In this issue of the Accident Benefit Reporter, we are pleased to provide the second annual review and summary of significant decisions- reported during the past year. This review consists of cases that are governed by the current legislation, Bill 59. They also include decisions that fall under the two earlier regimes – Bill 164 and the Ontario Motorist Protection Plan (OMPP), where the decision may impact on future Bill 59 interpretations.
Despite the fact that Bill 59 came into effect over five years ago, on November 1, 1996, there are still many unresolved issues arising from this legislation. These cases highlight the complexity and ever changing nature of the law.
Many will already be aware that the government of Ontario is reviewing the current legislation and proposed changes are expected to be announced in the near future. We will attempt to keep you informed of these proposed changes, through a special mailing of the Accident Benefit Reporter and/or postings on our website.
Pafco Insurance Company v Lorna Howden (OABCS #0612)
The Plaintiff, in a claim for accident benefits from her insurer, Pafco, successfully argued that in calculating her gross income for the purposes of determining the insured’s entitlement to weekly income benefits, the insurer should include the value of benefits contained in the insurer’s collective bargaining agreement.
The benefits to be considered included life insurance premiums, short term and long term disability premiums, contributions to a private pension plan (not CPP) and pay equity adjustments.
CPP contributions, unused sick leave credits and vacation pay not made in four weeks prior to the accident were not included in the gross income calculation.
Hunt and Sutton Group Incentive Realty Inc. (2001) 52 O.R. (3d) 425
The Plaintiff, who was a part-time employee of Sutton Group, became noticeably intoxicated at an office party on company premises during working hours.
Despite the fact that the Plaintiff’s boss offered to call someone to pick her up, neither her boss or other management personnel took steps to prevent the Plaintiff from driving, despite knowing that a winter storm was developing.
The Plaintiff left the party with other employees and went to a restaurant where she consumed two more drinks. On the way home from the restaurant, the Plaintiff suffered serious head injuries, brain damage, multiple fractures and other injuries as a result of a motor vehicle accident.
The Court held that the employer owed a duty to the Plaintiff to safeguard her from harm. There was a management responsibility not to allow the employee to become intoxicated on the employer’s premises, as well as a positive responsibility to prevent her from driving when the employer knew she was intoxicated.
The restaurant, as a commercial host, was also found to owe a positive duty to the Plaintiff not to allow her to drive home in an intoxicated state and to get the Plaintiff home safely by taxi, require her to hand over her keys or call the police.
The Plaintiff was found 75% contributorily negligent for her own injuries and the employer and restaurant were found jointly responsible for the remaining 25% of the Plaintiff’s damages.
Briggs v. Maybee et al. (2001) 53 O.R. (3d) 368
An injured party who has NOT suffered “catastrophic injuries” may nevertheless claim for housekeeping and home maintenance expenses in their tort claim.
These expenses are not considered “health care expenses” and therefore are not subject to s.267.5(3)(4) of the Insurance Act which allows excess health care expenses to be claimed in tort only where the injury is catastrophic.
TTC Insurance Company Limited v. Adosinda Correia (OABCS #0614)
Ms. Correia’s insurer arranged a Functional Capacity Evaluation (FCE) for Ms. Correia to determine whether she continued to be entitled to accident benefits.
While the FCE found that Ms. Correia had recovered from her injuries suffered in the original MVA, Ms. Correia complained that her symptoms were aggravated by the FCE examinations and testing. In addition, Ms. Correia argued that the FCE caused new injuries which disabled her from work.
At Arbitration and upheld on appeal to the Director’s Delegate, it was held that the risk of attending a rehabilitation assessment or program was a reasonably foreseeable risk to the insurer. As such, the aggravation of the original MVA injuries by the FCE was considered to be a continuation of the original injuries, and consequently weekly income benefits were held to be payable based on the injuries sustained during the FCE.
Lav v Li (2001) 53 0.R (3r) 727 (leave to Divisional Court Denied)
This case has helped clarify the seemingly contradictory decisions on the issue of whether a person from Ontario who is injured in another province, may sue in Ontario applying Ontario Law.
The court in this case recognized that there can be an exception of the Lex Loci Delicti Rule (the law of the location of the accident applies), where applying the law of the place where the accident occurred creates a major injustice.
In this case, an Ontario resident injured in Quebec was entitled to sue in Ontario, as their injuries were clearly catastrophic and would have met the threshold in tort. In Ontario, unlike Quebec, the claimant would be able to claim for all future care costs and medical rehab costs. This was seen as a
major injustice to the injured party. In addition, Quebec has no provision for Family Law Act Claims.
Co-Operators General Insurance Company and John Pierre Moons (May 28, 2001) FSCO Appeal P00-00033
A claim by the insured’s mother for lost wages while caring for her son was denied as a “Visitor’s Expense” under s.21 of the Regulations.
Throughout the decision, Director, David Draper, alludes to the fact that if the claim had been presented as an attendant care claim under s.16, it would have been allowed.
It is helpful in cases of this nature for the insured to obtain a letter from the nursing staff or social worker indicating that there is insufficient hospital staff to provide the degree of care necessary by the insured, and as such, that a family member was required to provide the care.
Ginette Lacroix v. Halifax Insurance Company (OABCS # 9655)
The Insurer must prove that the insured received a clear and unequivocal refusal of benefits for the limitation period to start to run. Here where the insurer could point to a notice of termination but could not prove a specific date when it was sent to the insured, the insured was not barred in their application, which was filed beyond the two year limitation period.
Nwakwesi v. Security National Insurance (2001) OIC File A00-000607
In this case, the victim was driving a car owned by his wife (from whom he was separated) when he was involved in an accident. He applied for benefits and was denied on the basis that he ought reasonably to have known that the car was not insured.
The victim gave evidence that he was unaware that the car was not insured.
The Arbitrator held that the test to be applied was “what a reasonable person, given the information that the victim was aware of, could reasonably be expected to know”. The test was not what a reasonable person would have done to inform himself.
Mahadan and Co-operators (2001) OIC File A00-000489
The word “accident” in the current legislation is defined more strictly than in the previous legislation. An accident must directly cause injury – whereas, in the previous legislation, an accident
could be a direct or indirect cause of injury.
It is insufficient that the injured person was operating the vehicle at the time or that the injury occurred in the automobile or that the automobile was involved incidentally. A “direct cause” is defined as that active cause that sets in motion a chain of events which brings about a result, without intervention of any force (also see Chisholm and Liberty Mutual Group (2001) Ontario Superior Court of Justice currently under Appeal to the court of appeal).
Ndem and General Accident Assurance of Canada (2001) OIC File A98-000489
French-speaking persons have the right to be assessed at a DAC by French-speaking assessors, without the assistance of interpreters.
The Estate of the late Jack Bitan v. CGU Insurance Ontario Accident Benefit Case Summaries # 9728
Where an application for income replacement benefits was submitted prior to the death of the insured, and where the insurer had terminated benefits prior to the death, the estate was permitted to continue with the claim.
Travel Insurance Co-Ordinators Limited v. ING Halifax Insurance Ontario Accident Benefit Case Summaries # 9732
The insured was injured in a M.V.A. outside of Ontario. The insured purchased private travel insurance from Travel Insurance Co-ordinators which included payment for certain medical expenses.
In a dispute as to which insurer was the primary payor between a privately purchased travel insurance policy and the insured’s Ontario automobile policy, the automobile policy was held to be the “primary payor” because the travel policy specifically indicated it was a “second – payor plan”.
The automobile insurer could not rely on subsection 60(2) of the Schedule which indicates that the automobile insurer is not required to pay for medical benefits which are “reasonably available under any insurance plan”.
Campeau and Liberty Mutual Insurance Company (2001) OIC File A00-00522 (Wendy Moore Mandel)
This case describes the expanded obligations of insurance companies to produce information and documentation to its insured. Arbitrator Blackman held that the insured was entitled to receive copies of virtually all information in the insurance company file, including: all medical reports, draft reports and clinical notes (whether relied upon by the insurance company or not); correspondence between the insurance company and any medical assessors; copies of the adjuster’s notes; and all surveillance or investigative information – including videotapes, photographs, reports, notes and summaries.
This case was one of the first of a growing number of cases which have proved to be an asset to injured parties who are making claims against their own insurance company for accident benefits.
See also Mizzi v York Fired Casualty Insurance (OABCS # 9717)
Krusto and General Accident Assurance of Canada (2001) OIC File A99-00392
This case involved a woman who had significant pre-accident health problems; however, was able to work until she was involved in a motor vehicle accident. Following the accident, she was unable to maintain consistent employment.
The Arbitrator held that applicants with pre-existing conditions qualify for accident benefits if the accident is a “significant or material contribution to the applicant’s impairment”. The accident need not be the only cause of the applicant’s impairment.
This case is important because it confirms that applicants with pre-existing problems, who nevertheless are able to function on a day-to-day basis prior to the accident, are not disqualified from receiving benefits when then accident exacerbates these problems.
Lombardi and State Farm Mutual Automobile Insurance (2001) OIC File A99-000957
In order to receive an income replacement benefit more than two years post accident, an insured victim must suffer a “complete inability to engage in any employment for which s/he is reasonably suited by education, training or experience”. This is a very difficult test.
The Arbitrator explained that a literal reading of those words would exclude all but the catastrophically injured person to qualify for the income benefit beyond two years. Further, the insured victim’s education, training and experience must be reviewed in order to determine the “any employment” test.
Lucia Stargratt v. Zurich Insurance (OABSC # 9699)
(Michael L. Bennett)
For the purposes of claiming entitlement to caregiver benefits, a motor vehicle accident need not be the sole cause of the injury complained of but rather, need only be a material or significant contributor to the impairment. In this case, the insured person suffered from heart tremors pre-accident which worsened following a motor vehicle accident. The arbitrator found the applicant was entitled to caregiver expense incurred at about $7.00/hour which was “at least minimum wage”. In addition, the injured person does not need to actually expend money out of pocket to claim the caregiver benefit. So long as an injured person is obliged to pay someone else for caregiving services then the insurer will be required to reimburse the injured person for this obligation.
Roza Kolonjari v. Cumis General Insurance (OABCS # 9701)
An injured person attended chiropractic and massage therapy treatments for six years. The insurer refused to pay for this chiropractic treatment and the massage therapy and requested that the injured person attend a Designated Assessment Centre to determine whether these modalities of treatment were still “reasonable and necessary” after this extended period of time. The Designated Assessment Centre ruled that these passive modes of therapy were “no longer reasonable or necessary”. At the Financial Services Commission of Ontario, the arbitrator rejected the ruling of the Designated Assessment Centre and decided that “relief of pain is a legitimate goal of medical and rehabilitation treatment” and that the insurer was required to pay these medical and rehabilitation benefits.
Chet Shubrooke v. Lombard General Insurance (OABCS # 9704)
Following a motor vehicle accident, an injured person elected to receive compensation through the Workers’ Compensation Board. As the injured person’s injuries deteriorated, he re-elected to apply for statutory accident benefits from his automobile insurer and commence an action in the courts for his tort damages. The automobile insurer then claimed that the injured person missed the 30-day limitation period for notifying it of his intention of claiming statutory accident benefits.
The arbitrator decided that the 30-day limitation period to apply for statutory accident benefits begins when the injured person who may elect for Workers’ Compensation benefits learns of his ability to meet the threshold to bring an action in tort. Also of note, is the arbitrator’s decision that in order to satisfy the 30-day limitation period to claim statutory accident benefits one need not forward a completed Application for Accident Benefits to an insurer. Instead the injured person may comply with the 30-day limitation period by notifying the insurer of an intention to claim accident benefits and with providing details of the accident.
Whiten v. Pilot Insurance Co. (2002) S.C.C. 18 File NO.; 27229
Supreme Court of Canada recently restored a jury verdict awarding an insured person $1,000,000.00 in damages for bad faith against an insurer. The court decided that in addition to the contractual obligation to pay a claim, an insurance company is under a distinct and separate obligation to deal with its policyholders in good faith. Where an insurer acts in a planned and deliberate manner over the course of a significant period of time and unreasonably believes that it is not required to respond to a claim, it may then become liable to pay punitive damages. The court explained that insurance contracts are sold by the insurance industry and purchased by members of the public for their peace of mind. The more devastating the loss and the more the insured may be at the financial mercy of the insurer, the more careful an insurance company should be when it decides not to pay a claim.
This decision is significant as it establishes a new high water mark for the payment of an award of punitive damages. It also seems to state that an insurer’s obligation to act in good faith is linked to the vulnerability and personal needs of the policyholder.