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ACCIDENT BENEFITS NEWSLETTER - MARCH 2003 - Catherine Zingg SABS-1996 s. 30 - Exclusions In Sesay v. Certas Direct Insurance Company, A02-001141, February 12, 2003, the applicant was denied benefits as the accident occurred while he was driving on a 400 series highway with a speed limit greater than 80 km/hr with a restricted class G1 licence. In making this decision, Arbitrator Wilson stated: I find, therefore, that Mr. Sesay's admission that he was driving on a 400 series highway at the time of the accident, is prima facie evidence that he was not in possession of a valid driver's licence at the time of the accident. ... The burden of proving an exception lies with the person asserting that exception. Mr. Sesay has not met that burden. Faced with prima facie evidence that his licence was not valid for the place where he was driving, it is encumben upon Mr. Sesay to adduce exculpatory evidence. As noted, he did (p.9). s. 38(14) - Rehab DAC - Pay Pending Provisions s. 42 - Insurer Examinations In Benn v. Certas Direct Insurance Company, P02-00032, February 5, 2003, the insured appealed a decision which stayed the arbitration until he made himself available for two insurer examinations pursuant to s. 42 of the Schedule. Mr. Benn argued that the insurer had defaulted on its statutory obligation to pay for certain rehabilitation benefits, pending the hearing, and the arbitrator erred when she stayed the arbitration hearing in face of this default. Following a motor vehicle accident on April 18, 1999, Mr. Benn claimed that he suffered from a traumatic brain injury and required the services of a support worker from Bartimaus Inc. Initially, Certas paid for the services, despite the fact that a treatment plan had not been presented. However, Certas refused to pay for the support worker from April 2000 to February 2001. In May 2001, Bartimaus prepared a treatment plan which recommended additional sessions with the support worker. The plan was rejected by Certas and was sent to a DAC. In November 2001, the DAC Report was released. It approved the additional sessions with the support worker that were proposed in the treatment plan of May 2001. In his decision to dismiss the appeal, Director's Delegate McMahon stated: He (Mr. Benn) pursued the appeal as though it was patently clear, on the evidence before the arbitrator, that the expenses in issue were subject to the “pay pending” rules and that Certas had breached those rules. I do not share Mr. Benn's view. To my mind, it is far from a forgone conclusion that the delivery of a DAC Report in November 2001, triggered a “pay pending” obligation with respect to the services rendered between April 2000 and February 2001. It is true that the DAC Report comments positively on the support worker's past services, but the treatment plan it had been asked to review referred only to the additional services Bartimaus was proposing to deliver. Absent a basis for saying that it is evident that Certas has ignored the “pay pending rules”, I do not think that Mr. Benn has laid the foundation for arguing that the arbitrator erred in staying the arbitration hearing (p.4). Mr. Benn was ordered to pay the appeal expenses of Certas fixed at $500.00. In National Frontier Insurance Company v. Pato, P02-00037, February 5, 2003, the insurer terminated Ms. Pato's income replacement benefits in July 2000. She applied for arbitration in June 2002, where upon the insurer arranged for two further IEs, one with an orthopaedic surgeon, the other with a neuropsychologist (p. 2). Ms. Pato refused to attend the examinations, but stated that she would return to the physiatrist and psychiatrist who conducted IEs in July 1999. National Frontier would not accept this proposal and made a motion before an arbitrator to have the arbitration stayed pending Ms. Pato's attendance at the IEs. The arbitrator dismissed the motion and the insurer appealed. Director's Delegate McMahon dismissed the appeal. The arbitrator had stated that in light of Ms. Pato's willingness to re-attend before the original IE assessors, National Frontier had to explain why it reasonably required her to attend before other practitioners (p.5). The Director's Delegate found that this approach reasonably balanced the parties' rights and interests (p.5). The insurer relied on the earlier decision in Scott v. Toronto Transit Commission, A-001116, September 4, 1992, in which it was stated that an arbitrator should not “second guess” the actions or motives of the insurer (p.5). The Director's Delegate, however, found that while the idea that the insurer must be given some latitude, the suggestion that their decisions should not be scrutinized has routinely been rejected, (Prudential of America General Insurance Company (Canada) v. Chafe-Moote, P99-00044, September 8, 2000 and Allstate Insurance Company of Canada v. Sellathamby, P02-0009, December 17, 2002).
s. 33 - Duty of Applicant to Provide Information s. 47 - Repayments to Insurer In Molnar v. Coachman Insurance Company, A02-001029, January 31, 2003, the applicant, a self-employed carpenter, was ordered to repay Coachman IRBs in the amount of $692.39. Mr. Molnar proved difficult to deal with. He was represented by four separate counsel at different times and eventually represented himself at the hearing. Coachman accepted that Mr. Molnar was disabled following the accident, but had difficulty in determining the quantum of the IRB due to Mr. Molnar's failure to produce relevant documents concerning his income. Although it was not required to pay benefits under s. 33, Coachman voluntarily paid IRBs. The arbitrator found that this was sensible in the circumstances. However, Coachman's position that Mr. Molnar should repay all of the IRBs that he had received, because of his non-compliance with s. 33 was rejected. The adjuster's estimate of Mr. Molnar's income replacement benefit in the amount of $166.84 was accepted in the absence of other evidence. Mr. Molnar was ordered to repay IRBs for seven days that he worked post accident without advising Coachman. The arbitrator found that Mr. Molnar willfully misrepresented his employment situation at the pre-hearing with respect to work performed and income earned (p.9). He was also ordered to pay $525.00 for 3.15 weeks overpaid in error. Mr. Molnar's claim for a special award was emphatically rejected. His allegations that Coachman purposely ignored a change of address and mishandled documents in his file in order to avoid paying benefits were found to be completely without merit, unreasonable and with no basis in fact (p.10). It was found that the Molnars were under a court order to live separately, but chose not to do so and for that reason, Mr. Molnar did not disclose that he had moved into an apartment with his wife and daughter (p.13). A chiropractor attended at two different addresses to conduct an FAE and was advised at both homes that Mr. Molnar did not live there. Insurance Act - s. 282(10) - Special Award
In Liberty Mutual Insurance Company v. Persofsky, P00-000041, January 31, 2003, the insurer's appeal was allowed in part. Liberty Mutual did not challenge the imposition of a special award, but objected to the amount awarded. In making the decision, Director Draper found that the percentage approach is overly simplistic and does not serve the purposes of the legislation (p.21). He further remarked that arbitrators are not meant to assess damages or deal with industry practice in a general sense, stating: I prefer the analysis suggested by the IBC, which focuses more on the common principles between punitive damages and special awards. It is suggested that the amount of the special award should be considered within the context of the Insurance Act, but according to the same principles identified in Whiten for punitive damages: rationality and proportionality. Rationality refers to the need to relate the particular facts of the case to the underlying purposes of the legislation. In other words, what amount is large enough to further the goals of punishment and deterrence, but no larger than is needed to serve that purpose (p.30). |