ACCIDENT BENEFITS NEWSLETTER - JUNE 2004

Catherine Zingg

In Licata and Gore Mutual Insurance Company, A03-000288, May 11, 2004, the applicant claimed $1,219.80 for a rehabilitation assessment prepared by a social worker. Arbitrator Blackman held that the report was reasonably obtained for the purpose of the Schedule. The insurer argued that it was not reasonable to retain the social worker as other health care practitioners were involved in the claim and were able to make the recommendations set out in the social worker’s report (p.7). This argument was rejected, with the Arbitrator noting that insureds are entitled to assessments from medical practitioners of their own choice, as long as such assessments are reasonable and necessary (p.7). Secondly, while one of the other health practitioners could have provided a similar report, the applicant was not prohibited from retaining a new expert to review the relevant information and documentation (p.7).

The cost of the report, however, was found to be unreasonable. Arbitrator Blackman commented that the report was generally superficial and vague, provided little thought or analysis, with occasional reliance on motherhood statements of questionable relevance (p.11). The Arbitrator stated that the report struck him as “the kind of report one would see dictated, in assembly line manner, following a cursory review of submitted documentation and possibly a somewhat more in depth interview” (p.11). The social worker’s rough notes and time sheets were not presented at the hearing. The Arbitrator awarded $321.00, inclusive of GST “for the report plus interest in accordance with s. 46(2) of the Schedule.”

In Cristales and Aviva Canada Inc., A03-000586, April 29, 2004, the insurer took the position that the applicant was excluded from receiving income replacement benefits pursuant to s. 30(1)(d) of the SABS-1996 on the basis that he knew or ought to have known that he did not have his employer’s permission or consent to drive the company van. Arbitrator Allen found in favour of the applicant. She noted that the case required a determination on credibility and preferred the applicant’s evidence over that of Peter and Jeffrey Chomyn, the company owners. In her reasons she stated:

I find the applicant gave detailed and credible evidence about his communications with Peter Chomyn and his activities before he left for Toronto. His oral evidence was basically consistent with his and his coworker’s post-accident statements to Aviva’s adjuster. The applicant testified, and I accept, that it was reasonable for him to believe that Peter Chomyn consented to his use of the van to go to Toronto for the weekend. To support this belief, the applicant pointed to various communications with Peter Chomyn and his own activities before he left Collingwood. I accept: that the applicant retained the keys to the van after work; that he requested and received from Peter Chomyn updated insurance documentation for the van; that Peter Chomyn instructed the applicant, and he undertook to unload the tools and watch the van before the trip; and that Peter Chomyn paid to fill the van with gas before the trip (p.9).

In McIntosh and Allstate Insurance Company of Canada, A02-001277, April 23, 2004, the insurer denied the applicant benefits on the grounds that he had failed to submit an application for benefits within 30 days after receiving the application forms. Arbitrator Bayefsky found that Mr. McIntosh had complied with s. 32(3) of the SABS-1996 and was entitled to proceed with his arbitration. Mr. McIntosh suffered injuries in a motor vehicle accident on April 21, 2000. He informed his insurance broker and Allstate of the accident and an application for accident benefits package was sent to him on May 2, 2000, along with documents explaining the need to send the completed application within 30 days (p.3). Allstate’s documents indicated that Mr. McIntosh had “a difficult time with the use of the English language”. In May 2001, Mr. McIntosh was the victim of an assault which lead to a brief hospitalization. Dr. Bedessee, Mr. McIntosh’s family physician reported that Mr. McIntosh had ongoing pain arising from the right and left fractures of the mandible and that, as a result of the assault, he had post-traumatic stress disorder and chronic pain syndrome. Dr. Bedessee described Mr. McIntosh as a “simple and honest person” who was “just below average intelligence” and who had “difficulty remembering in detail, his past activities, but generally speaking he remembers some events of his past, but not in detail” (p.6).

At the hearing, the Arbitrator found that Mr. McIntosh did not submit an application for benefits on the forms provided by Allstate until January 30, 2002. Following the reasons in Liberty Mutual Insurance Company v. The Commerce Insurance Company, [2002] I.L.R. 7366, O.S.C., the Arbitrator found that s. 32(3) does not require an insured to submit an application for a benefit on the application form supplied by the insurer. It was found that s. 32(3) must be interpreted as requiring an insured to provide sufficient information to permit an insurer to commence the process of adjusting a claim (p.12).

The Arbitrator found that Allstate had received sufficient material to adjust the claim by July 6, 2000, which was within 30 days of Mr. McIntosh receiving the application forms. The Arbitrator was also critical of Allstate’s claim that it did not have sufficient information to assess the claim, when it had proceeded to discuss settlement with Mr. McIntosh. Arbitrator Bayefsky stated:

In my view, Allstate cannot maintain that it did not have enough information to assess Mr. McIntosh’s claim, but that it did have enough information to settle Mr. McIntosh’s entitlement to statutory accident benefits on a full and final basis, particularly so early in the process. While the process of settlement is, of course, a fluid one, in the context of a first party insurance relationship in which an insurer is attempting to resolve its insured’s entitlement benefits on a global basis, I find that an insurer cannot legitimately assert that it requires more information to even consider its insured’s claim. Therefore, despite the absence of some of the information requested on the application form, I find that Allstate had sufficient information to commence the process of adjusting Mr. McIntosh’s claim (p.13).

The Arbitrator also noted that at no time did Allstate properly explain to Mr. McIntosh the consequences of failing to submit an application for benefits (p.14). In Horvath v. Allstate Insurance Company of Canada, A02-000482, June 9, 2003, it was stated that s. 32(2)(c) should be interpreted in a way which protects consumers by requiring insurers to inform insured persons of the far more serious potential consequences of their failure to comply with s. 32(3) or of failing to provide a reasonable explanation for non-compliance.(p.15)

In Khawaja v. ING Insurance Company of Canada, A03-000974, May 10, 2004, the insurer brought a motion for the dismissal of the arbitration hearing. Counsel for the applicant had moved to get off the record and had presented an affidavit which stated that their client was intending to leave the country and had no interest in pursuing the arbitration. It was submitted by the insurer that the arbitrator had the authority to dismiss the arbitration without a hearing pursuant to Rule 34.1(e), as the applicant had failed to comply with any of the production undertakings and failed to comply with Rule 41, which requires the parties to an arbitration to provide a witness list 30 days before the first day of the hearing (p.3). Arbitrator Miller rejected this argument, finding that the arbitration decisions in Shalchi-Amirkhiz v. Belair Insurance Company, A02-001155, November 21, 2003, and the decision in Lyght v. Allstate Insurance Company of Canada, A01-000749, May 14, 2002, held that Rule 34.1(e) cannot be relied on to dismiss an arbitration without a hearing where an applicant has failed to provide documents (p.6). Rule 68 was found to be the applicable Rule. However, under Rule 68, the insurer bears the onus of proving that the arbitration should be dismissed. Arbitrator Miller had recommended that the insurer wait until the arbitration hearing to move for a dismissal of the arbitration as the applicant bears the onus of proof at an arbitration. Counsel for the insurer submitted that this was not a prudent way to proceed as she would have to prepare for an arbitration hearing which would be costly to her client. The arbitrator, however, stated that the time-lines required by Rule 68 had not been met and that proceeding under Rules 68 and 34.1(e) was not the most expeditious way to have proceeded and should be taken into account by the hearing arbitrator when the issue of expenses was dealt with.

In Martinez and Aviva Canada Inc., A03-000880, May 7, 2004, the applicant was not permitted to proceed to arbitration because of her failure to attend a psychiatric examination. Arbitrator Alves remarked that she appreciated the applicant’s frustration with the delay and Aviva seeking a psychiatric assessment while intending to deny psychiatric treatment, but it was found that while such evidence may be a consideration relevant to questions of interest, expenses or a special award, the insurer is not deprived of its right to require an assessment to evaluate the applicant’s entitlement to income replacement benefits under s. 42 of the SABS -1996. The applicant was unable to demonstrate any prejudice, provided the assessment did not given rise to an adjournment of the hearing (p.4).

In Chau v. Guarantee Company of North America, A02-001650, April 27, 2004, Arbitrator Bayefsky held that the applicant was not disentitled to benefits pursuant to s. 48(1) of the Schedule. The insurer relied on PSI Solutions Inc. in maintaining that the accident could not have happened as alleged by Mr. Chau. It argued therefore that he was not entitled to benefits as he wilfully misrepresented material facts with respect to his application for benefits. The Arbitrator, however, found that Guarantee had not discharged the onus on it of showing that Mr. Chau had wilfully misrepresented the circumstances of the accident. Photographs had been taken of Mr. Chau’s car after he was involved in a second accident. The Arbitrator found that the investigation’s reliance on pictures that post-dated the second accident significantly undermined the investigator’s conclusions as to the likely mechanism of the first accident (p.10).