repairman when the incident occurred.
At the time of the incident, the claimant was insured with Unifund under a standard Ontario Automobile Policy (OAP 1), which insured his personal vehicle. He was also insured with Intact under the standard Ontario Garage Automobile Policy (OAP 4). Both policies were valid at the time of the incident.
The claimant submitted an application for accident benefits to Unifund on January 10, 2014. On March 27, 2014, Unifund advised the claimant that he was precluded from receiving any accident benefits under his policy because of the garage exclusion under section 1.8.4 of the OAP 1.
On April 15, 2014, the claimant’s lawyer wrote to Unifund and advised about the Intact policy. The claimant’s lawyer encouraged Unifund to pursue a priority dispute against Intact, pursuant to O. Reg. 283/95 . Unifund refused to do so.
On June 18, 2014, the claimant submitted an application for accident benefits to Intact. Intact denied the application on the basis that it was not the first Insurer to receive a completed application.
The claimant did not receive any benefits, so he applied for mediation and arbitration at FSCO. A preliminary issue hearing was held to determine a number of issues, the main one being whether FSCO had jurisdiction to determine whether section 1.8.4 of the OAP 1 could relieve Unifund of its obligations to respond/adjust and pay benefits, pursuant to section 2.1 (6) of O. Reg. 283/95. In other words, could FSCO determine coverage or was that issue reserved for a priority dispute?
Priority Dispute Scheme ( in a nutshell)
Section 2.1 (6) of O. Reg. 283/95 requires the first insurer who receives a completed application for accident benefits to respond and pay benefits pending the outcome of any priority dispute with another insurer. In Kingsway v. Ontario (2007), the Court of Appeal stressed that the “pay now, fight later” principle is vital:
Section 2 of regulation 283 is critically important in the timely delivery of benefits to victims of car accidents. The principle that underlies section 2 is that the first insurer to receive an application for benefits must pay now and dispute later. The rationale for this principle is obvious: persons injured in car accidents should receive statutorily mandated benefits promptly; they should not be prejudiced by being caught in the middle of a dispute between insurers over who should pay, or as in this case, by an insurer’s claim that no policy of insurance existed at the time.
Where an insurer receives a completed application and believes that another insurer has priority over it for the claims, O. Reg. 283/95 allows the insurer to compel the other insurer(s) to participate in a priority dispute. The entire procedure is contained in the Regulation and disputes are resolved in private arbitration, pursuant to the Arbitration Act, 1991.
O. Reg. 283/95 has strict timelines: When an insurer receives a completed application for accident benefits, it has 90 days from the date of receipt to investigate priority and to give a target insurer written notice of the dispute, pursuant to section 3. An insurer that fails to give written notice within that 90-day period is barred from pursuing priority against the other insurer, unless it can show, firstly, that 90 days was not enough time to make its determination and, secondly, that it made reasonable investigations during those 90 days. These two “saving provisions” are often difficult to satisfy.
Section 4 requires the insurer giving notice under section 3 to also give the claimant a Notice to Applicant of Dispute Between Insurers form, which is a prescribed document that advises the claimant of the dispute and the name or names of the other insurer(s) who might have priority over the claims. The claimant is given 14 days to object to the transfer of their file. If the claimant objects, he or she becomes a participant in any proceeding to determine priority. The Superior Court[1] held recently that the notice under section 4 must be given within 90 days after the insurer receives the claimant’s completed application for benefits.
Once an insurer gives its written notice, subsection 7 (3) states that any arbitration to decide the issues between the parties must be initiated within one year from the date the insurer paying benefits gave its priority dispute notice.
Cankaya Decision
As noted above, Unifund rejected the application on the basis that the claimant was subject to the garage exclusion under section 1.8.4 of the OAP 1. Having determined that there was no coverage under the policy, Unifund refused to adjust and pay benefits pending the outcome of any priority dispute with Intact. Actually, Unifund refused to initiate a priority dispute against Intact.
Meanwhile, Intact refused to adjust the claim on the basis that it was not the first insurer to receive an application for accident benefits. Essentially, Intact argued that Unifund was the first insurer to receive an application, so only Unifund was compelled to pay now and dispute later.
The first issue was whether FSCO had jurisdiction to determine whether section 1.8.4 of the OAP 1 could relieve Unifund of its obligations under section 2.1 (6) of O. Reg. 283/95. The arbitrator relied on previous FSCO decisions (Vieira and Royal & SunAlliance and Chubb, 2004 FSCO App) and Bianca v. Wawanesa, 2004 FSCO Arb) and held that FSCO did not have jurisdiction to make that decision.
Put another way, FSCO (and the courts, and likely the LAT) often determines whether a particular claimant was involved in an “accident”. This is a general coverage issue that applies to a claimant regardless of where she applied for benefits. If she was involved in an “accident”, she is entitled to benefits from at least one insurer. If she was not involved in an “accident”, she is not entitled to benefits from any insurer. FSCO has jurisdiction to make this determination.
However, where there is no issue as to whether a claimant was involved in an “accident”, any other coverage issues (i.e., whether the claimant is an “insured person” under a particular policy) is determined in a priority dispute between insurers. FSCO does not have the jurisdiction to make that determination.
Although FSCO does not have jurisdiction to determine coverage in a priority dispute, it t is well settled law that FSCO has the jurisdiction to determine whether an insurance company complied with section 2.1 (6) of O. Reg. 283/95. The test is whether there is a sufficient nexus between the claimant and the target insurer. For example, in Vieira, there was a nexus even though the policy under which the application was made was not in force at the time of the accident.
It is easy to see the nexus between Mr. Cankaya and Unifund: At the time of the accident he was a named insured of Unifund. Therefore, Unifund’s obligations under section 2.1 (6) of O. Reg. 283/95 would have been triggered when its insured applied for benefits under his policy. It would be open to Unifund to rely on any exclusions under section 31 of the SABS to deny certain benefits. Unifund could also pursue a priority dispute against another insurer, such as Intact. In this case, it failed to do both.
Consequently, the arbitrator found that Unifund was required to adjust the claims and pay benefits:
Given my findings above in Issue 1, Unifund is obliged to respond and adjust Mr. Cankaya’s application for statutory accident benefits. This finding is necessary so Mr. Cankaya may be treated fairly and receives benefits under the SABS to which he is entitled. As well it is consistent with the purpose and rationale of O. Reg. 283/95.
Takeaways
Except in the most unusual circumstances, any insurer in Unifund’s position should take the safe route: They should accept the application, pay the benefits, and dispute priority.
If Unifund was correct that there was no coverage under its policy, the file would have gone to Intact and Unifund would not be responsible for paying benefits.
However, Unifund failed to pursue priority against Intact, so the merits of the dispute will never be resolved because the priority dispute would be time-barred. Accordingly, Unifund is now saddled with the responsibility to pay benefits indefinitely, regardless of whether priority rested with another insurer.
See Cankaya and Intact, FSCO A14-009220
[1] Unifund Assurance Company v The Dominion of Canada General Insurance Company, 2016 ONSC 4337 (CanLII), <http://canlii.ca/t/gshr3> [/et_pb_text][/et_pb_column][/et_pb_row][/et_pb_section]by Lee SamisFSCO Reform Task Force Releases Preliminary Position Paper
[et_pb_section bb_built=”1″][et_pb_row][et_pb_column type=”4_4″][et_pb_text _builder_version=”3.9″]The task force looking at reform of FSCO has issued a preliminary position paper today calling for a new structure with broader supervisory jurisdiction. It appears that insurance issues would come under the watch of two Superintendents, one for market conduct and product issues, and another Superintendent of Prudential Matters.
The panel is inviting feedback.
For more info and to read the paper: Ministry of Finance
[/et_pb_text][/et_pb_column][/et_pb_row][/et_pb_section]by Neil Colville-ReevesFSCO supports Insurers’ rights to broad section 44 examinations
[et_pb_section bb_built=”1″][et_pb_row][et_pb_column type=”4_4″][et_pb_text _builder_version=”3.9″]The recent FSCO preliminary issue decision of Arbitrator Rogers in Deschambault v. Wawanesa Mutual Insurance Company (October 2015) confirms that an Insurer has a prima facie right to schedule examinations under section 44. It also confirms that the Insurer controls the examination process and an Insured does not have a right to impose his/her own terms upon the examination.
The Insured, Robert Deschambault, attended a multidisciplinary insurer examination in January and February 2013, about one year post-accident, to address non-earner benefits. Following the examination, his non-earner benefits were terminated on the basis of the assessors’ opinions. In late 2013, the Insured submitted an updated Disability Certificate suggesting he still met the test for non-earner benefits. He also submitted a significant amount of new medical documentation in support of his position. The Insurer determined that it required further section 44 assessments and notified the Insured in accordance with the SABS. However, the Insured refused to attend unless Wawanesa agreed to limit the assessments on the basis of terms proposed by him. Among other things, the Insured demanded that the assessments be limited to the consideration of new medical productions only and imposed a one hour time limit. Wawanesa refused to agree to the terms proposed by the Insured and the Insured refused to attend the assessments.
This matter proceeded to a preliminary issue hearing in writing. Wawanesa took the position that the requested assessments were reasonably necessary, that the Insured’s failure to attend the assessments was unreasonable, that the FSCO arbitration should be stayed until the Insured attended the assessments and that the Insured was precluded from claiming non-earner benefits due to his failure to attend the assessments.
The Arbitrator agreed with Wawanesa that the assessments were reasonably necessary. In his analysis, he recognised that procedural fairness is now considered an overriding consideration when determining if an examination is reasonably necessary.
The Arbitrator rejected the Insured’s argument that the use of a company to co-ordinate the assessments was not permitted by the SABS in light of the fact that the assessors themselves were regulated health professionals. The Arbitrator rejected the Insured’s proposal that only new medical productions be considered. He also rejected the proposed one hour time limit. He stated that the Insured’s proposed limitations were not a reasonable restriction of Wawanesa’s rights of examination, which are quite broad. He also rejected the Insured’s proposal that Wawanesa be limited to obtaining only one copy of the assessment report and requiring Wawanesa to obtain consent from the Insured to request any further copies of the assessment report. The Arbitrator stated that this condition would prevent Wawanesa from being able to request additional paper review assessments, if necessary, which ran contrary to the Insured’s principal position that in-person examinations should be avoided.
The Arbitrator ultimately concluded that Wawanesa’s requested examinations were reasonably necessary, without terms, and that the Insured had failed to attend. As a result of this non-attendance, the arbitration was stayed until the Insured attended, as it would be unfair to Wawanesa to continue without the additional opinions sought. While the Arbitrator also stated that Wawanesa may rely on section 37(7) to refuse to pay non-earner benefits until the Insured attended, he refused to make a decision on whether the Insured’s refusal to attend was reasonable, as required by section 37(8).
As noted above, this case confirms that Insurers have the right to control the section 44 examination process without undue restrictions being placed on the process by Insureds. However, it is still important for Insurers to always deal with Insureds in good faith, to provide reasons why any proposed restrictions are considered unreasonable in the particular circumstances of each case and to ensure that they meet the requirements for assessment requests outlined in the SABS.
[/et_pb_text][/et_pb_column][/et_pb_row][/et_pb_section]by Neil Colville-ReevesUpdate on the MIG Protocol Project
[et_pb_section bb_built=”1″][et_pb_row][et_pb_column type=”4_4″][et_pb_text _builder_version=”3.9″]BACKGROUND: INCEPTION OF THE MINOR INJURY TREATMENT PROTOCOL PROJECT (MITPP)
The FSCO Superintendent’s 2009 Five Year Review recommended the development of a minor injury treatment protocol that reflected current scientific and medical literature. [1] This recommendation was accepted by the Ontario government and confirmed in the 2012 Budget. [2]
Dr. Pierre Côté was awarded the consulting contract to spearhead the development of a new Minor Injury Treatment Protocol. Dr. Côté is an Associate Professor in the Faculty of Health Sciences at the University of Ontario Institute of Technology.
The team that was assembled to develop the new protocol is known as the Ontario Protocol for Traffic Management (OPTIMa) Collaboration. This multidisciplinary team of practitioners, academics, scientists, insurers, a retired judge, a patient liaison, and a consumer advocate, produced a report entitled “Enabling Recovery From Common Traffic Injuries: A Focus on the Injured Person,” which contains a number of minor injury treatment protocols for various types of injuries.
The Final Report (CTI Report) was delivered to FSCO in December 2014 and released to the public in mid-2015. [3] It is lengthy, numbering 279 pages and referencing voluminous background material.
FSCO invited feedback on the CTI Report addressing its impact on individual stakeholders. [4]
THE CTI REPORT: ENABLING RECOVERY FROM COMMON TRAFFIC INJURIES
The CTI Report addresses and outlines science-based treatment for “common traffic injuries”. The OPTIMa Collaboration was tasked with developing “Care Pathways” to promote recovery from common traffic injuries. [5] These take the shape of clinical practice guidelines that form the bulk of the CTI Report. These Care Pathways or guidelines cover the following injury types:
- neck pain and associated disorders;
- headaches associated with neck pain;
- soft tissue disorders of the upper extremity;
- soft tissue disorders of the lower extremity;
- temporomandibular disorders;
- mild traumatic brain injury; and
- low back pain with and without radiculopathy.
The “common traffic injury” classification was adopted to replace the term “minor injury”, which the Collaboration viewed as inappropriate. It reached this conclusion after canvassing a small number of injured persons with minor injuries, inviting comments on the terminology.
In a further movement away from the “minor injury” terminology, the CTI Report proposes a new categorization of motor vehicle accident injuries into one of three categories: Type I; Type II; or Type III.
Type I injuries roughly encompass today’s concept of minor injuries, but notably explicitly include traumatic radiculopathies, mild traumatic brain injuries, and post-traumatic psychological symptoms such as anxiety and stress. [6] The Report acknowledges that a small number of patients with these injuries will experience residual problems over time and develop chronic and more widespread pain, regardless of intervention. [7]
Type I injuries are comprised of three subcategories: [8]
- Physical impairments: grades I to III NAD; headaches associated with neck pain; non-specific thoracic and lumbar spine pain, thoracic and lumbar radiculopathy [nerve root injury]; grades I and II girdle and limb sprains and strains; grades I and II sprains and strains of the temporomandibular joint; skin and muscle contusions, abrasions and skin lacerations (which do not extend beneath the dermis).
- Mental impairments : concussion/mild traumatic brain injury as defined by the American Congress of Rehabilitation Medicine (MTBI is defined by loss of consciousness of less than 30 minutes, with altered consciousness < 24 hours, and post-traumatic amnesia < 1 day, and a Glasgow Coma Scale of 13 to 15) and normal structural imaging.
- Psychological impairments : “early” psychological signs and symptoms that include poor expectations of recovery, post-collision depressive symptomatology, fear, anger and frustration.
By contrast, the current “minor injury” definition covers sprains, strains, whiplash associated disorder, contusions, abrasions, lacerations or subluxation and any clinically associated sequelae. Though the inclusion of “clinically associated sequelae” and the ambiguity of this term broadens the existing definition, it appears that the new “common traffic injuries” or Type I injuries concept covers more injuries than the current minor injury definition, most notably by the explicit inclusion of some mental and psychological impairments.
Type II and III injuries are not dealt with in the CTI Report, but roughly correspond with what today would be referred to as non-minor and catastrophic injuries, respectively. In more technical terms, the CTI Report defines Type II injuries as typically involving a “substantial loss of anatomical alignment, structural integrity, psychological, cognitive, and/or psychological functioning.” By way of example, the Report states that depression and PTSD, among many other injuries, fall into this category.
SUBMISSIONS OF VARIOUS STAKEHOLDERS
It appears that consultations between FSCO and various stakeholder groups have occurred. A number of stakeholders have also taken the opportunity to provide submissions on the CTI Report and a draft CTI Guideline.
Concerns regarding the CTI definition
First, there are concerns about the terminology used in the new CTI definition and the definition itself.
The inclusion of “early” psychological signs addresses the MIG’s silence on psychological issues, but falls under scrutiny. Some stakeholders argue that this terminology is confusing, particularly when diagnosis of such symptoms and their severity relies heavily on subjective judgments and self-reporting. Others suggest avoiding reference to potentially confusing terms that might imply a diagnosed disorder, such as “depression”, “anxiety”, and “post-traumatic stress”. [9]
Second, and predictably so, there is disagreement from stakeholders as to what injuries should and should not be included in the Type I category. As noted above, the CTI definition appears to be a broadening of its minor injury predecessor.
Some psychological practitioners suggest that psychological, mental and behavioral disorders should be considered Type II injuries. [10] Notably, the inclusion of depression and PTSD in Type II, two frequently disputed issues between claimants and insurers, is furthermore likely to continue to generate disputes.
Other practitioners point out that traumatic radiculopathies can have different courses of care and if neurological signs outweigh musculoskeletal symptoms, such an injury should not be considered Type I. [11] These same practitioners do not support the inclusion of minor traumatic brain injuries in Type I. [12]
The definition of Type II injuries appears to suggest that Type I injuries could become Type II if they persist beyond six months, thus escaping the CTI financial limits. [13] Notably, the CTI financial limits have yet to be discussed and agreed upon, and are likely to generate further criticism from stakeholders.
Concerns regarding the OPTIMa Collaboration’s methodology and the nature of the Care Pathways
Some stakeholders have argued that the research of the OPTIMa Collaboration did not account for cumulative effects of multiple injuries, particularly with respect to recovery time, response to treatment, and risk factors, and how these may impact the recommended Care Pathway or treatment protocol. [14]
There have also been concerns expressed about the allegedly disproportionate composition of the professionals on the MITPP teams and the minor injury clients they consulted. Some stakeholders note that these teams featured a large number of chiropractors and clinicians specializing in insurer examinations, with no representation from, for example, speech language pathologists, social workers, psychologists or clinicians that carry out treatment. [15] Others add that there was a notable lack of consultation with broader clinical and academic communities before finalizing the CTI Report and the treatment protocols contained therein. [16]
Some practitioners criticize the Care Pathways as being overly directive, noting that the options within certain Pathways are very limited. [17] Others consider it troubling that occupational therapists are left off the list of permitted initiating and coordinating health professionals. [18]
Though the intention of the MITPP was to base treatment protocols on proven scientific research, some stakeholders are also critical of the Collaboration’s position that only practices proven to be effective by quality research are worth implementing. [19]
Stakeholders have drawn attention to the specific language used in the CTI Report and draft Guideline, noting places where terms could be clarified or modified because, as written, they are likely to cause confusion. [20]
Concerns regarding reliance on Self Reporting and Shared Decision-Making
From a defence perspective, there are a couple a features of the CTI Report that may cause concern, namely the reliance on a claimant’s self-reporting of his or her injuries and the notion of “shared decision-making” that appears throughout the Report. Though “a focus on the injured person” is not doubt invaluable in a healthcare context, the SABS environment is compensation driven, where a claimant will generally receive greater benefits for a more serious impairment. This is a financial incentive that is likely to affect how the CTI structure may play out if implemented.
COMMENTARY
The Minor Injury Treatment Protocol Project and the CTI Report produced by the OPTIMa Collaboration are, at least in one way, beneficial to nearly all stakeholders in that they provide some clarity around the definition of common traffic injuries and the appropriate treatment protocols for certain commonly encountered subsets of injuries within this category. The process that led to the Report appears robust, reflecting a thorough analysis of existing scientific research.
The identification and description of treatment protocols is an important step in the evaluation of the “minor injury” concept, particularly because – at the very least – it distinguishes between treatment approaches that are valuable and those that are not supported by existing scientific literature.
Predictably there are concerns from various stakeholders regarding the terminology, the definition, the methodologies in determining the Care Pathways and the protocols as well as the heavy reliance on subjective reporting.
The challenge with the CTI Report will come now as the government seeks to integrate elements of the Report into the existing and evolving statutory accident benefits framework.
[1] FSCO, “Minor Injury Treatment Protocol”: < https://www.fsco.gov.on.ca/en/auto/Pages/minor-injury-treatment-protocol.aspx>.
[2] FSCO, “Minor Injury Treatment Protocol”: < https://www.fsco.gov.on.ca/en/auto/Pages/minor-injury-treatment-protocol.aspx>.
[3] FSCO, “Minor Injury Treatment Protocol”: < https://www.fsco.gov.on.ca/en/auto/Pages/minor-injury-treatment-protocol.aspx>.
[4] FSCO, “Minor Injury Treatment Protocol”: < https://www.fsco.gov.on.ca/en/auto/Pages/minor-injury-treatment-protocol.aspx >.
[5] Ontario Protocol For Traffic Injury Management Collaboration, “Enabling Recovery From Common Traffic Injuries: A Focus On The Injured Person”, p. 5.
[6] Ontario Protocol For Traffic Injury Management Collaboration, “Enabling Recovery From Common Traffic Injuries: A Focus On The Injured Person”, p. 7.
[7] Ontario Protocol For Traffic Injury Management Collaboration, “Enabling Recovery From Common Traffic Injuries: A Focus On The Injured Person”, p. 7.
[8] Ontario Protocol For Traffic Injury Management Collaboration, “Enabling Recovery From Common Traffic Injuries: A Focus On The Injured Person”, p. 34.
[9] Ontario Psychological Association, “OPA Response to: Enabling Recovery From Common Traffic Injuries: A Focus On The Injured Person”, p. 5.
[10] Ontario Psychological Association, “OPA Response to: Enabling Recovery From Common Traffic Injuries: A Focus On The Injured Person”, p. 5.
[11] Coalition of Health Professional Associations in Ontario Automobile Insurance Services, Letter to FSCO re: The Optima Report “Enabling Recovery from Common Traffic Injuries: A Focus on the Injured Person”, p. 2.
[12] Coalition of Health Professional Associations in Ontario Automobile Insurance Services, Letter to FSCO re: The Optima Report “Enabling Recovery from Common Traffic Injuries: A Focus on the Injured Person”, p. 4.
[13] Coalition of Health Professional Associations in Ontario Automobile Insurance Services, Letter to FSCO re: The Optima Report “Enabling Recovery from Common Traffic Injuries: A Focus on the Injured Person”, p. 3.
[14] Coalition of Health Professional Associations in Ontario Automobile Insurance Services, Letter to FSCO re: The Optima Report “Enabling Recovery from Common Traffic Injuries: A Focus on the Injured Person”, p. 2.
[15] Ontario Rehab Alliance, “Response to the Draft Superintendent’s CTI Guideline”, September 3, 2015, p. 1.
[16] Coalition of Health Professional Associations in Ontario Automobile Insurance Services, Letter to FSCO re: The Optima Report “Enabling Recovery from Common Traffic Injuries: A Focus on the Injured Person”, p. 1.
[17] Coalition of Health Professional Associations in Ontario Automobile Insurance Services, Letter to FSCO re: The Optima Report “Enabling Recovery from Common Traffic Injuries: A Focus on the Injured Person”, p. 3.
[18] Ontario Rehab Alliance, “Response to the Draft Superintendent’s CTI Guideline”, September 3, 2015, p. 4.
[19] Ontario Rehab Alliance, “Response to the Draft Superintendent’s CTI Guideline”, September 3, 2015, p. 2.
[20] Ontario Psychological Association, “OPA Submission Regarding the CTI Guideline”, p.6.
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