by Kevin MitchellJust Dig: Musings on Collateral Benefits
In the long awaited July 14, 2022 LAT award rendered in #20-007407/AABS by Vice-chair, Sandeep Johal, the question arose whether an LTD benefit that was not being received could be deducted from an IRB benefit. The upshot was that the deadline for the SABS claimant to apply for the collateral disability benefit had expired. While he was aware of that deadline, he applied late to SunLife and was denied on that technical basis. The conundrum with the ongoing payment of the unreduced weekly IRB in this case was that if the LTD payment was ultimately found to be deductible there would be a substantial repayment claim available to Allstate.
The dispute proceeded by way of written submissions. At issue, per the September 2010 version of the SABS, was whether “other income replacement assistance” was available to the claimant, and had he made an application for same? The claimant argued the auto insurer had a greater part to play in informing him of the requirement to apply for the LTD benefit, offered various reasons for his delay in applying for it and claimed the related SunLife denial was sufficient to deny Allstate the right to deduct.
Allstate relied upon the FSCO case of Li Pan (#A16-003705), which gave that auto insurer the right to deduct a CPP disability benefit where no application had been made for those benefits (and also did not require the level of information from the auto insurer argued by that claimant). To deny the offset, the Schedule would effectively be made the first payor, which is not what was intended by the Ontario Legislature. The Vice-chair found the FSCO precedent persuasive, and the Court of Appeal judgment discussed therein (Wilken) binding, that a claimant must be diligent and exhaust collateral benefits before resorting to the SABS insurer. Failing to apply in time was akin to failing to apply at all, especially when represented. To be sure, the LAT has extended Li Pan in looking at the nature of the LTD denial and not just that a denial was made. Accordingly, it now behooves auto insurers to dig deeper; to know the terms of the LTD contract and assess whether a limitation period has been missed and the true nature of the denial.
In the end, Allstate is entitled to deduct from the IRB the amount of the LTD benefit the claimant could have received had he applied for it in a timely manner (and if it was approved). If claimants apply in a timely way for collateral disability benefits they might receive them and they might not. The auto insurer will be able to deduct in the former scenario but not in the latter. But if they don’t apply in time, the deduction will happen irrespective of the collateral carrier’s decision. Claimants are on notice that they need to have their collateral benefits entitlement decided on the merits to give real effect to the SABS provisions; the way it was meant to be.
Reference is had to a line from a song by the band, Incubus: “Dig me up from under what is covering the better part of me”. Just dig.
by Ryan KirshenblattArguing Over Nothing: The Priority Dilemma
Seinfeld’s charm was that it was “a show about nothing.”
Of course, anyone on “the priority circuit” knows that this concept is not limited to TV, and that sooner or later, you have been, or you will be, involved in a priority dispute “about nothing.” You get on the first pre-arbitration/pre-hearing call and one of the lawyers for one of the insurers asks: “so, how much has been paid on this claim that we are all fighting over?” Counsel for the applicant insurer says “nothing.” The answer is met with a collective eye roll and a groan. Eventually, the voice of reason says “Folks, we are fighting over nothing here. Can someone just accept priority?” But nobody accepts priority, and nobody takes any steps either because the cost of getting the information far exceeds the actual amount in dispute, i.e. nothing. So, one insurer proposes a “standstill agreement”. That was Gore’s proposal in Gore and Allstate (Award, January 5, 2022). That’s how things were often done.
However, if inspired by George Costanza himself, the opposite would have to be right: “Yes I will do the opposite. I used to sit here and do nothing, and regret it for the rest of the day, so now I will do the opposite, and I will do something.” In Gore and Allstate, our office acted for Allstate and we decided to do “something” about “nothing.” Allstate brought a motion to dismiss the arbitration on the basis that Gore paid no benefits to the claimant. In Gore and Allstate, Arbitrator Bialkowski held that an insurer who has not paid benefits to the claimant cannot proceed with arbitration.
The “pay now, dispute later” philosophy underlies Ontario’s priority dispute system. However, Gore and Allstate (following Economical v. Intact) takes this principle further to “don’t pay, never dispute.” Justice Chalmers held in Economical v. Intact (2021 ONSC 3249):
“It is my view that Economical cannot bring a priority dispute against Intact when it did not first pay benefits to Ms. Belhumeur. The rationale behind the ‘pay first and dispute priority later’ policy is to promote the timely delivery of accident benefits: see Chubb, at para. 40. To permit Economical to purse a priority dispute without making any payment is inconsistent with this policy. Also, if no payment is made by Economical, there is nothing for Intact to reimburse on a priority dispute.”
There are, of course, practical consequences to being the insurer stuck with an OCF-1 but having made no payments on the claim. However, Justice Chalmers was unpersuaded:
“Economical argues that s. 3(1) of that regulation imposes strict time limits on an insurer to put another insurer on notice of a priority dispute, and it may be necessary for an insurer to provide notice of a priority dispute before it makes a payment to the claimant. Economical argues that paying a claim is not a prerequisite to providing notice pursuant to s. 2.1(6) of Disputes Between Insurers. I acknowledge that there may be circumstances in which notice must be provided before the first insurer makes a payment. Although a payment may not be a prerequisite to providing notice, it is my view that the insurer cannot proceed to an arbitration hearing to dispute priority unless it first makes a payment to the claimant.”
Arbitrator Bialkowski focused a considerable portion of his decision in Gore and Allstate expanding on the problems that insurers would face under a regime where no payment means no dispute. Nevertheless, Arbitrator Bialkowski held that he was bound by Justice Chalmers’ decision and ruled in Allstate’s favour:
On the basis of that set out above, I would find that a payment having been made is not a pre-condition to an arbitration being commenced in accordance with the dispute mechanism set out in O. Reg 283/95. Receipt of OCF-1 Application for Benefits ought to be the pre-condition. Unfortunately, I am bound by the appellate decision in Economical (supra), despite my strong views to the contrary, as I do not believe that the underlying facts in that case sufficiently different so as to make the decision in Economical distinguishable. Justice Chalmers dealt with the PAU and non-payment of benefits separately.
Although Gore did not appeal Arbitrator Bialkowski’s decision, it remains to be seen whether the next decision on this point gets appealed for any of the reasons identified by Arbitrator Bialkowski.
However, as we fondly remember Arbitrator Guy Jones, recall his comment in Zurich v. Cooperators:
“While this may seem unfair… it should be remembered that in the next case that same insurer may be the beneficiary.”
If you are an insurer that has not made a payment on the claim, consider doing so before proceeding with arbitration. If you are a second-tier insurer who has been put on notice or who is responding to an arbitration demand, check whether the first tier insurer/applicant ever made a payment. An insurer confronted with nothing can still do something.
by Neil Colville-ReevesGraul v. Kansal – An Abundance of Teaching Moments
The recent decision of Justice Lemon in Graul v. Kansal weighs in at 182 pages and comes with plenty of teaching moments about defending personal injury claims, weighing the strengths and weaknesses of a claim and the uncertainty of trials.
The plaintiff came to the case as a 52 year old husband and father of 3 grown children. He had a lengthy work history in a supervisory capacity with the City of Guelph working at the Guelph wastewater treatment plant. The decision depicts an individual who lived a full life before the accident – earning $100,000 per year in a job he enjoyed, active in sports and recreational activities and an engaged father and husband who enjoyed excellent health. After the accident, he did not return to work and his recreational pursuits and social life were significantly curtailed. The plaintiff, supported by his doctors and experts retained in the litigation, alleged that he suffered a mild traumatic brain injury with a constellation of related and other symptoms including memory and focus problems, issues relating to his hearing and vision and back and neck pain.
The plaintiff was successful in his claim. The case heard by a judge alone awarded $225,000 in general damages, past and future income losses of $1,300,000 million and future care costs of $735,000. The court accepted that the plaintiff would have worked until he was 70 which accounted for the sizable income loss award.
Of note is that the SABS experts that testified all supported the plaintiff’s general position that there were real injuries that impacted the plaintiff, providing various diagnoses including ‘major depressive disorder’ and confirmed his inability to ‘participate and produce in most work roles in a sustained way’. One of the defendant’s experts agreed that there was a mild TBI and while she did not believe it was accident related, she agreed that it could be. A neuro psychologist retained by the defence gave testimony on the issue of whether the plaintiff sustained a traumatic brain injury but had not been involved in TBI treatment for over 15 years. Despite this, he agreed that the plaintiff’s test results would suggest difficulty working with ‘machines and processes’ which was central to the plaintiff’s pre accident employment. The defence had abundant surveillance which depicted the plaintiff engaged in a variety of daily activities (although not work) but the trial judge put little or no weight on this evidence. The decision makes clear the aspects of the case on which the defendant based its defence. In reading the decision, one has an equally clear idea of how and why the judge discounted that evidence.
There are an embarrassment of riches in this case to dissect by way of a post mortem to see why things went so well for the plaintiff and so badly for the defence. In an alternative universe, with a different judge or with a jury, it may have turned out differently. But not at this time, with these facts and this judge. You can read the decision here .
by Neil Colville-ReevesWhat did I just trip on?
A recent decision of Justice Mitchell of Ontario’s Superior Court of Justice has re-affirmed that a plaintiff in a slip and fall case is not required to pin point the exact cause or mechanism of the fall to succeed in establishing liability on a defendant.
In Branton, the defendant was involved in a municipal infrastructure project involving the installation of sewers and related road and curb work. The construction resulted in residents, including the plaintiff, having restricted access to their driveway while curbs were being poured. A rope between two temporary poles was placed as a barrier preventing passage to the roadway.
To facilitate access for the injured plaintiff’s spouse on the date of loss, a portion of the rope between two poles was removed and a temporary ramp was constructed from the driveway over the apex of the newly poured curb and onto the roadway. Several hours later, the plaintiff, unaware of this temporary construction, departed his house late at night and tripped as he passed between the opening in the ropes. He did not know precisely what caused him to fall.
There were no photographs or measurements taken of the temporary ramp at the time of the loss. Therefore the description of what was built and how it was built was based on the evidence of the injured plaintiff’s spouse who watched it being constructed. She was only able to provide estimates of ramp dimensions but was able to describe the manner in which it was constructed. The evidence was uncontroverted that the defendant constructed the ramp ‘on the fly’ and did not rely on any set procedure for construction of this kind.
The plaintiff testified that when he fell it was night time and the area was poorly lit and was able to describe the mechanism of the fall as follows:
I got to the pathway, and I walked through the opening, because I’ve seen the way it was open, and then as soon as I walked to go through the pathway, then as soon as I went through
that opening I tripped, or whatever, and I fell down. And I got up, and I tried to put weight on my foot, and I felt pain in my toes, and I didn’t put no weight on it.
The defendant argued that the plaintiff’s inability to describe what caused him to fall is fatal to the case because he could not prove that there was any hazard proximate to where he fell. The court disagreed, noting:
[66] Although Mr. Branton cannot say specifically what caused him to fall, he knew the precise location of his fall. The uncontradicted evidence places him stepping into the
construction zone where the ramp was constructed earlier that day. It is not disputed there was a drop off on either side of the temporary ramp.
[67] It is not disputed that Mr. Branton fell as he stepped through the opening between the poles. It is not disputed that Euro-Ex removed the rope between the poles to allow the
plaintiffs access from their driveway onto Maple Lane. It is not disputed Euro-Ex constructed a temporary ramp between the poles where the rope had been removed. Euro-Ex has produced
no evidence suggesting an alternative cause of Mr. Branton’s fall other than the design and construction of the ramp.
In this instance, the evidence was clear that the defendant, in constructing a temporary ramp had created a hazard and the court made that express finding. The court noted that the duty to keep premises in safe are fact specific in each case and in this instance the standard was informed by the following:
In this case, I have considered the absence of policies and procedures related to the construction, maintenance and inspection of potential hazards including temporary ramps and the admitted absence of any visual aids (pylons or demarcations) or additional lighting to assist pedestrians to safely traverse the temporary ramp and illuminate the width of the ramp
and therefore the drop-off.
This decision is consistent with the Court of Appeals’ decision in Kamin v. Kawartha Dairy in which an occupier was still found liable where the plaintiff was unable to recall the precise location of a fall in a parking lot that was found to be in a state of disrepair. The decision reinforces the importance of an occupier’s policies and procedures aimed at ensuring premises are maintained in a reasonable state.
The decision in Branton v. 2008422 Ontario Limited can be found here.
by Neil Colville-ReevesWait – Let Me Grab My Purse!
In the recent LAT decision of S.B. and Aviva, a woman who sustained injuries after retrieving her purse from her car, closing the door, and then falling to ground did NOT meet the definition of “accident” as defined in the SABS. Instead the applicant’s fall in this case was considered to be an “intervening act”, which in turn was the “direct” cause of her injuries and not the use or operation of her automobile.
On November 28, 2017 the applicant arrived at a gas station, put gas in her car, went to retrieve her purse from the front passenger seat of her car in order to pay. She closed the door, turned to walk away, and fell to the ground sustaining injuries. Her body did not come into contact with the car. In determining whether an accident had occurred for the purposes of the SABS, Adjudicator Fricot implemented the well-established two-part “Purpose” and “Causation” test from the Ontario Court of Appeal decision in Greenhalgh v. ING Halifax Insurance Co.
Purpose Test
The applicant relied on the Davis case which held that routine maintenance (checking and topping up fluid levels, checking tire pressure, filling the gas tank) satisfies the purpose test. She further relied on Caughy for the proposition that there was no requirement that the vehicle be in active use to satisfy the purpose test.
Adjudicator Fricot found that Davis was distinguishable because the applicant in that case was injured when the hood of the car collapsed on her while she was refilling her windshield washer fluid, unlike in the case at bar where the applicant had completed refueling and was walking away at the time she was injured. Further, Adjudicator Fricot found Caughy was distinguishable because in the case at bar the applicant had no contact with any parked vehicle when she fell, nor had contact with a parked vehicle caused her to fall.
The Adjudicator agreed with the Insurer that the purpose test was not met because the applicant’s use of the vehicle had ended prior to the fall when she retrieved her purse, closed her car door and walked away.
Causation Test
Of note, neither party made submissions on the applicability of the “but for” test but instead focused on the intervening causes analysis and the dominant feature test. In her intervening cause analysis, Adjudicator Fricot referred to a number of cases where a person had fallen outside a parked car, including Banos, where the arbitrator had concluded that “a common sense view of the facts in this case militates against a parked car that has already been refuelled as constituting a “use” in terms of the two-fold test” and held that the slip and fall on ice was the sole cause of injury, not the use and operation of the vehicle. With respect to the dominant feature test, Adjudicator Fricot found that although the applicant’s fall was very close to her car, she did not come in contact with her car when she fell, nor did the car cause her to fall. Accordingly, the use of her car was neither a dominant feature in her fall nor did her car or the use or operation of that car cause her to fall.
Having not met the purpose and causation test, the application be dismissed.
A copy of the decision in S.B. and Aviva can be found here.