Accident Benefit Reporter Vol. 9 Issue 2
- Duty of Utmost Good Faith
- Class Actions 101
- Overhaul of Ontario’s Human Rights Complaint System
- About Attendant Care
By: Michael Bennett
Every person injured in a motor vehicle accident is entitled to receive Statutory Accident Benefits, regardless of fault.
In a recent accident benefits case I handled for one of our clients , the Court considered how the obligation to act in the utmost good faith relates to automobile insurers when handling a claim for accident benefits.
The right to sue an at-fault person for the accident is also an important consideration but, in the immediate aftermath of a motor vehicle accident, victims must first turn their minds to claiming accident benefits from their own automobile insurer, or, in some cases, the automobile insurer who stands in line of priority to pay accident benefits. If an injured person cannot find the correct automobile insurer, he or she should call a lawyer immediately.
Victims may require medical/rehabilitation benefits, attendant care benefits, housekeeping and home maintenance benefits, and often, income replacement benefits. Depending upon the severity of the accident related injuries, a victim may even require benefits while still in hospital as well as a Case Manager to co-ordinate private health care services in preparation for discharge from the hospital. Without timely approval and payment of these benefits, an injured party’s physical and mental recovery may be jeopardized.
In order to maximize the opportunity to fully recover, the automobile insurer must step forward and become a partner in the rehabilitative and claims process. Victims of motor vehicle accidents are usually at a very low ebb in terms of their ability to advocate on their own behalf or to finance their own recovery. Therefore, in most cases, a relationship of dependence is immediately created between the victim and the automobile insurer regarding the payment of accident benefits.
The Court has recognized the importance of this relationship of dependence between victims and their insurers in a number of decided cases. The leading case which defines and enshrines the nature of this relationship is the Supreme Court of Canada decision Whiten v. Pilot Insurance Company, [2002] S.C.J. No. 19. Although this decision related to a fire loss claim, the Supreme Court of Canada took the opportunity in this case to describe the relationship that exists between every person and his or her insurer. According to the Supreme Court of Canada, an insurer must treat its insured during the claims process with the “utmost good faith”.
While there have been a number of cases that discuss the meaning of the term “utmost good faith”, the obligation clearly includes the responsibility of the insurer to act both promptly and fairly when investigating, assessing and attempting to resolve claims made by its insureds. The duty to act fairly applies to the manner in which the insurer investigates and assesses the claim and to its decision about whether or not to pay a claim. Before refusing payment of a claim, an insurer must assess the merits of the claim in a responsible and reasonable matter. It must not deny coverage or delay payment in order to take advantage of the insured’s economic vulnerability or to gain bargaining leverage in negotiating a settlement. A decision by an insurer to refuse payment should be based on a reasonable interpretation of its obligations under the policy.
In a recent accident benefits case I handled for one of our clients, Mamaca v. Direct Protect, the Court considered how the obligation to act in the utmost good faith relates to automobile insurers when handling a claim for accident benefits. In this case, the insurer denied my client’s claim for income replacement benefits. After denying this benefit, the automobile insurer took the position that it was no longer responsible to honour its obligation to act in the “utmost good faith” to its insured because it was reasonable to believe at this point in time that a court action would be commenced for payment of this benefit. The question before the Court became whether the automobile insurer’s obligation to act in the utmost good faith survives a denial of benefits.
In short, the question before the Court was whether the obligation or duty of utmost good faith ends after the insurer and the victim appear to be heading into battle with one another over the payment of benefits. In answer to this question, the Court found that the handling of an accident benefit claim is more complicated than most other contracts of insurance. Usually, when one makes a claim to an insurer, the insurer is responsible to make a single decision whether or not to pay. In contrast, when dealing with accident benefits, there are a number of different benefits a victim can claim and entitlement to these benefits may survive a denial of any separate benefit. What the Court confirmed in Mamaca v. Direct Protect was that a denial of a benefit does not end the automobile insurer’s obligation to act in the utmost good faith towards its insured. Instead, the insurer must continue to treat and adjust the accident benefit claim fairly even after there has been a denial.
In most cases, victims are treated very fairly by their automobile insurer and the duty of utmost good faith is honoured by the appointed adjuster. However, once in a while adjusters refuse to consider payment of benefits in a timely manner. Other times, denials of benefits are made without due consideration to the injuries involved and how these injuries have affected this individual victim. When this happens or where victims feel they are being treated unfairly by their insurer, it is very important to document these concerns. It is best to write a letter to the insurer setting out the concerns one has and remind the insurer of its obligations to act in the “utmost good faith”.
When a victim is involved in a car accident they have one claim for accident benefits and this claim is very important to them. Usually, insurance adjusters have several claims and they may not be investing an appropriate amount of time handling your claim. In those circumstances, it is important to keep in mind that institutional delay on behalf of an automobile insurer is unacceptable. If an automobile insurer cannot respond in a timely and effective way to a claim, it is incumbent upon this insurer to hire more staff. Every victim is entitled to a fair determination of their needs and benefits in a timely manner by a properly trained and experienced representative of the insurance company. Even after benefits are denied, this obligation continues while other benefits are being claimed.
It may be necessary to have a lawyer involved to consider whether a claimant is entitled to claim “punitive” or “aggravated” damages against the insurer for failing to honour its obligation to act in the “utmost good faith”. Letters sent by treating healthcare professionals, social workers or the victim him or herself will be of great assistance in establishing a “bad faith claim” against the automobile insurer.
It is equally important that claimants act responsibly towards the insurer. Timely filing of the Statutory Accident Benefit forms and providing the information that the insurer is entitled to receive is a parallel obligation that exits between an insured person and his or her insurer. Unfortunately, all too often, insurers take advantage of an insured’s lack of knowledge in relation to the forms that must be submitted and what information the insured is required to provide to the automobile insurer at the outset of the claim. Sometimes, the insurer’s request for information may be “overly broad”. When considering what information must be provided to an insurer at the outset of a claim, one may wish to consult with a lawyer to discuss what the true obligations are in this regard.
Where the relationship breaks down to such an extent that the insurer appears to be acting in an adversarial manner, there may be a need to involve a lawyer to consider a claim for “bad faith”. Bad faith claims are very difficult to prove against the insurer but, with sufficient documentation it may well be possible to prove that the automobile insurer fell short of its obligation to deal with its insured with the “utmost good faith”.
1 7025353 Ontario Inc. v. Non-Marine Underwriters Lloyds of London, [2000] O.J. No. 29 (Ont. C.A.)
2 Mamaca (by His Litigation Guardian) v. Direct Protect (2007), 50 C.P.C. (6th) 197; affirmed [2008] O.J. No. 2508 (Ontario Divisional Court)
By: Marcia Pritzker Schmitt
Class actions are a relatively recent phenomenon in Canadian law. Ontario did not have class action legislation until the Class Proceedings Act came out in 1992. Most Canadian jurisdictions, including Ontario, have seen an explosion in the number of class action cases brought within the past 5 years.
It would be hard not to notice the fact that class actions seem to be everywhere. In news reports across the country people are being advised of actions being launched for all sorts of claims from misleading shareholder reports, to poisonous foods, and exploding fuel depots. For most Canadians, the phrase ‘class action’ brings to mind visions of Hollywood’s David and Goliath-type legal dramas where giant corporations are called to account for causing death and destruction for the sake of profit.
But where do class actions come from and what do they mean for Ontario’s legal landscape?
WHY START A CLASS ACTION
Class actions are an ideal way to address situations where a number of individuals have similar claims and it would not be worthwhile for them to hire lawyers individually and pursue those claims.
In a class action, the entire class is represented by one or a few individuals, who are named in the Statement of Claim as the Representative Plaintiff(s). The other class members do not need to be named nor participate in the class proceedings in court, as long as their issues are common to all class members, and therefore form part of the main claim.
According to the Class Proceedings Act, 1992, there are three objectives to pursuing something as a class action, as opposed to an individual action: First, to improve access to justice; second, to increase judicial efficiency; and third, to modify the behaviour of wrongdoers.
WHAT QUALIFIES AS A CLASS ACTION?
Class actions are commonly pursued in cases of product liability, breach of shareholder rights, airplane or train accidents, or in claims like illegal surcharges on money services.
Class actions are subject to a unique set of rules and procedures, which vary in minor ways from province to province.
All class actions must be certified before they can proceed. This means that the plaintiffs bring a motion for the court to certify that a class action is the appropriate mechanism to advance the common issues of the class members.
In order to be certified, a class action must meet the following 5 criteria:
- the pleadings must disclose a cause of action;
- there must be an identifiable class;
- the proposed Representative Plaintiff must be appropriate;
- there must be common issues; and
- the class action must be the preferable procedure.
The pleadings must disclose a cause of action
The court wants to know that the claim is not being brought frivolously. The Plaintiffs have to show that it is plain and obvious that an identifiable wrong has been done, and that as a result of the wrong, the class has suffered harm. This is a lower threshold than what is required in standard (non-class action) cases.
There must be an identifiable class
A class can be any group of two or more persons.
The Plaintiffs have to show that the class can reasonably be identified. This does not necessarily mean that the exact names of the people in the class must be known at the time of the certification hearing, but the court must be satisfied that a reasonable person would be able to identify who is involved in the class. This is important because in Ontario a class action binds all of the class members, unless they opt out. If the class definition is ambiguous, people may not know if they are part of the class, and may lose the opportunity to exercise their rights within the process.
There must be an appropriate Representative Plaintiff
The Representative Plaintiff must:
- Fairly and adequately represent the interests of the class;
- Produce a plan for advancing the proceeding and notifying the class members; and
- Not have a conflict with the interests of the other class members.
The Representative Plaintiff does not have to have the most serious or valuable claim, nor do they need to fully understand all of the legal facts and issues. But he or she should be able to understand the basic nature of the claim and the purpose of the proceeding, and they must be able to give instructions to legal counsel. It is important for the Representative Plaintiff to be aware that they may be responsible for legal costs of the other side, should the action fail.
There must be common issues
The recent decision of Cullity, J. in Tiboni v. Merck Frosst Canada Ltd., 2008 CanLII 37911 (ON S.C.), confirmed that the test is not whether or not there are more common issues than individual issues, but rather whether or not common issues exist among the class members, and whether the resolution of these issues will advance the three objectives of the Class Proceedings Act: access to justice; judicial economy; and behavioural modification.
The Future of Class Actions
It is likely that the advantages that are provided by class actions will mean that the explosion in the number of class action proceedings in Canada will continue. In the past, it has been a daunting, if not impossible task for a single consumer, shareholder or victim to bring an expensive legal claim against defendants with virtually unlimited resources. Now, class actions have the potential to level the playing field. It is hoped that with this evolution in Canadian law, the goal of true access to justice has become a little less elusive.
Class Action is the preferred procedure
In Markson v. MBNA Canada Bank (2007), 85 O.R. (3d) 321 (C.A.), the Court of Appeal examined what is required to confirm that a class action is the preferred procedure. That decision found that a class proceeding is preferred if:
- it promotes the three objectives of the Class Proceedings Act : access to justice; judicial economy; and behavioural modification;
- a class proceeding is a fair, efficient and manageable way of advancing the claim AND it is preferable to other options, such as joinder of proceedings, test cases and any other method of advancing the claim; and
- consideration is given to the importance of the common issues of the claim, in relation to the claim as a whole.
Overhaul of Ontario’s Human Rights Complaint System
By Robert Brent
Groundbreaking changes to Ontario’s human rights system came into effect on June 30, 2008, intended to increase access to justice and the speed with which human rights complaints are resolved.
Significant changes have been made for complaints that proceed by the traditional route to the Ontario Human Rights Tribunal.
The Ontario Human Rights Code (the “Code”) applies to areas such as employment, housing, membership in trade and vocational associations and agreements for goods and services. The Code prohibits discrimination and harassment in those areas based on grounds like race, ancestry, disability, creed, sexual orientation, family status, marital status, and age.
Other key features of the recent amendments to the Code include:
- Complainants now have direct access to the Human Rights Tribunal. Previously, they made their complaint to the Ontario Human Rights Commission, which investigated the complaint and determined whether to refer the complaint to the Tribunal for a hearing;
- The time limit for applications is extended from 6 months to 1 year after the incident to which the application relates or, if there was a series of related incidents, the last incident in the series;
- A Human Rights Legal Support Centre, funded by the provincial government, has been created to provide free legal assistance to applicants to the Tribunal;
- The Tribunal has been handed broad powers to vary the hearing process, compel the parties to produce documents or witnesses, to directly question witnesses, and to define and narrow the issues before it;
- The Tribunal also has important new investigative powers, by which an inquiry can be ordered, where appropriate, to obtain evidence in response to a complaint;
- Parties will face tight timelines at each step of Tribunal proceedings, intended to move complaints forward promptly;
- Complainants can seek to have proceedings expedited or seek interim relief from the Tribunal;
- The Tribunal has authority to award monetary compensation to an applicant for loss arising out of the infringement of his or her human rights, including compensation for injury to dignity, feelings and self respect. The Tribunal also can order a party to make restitution to the party whose rights were infringed, other than through monetary compensation (i.e. an employer could be ordered to reinstate an employee); and • The Commission can seek to intervene in any application, with or without the consent of the complainant, and will retain power to pursue public inquiries.
For the first time, people who allege that their human rights have been infringed will have the option to pursue a complaint in Ontario’s courts, if that human rights complaint is combined with a recognized court claim. For example, an employee dismissed without reasonable notice – who also believes that he or she has suffered discrimination – will be able to combine a human rights complaint with a wrongful dismissal action in court.
The new approach may have particular benefit to disabled employees who assert that they have been dismissed on the basis of their disability. Furthermore, a judge now potentially has the ability to order an employer to reinstate the employee.
The ability of the courts to deal with human rights violations is not limited to employment disputes. Specifically, section 46.1 of the Code now provides that if the court, in a civil proceeding, finds that a party’s human rights have been infringed, the court may make an order directing the party who infringed the right to:
- pay monetary compensation for the other party’s loss arising out of the infringement, including compensation for injury to dignity, feelings and self-respect; and/or
- make restitution to the party whose right was infringed, other than through monetary compensation, for loss arising out of the infringement.
This represents a significant change to the law in Ontario and sets Ontario apart from most other Canadian provinces. Previously, the Supreme Court of Canada – in the absence of such language in the Ontario Code – had held that there was no recognized cause of action for discrimination, and an employee alleging a breach of his or her human rights was restricted to pursuing a complaint to the Human Rights Commission.
Meanwhile, the ability of a court to now award “compensation for injury to dignity, feelings and self-respect” also represents a departure from the past, in which damages were rarely awarded for hurt feelings alone. At the same time, a former $10,000.00 cap on compensation that could be awarded for mental anguish resulting from a human rights breach has been removed, both for the purposes of Tribunal and court proceedings. It remains to be seen what sort of awards might be made in the absence of that cap.
Similarly, the ability of courts to award non-monetary relief for a breach of someone’s human rights represents uncharted territory, and only time will tell how Ontario’s courts will approach the exercise of that authority.
By: Martha Binstock, B.Sc.P.T. CLCP, Rehabilitation Planning Inc.
After I developed the chart, entitled Assessing Attendant Care Using the Form 1, (which was published in Volume 8, Issue 2 of the Accident Benefit Reporter), I received several phone calls asking questions about the proper use and completion of the Form 1. It became increasingly clear that others were as frustrated as I about the lack of clear guidelines on how one is to correctly fill out the Form. There is tremendous difficulty finding comprehensive information regarding which Forms to use for which legislation. Trying to navigate the Financial Services Commission (FSCO) website can be challenging. While I am aware the Ontario Society of Occupational Therapists (OSOT) has a working group looking at these issues, its guidelines and findings are not readily available to other professionals also involved in completing the Form 1. Hence, there is no open forum for multi-professional discourse on issues related to it.
Therefore, it is my intention to write a series of articles that will stimulate discussion and encourage people to write in with questions or share their opinions on how they deal with Form 1 issues. Thomson, Rogers will provide input on what legal directions can be found from reviewing available case law and/or arbitration decisions.
PART 1: HISTORY OF THE FORM 1 /BILL 164.
For accidents, which occurred from January 1, 1994 to October 31, 1996, the Form 1 was first introduced to deal with attendant care calculations. The preamble on this form state, “Use this form to report the future needs for attendant care required by the client as a result of an automobile accident.”
Attendant care is subsequently divided into three levels:
Part 1: Level 1: Routine Personal Care
Part 2: Level 2: Basic Supervisory Functions
Part 3: Level 3: Complex Health/Care and Hygiene Functions
Part 4: Is the Calculation of Attendant Care Costs under each Level
Bill 164 legislated that the value for each attendant care level is to be indexed on a yearly basis. Therefore, since the inception of Bill 164, the indexed monthly rates have increased every year.
For those of you doing past attendant care assessments on Bill 164 cases (yes there are still many of them around) it is important to ensure that you are using the Bill 164 Form 1 correctly and calculating the benefit using the relevant indexed amounts for each Level of Care.
The chart below – (revised to meet the 2008 rates) is a handy reference guide outlining the yearly indexed amounts to be used in Part 4 calculations.
|
|
Calculations in Part 4
|
Monthly Maximums
|
||||
|
Year
|
Level 1
|
Level 2
|
Level 3
|
$3,000.00
|
$6,000.00
|
$10,000.00
|
|
1994
|
$ 8.75
|
$6.85
|
$14.00
|
$3,000.00
|
$6,000.00
|
$10,000.00
|
|
1995 |
$ 8.77
|
$6.85
|
$14.03
|
-
|
-
|
$10,200.00
|
|
1996
|
$ 8.97
|
$6.85
|
$14.35
|
$3,075.14
|
$6,150.28
|
$10,250.46
|
|
1997
|
$ 9.10
|
$6.85
|
$14.57
|
$3,121.27
|
$6,242.53
|
$10,404.22
|
|
1998
|
$ 9.25
|
$6.85
|
$14.80
|
$3,171.21
|
$6,342.41
|
$10,570.69
|
|
1999
|
$ 9.31
|
$6.85
|
$14.80
|
$3,192.41
|
$6,386.81
|
$10,644.68
|
|
2000
|
$ 9.55
|
$6.85
|
$15.29
|
$3,276.44
|
$6,552.87
|
$10,921.44
|
|
2001
|
$ 9.81
|
$6.85
|
$15.70
|
$3,364.90
|
$6,729.80
|
$11,216.32
|
|
2002
|
$10.07
|
$6.85
|
$16.11
|
$3,452.39
|
$6,904.77
|
$11,507.94
|
|
2003
|
$10.30
|
$6.85
|
$16.48
|
$3,531.79
|
$7.063.58
|
$11,772.62
|
|
2004
|
$10.53
|
$7.15
|
$16.84
|
$3,609.49
|
$7,218.98
|
$12,031.62
|
|
2005
|
$10.72
|
$7.45
|
$17.14
|
$3,674.46
|
$7,348.92
|
$12,248.19
|
|
2006
|
$11.08
|
$7.75
|
$17.72
|
$3,799.39
|
$7,598.78
|
$12,664.63
|
|
2007
|
$11.16
|
$8.00
|
$17.84
|
$3,825.99
|
$7,651.97
|
$12,753.28
|
|
2008
|
$11.44
|
$8.75
|
$18.29
|
$3,921.64
|
$7,843.27
|
$13,072.11
|
Minimum Wage (Level 2 rate) increase from $8.00 to $8.75 began March 31, 2008
If you have any questions regarding the above or would like to make a comment that can be considered for further articles, please contact me at rehabplan@rogers.com.
The material in this newsletter is provided for the information of our readers and is not intended nor should it be considered legal advice.
For additional copies or information about “Accident Benefit Reporter”, please contact Thomson, Rogers.
If you have any questions regarding the articles in this issue of the Accident Benefit Reporter, please contact the following authors:
Michael L. Bennett
mbennett@thomsonrogers.com
“Accident Benefit Reporter” is a publication of Thomson, Rogers, Barristers and Solicitors
Suite 3100, 390 Bay Street,
Toronto, Ontario M5H 1W2
Tel 416-868-3100
Toll Free 1-888-223-0448
Fax 416-868-3134
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Posted: November 1, 2008
