BROWN & PARTNERS LLP SABS SUMMARIES APRIL 2016

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1 Case Name Griva and AIG, FSCO A Date April 18, 2016 Date of Loss January 19, 2011 Arbitrator Issue(s) Marshall Schnapp Should the arbitration be stayed pending the applicant s attendance at insurer s examinations? Does the service provider have to speak to the insurer s assessors or produce employment and income documentation? Since the insurer last assessed attendant care in 2012, the applicant alleges that his psychological health has deteriorated. The insurer arranged in home, orthopaedic and psychological assessments to assess the applicant s attendant care needs. The insurer s in-home assessment was conducted over eight hours on two days, but was not completed. The applicant alleges that the insurer s occupational therapist, Ms. Lok, was ill-prepared and had not reviewed his medical file. Ms. Lok alleges that the assessment took longer than normal and has not been completed because the applicant s treating occupational therapist attended unannounced, his wife made unsolicited interjections, and questions needed to be repeated in order to clarify contradictory answers. The applicant alleges that he felt very ill following Ms. Lok s assessment and experienced panic attacks. His psychiatrist opined that the applicant should not resume the assessment with Ms. Lok. The applicant refuses to complete the in-home or other assessments. The insurer requested the attendant care service provider s employment file, bank statements and a statutory declaration detailing the services provided. The insurer already has the service provider s income tax returns showing reduced commission income from her employment as an insurance broker. The arbitration is stayed pending the applicant s attendance at psychology and in-home assessments. The service provider does not need to speak with the insurer s assessors or provide additional documentation. The treating psychiatrist opined that the applicant should not attend a further assessment with Ms. Lok. No physician opined that the applicant will be harmed by attending the psychology assessment. The applicant shall complete the in-home assessment with another OT. Based on the SABS and previous FSCO decisions, the service provider does not have to speak to the insurer s assessors. The insurer already has an informal statement from the service provider regarding the services provided and it has sufficient information to allow it to determine if an economic loss was sustained. 1

2 Case Name Estate of Francis Aguis v. TTC Insurance FSCO A Date April 18, 2016, Date of Loss April 28, 2007 Arbitrator Ellen Fry Issue(s) Was the Application for Mediation authorized by the Applicant? Applicant s wife, having power of attorney (signed on March 29, 1995), signed a claim for accident benefits on his behalf in 2007 as well as ongoing expense forms. On February 3, 2012, the Insurer reduced attendant care benefits. On December 25, 2013, the Applicant died. His will declared his wife as executrix of his estate. On January 24, 2014, an unsigned Application for Mediation was submitted for attendant care benefits. On September 4, 2014, the Applicant s counsel submitted an Application for Arbitration and filed copies of the death certificate and will. The Application for Mediation was authorized by the Applicant and did not fail to meet sections 55 of the SABS or 280 and 281 of the Insurance Act. A signature is not required on an Application for Mediation. Even if required, its absence is a technical defect and covered by Rule 1.3 of the DRPC. The Applicant s wife was found to have a valid power of attorney, in effect at all relevant times, and was an executrix named in the Applicant s will. She authorized counsel to apply for mediation as part of a broad mandate she gave to counsel to pursue the claim. The specifics of those instructions are and can be decided between the client and their solicitor. 2

3 Case Name Khan and State Farm Mutual Automobile Insurance Company, FSCO A Date May 6, 2016 Date of Loss February 4, 2010 Arbitrator Issue(s) John Wilson CAT impairment designation and entitlement to further housekeeping benefits and non-earner benefits. The self-represented applicant was born in Afghanistan. He had no official status in Canada, was barred from working and had no medical coverage. The applicant had significant psychological issues before the MVA. He was combative with people, feared water and was forgetful and paranoid. He was involuntary detained and treated for symptoms of schizophrenia. The applicant s CAT assessor stated it was unclear to what degree the MVA affected his cognitive status but his psychological condition did worsen after the MVA. The assessor opined that the applicant had a WPI of 55% based on a combination of physical and mental impairments. In denying CAT, the insurer relied on a psychiatrist who found that the applicant suffered from cannabis induced psychosis and was dysfunctional before the MVA. The insurer s psychiatrist did not apply the AMA guidelines and gave no impairment rating to the applicant. The applicant is not entitled to a CAT designation and entitlement to further housekeeping benefits and non-earner benefits. Although the arbitrator noted that the insurer s CAT report failed to assign a percentage to the applicant s impairment was a major deviation from the process set out in the Guides, the applicant failed to adduce enough evidence to prove he was CAT. While the applicant s assessor was credible, he did not address either the Guides rating or the issue of causation of the impairments. The arbitrator held that credible evidence of pre-mva impairment is not enough alone to establish causation, without expert evidence pointing to the MVA as a trigger for a worsening of the applicant s condition. Given the findings with regard to CAT, no further housekeeping benefits were payable since non-cat benefits were exhausted. The applicant did not provide evidence that he had greater capabilities in the period immediately before the MVA. In fact, the Emergency Crisis Service CAMH records show that the applicant was already highly dysfunctional before the MVA (angry, frustrated and desired to kill people) and had ongoing immigration and housing issues. While the arbitrator accepted that the applicant s medical conditions likely rendered him unable to carry on most aspects of a normal life, he did not met the burden of proving that his post-mva disabilities arose from the MVA or were precipitated by a worsening of his condition following the MVA. 3

4 Case Name Sangaralingam v. TD General, FSCO 4886 Date April 27, 2016 Date of Loss June 15, 2007 Arbitrator Director s Delegate Feldman Issue(s) An insurer s request for a stay of an order pending the appeal Arbitrator Osunde ordered the insurer to pay for some of the goods and services in dispute and to pay for the cost of a catastrophic impairment assessment plus interest on overdue payments. The insurer appealed. The arbitrator dismissed other claims brought by the insured and the insured appealed the dismissal of those claims. Pending a final determination of the appeal, the insurer requested a stay of the order. Request for stay pending appeal denied. Section 283(6) of the Insurance Act states that an appeal does not stay the order of an arbitrator unless decided otherwise. The onus is on the moving part to establish that the exception is justified. The criteria are: (1) The bona fides of the appeal, (2) The substance of the grounds for appeal, and (3) The hardship of the respective parties if the stay is granted/refused. The insurer raised on important legal issue: whether the correct causation test is material contribution or but for, and Feldman agreed that the appeal is bona fide. The strength of the appeal was less clear to Feldman, since both parties will be able to present strong arguments concerning whether the correct test was used and whether the other test would have resulted in a different outcome. Often, the most important factor is hardship, and the onus is on the party seeking the stay to show that the stay is appropriate in light of all circumstances, including risk of hardship to the parties if the stay is granted. The arbitrator found that the claimant s cognitive and executive functioning worsened as a result of this accident. Many goods and services were reasonable and necessary. Other than the risk that it would be unable to obtain repayment of amounts paid pursuant to the order, there was no evidence of imminent hardship to the insurer. The insurer argued possible prejudice, since it has commenced a separate arbitration proceeding for a catastrophic impairment determination. It is concerned that it will be estopped from raising causation as an issue in that arbitration proceeding. It is also concerned that the insured may submit new claims for accident benefits, and that if the order is not stayed, and the insurer denies claims on the basis of causation, it may be exposed to a claim for a special award for 4

5 unreasonably denying a benefit. Delegate Feldman agreed with the insured that these concerns are purely speculative at this point, as there are currently no outstanding treatment plans in dispute and the appeal is likely to be resolved well before the pending arbitration proceeding comes to a hearing. 5

6 Case Name Kehoe and Allstate, FSCO 4891 Date May 2, 2016 Date of Loss October 19, 2002 Arbitrator Issue(s) Dana Hirsh Preliminary Issue - Is the applicant s claim for NEB statute barred due to section 51 of the SABS for of the Insurance Act? October 19, 2002 DOL October 28, 2002 App for AB s: 3 kids, ages 10, 11 and 16 October 30, 2002 EOB, NEB section, boxes marked eligible and not eligible are left blank and the Explanation stated N/A. Mandatory 26 week waiting period. There has to be a complete inability to carry on [a] normal life to qualify for this benefit. November 25, 2002 insurer provides payment for caregiving June 16, 2003 EOB, stops caregiving based on insurer exams February 18, 2009 App for mediation, caregiver November 1, 2009 App for arb, caregiver March 12, 2010 pre-hearing letter, NEB is an issue from July 2008 because that is when youngest child turns 16 November, 2011 insurer successfully argued limitation period on caregiving issue November, 2012 appeal on caregiving prelim issue dismissed July, 2013 App for mediation, NEB Claim for NEB is not precluded by section 51 of the SABS or of the Insurance Act The insurer states that the explanation given on October 30, 2002, as quoted above, constituted a clear and unequivocal denial of NEBs. The arbitrator disagreed and noted that both eligible and not eligible boxes were left blank. It is not clear that this is a refusal, and it was too early to assess the claim since it is not payable until 6 months later. Further, the insurer simply restated the information regarding the NEB eligibility in the SABS under the explanation section, rather than providing clear reasons for the denial. N/A could mean that the applicant simply had to wait 26 weeks before qualifying, as opposed to an outright denial. As well, although the insurer states that there has to be a complete inability, it did not relate the inability specifically to the applicant. The arbitrator distinguished this case from Seitzema, which concluded that incorrect reasons were still clear reasons and capable of starting the limitation period. In that case, the reasons were incorrect. In this case, there was a complete absence of reasons. 6

7 Case name State Farm Mutual Automobile Insurance Company v. Aslan, 2016 ONSC 2725 April 26, 2016 Date Justice Hackland J. Issue Application by State Farm for an order that the seven respondents attend an EUO regarding entitlement to benefits The application was dismissed The seven respondents were involved in separate accidents and did not know each other but were represented by the same counsel Three respondents were accepted as CAT, three had been assessed as CAT and one was denied CAT All respondents received attendant care from one or both of two service providers State Farm suspected fraud because the service providers claimed they provided care from hours/week State Farm requested an EUO to determine its liability to pay benefits but did not specifically indicate attendant care State Farm did not serve a formal notice outlining the reasons for an EUO because counsel outright refused the EUO after receiving State Farm s initial request letter Respondents counsel refused the EUO on the basis of s.33(2)(b) of the SABS: the person is incapable of being examined because of his or her physical, mental or psychological condition. On this motion, the respondents also argued they were not provided with reason(s) for the EUO The legislature sought to achieve a balance between the insurer s right to properly determine eligibility for benefits with the insured s right to reasonable advance notice of the examination and reasons for the examination The reason must be something more than stating to determine entitlement to benefits In this case, State Farm should have advised the respondents that the reason was to review the claims submitted for attendant care. The respondents could then have prepared to discuss that issue and bring any relevant documentation to the EUO As proper notice was not given per s.33(4)3 of the SABS, they were not required to attend an EUO If State Farm serves a proper notice that includes reasons for the EUO, the respondents would be obliged to attend unless any or all of them were incapable of being examined. Sufficient medical evidence would be required to prove incapacity 7

8 Case Name Dilorenzo and Intact Insurance Company, FSCO A Date April 15, 2016 Date of Loss July 8, 2013 Arbitrator Issue(s) Paulina Gueller Calculation of IRBs with respect to the deduction of income received as a result of post-mva part-time work. The applicant and the insurer disagreed about the method of calculating IRBs in the light of the applicant s return to part time work as a pharmacy assistant. The applicant s approach, called the Equitable Approach, stated that applicant did not suffer a substantial inability during the times when she was actually doing her pre-mva job. However, there were days when the applicant did suffer an inability to complete her job; it is for these missed hours that the applicant should be entitled to the benefits. The applicant s approach further stated that for an overall period during which a person is accepted as entitled to IRBs, a person might alternately be disabled and entitled to benefits and then not disabled and not entitled to benefits depending on the person s medical progress. As such, the insurer cannot take deductions under section 7(3) of the Schedule of the part-time income, because, the time that the applicant returned to work would not constitute part of the period under which she suffered a substantial inability. The insurer paid IRBs without any deduction from one week post-mva until December 2013 accepting that the applicant suffered a substantial inability. The insurer was informed that the applicant returned to 6 hours per day, 3 days per week. The Insurer s Approach argued that despite her return to, she continued to meet the substantial inability test, and the insurer deducted 70% of that post-mva income. Furthermore, the insurer argued there is no specific language in the legislation limiting the insurer s ability to deduct post-mva income. The insurer s approach is the correct method of calculating the IRBs. The law clearly states that if a person returns to work after the MVA, the insurer may deduct from the entitlement amount 70% of any gross employment income received by the insured person during the period in which he or she is eligible to receive an IRB. The arbitrator was not persuaded by the applicant s argument that the amount of hours when she was not working during the week represented a different period of disability than the period that she was already in. It is clear that the insurer already accepted that she met the substantial inability test and that was the reason why she received IRBs. The intention of the law, for a person who returns to work after the MVA, is to calculate the amount to be deducted based on the weekly income earned and not based on percentages of moments in time when the person is working and not working during a week. 8

9 Case Name Green and Belair Insurance Company, Appeal P Date April 19, 2016 Date of Loss September 20, 2009 Director s Lawrence Blackman Delegate Issue(s) Should the appellant be allowed to argue s when it was not an issue at the arbitration or within the written appeal materials filed? This was one of 15 arbitrations decisions that were sought to be stayed on the basis of tort actions for fraud against the service providers. This was denied and the arbitration proceeded on December 2013 with Arbitrator Richards. All claims were dismissed, which were centred on treatment from Osler Rehabilitation. The applicant appealed. Appeal and cross-appeals dismissed. There were telephone calls and written appeal submissions given in this matter. Yet, in the oral appeal hearing, the appellant brought up s as an appeal argument. This was not in written documents and was also not an issue in the arbitration. The oral appeal hearing was adjourned. New written arguments are to be exchanged. Expenses to be paid by the appellant in the amount of $ for unnecessary prolonging the appeal. 9