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Wednesday, August 16, 2017

 
 
 

 
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Motor Vehicle Accidents

The New Dispute System for Accident Benefits Claims: You Lose Before You Even Begin

It is a common legal principle in civil law that the party that loses a case must pay at least some of the winner’s costs, which can include legal fees and disbursements. This is based on the tenant of access to justice, which allows anyone regardless of economic resources to advance a claim against a party that has wronged him or her. In the context of the accident benefits system, it means that an injured person can advance a dispute against an insurance company and, if they are successful, their legal costs will be paid. They are not hindered in advancing a claim because they cannot afford to do so.

On April 1, 2016, all disputes for accident benefits from motor vehicle accidents in Ontario were moved into a new system through the License and Appeals Tribunal (LAT) through the Ministry of the Attorney General. With a new system came new rules. One of the most concerning is Rule 19, which deals with costs.  A recent LAT decision with respect to this rule deemed that costs can only be claimed if a party has acted unreasonably, frivolously, vexatiously or in bad faith within the dispute resolution process.  In other words, as long as both parties have acted well within the dispute resolution process, costs will not be awarded, no matter how egregious an insurer might have been in denying benefits.

In our view, this is totally unjust and unfair.

At Smitiuch Injury Law we fully intend on appealing any adverse decisions on costs and will raise the access to justice principle in order to declare the current Rule 19 void.

Neuropsychological Assessments and the $2,000 AB Cap

In September of 2010, the Statutory Accident Benefits Schedule (SABS) were amended with respect to Costs of Examinations.  A cap of $2,000.00 was placed on each assessment completed, either for the insured or the insurer.

This cap has proven difficult for some more complex assessments, including neuropsychological assessments.  In order to obtain a reliable assessment the cost is well beyond $2,000.00.

Many in the accident benefits community (plaintiff lawyers acting on behalf of injured victims, as well as insurers) have been getting around this cap by dividing up the assessment into two distinct assessments; normally a “psychological” assessment and a “neuropsychological” assessment.  For the most part this has been widely accepted as a way to comply with the statutory limit while getting a fairly reliable assessment report.  There have been a few insurers who have not agreed with this approach.

A recent FSCO arbitration decision, Breadner and Co-operators [FSCO A15-005120] has challenged this approach.

A Treatment and Assessment Plan (OCF-18) was submitted on behalf of Ms. Breadner with the following breakdown of costs:

  • Neuropsychological Interview – $2,000.00
  • Neuropsychological Testing – $2,000.00
  • Neuropsychological Screen related to the OCF-18 – $250.00
  • OCF-18 – $200.00

With taxes, the total amount of the proposed OCF-18 was $5,028.50.

Co-operators paid $2,200.00 for the cost of one assessment, plus $200.00 for the cost of completing the OCF-18.  They also paid the applicable HST for one assessment.  Ms. Breadner applied for arbitration to claim the costs of the second assessment.

Arbitrator Caroline King determined that the assessment work constituted one assessment within the meaning of the SABS.  She noted that the OCF-18 identifies a neuropsychological assessment and the documents/reports themselves had the same purpose identified, the same author of both reports on the same date, the same dates of examination and the same tests administered.  It was also noted that the results and information in the second document were incorporated by reference into the first document.

Arbitrator King concluded that, “When these points are considered as a whole, I find that the nature, content, and language of the documents clearly supports a finding that the work done constituted one assessment.”

This decision presents a quandary for both injured individuals as well as insurers.  Unless the two assessments are distinct, they may not be entirely paid for by the insurer.  However, any insurance company taking this position would do so at their own peril, as it would also prohibit them from getting a complete neuropsychological assessment as well under Section 44 of the SABS (insurer’s examinations).

The entire decision can be read in its entirety at the link below:

Breadner and Cooperators – Neuropsych and Psych as one assessment

Chiocchio v. City of Hamilton et al.

On December 7, 2016, the Honourable Mr. Justice Skarica released his Reasons for Judgment after a trial before him in Hamilton. This action arose from a tragic motor vehicle accident which resulted in the Plaintiff (our client) being rendered a quadriplegic. The losses and damages suffered by the Plaintiff were considerable. The trial proceeded before Justice Skarica on the issue of liability only. While one of the Defendants admitted some fault for the accident, the main issue was whether the City of Hamilton was liable also.

The evidence during the trial established that the intersection in question had a history of accidents and that the City failed to paint the stop line at the intersection despite the recommendation to do so. The visibility at the intersection also became poor the further back that a motorist stopped. In the end, Justice Skarica found the City of Hamilton liable and apportioned fault at 50% against the City and 50% against the Defendant driver. In finding liability against the City, Justice Skarica concluded as follows:

“In my opinion, the evidence establishes that the condition of the intersection with the faded stop line posed an unreasonable risk of harm to a reasonable driver. Accordingly, I find on a balance of probabilities that the City of Hamilton failed to keep the intersection at 5th Concession West and Brock Road in a reasonable state of repair.”

Click here to read the full Judgment on CanLII. (Chiocchio v Ellis, 2016 ONSC 7570 (CanLII))

Peter Cho and Michael Smitiuch were trial counsel for the Plaintiffs.

Concussions – Not a “get up and shake it off” injury

The seriousness of concussions cannot be overstated.

Health care providers are becoming more aware of the effects of concussions (also known as Acquired Brain Injury – ABI).  What was once a, “get up and shake it off” occurrence, has now become a proper assessment with protocols for monitoring the status of the individual as they return to work or sports.

ABI is a physical injury to the brain (concussions). It can be caused by a blow to the head, severe rotation of the neck or whiplash, or even from a lack of oxygen. Over 160,000 Canadians suffer brain injuries every year and, with better reporting, that number gets more accurate and thus keeps rising.

concussions

Concussions can occur many different ways and can have many different symptoms. No two concussions are identical.

About 50% of ABI’s come from falls and motor vehicle accidents.  While many injuries are mild and fully recover (80 – 90% in 7 – 10 days), many can last for much longer.  Some of the symptoms are temporary – headaches, vomiting, concentration issues, memory issues and balance problems. However, some issues can be longer standing – personality changes, sensitivity to light and noise, sleep problems, depression and other psychological issues.

 

Prognosis for ABI’s depends on many factors.  Red flags include post traumatic amnesia, history of previous ABI, skull fracture, nausea and dizziness after injury.

 

Treatment for concussions are rest, rest, and more rest.  Also, those recovering have to limit their exposure to stimulation and thinking that taxes the brain (computer screens and video games).  Return to work or sports is the responsibility of the treating doctor.  Premature return increases risks of second impact syndrome (can be fatal).

 

The seriousness of this condition cannot be overstated.  New imaging techniques are developed to show the extent of the injury and direct treatment.  Hopefully those tests will help those suffering to have the greatest chance of recovery and advocacy.

 

This article was originally published in the Fall 2016 issue of Disclosure. Click here to read the complete newsletter.

Catastrophic Impairment Denial Not Subject to Limitation Period

Because a catastrophic impairment designation is not a “benefit”, as defined under the Statutory Accident Benefits Schedule (SABS), there is no time limitation for disputing an insurer’s denial.

On January 6 2009, Zofia Machaj submitted an Application for Determination of Catastrophic Impairment (OCF-19) to RBC Insurance.  After conducting insurer’s examinations, RBC responded on May 25, 2009, stating that, “the assessors have formed the consensus opinion that you have not sustained a catastrophic impairment and therefore you do not qualify for the increased benefits.”

In order to dispute RBC’s denial, an Application for Mediation was submitted by Ms. Machaj on July 18, 2011, which was almost two months beyond the two year limitation period that the Insurance Act stipulates is required.  Section 281.1 of the Insurance Act establishes a limitation period, provides that a mediation proceeding, “…shall be commenced within two years after the insurer’s refusal to pay the benefit claimed” (emphasis added).

In 2015, Whitten J. issued a decision on a Summary Judgment Motion in the matter of Machaj v RBC General Insurance Company [2015 ONSC 4310], wherein he found in favour of RBC Insurance and ruled that the two-year limitation applied, because the denial, “…flushed out the consequences of the denial of the status of catastrophic impairment; namely, the enhanced benefits were not available.”

Ms. Machaj appealed.  The Ontario Court of Appeal disagreed with Judge Whitten’s decision, noting that, “In our opinion, by adding the words, “and you therefore you do not qualify for the increased benefits”, the respondent insurer was doing nothing more than telling the appellant that she lacked status to claim increased benefits. The additional words did not convert what was, in substance, a denial of a catastrophic determination into a denial of the specific benefits that would trigger the commencement of the two year limitation period.”

RBC Insurance sought leave to appeal to the Supreme Court of Canada, but it was dismissed with costs.

As such, under the current legislation, an insured person is not bound to dispute an auto insurance company’s denial of catastrophic impairment determination within two years, unlike a denial of an actual “benefit” under the SABS.

If you have been injured in an automobile accident and your insurance company has denied anything, it is always best to consult with a lawyer to ensure that your interests and entitlements are protected.

Insurer Has Obligation to Ensure Graduated Return to Work is Possible: FSCO

A recent arbitration decision from the Financial Services Commission of Ontario (FSCO) has concluded that an accident benefits insurer has an obligation to ensure that a graduated return to work is possible before terminating income replacement benefits.

In the decision Nader and State Farm [FSCO A13-003230], Javed Tabey Nader was injured in a motor vehicle accident and was unable to return to his pre-accident job.  His accident benefits insurer, State Farm, sent him to insurer’s examinations and the assessors concluded that he could participate in a graduated return to work program.  State Farm then notified Mr. Nader that they were discontinuing his income replacement benefits after the period that the insurer’s assessors concluded that the graduated return to work would be completed.

No one from State Farm ever checked to see if Mr. Nader’s employer was able to accommodate a graduated return to work, which it could not.  Moreover, when State Farm was advised that Mr. Nader did not return to work, State Farm did not find out why this did not happen and simply maintained their denial.

Arbitrator Bujold concluded that Mr. Nader was entitled to income replacement benefits for the first two years of his accident benefits claim and made the following comments with respect to a special award of $5,000.00:

Dr. Armitage’s opinion that Mr. Nader could return to work was premised on the availability of a graduated return to work program, and the provision of active rehabilitation and other supports as may be reasonably required to facilitate the attempt. However, neither Dr. Armitage nor State Farm knew whether graduated work was available, and the OCF-9 provided no guidance or direction to Mr. Nader with respect to what was expected of him in terms of investigating, arranging or participating in a graduated work return. More importantly, when advised that Mr. Nader had not returned to work, State Farm took no steps to ascertain the reasons for his non-return to work, help determine the availability of graduated work, and either help facilitate a graduated return to work (if available) or proceed with a vocational assessment to explore other employment options, including possible upgrading. Instead, State Farm simply maintained its denial. In these ways, State Farm acted unreasonably, and its withholding of income replacement benefits from this point became subject to a special award.

This decision is an important lesson to insurers of their obligation to keep an open mind and to continue consideration of entitlement to accident benefits even after the benefit has been denied.

The decision can be read in its entirety by clicking on the link below.

Nader and State Farm – Special Award

 

Important Changes are Coming to Your Car Insurance Policy

While no one likes to pay car insurance premiums, these are meant to provide you with peace of mind in the event that you are ever injured in a motor vehicle accident. It is very important that you plan for the worst-case scenario so that you will have the funds that you need to cover your medical, rehabilitation, attendant care, and other expenses if you are seriously or catastrophically injured.

As of June 1, 2016, all new or renewed automobile insurance policies written in Ontario will significantly lower the standard amount of accident benefits available to an individual who is injured in a motor vehicle accident.

Accident Benefits are available to anyone in Ontario injured in a motor vehicle accident, regardless of fault.

The most significant changes to the standard policy will be as follows:

Benefit Current Policy New Policy You can choose1
Medical and Rehabilitation for non-catastrophic injuries $50,000 These benefits have been combined and reduced to $65,0000 total Increase the benefit to $130,0002 total
Attendant Care for non-catastrophic injuries $36,000
Medical and Rehabilitation for catastrophic injuries $1,000,000 These benefits have been combined and reduced to $1,000,000 total An addition $1,000,000 for a total of $2,000,0002 for catastrophic injuries
Attendant Care for catastrophic injuries $1,000,000
Medical, Rehabilitation and Attendant Care, all injuries Not applicable Not applicable Increase the combined non-catastrophic benefit to $1,000,000 and the combined catastrophic benefit total to $2,000,0002 3
  1. If you have previously chosen to purchase these optional benefits check your policy – they may have changed to reflect amounts available in new options.
  2. Medical, Rehabilitation and Attendant Care benefits for minor injuries are fixed at a maximum limit of $3,500.
  3. If you purchase both the additional Medical, Rehabilitation and Attendant Care benefit for catastrophic injuries and for all injuries, the total eligible benefit amount for a catastrophic impairment would be $3,000,000. There are additional optional coverages available to increase your income replacement benefit from the basic maximum of $400.00 per week, in case you are unable to work. You can also get coverage for caregiver and housekeeping and home maintenance benefits for non-catastrophic injuries.We strongly advise you to discuss your policy with your insurance broker or agent before your policy is renewed after June 1, 2016, to ensure that your needs are met. While no one wishes the worst, it is good to have the coverage if it is ever needed. Many of our clients will attest to this.

There are additional optional coverages available to increase your income replacement benefit from the basic maximum of $400.00 per week, in case you are unable to work. You can also get coverage for caregiver and housekeeping and home maintenance benefits for non-catastrophic injuries.

We strongly advise you to discuss your policy with your insurance broker or agent before your policy is renewed after June 1, 2016, to ensure that your needs are met. While no one wishes the worst, it is good to have the coverage if it is ever needed.  Many of our clients will attest to this.

Proposed Amendments to Ontario Automobile Insurance Dispute Resolution System

The Ontario Government has released its proposed amendments to the Insurance Act regulations regarding the Ontario Automobile Insurance Dispute Resolution System (AIDRS).

Effective April 1, 2016, an individual who wishes to dispute a denial by an insurance company for statutory accident benefits will go through the Ministry of the Attorney General’s License Appeal Tribunal (LAT) and not the Financial Services Commission of Ontario (FSCO).

The proposed amendments include the following:

  • Applications for mediation, neutral evaluation, or the appointment of an arbitrator for arbitration will not be accepted by FSCO after March 31, 2016.
  • Applications to the Director of Arbitrations for appeals may only be made where the application for the appointment of an arbitrator was received by FSCO on or before March 31, 2016.
  • Applications to the Director of Arbitrations for variation or revocation may only be made where the application for the appointment of an arbitrator was received by FSCO on or before March 31, 2016.
  • The Office of the Director of Arbitrations shall be continued until the date on which all notices of appeal and all applications for variation or revocation have been finally determined.
  • Statutory Accident Benefits Schedule (SABS) provisions that apply to the dispute resolution process at FSCO will continue to apply, as they read on March 31, 2016, to all applications that were received by FSCO before the transition date but are not finally determined before that date. The SABS will also be amended, where necessary, to apply to applications filed at the LAT on or after April 1, 2016.

Comments on the proposal are due by January 23, 2016.

The posting can be read in its entirety by clicking on the link below:

http://www.ontariocanada.com/registry/view.do?postingId=20442&language=en

Change to Economic Loss Payment Not Retroactive: Court

A judge of the Ontario Superior Court of Justice has ruled that a change to the Statutory Accident Benefits Schedule (SABS) which became effective on February 1, 2014, does not apply to accidents prior to this date.

In the decision David v Wawanesa Mutal Insurance Company [2015 ONSC 6624], Quinlan J. considered whether Section 2 of Ontario Regulation 347/13 applies to accidents prior to February 1, 2014, when this regulation came into force.

In September of 2010 a change to the SABS allowed for non-professionals (e.g., family or friends) to be compensated for the attendant care that was provided to a person injured in a motor vehicle accident only if that non-professional suffered an “economic loss”.  The term “economic loss” was not defined.  The Ontario Court of Appeal later ruled, in its decision on Henry v Gore Mutual Insurance, that if a non-professional suffered an economic loss, they were entitled to the full amount of the monthly attendant care needs (Form 1) and that reimbursement was not limited to the actual amount of the economic loss.  In other words, once a non-professional established that an economic loss had been demonstrated, the full amount of attendant care benefit was payable as assessed.

In December of 2013 the Government of Ontario filed Ontario Regulation 347/13 to limit the amount of compensation for a non-professional to the actual amount of the economic loss sustained.  This regulation went into effect on February 1, 2014.  The regulation is silent on whether or not it is retroactive.

Quinlan J. states as follows:

[31]           Therefore, I accept the plaintiff’s position that attendant care benefits are a contractual right to which an injured person is entitled.  The contract of insurance between an insured and insurer creates rights and obligations, including the right to attendant care benefits.  As such, despite the fact that SABS are a government-legislated scheme, the treatment of other benefits bestowed by legislation and cases dealing with those benefits do not assist in deciding the issue before me.

[34]           The fact that legislation is remedial does not necessarily mean that it is intended to apply retrospectively (R. v. Evans, 2015 BCCA 46 (CanLII), 321 C.C.C. (3d) 130 at para. 33).  As the Court of Appeal held at para. 60 of R. v. Bengy, 2015 ONCA 397 (CanLII), 325 C.C.C. (3d) 22, if the need for immediate reform of the law were so pressing, why would the legislature not have explicitly made the law retrospective?  There is nothing in the record, including the explanatory notes, that demonstrates a clear legislative intent that the amendment is to apply retrospectively.

[35]           Accordingly, the presumption has not been rebutted and therefore applies.  I find that the plaintiff has a vested right to payment of the attendant care benefit to which she was entitled on the date of her accident.

The decision can be read in its entirety by clicking on the link below:

http://www.canlii.org/en/on/onsc/doc/2015/2015onsc6624/2015onsc6624.html

FSCO Announces Changes to SABS, Attendant Care Hourly Rates

The Financial Services Commission of Ontario (FSCO) has announced major changes to the Statutory Accident Benefits Schedule (SABS), effective June 1, 2016.

These changes include the following:

  • Medical and Rehabilitation Benefits, as well as Attendant Care Benefits, will be combined with respect to limits
    • For non-catastrophic claims, the maximum will be $65,000.00 for up to five years from the date of accident
    • For catastrophic claims, the maximum is $1,000,000.00, over a lifetime
  • Non-Earner Benefit – $185.00 per week, payable after four weeks but only to a maximum of two years following the accident
  • Catastrophic Impairment Designation – a whole new criteria for determining catastrophic impairment will be in force

FSCO has provided a new Attendant Care Hourly Rate Guideline, reflecting an increase to $11.25 per hour, effective October 1, 2015.

The Professional Services Guideline fees for 2015 remain unchanged from the previous year.

The bulletin can be read in its entirety by clicking on the link below:

http://www.fsco.gov.on.ca/en/auto/autobulletins/2015a/Pages/a-06-15.aspx

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