ACCIDENT BENEFITS NEWSLETTER - JULY 2005

Catherine Zingg

Liberty Mutual Insurance Company and Young, P03-00043, June 20, 2005 - Director’s Delegate Evans dismissed the insurer’s appeal of an arbitration order which found that Mr. Young suffered a “catastrophic impairment” in an accident on February 15, 2001. The arbitrator had based her decision on Mr. Young’s Glasgow Coma Scale assessment in s.2(e)(i) of the definition of catastrophic impairment. Liberty Mutual submitted that only scores that are predictive of outcome should be considered, so the “reasonable period of time after the accident” had to be at least six hours (p.3). The arbitrator had found that the GCS scores taken within the first hour after the accident were not confounded by other factors and were taken within a reasonable period.

The Director’s Delegate considered several confounding factors. The first was intubation. There was a discrepancy in the evidence as to when Mr. Young was intubated following the accident. The Director’s Delegate found that in light of the evidence from the hospital records, and the vagueness of Dr. Stewart’s testimony, the arbitrator had more than enough evidence to support her conclusion that Mr. Young was first incubated by Dr. milkovich (at the hospital) and not by ambulance attendants (p.15). Following the accident Mr. Young had suffered seizures. The arbitrator found that the seizures formed part of the continuum of Mr. Young’s brain impairment after the accident, although a temporary and reversible condition and, therefore, the post seizures score should not be discounted when assessing catastrophic impairment (p.17). The Director’s Delegate found this less convincing, considering that both experts testified that the temporary and reversible nature of the seizures meant any scores taken during or immediately after them should be discounted. In any event, it was found that the arbitrator had accepted the testimony of Dr. Stewart on this point, so there was evidence on which she based her finding and therefore no error of law (p.18).

There was a debate as to what should be considered a “reasonable period of time after the accident”. In considering the evidence on this point, the Director’s Delegate stated:

I agree with the arbitrator. Again, to return to the definition, ‘catastrophic impairment’ means brain impairment that, in respect of an accident, results in a score of 9 or less on the Glasgow Coma Scale. None of the other provisions of the definition require a forecast of the insured’s future condition, so it is unclear why a forecast should be part of the GCS test. The definition on its face requires that the low scores result from a brain impairment, and accordingly the ‘reasonable period of time’ requirement focuses on that point and not on a forecast. The matter would be different if, for instance, catastrophic brain impairment meant resulting from GCS scores of 9 or less taken after a reasonable period of time. However, that would then start to resemble the GOS [subclause e( ii)] test, which does indeed look at the outcome of the insured after six months (p.25).

The insurer argued that a private arbitrator in the Unifund Assurance Company and Fletcher (January 18, 2000) applied the correct interpretation of the test. The arbitrator in that case had interpreted the test as predictive, namely that it was intended to be based on a measure which would assist in predicting the outcome of a brain injury (p.26). Furthermore, he found that a reasonable period of time was a half an hour after the accident. It was noted that the facts in Fletcher differed from Mr. Young’s situation. Fletcher had recovered quickly and had scored higher then 9 on the GCS six minutes after the he scored lower then 9.

The Director’s Delegate found that as always “the issue is whether a brain impairment led to a low score”. If something else, such as extensive bleeding, led to a low score, then that would not be as a result of a brain impairment so the person would not pass the test (p.27).

Pangolino and TTC Insurance Company Limited, A03-001718, May 20, 2005 - The applicant claimed that she had banged her head on a TTC bus when she fell while attempting to board the bus. Ms. Pangolino did not testify before the arbitrator in her examination-in-chief. Her agent requested that a sworn statement be filed and she was then cross examined on the statement. Ms. Pangolino had been examined by Doctors and other medical specialists between July 2002 and November 2002, but she did not mention to any of them that she had struck a bus. Ms. Pangolina claimed that she had mentioned that she had indeed struck the bus, but that the doctors and specialists had neglected to report or had misunderstood her statement (p.6). The statement in which she claimed that she had struck the bus was made over two years after the accident in December 2004. The arbitrator found that Ms. Pangolino was not credible in regard to her evidence concerning the incident. The arbitrator concluded that there had been no accident. Rather, the fall to the ground was caused when a young women collided with Ms. Pangolino. She was approximately 5 feet from the bus when she fell. Arbitrator Lee found that an “accident” cannot occur if the use or operation of the automobile has never commenced.

Herbison v. Lumbermens Mutual Casualty Company, Docket C40602, Ont. C. A., June 7, 2005; Vytlingam (Litigation Guardian) v. Farmer (2005) O.J. No. 2266, Ont. C. A. The plaintiffs in these cases were found to have been injured as a result of the indirect use or operation of the automobiles. The plaintiff Herbison had been shot by another member of a hunting party who had got out of his truck to take the shot that hit him. The plaintiff Vitlingam was catastrophically injured when a boulder dropped from a highway overpass onto the vehicle in which he was a passenger. It should be noted, however, that in both of these decisions, the Court was considering s.239(1) of the Insurance Act which provides coverage against liability imposed by law for loss or damage:

(a) arising from the ownership or directly or indirectly from the use or operation of any such automobile; and
(b) resulting from bodily injury to or the death of any person and damaged to property.

This is in contrast to the definition found in the SABS /96 in which the word “indirectly” has been removed from the definition of accident In Vitlingam the Court commented:

Similarly, while the work “indirectly” was removed from the accident benefits (no fault) coverage in 1996, it remains in the third party liability coverage as it does in the language of the endorsement before us. Logically one must conclude that the liability coverage is intended to be of broader application than the accident benefits coverage. I agree with the observation of Lederman J. in Saharkhiz, (supra) that the use of the word “indirectly” imports a relaxed causation requirement comparable to the one suggested by Major J. in Amos (p.8).

Yusuf and Guarantee Company of North America, A04-000049, June 3, 2005 - Guarantee took the position that Mr. Yusuf was not entitled to receive benefits because he had willfully misrepresented a material fact with respect to his application for benefits, namely that he was involved in an accident on June 4, 2002. The hearing began with Mr. Yusuf’s counsel seeking an order that he be removed from the record. This was necessary as he did not have his client’s written consent as required by Rule 9.8. Mr. Yusuf did not oppose the withdrawal on the condition that he be allowed to have an adjournment so that he could retain new counsel. Arbitrator Rogers allowed counsel to be removed from the record and denied Mr. Yusuf’s adjournment request. Arbitrator Rogers stated that the right to be represented by counsel is not absolute. He found that it should be balanced against Guarantee’s right to proceed expeditiously and with the least expense (p.3). Mr. Yusuf had already had three counsel in the matter.

Guarantee relied on the evidence of Mr. Jenkins and Mr. Kodsi of TSI Solutions, who were experts in motor vehicle accident investigations. Mr. Yusuf challenged Mr. Jenkins’ qualifications on th ground that he had not seen any certificates or degrees proving Mr. Jenkins expertise. The arbitrator, however, accepted that Mr. Jenkins was qualified to give expert evidence. Ultimately, it was found that there was nothing in the physical evidence, consistent with a collision between the Nissan and the Integra and that Mr. Yusuf willfully misrepresented that a collision occurred, a material fact with respect to his application for benefits (p.8). Accordingly, his claim was denied and he was ordered to pay expenses to the insurer.

Lebana and Zurich Insurance, A04-001439, May 26, 2005 - The applicant was injured in a motor vehicle accident on November 17, 2003. The insurer did not file its Response to the Application for Arbitration within the 20 days provided by Rule 26.1 (a) of the Dispute Resolution Practice Code. The insurer brought a motion for an order extending the time for delivery which was granted by Arbitrator Wilson.

In reviewing the case law, the arbitrator noted that an early decision, Ntana and Zurich Insurance Company, A-003279, November 15, 1993, had held that the appropriate consequence of a lengthy delay in responding to the arbitration would be the exclusion of the insurer from the arbitration (p.3). Arbitrator Wilson found that it was entirely consistent with the scheme of the Insurance Act that a failure to respond on a timely basis leads directly to what may be seen as a default by an insurer, particularly in the context of s.281(3) of the Insurance Act (p.6). In his reasons, however, he raised the question as to when in the process should a default occur and what should the consequences and potential remedies be. He also turned to the litigation case law to compare the approach taken in similar circumstances. In Hunt v. Brantford (City) [1994] O.J. No. 1867 O.S.C. Counsel agreed that on a motion to satisfy default judgement, the defendant is required to show that:

(a) the default was unintentional and provide a valid reason for the default;
(b) the motion was launched forthwith after the judgement came to its attention;
(c) a valid defence on the merits exists; and
(d) full disclosure of all material(s) facts have been made (p.8)

In addition, it must be shown that an applicant will suffer no prejudice that cannot be addressed by either a costs order, an adjournment or other relief within the jurisdiction of an arbitrator (p.8).

In the case before him, Arbitrator Wilson found that the criteria in Ntana had been met. He also found that Zurich made positive efforts, in good faith, to advise the Commission of the delay in responding and, indeed, may have been lulled into complacency by relying upon the information provided by the Commission (p.8). In the circumstances, the insurer’s motion was granted and an extension was given for the filing of the Response.

State Farm Mutual Automobile Insurance and ING Insurance Company, Arbitrator Craig Brown , London, February 16, 2005 - On July 22, 1999 Devon Scanlan suffered injuries when she was riding her motorcycle and it collided with a car owned by Metro Park Services Ltd. The applicant paid Ms. Scanlan’s benefits, independent medical examinations ($4,072.50) and for the cost of a med rehab DAC report ($2,050.00). The applicant received indemnification from the respondent for amounts paid as benefits to Ms. Scanlan. A dispute arose with respect to whether indemnification was required for the cost of medical examinations and the DAC report.

Arbitrator Brown followed the decision of Judge Mandel in Jevco Insurance Company v. Prudential Insurance Company (1995) O.R. (3d) 779, Ont. Ct. (General Division). In that case it was held that the cost of loss control efforts was “never intended by the legislature to be indemnified” because they are not a payment of benefits (p.3). Arbitrator Brown found that te Jevco case was binding on him subject to any subsequent changes to the legislation or regulations. Reference was made to OIC Bulletin 11/94 which was issued after Jevco, which asserts that the change in regimes in 1993 provided for indemnification of assessment costs and other expenses covered by the schedule. Arbitrator Brown, however, found that OIC Bulletins, issued as they are by the Commission charged with the administration of the regulations are to be given considerable weight, but he found that they are not law and cannot change the law (p.4).

Counsel also asked the arbitrator to consider whether the outcome would be different under the amended regulations relating to independent medical examinations and DAC assessments which came into effect in 2003. In obiter dicta he remarked that the amended regulations do not change the characteristic of medical examinations and assessments as loss control measures as that phrase is understood in Jevco (p.5).