If requested by an accident benefits insurer, a person injured in a car accident “shall” submit to an examination under oath. These examinations can take hours and cover all aspects of the accident, nature of the injuries, the types of benefits claimed, etc. If a request for an examination under oath is made, the insurer must provide to the insured, pursuant to section 33(4)(3) of the Statutory Accident Benefits Schedule (“SABS“), the “reason or reasons” for the examination under oath.
These requests are of critical importance, as the consequence for refusing to comply is the possible suspension of accident benefits for the period of non-compliance.
In the decision of Aviva Insurance Company of Canada v. McKeown, released on July 4, 2017, the Ontario Court of Appeal considered whether the word “reason” in section 33(4)(3) amounts to a “justification” or something less. Unfortunately for injured car accident victims, the Court held that no justification is required in order for an insurer to request an examination under oath. Rather, the Court held that “a general statement of the purpose of the examination under oath that gives the applicant notice of the general type of questions that will be asked is sufficient”.
The Court’s decision is concerning for a number of reasons; some of which include:
- The Court did not seem to consider the suspension of benefits to be an especially problematic consequence. The Court noted this consequence to be “much less onerous” than other consequences for non-compliance provided under the SABS (e.g. the consequence of being prevented from proceeding to arbitration if having failed to attend an insurer examination). Presumably, a person injured in a car accident who has a family to support and who was relying post-accident on an income replacement benefit as his or her sole source of income might consider the suspension of that benefit to be extremely “onerous” – so much so that they submit to the examination under oath even where he or she has legitimate reasons to contest the sufficiency of the reasons for the examination under oath.
- The Court accepted that the legislative objectives of the examination under oath were to “reduce insurance costs, address fraud, and increase accountability within the system”. In the vast majority of cases, however, fraud is not a concern and the examination under oath only serves to increase costs. Much of the time, the information sought by the insurer can be provided by the insured through other, much less costly means; such as: completion of the accident benefits forms (e.g. OCF-1, OCF-2, and OCF-3), documentary production, a statutory declaration, or a letter provided by the insured’s lawyer. Comparatively, an examination under oath typically involves the costly process of having a roaming adjuster travel to the insured’s lawyer’s office; the injured insured travelling to the lawyer’s office; the insured and his or her lawyer having a preparation meeting in advance of the examination under oath; the hiring of a court reporter; all parties attending the examination under oath (sometimes for hours); and the cost of ordering a transcript.
- While the Court noted that an insured has recourse if there is a genuine belief that the request for the examination under oath is improper, that recourse results in little direct benefit to a person injured in a car accident. The recourse referred to is a complaint to the Financial Services Commission of Ontario that the insurer has engaged in an “unfair deceptive act or practice” (“UDAP”). The problems with resorting to a UDAP complaint include:
- it is a process that can take months as it involves an investigation;
- the result, if the insured is successful, is typically a letter of caution to the insurer or a letter holding that the insurer has engaged in a UDAP – the result is not an Order compelling the insurer to pay the benefit that was wrongfully suspended;
- given the foregoing, even if the insurer willingly pays the benefit that was suspended, it is unclear that there is any obligation to pay interest since this is not an Arbitration finding that the benefit was due and owing, but rather a finding that the request for the examination under oath amounted to a UDAP.
In summary, the Ontario Court of Appeal’s decision is not a helpful one for the insured. To avoid requests for examination under oath, those injured in a car accident (and their lawyers) ought to make best efforts to carefully complete insurance forms, to comply with requests for productions and information in a timely manner, and to maintain an open and co-operative dialogue with the adjuster so that any confusion can be promptly clarified.
For other articles regarding other notice requirements under the SABS see: