Financial Services Commission of Ontario Commission des services financiers de l Ontario BETWEEN: YAO YUE CHEN and DE HUAN CHEN Applicants and CERTAS DIRECT INSURANCE COMPANY Insurer DECISION ON A PRELIMINARY ISSUE Before: Heard: Appearances: Susan Sapin By written submissions, received December 22, 2015, and January 25 and February 3, 2016 Philip Kai Kwong Yeung for Ms. Chen Marni Miller for Certas Direct Insurance Company Issues: The Applicants, Yao Yue Chen and De Huan Chen, were injured in a motor vehicle accident on December 30, 2011. They applied for and received statutory accident benefits from Certas Direct Insurance Company ( Certas ), payable under the Schedule. 1 Certas refused to pay certain benefits. The Applicants applied for mediation, which was unsuccessful. They then applied for arbitration at the Financial Services Commission of Ontario under the Insurance Act, R.S.O. 1990, c.i.8, as amended. 1 The Statutory Accident Benefits Schedule Effective September 1, 2010, Ontario Regulation 34/10, as amended.
The preliminary issue, as identified by the pre-hearing arbitrator is 2 : 1. Are the Applicants precluded from commencing mediation proceedings by s. 55(2) of the Schedule because they failed to attend insurer s examinations ( IE s ) under s. 44? Result: 1. The Applicants are not precluded from commencing mediation proceedings by s. 55(2) of the Schedule despite failing to attend IEs, because Certas did not provide them with notices in accordance with the Schedule as required by that section. 2. If Certas wishes to schedule an IE prior to a hearing on the merits, it may do so after providing the Applicants with proper notice in accordance with the Schedule as required by s. 55(2). 3. Mr. and Mrs. Chen shall pay to Certas its arbitration expenses, fixed at $750.00. Background: The Applicants applied to Certas for medical benefits on the basis that their injuries were not predominantly minor injuries as those are defined in the Minor Injury Guideline (the Guideline ). Predominantly minor injuries are subject to a $3,500 limit for treatment expenses. Mr. Chen also applied for income replacement benefits (IRBs), and both Mr. and Mrs. Chen applied for attendant care benefits. Certas disputed the Applicants claims and notified the Applicants that it required them to attend IE s to determine whether their injuries fell within the Guideline, as well as whether the Applicants met the statutory tests for entitlement to attendant care and IRBs. 2 Pre-hearing letter dated August 10, 2015 2
There is no dispute that the Applicants failed to attend any of the numerous IEs that Certas scheduled, and rescheduled, several times. They did not attend IEs that conflicted with their work or treatment schedules. When Certas scheduled IEs that were convenient, the Applicants refused to attend unless Certas agreed to provide a Cantonese interpreter accredited or certified by the Ministry of the Attorney General ( MAG ). Certas was willing to provide a competent Cantonese interpreter, but not one necessarily accredited by MAG. After the Applicants applied for arbitration, Certas brought this preliminary motion for a declaration that the Applicants were precluded from mediating their disputes, and consequently from proceeding to arbitration, by section (55)2 of the Schedule, which provides that an insured person may not commence a mediation proceeding under section 280 of the Insurance Act if the insurer has provided the insured person with notice in accordance with this Regulation that it requires an examination under section 44, but the insured person has not complied with that section. [Emphasis added]. The Applicants submit Certas notices to attend IEs did not comply with s. 38(8) and s. 44(5) and so were not in accordance with the Schedule as required by s. 55(2). Hence, they should not be barred from mediation, which would effectively shut them out of the dispute resolution process entirely. They further submit that if their request for a MAG-certified interpreter is found to be unreasonable, they should still be given the opportunity to comply with the Insurer s request to attend an IE under s. 37(8) 3 of the Schedule, before a final order is made. In addition to a declaration barring the Applicants from mediation, Certas also seeks an order that the arbitration be adjourned until the Applicants attend an IE. 4 In the same breath, Certas asserts that IEs conducted at this time would be prejudicial to it as there is no way to determine, 3 Section 37(8) applies only to specified benefits, which are defined as IRBs, non-earner benefit, caregiver benefit or payments for housekeeping or home maintenance expenses. It provides that if an insured person subsequently complies and attends an IE, the insurer is required to reconsider entitlement and to pay the benefit claimed if the insured person provides a reasonable explanation for not attending the IE. There is no equivalent saving provision for treatment expenses. 4 No arbitration hearing to determine the substantive merits of the claims has been scheduled. 3
retroactively, four years after the accident, whether the Applicants suffered accident-related impairments or met the tests for entitlement to the benefits they claim. For the reasons set out below, I find that even though the Applicants reasons for refusing to attend the IEs scheduled by Certas were unreasonable, they are not precluded from mediating their various claims. Certas Notices of Examination were not in accordance with s.44 of the Schedule Under s. 44 of the Schedule, an insurer has the right to its own assessments by medical health professionals to help it determine if an insured person is entitled, or continues to be entitled to benefits. The Applicants submit that Certas notices requiring them to attend IE s were defective because they did not contain the medical and any other reasons for the examinations required by s. 44(5). They rely on the decision in Augustin and Unifund Assurance Company 5, where I held that if insurers notices do not comply with Schedule requirements, an insured person will not be barred from mediation by s. 55(2) if they fail to attend an IE. In Augustin which dealt with a Notice of Examination to attend an IE pertaining to treatment outside the Guideline, I found that the Notice of Examination sent by the insurer did not explain the medical and any other reasons for the IE, as required by s. 44(5)(a); similarly, its notice refusing to pay for treatment under s. 38(8) also failed to include medical reasons required to explain why it believed the Guideline applied. 6 As stated in Li and Deng and State Farm Mutual Automobile Insurance Company 7, the sufficiency of the notice of examination is always 5 (FSCO A12-000452, November 13, 2013) 6 Under the Schedule, notices refusing to pay for particular benefits, as well as notices to attend an IE, must both contain medical and other reasons. 7 (FSCO A15-002955 and A13-002954, November 9, 2015) 4
relevant as the legislature has mandated, by virtue of section 44(5) of the Schedule, that an Insurer must provide the medical and other reasons for the examination. [Emphasis added]. There are important reasons for holding insurers to their notice obligations under sections 38(8) and 44(5)(a), in particular the obligation to provide medical reasons. As noted in Augustin,... by imposing the more onerous requirements upon insurers to provide medical reasons if they believe the MIG applies and they choose to refuse to pay for treatment, the 2010 Schedule makes insurers accountable for any initial decision that limits or denies initial treatment. The requirement to provide medical reasons prevents insurers from deciding to refuse treatment arbitrarily or on principle. The requirement to provide reasons, medical and any other, also allows the insured person to make an informed decision about whether to accept initial treatment under the MIG, 8 provide additional information, or dispute the insurer s refusal to pay for treatment by applying for mediation. This is consistent with the legislative intent to provide early and medically necessary and reasonable treatment for injuries suffered in automobile accidents; to forestall premature disputes; to limit the need for unnecessary and costly assessments in the early stages; and to ensure accountability and oversight. These principles are fundamental to the fairness and efficiency of the no-fault scheme and the dispute resolution process. In addition to the s. 38(8) requirement to support a refusal to pay for treatment with medical reasons, ss. 38(9) and (10) state that if there is a refusal to pay, or if the insurer believes that the Minor Injury Guideline applies, 1) the s. 38(8) notice must so advise; and 2) the s. 38(8) notice may notify the insured person that the insurer requires an IE under s. 44. Certas notices to Mr. and Mrs. Chen to attend IEs are not materially different from those at issue in Augustin, in that Certas notices do not articulate the medical and any other reasons for requiring the IEs and do not advise that it believes the Guideline applies: 8 By resubmitting their claim for treatment on a Treatment Confirmation Form (OCF- 23) under s. 40. 5
Based on the information and medical documentation we have received we are setting up an Insurer s Examination to address: 1) if the claimant continues to meet the test of disability for Income Replacement Benefit; 2) Medical & Rehabilitation Benefits; 3) if the claimant s injuries can be treated under the Minor Injury Guideline. 9 CHEN and CERTAS Regarding treatment, key to ss. 38(9) and (10) is that these provisions do not say that an insurer is allowed an IE simply to determine if the Guideline applies. That would allow insurers to refuse to pay for treatment and require an IE, on principle or as a matter of course, for any initial claim for treatment outside the Guideline. As noted above, this is contrary to the intention of the Schedule. Rather, these sections only permit an IE if the insurer believes the Guideline applies. The use of the word believes begs the question why, which requires a reason in the case of ss. 38(9) and (10), medical or other reasons. The lack of compelling evidence provided by a health practitioner is a medical reason: In the case of the Treatment Plans submitted by the Applicants, which were almost identical in all important respects, I find all Certas had to do was to advise the Applicants in its ss. 38(8) notices refusing to pay for the treatment claimed, that the medical information/opinion provided by their health practitioner did not meet the Guideline requirement for compelling evidence that would take them out of the minor injury treatment protocol, because the injuries described in the Treatment Plan came within the definition of predominantly minor, for example, with no exception identified. That would have been, I find, a sufficient medical reason as required under ss. 38(8). 10 Certas then should have stated that, because of the lack of compelling evidence, it believed the MIG applied, which would also, in my view, satisfy the requirements of section 38(9). Those same reasons should have been given in the Notices of Examination prepared under s. 44(5). 9 Notice of Examination to Yao Yue Chen, March 1, 2012, Preliminary Issue Record of the Applicants at Tab D. All of Certas notices to both Applicants contain identical or similar wording. 10 As opposed to any other reasons, for example, discussed below. 6
The Applicants failed to provide compelling evidence: Applicants, too, have certain responsibilities under the Schedule. Under ss. 38(3)(c)(i)(B), treatment plans must include a statement by the health practitioner stating that he or she is of the opinion that the insured person s impairment is predominantly a minor injury but, based on compelling evidence provided by the health practitioner, the insured person does not come within the Minor Injury Guideline because the insured person has a pre-existing medical condition that will prevent the insured person from achieving maximal recovery from the minor injury if the insured person is subject to the $3,500 limit or is limited to the goods and services authorized under the Minor Injury Guideline... This language mirrors that in the Guideline itself. The Guideline further provides that compelling evidence is to be provided using the Treatment and Assessment Plan (OCF-18) with attached medical documentation, if any, prepared by a health practitioner. Given the wording used in both the Schedule and the Guideline, I find that compelling evidence means compelling medical evidence provided by a health practitioner. The health practitioner s opinion is a crucial component, and an essential first step in applying for benefits. In this case, I find the Applicants health practitioner provided no such compelling medical evidence that their injuries were not predominantly minor. I find Certas would have met the criteria for a valid refusal to pay treatment under s. 38(8) and a valid Notice of Examination under s. 44(5) if it had advised the Applicants that their health practitioner did not provide compelling evidence that their injuries fell outside the Guideline. In Ms. Chen s 11 case, for example, the extensive list of injuries and impairments described in the Disability Certificate (OCF-3) 12 submitted to Certas with her Application for Accident Benefits 11 As the Treatment Plans for both Applicants are virtually identical, the same findings and reasoning apply to Mr. Chen s as well. 12 OCF-3 dated January 6, 2012, Applicant s Response Record, Tab B. 7
does not identify any injuries or impairments that would take her out of the predominantly minor injury category, as that term is defined in the Guideline. In Part 8 of the OCF-3, which asks if the applicant had any pre-accident disease, condition or injury that affected her ability to perform her pre-accident activities - which is a main reason an insured person s impairments would not be considered to be minor injuries - the No box was checked off. Similarly, although Ms. Chen s Treatment Plan states the impairment is not a minor injury, the No box is also checked off in answer to the question, Prior to the accident, did the applicant have any disease, condition or injury that could affect his/her response to treatment for the injuries identified...? Finally, no attachments were included with the OCF-18. In the space on the form provided for additional comments, the treatment provider wrote: Based on evidence of marked physical impairment resulting in significant inability to return to ADL s as well as the presence of psychosocial issues impacting upon the patient Ms. Chen s condition is not presently considered to be minor. More involved multi-disciplinary treatment outside a minor injury framework (according to biopsychosocial models) is recommended in order to avoid chronicity. That statement is not helpful. Marked physical impairment is not one of the criteria for distinguishing whether injuries fall within the Guideline. The presence of psychological issues does not necessarily mean Ms. Chen s injuries are not predominantly minor. As none of the information provided on the OCF-3 or the Treatment Plan identifies any pre-existing injury and does not address the specific criteria for determining when an injury or impairment is predominantly minor, I find it does not meet the test of compelling evidence. 13 13 As the Treatment Plan provided on behalf of Mr. Chen contains the same information, the same reasons apply to his claim. 8
Certas could have come to that conclusion itself after reviewing the Treatment and Assessment Plans, without first seeking a medical opinion. A medical reason is not the same thing as a medical opinion. Other Reasons: I note in passing that, regarding the other reasons required by ss. 38(8), these could have, in this particular case, included the fact that neither the Applicants nor the treating practitioner signed the Treatment Plans. Under ss. 38(3)(a) and (b), insurers are not liable to pay for medical benefits claimed if the Plans are unsigned, unless the insurer chooses to waive that requirement. Entitlement to a MAG-accredited interpreter at an IE is not a reasonable requirement: Although in this case Certas cannot rely on the Applicants non-attendance at its IEs to preclude them from the dispute resolution process because its notices were defective, the fact remains that the Applicants refusal to attend the IEs was for a completely different reason a dispute over the type of interpreter Certas was required to provide. This particular issue has been dealt with in a number of FSCO decisions recently, and in each case arbitrators have consistently held that there is no entitlement to a MAG-certified interpreter at an IE. 14 I agree with their reasons and find no distinguishing facts in the case before me. Briefly, those reasons include: there is no explicit legislative or other requirement for an insurer to provide a MAG-certified interpreter at an IE; 14 Li and Deng and State Farm Mutual Automobile Insurance Company (FSCO A13-002953 &A13-02954, November 9, 2015; Luo and Unica Insurance Inc. (FSCO A13-000231, January 19, 2015); Chen and Personal Insurance Company of Canada (FSCO A13-008139, January 23, 2015); Gao and State Farm Mutual Automobile Insurance Company (FSCO A13-002281, March 30, 2015); Zhang and Wen and Security National Insurance Co./Monnex Insurance Mgmt. Inc. (FSCO A13-003889 & A13-003890, April 23, 2015); and Lee and Yau and State Farm Mutual Automobile Insurance Company (FSCO A13-003027& A13-014560, June 30, 2015). Many of these cases are under appeal. 9
proportionality: MAG has its own accreditation system designed specifically for criminal proceedings; full MAG accreditation is not required for interpreters at tribunals such as the Immigration and Refugee Board of Canada despite the proceedings being under oath and the often serious consequences of the decisions being rendered in that forum; 15 FSCO hearings do not require interpreters accredited or certified by MAG; The fact that some insurance companies have supplied MAG-certified interpreters does not impose a positive obligation on any insurer to provide same. I was not presented with any evidence that non-mag accredited interpreters from other available interpretation agencies are less competent for the purposes of an IE than those accredited by MAG. I reject the Applicants argument that a MAG-accredited interpreter at an IE is a reasonable accommodation under a policy of insurance, and that Certas should provide one as part of its duty of utmost good faith owed to the Applicants. I do not agree that the duty of good faith extends to providing interpretation services that exceed those reasonably required. The nofault auto insurance scheme and the dispute resolution procedures set out in the Schedule, are meant to be quick, expedient and cost-effective. In that context, a competent interpreter in the language of choice at an IE is reasonable. To expect a MAG-accredited interpreter is not. The Applicants decision not to attend IEs does not prevent them from access to mediation, but I find it is not without consequence. This will be dealth with under Expenses below. Relief Requested: As noted, Certas has asked that the arbitration hearing be stayed until the Applicants attend IEs, all the while submitting that IEs at this late date would be prejudicial to it. The Applicants state 15 Chen and Personal Insurance Company of Canada (FSCO A13-008139, January 23, 2015) 10
they are willing to attend IEs if it is determined that their failure to attend because no MAGaccredited interpreter would be provided was unreasonable. Certas is within its rights to require the Applicants to attend an IE upon providing them with valid notices, but there is no obligation to do so. It is difficult to see how a medical assessment four years after the accident would be helpful in adjusting claims based on impairments that arose after the accident, particularly where there was, at the time, no evidence from the Applicants to indicate their injuries were anything other than predominantly minor; hence, the prejudice to Certas. Much depends, of course, on what further medical and other information the Applicants intend to rely on at an arbitration hearing. Attending an IE may be of some significance to Mr. Chen, who has claimed an IRB, because s. 37(8) of the Schedule provides that if he subsequently attends an IE, the insurer shall reconsider his entitlement to this benefit, and could pay an IRB withheld during the period of non-compliance if it finds he is entitled, if Mr. Chen provides a reasonable explanation for not attending the IE. I reiterate, however, that there is no obligation on Certas to schedule a further IE. I have found that the insistence on a MAG-accredited interpreter is not a reasonable explanation for failing to attend an IE. I was not provided with submissions about whether failing to attend an IE because of a defective Notice of Examination qualifies as a reasonable explanation for the purposes of s. 37 on the limited facts before me in this preliminary issue hearing. I find the most sensible thing to do under the circumstances is to resume the pre-hearing to allow the parties to discuss next steps, disclosure of medical information, and to schedule an arbitration hearing on the substantive merits if necessary. Any further preliminary issues should be brought before the pre-hearing or hearing arbitrator. 11
EXPENSES: Certas invalid notices may not prevent the Applicants from proceeding to mediation, but the delay occasioned by the Applicants refusal to attend IEs for a completely unrelated reason compromised the timely adjusting of their claims. That they did not raise the defective notice issue until the pre-hearing is also a factor in delaying the dispute resolution process. These are factors to be taken into account when determining who is liable for the expenses of this preliminary issue hearing. Subsection 282(12) of the Insurance Act sets out the criteria I must follow in determining entitlement to expenses. The relevant criteria in this proceeding are, first, each party s degree of success in the outcome of the proceeding; second, the conduct of a party or a party s representative that tended to prolong, obstruct or hinder the proceeding, including a failure to comply with undertakings and orders; and three, whether the insured person refused or failed to submit to an examination as required under section 44. Although the Applicants were successful in challenging Certas reliance on s. 55(2) and so may proceed to mediation, they were unsuccessful in persuading me that their failure to attend an IE without a MAG-accredited interpreter was reasonable. Given the ample case law to the effect that this latter claim was unreasonable, and that was the real reason they failed to attend the IEs, I find their conduct delayed the timely adjusting of their claims. I note that the Applicants received a number of notices to attend IEs from Certas, and advised Certas they would not attend because the examination times conflicted with their work or treatment schedules. Certas rescheduled the IEs several times. Regarding the notices, the Applicants never raised any objection about the qualifications of the Cantonese interpreters Certas agreed to provide until a convenient IE was arranged. As noted, they did not raise any concerns about the validity of the notices until the pre-hearing in August 2015, almost four years 12
after the accident, a delay which prejudiced Certas ability to remedy the situation in a timely manner. I find the Applicant s conduct caused unreasonable delay and therefore it is not entitled to its expenses of this preliminary issue hearing, and Certas is entitled to its partial expenses of this motion, fixed at $750.00. Susan Sapin Arbitrator May 24, 2016 Date 13
Financial Services Commission of Ontario Commission des services financiers de l Ontario BETWEEN: YAO YUE CHEN and DE HUAN CHEN Applicants and CERTAS DIRECT INSURANCE COMPANY Insurer ARBITRATION ORDER Under section 282 of the Insurance Act, R.S.O. 1990 c. I.8 as it read immediately before being amended by Schedule 3 to the Fighting Fraud and Reducing Automobile Insurance Rates Act, 2014, and Ontario Regulation 664, as amended, it is ordered that: 1. Mr. and Ms. Chen are not precluded from mediating their disputes with Certas by subsection 55(2) of the Statutory Accident Benefits Schedule. 2. Mr. and Ms. Chen shall pay to Certas Direct Insurance Company arbitration expenses of $750.00. Susan Sapin Arbitrator May 24, 2016 Date