The Test for Catastrophic Impairment

A recent decision by the Divisional Court in Ontario provides a plaintiff-friendly interpretation of the test for catastrophic impairment under the SABS.

In Security National Insurance Co. v Hodges, 2014 ONSC 3627 (Div. Ct.), GCS scored administered within 30 minutes of the accident were 11.  He underwent surgery the day after the accident and scores fell to 3 while he was intubated, but rose to 10 once the trachea was removed. Roughly three days following the accident – and while still under the influence of medication – several GCS tests were administered and resulted in scores of 9.  MRI and CT scans done at the time suggested that, while Mr. Hodges had suffered a brain injury from the accident, the extent of the injury was quite limited. GCS tests administered over the following days showed continuing improvement and the final GCS test indicated no impairment in consciousness.

The insurer denied the plaintiff's application for catastrophic impairment.  The arbitrator found that the plaintiff met the test for catastrophic impairment and this finding was affirmed under appeal to FSCO.  The insurer appealed to the Divisional Court. 

In upholding the FSCO decision, the Divisional Court stated that what constitutes a reasonable period of time to conduct the GCS test should be determined on a case-by-case basis. It found that, in this case, the test was conducted within a reasonable period of time, given that the injured individual was still experiencing fluctuating levels of consciousness at the time of the test. The court rejected the argument that the GCS score had to have “prognostic value,” saying that this would turn the legal test for catastrophic impairment into a medical test. The court also rejected the argument that the statute required that the brain injury be the sole cause of the score of 9 or less, saying: “It is sufficient that the person claiming catastrophic impairment had any brain injury causing any impairment….”

It will be interesting to see if Hodges results in a greater number of applications for a CAT designation.  Of course, the claimant still needs to show entitlement to benefits even if successful.

Evidence Required to Dismiss a Non-Earner Benefits Claim

In Willoughby v.Dominion of Canada General Insurance Co, 2014 ONSC 1136 (S.C.J.), the plaintiff sustained injuries in a motor vehicle accident on July 8, 2004. The plaintiff settled her claim for income replacement benefits with her insurer and proceeded to bring a claim for non-earner benefits.

The insurer brought a motion for summary judgment on the basis that the plaintiff did not satisfy the test for non-earner benefits. To support the motion, the insurer submitted an affidavit relying on the oral evidence given by the plaintiff at her examinations for discovery that showed she had continued to engage in her pre-accident activities. The plaintiff opposed the motion and submitted an Affidavit sworn by the plaintiff, a report of a neurologist and a report from an occupational therapist, all highlighting the differences in her pre and post-accident life. The insurer did not cross-examine on the affidavit nor did they submit an affidavit in response. Given this the court held that the evidence provided by the plaintiff would be considered undisputed.

In their reasoning, the court relied on the Ontario Court of Appeal’s decision in Heath v. Economical [2009] O.R. (3d) 785 for the general principle that in cases where pain is a primary factor preventing the claimant from engaging in substantially all of her pre-accident activities the question is not whether the insured is physically able to do these activities, but whether the degree of pain experienced is such that the claimant is practically prevented from engaging in those activities. The court applied a qualitative perspective requiring the activities to be viewed as a whole and held that the evidence led by the insurer was insufficient. Therefore the motion was dismissed.

Willoughby indicates the high standard courts will apply in summary judgment motions to dismiss applications for non-earner benefits. Defendants who bring such motions should not merely rely on the plaintiff’s evidence provided at examinations for discovery to satisfy the court’s qualitative approach.  

The Definition of "Dependency" Under the SABS

Does an adult child attempting to become self-supporting qualify as a "dependent" under the SABS? The answer may be "yes", depending on the person's circumstances at the time of the accident.

In State Farm v. Bunyan, 2013 ONSC 6670 (S.C.J.), Mr. Bunyan was a pedestrian who was catastrophically injured in a motor vehicle accident.  He moved out of his mother's house after high school, lived with a girlfriend and had a child.  He moved twice to Alberta to find work, but came back to his live with his mother each time.  At the time of the accident he had $0.24 in his bank account and was covering his daily expenses with money from his mother.  He had problems with alcohol.  Corbett J. was satisfied that Mr. Bunyan would have continued relying on his mother's support until she refused help or he obtained help with his alcohol issues.

Corbett J. held that "dependency" must be assessed looking at four factors:

1.  Amount of dependency;
2.  Duration of dependency;
3.  Financial or other needs of the alleged dependent; and
4.  The ability of the alleged dependent to be self-supporting.

Corbett J. held that Mr. Bunyan was principally dependent on his mother: although he was seeking to become self-supporting, more than half of his day-to-day expenses were covered by his mother, he had not found permanent accommodation, had not obtained transportation, had not established that he could keep steady employment, was not paying child support, had no savings, and had problems with alcohol.  He therefore qualified as an "insured person" under his mother's policy.

Attendant Care Benefits under SABS-2010

Can an insurer pro-rate attendant care benefits payable based on the hours of work lost by the attendant care provider?

Tyrone Henry was left a paraplegic after a motor vehicle accident in September 2010. His mother took an unpaid leave of absence from work to provide the full-time care he required. Gore Mutual Insurance took the position that the attendant care payments were limited to the number of hours that Tyrone Henry’s mother had been working as a proportion of the total attendant care hours assessed as reasonable.

Tyrone Henry brought an Application before the Ontario Superior Court (Henry v. Gore Mutual Insurance Company, 2012 ONSC 3687) taking the position that he was entitled to the total attendant care hours. The judge agreed. At issue was the interpretation of the Statutory Accident Benefits Schedule effective September 1, 2010 (“SABS-2010”). Justice Ray commented that the intent of SABS-2010 was “to prevent a member of an insured’s family who was not ordinarily an income earner or working outside the home, from profiting from an attendant care benefit, when they would likely be at home anyway and would have looked after the injured person without compensation”. This was not the case with Tyrone Henry’s mother who was employed full-time. Justice Ray held that Gore Mutual was obliged to pay to Tyrone Henry all reasonable and necessary attendant care expenses he was obliged to pay his mother, not limited to the economic loss she sustained from leaving her 40 hour per week job.

Gore Mutual appealed to the Ontario Court of Appeal (Henry v. Gore Mutual Insurance Company 2013 ONCA 480). The appeal was dismissed. The Court held that Justice Ray was correct in concluding economic loss was a threshold for entitlement to, but not a measure of, reasonable and necessary attendant care benefits to be paid by an insurer. Once Tyrone Henry’s mother sustained an economic loss, attendant care benefits were payable with respect to all the care she provided to him.

As a result of this case, regardless of the attendant care provider's amount of lost income, as long as they experience a loss of income, they will receive the entire benefit.  This will result in some attendant care providers earning more than they would have if they had not left their employment and others earning less. 

Failure to Submit Disability Certificate Disentitles Claimant to Accident Benefits

A recent arbitration decision confirmed the importance of a disability certificate in accident benefits cases.

In Anthonipillai v. Security National, FSCO A11-001168 (July 12, 2013), the applicant was injured in an accident on April 21, 2008.  Although the insurer requested she submit a completed disability certificate several times, she failed to do so until 3.5 years after the accident, after an arbitration pre-hearing.  Even when she did submit a disability certificate, it only addressed caregiver benefits and not housekeeping.  The applicant argued that by continuing to adjust the claim and pay benefits, the insurer waived the requirement for a disability certificate.

The Arbitrator held that the applicant was disentitled to housekeeping and home maintenance benefits as she never submitted a disability certificate.  The insurer did not waive the requirement for a disability certificate as it had an obligation to adjust the claim, even if the plaintiff had not complied with her obligation.  In addition, the treatment and assessments the insurer adjusted were applied for through OCF 18 and 22 forms, which contain the signature of a health professional confirming the information is accurate, the treatment reasonable and necessary and acknowledging that it is an offence to make a false statement.  The insurer was entitled to insist on the same assurances through a disability certificate relating to caregiving and housekeeping expenses.  In addition, the insurer was entitled to obtain s. 42 assessments, without being deemed to have waived compliance by the insured.

Definition of "Accident" Under the SABS

How far can the definition of "accident" under the SABS be stretched?

In Dominion of Canada v. Prest, 2013 ONSC 92 (S.C.J.), the insured was washing his car and tripped over a curb sticking out from the wall of his parking garage.  He claimed that his right hand was touching the car as he fell, and therefore he was entitled to accident benefits.  Dominion sought a determination as to whether the incident met the definition of an "accident" within s. 3(1) of the SABS, which defines "accident" as "an incident in which the use or operation of an automobile directly causes an impairment."

Justice McNamara held that the incident was not an "accident".  He used the two part test set out by the Court of Appeal in Chisholm v. Liberty Mutual (2002), O.R. (3d) 776 (C.A.) and Greenhalgh v. ING (2004), CanLii 21045 (C.A.):

(a)  Did the incident arise out of the use or operation of an automobile (the “purpose test”); and

(b)  Did such use or operation of an automobile directly cause the impairment (the “causation test”).

Justice McNamara held that the vehicle was not being used or operated at the time of the incident and was not a direct cause of the impairment.  The use of the car had ended without injury being suffered and tripping over the curb was a new intervening act. The insured was not entitled to accident benefits, showing that there is indeed a limit to how far the definition can be stretched.

When Has FSCO Mediation Failed - Part 2

Last week, we blogged on the Court of Appeal`s decision in Hurst v. Aviva, which held that insureds may proceed to bring court actions or arbitration proceedings if 60 days have passed since an application for mediation at FSCO has been filed and no mediation has taken place.

The Court released its decision in Younis v. State Farm Insurance Company, 2012 ONCA 836 (C.A.) concurrently with Hurst.  In the Hurst actions, the 60 day period had elapsed prior to the insured filing a court action.  In Younis, however, the claimant applied for mediation on July 14, 2011 and filed a court action a few days later. State Farm`s motion to stay the action took place well after the 60 day period had elapsed.  Justice Sloan refused to stay the action. 

The Court of Appeal allowed the appeal.  The Court held that the insured commenced his action in contravention of the statutory requirement by not waiting 60 days.  Since Younis had not waited until mediation had failed, his action was barred.  To allow otherwise would permit insured person to immediately commence civil actions and the statute did not permit this tactic.

When Has FSCO Mediation Failed - Part 1

We previously blogged on the decision in Cornie v. State Farm, in which Justice Sloan held that insureds may commence claims against their accident benefits carriers if 60 days have elapsed since an application for mediation has been filed, even if mediation itself has not occurred.  The Court of Appeal has now released its appeal decision in Hurst v. Aviva, 2012 ONCA 837 (C.A.).

Section 281(2) of the Insurance Act prevents insured persons from commencing court actions or arbitrations against their insurers unless they first seek mediation and mediation has failed.  The claimants waited 60 days after applying for mediation and when no mediation had taken place, they commenced actions.  FSCO`s position was that the prescribed 60 day time limit for conducting mediation did not begin to run until an application for mediation had been assessed by FSCO and found to be complete.  FSCO refused to issue a report declaring the mediations had failed.  The insurers in four actions brought motions to have the actions stayed on the basis that they were barred by s. 281(2) as mediation had not taken place.  Justice Sloan dismissed the motions and the insurers appealed. 

The Court of Appeal dismissed the appeals.  The Court concluded that the process is intended to be completed with 60 days after an application for mediation has been filed; however, if mediation has not taken place within 60 days, insured persons are free to pursue either court action or arbitration. 

The Court rejected the insurers` arguments that the cost to the industry could be $83 million as a result of the interpretation of the Act that does not require mediation to actually take place.  The insurers submitted statistics that 75% of claims are resolved by mediation at FSCO.  One has to expect a flood of court proceedings as a result of this decision, along with significant costs to insurers.

Catastrophic Impairment: Aviva v. Pastore

The Court of Appeal has released an important decision relating to catastrophic impairment:

Aviva Canada Inc. v. Pastore, 2012 ONCA 642 (C.A.)

The insured was injured in a 2002 motor vehicle accident as a pedestrian and sustained an ankle injury. She alleged her gait had been altered and was diagnosed with a pain disorder.  A DAC found her to be catastrophically impaired in 2005 due to a marked mental or behavioural impairment under s. 2(1.1)(g) of the SABS.  An assessment under s. 2(1.1)(g) is carried out with reference to the AMA Guides, which provide for an assessment of function in four categories:

(1)              Activities of daily living (ADL);

(2)              Social functioning;

(3)              Concentration, persistence and pace; and

(4)              Deterioration or decompensation in work or work-like settings.

Pastore was diagnosed with a number of psychological disorders and the DAC concluded that she had a class 4 marked impairment in activities of daily living.  The DAC concluded she was catastrophically impaired on the basis of the one class 4 impairment.  The insurer did not agree with the assessment and the matter proceeded to mediation then arbitration.

At arbitration, the arbitrator agreed with the DAC assessors and held that one marked impairment was enough to comply with the Guides approach to impairment.  In addition, it was appropriate to consider physical pain in assessing mental disorder, as it was not possible to factor out all physically based pain since it was intertwined with mentally based pain. The Director's Delegate upheld the decision, but the Divisional Court overturned the arbitrator.

The Court of Appeal allowed the appeal and reinstated the arbitrator`s decision.  The conclusion that only one marked impairment is sufficient to meet the definition of catastrophic impairment was a reasonable one. In addition, it was not an error for the DAC assessors to consider both physical and mental pain.

Pastore appears to have lowered the bar for catastrophic impairment based on a mental disorder and more claimants may be able to fit themselves into a catastrophic designation than prior to this decision.

Election of Arbitration or Court Proceeding

Gordyukova v. Certas Direct Insurance Company, 2012 ONCA 563 (C.A.)

The subject of this appeal is s. 281.1(1) of the Insurance Act, which provides that an insured shall commence a court proceeding or arbitration within two years of the insurer's refusal to pay benefits.

The plaintiff was in a motor vehicle accident in 2001.  She applied for accident benefits and a dispute arose over certain medical benefits.  After mediation failed, she issued a Statement of Claim in 2002. In 2005, the insurer advised her she had exhausted her non-catastrophic limits for medical and rehabilitation benefits.  Her application for a catastrophic designation was rejected so she commenced an arbitration at FSCO in 2008.  Certas brought a motion to stay the arbitration on the grounds that the CAT dispute should be added to the court action. The arbitrator ruled the plaintiff could not proceed with both the court action and the arbitration, but could proceed with arbitration if she discontinued the court action.  The arbitrator ruled he was not ruling on the limitation issue.  The plaintiff gave notice of her intention to discontinue the court action and proceed with arbitration, and the insurer brought a motion seeking a ruling on the limitation issue.  The arbitrator ruled the plaintiff could add all of the matters pending before the Superior Court to the arbitration.

Certas appealed, arguing that the plaintiff could not re-elect the method of proceeding eight years after the court action was commenced. The matter was appealed to the Director 's Delegate then the Divisional Court.

The Court of Appeal held that the arbitration should be stayed.  Section 281.1(1) of the Insurance Act requires an election between a court action and an arbitration. It provides that a proceeding shall be brought within two years. The insured has the choice of forum, but cannot switch forums after the expiry of the limitation period.  Since the court proceeding included a claim for "continued accident benefits", it would necessarily include a determination of the CAT issue. 

SABS - Pursuing Litigation without a Mediator's Report

Cornie v Security National, 2012 ONSC 905 (S.C.J.)

This motion involved plaintiffs in four actions who commenced actions against their insurers for statutory accident benefits.

The Insurance Act imposes a mandatory mediation scheme in accident benefits cases.  Rule 19 of the Dispute Resolution Practice Code (DRPC) provides that mediation must be concluded within 60 days of the filing of an application.  Once mediation has failed, the plaintiff may pursue litigation.  In all four cases, the plaintiffs filed mediation applications and after 60 days passed without a mediator being appointed, they wrote to FSCO requesting a mediator's report confirming mediation had failed.  FSCO refused, taking the position that the 60 day period does not begin to run until a mediator is appointed.

The insurers brought motions to dismiss on the basis that mediation had not failed.  Justice Sloan dismissed the motion.  The 60 day period in the DRPC is mandatory.  The plaintiffs did not require a report from FSCO in order to claim that mediation failed through non-compliance with r. 19.  The plaintiffs were therefore able to show that mediation had failed and they were entitled to proceed with litigation.

This decision is a clever way to get around the lengthy back-up taking place at FSCO; however, does it transfer the backlog to the court system?

Definition of "Accident" Under the SABS

Downer v. Personal Insurance Co., 2012 ONCA 302 (C.A.)

The issue on this appeal was whether the plaintiff was in an “accident” that entitled him to accident benefits.

On February 26, 2000, the plaintiff was physically assaulted by several unidentified assailants while parked at a gas station sorting his money. He escaped by putting his car in gear and driving away. He believed he may have run over one of his assailants in the course of fleeing. He claimed he sustained psychological and physical injuries as a result of the incident.

The insurer initially paid benefits, but then took the position that the injuries were not caused by an accident within the meaning of s. 2(1) of the SABS, which defines an "accident" as “an incident in which the use or operation of an automobile directly causes an impairment”. The motion judge granted a declaration that the plaintiff was involved in an “accident” within the meaning of the SABS. The insurer appealed.

The Court of Appeal allowed the appeal with respect to the physical injuries, holding that the physical assault did not constitute an “accident”. The Court held that a trial was required to determine whether the psychological injuries were caused by the ordinary use of a motor vehicle.

The proper test to be applied is the modified causation test set out in Greenhalgh v. ING Halifax Insurance Co. (2004), 72 O.R. (3d) 338 (C.A.):

1. Was the use or operation of the vehicle a cause of the injuries?
2. If the use or operation of a vehicle was a cause of the injuries, was there an intervening act or intervening acts that resulted in the injuries that cannot be said to be part of the “ordinary course of things?” In that sense, can it be said that the use or operation of the vehicle was a “direct cause” of the injuries?

At paragraph 39, Justice LaForme held that under the modified causation test, it is not enough to show that an automobile was the location of an injury inflicted by tortfeasors, or that the automobile was somehow involved in the incident giving rise to the injury. Rather, the use or operation of the automobile must have directly caused the injury. Justice LaForme held that an assault on the plaintiff as he sat in his vehicle sorting money cannot be considered a normal incident of the risk created by the use of operation of the car. With respect to the psychological injuries, he held that running someone over could be considered a normal incident of the risk created by the use or operation of a vehicle.

One has to wonder whether this case has limited applicability due to its facts, or whether it will give rise to more claims of psychological injuries in order to fit an incident into the definition of “accident” within the SABS.

Limitation Periods in Loss Transfer Claims

Markel Insurance Co. of Canada v. ING Insurance Co. of Canada, 2012 ONCA 218 (C.A.);

The issue in this appeal was the date from which the limitation period begins to run in loss transfer claims.

The appeal arose out of two arbitration decisions that reached different conclusions on the start date for the limitation period. In Federation v. Kingsway, the arbitrator held the limitation period begins to run on the day after the request for loss transfer is made; in Markel v. ING, the arbitrator held the limitation period begins to run when the second insurer refuses to indemnify. On appeal to the Superior Court of Justice, the court favoured the Federation approach. The matter was appealed to the Court of Appeal.

The Court of Appeal dismissed the appeal. Justice Sharpe held that the limitation period begins to run on the day after the request for indemnification is made by the insurer who paid accident benefits.

Lawyers and insurance professionals should be aware of this decision when diarizing their files so that claims can be brought within the correct limitation period.

- Tara Pollitt

Kusnierz - Combining Impairments in Determining Catastrophic Impairment

Kusnierz v. The Economical Insurance Company (2012) 108 O.R. (3d) 272 (C.A.)

Kusnierz is an important Court of Appeal decision regarding catastrophic impairment under the SABS.

Mr. Kusnierz suffered a below the knee amputation and clinical depression in a 2001 accident. The parties disagreed as to whether he met the criteria to be declared catastrophically impaired, and the trial judge held that he did not. The key issue was whether physical and psychological impairments can be combined in evaluating whether a person is catastrophically impaired under the SABS.

The Court of Appeal held that it is permissible to combine physical and psychological impairments for the following reasons:

1. The legislator did not expressly forbid the combination;
2. The AMA Guides aim to assess the total effects of a person’s impairments on daily activities;
3. The Guides describe a number of situations where physical impairments should take into account mental and behavioural impairments;
4. The combination of impairments is consistent with the purpose of the SABS. The Court noted that the respondent conceded that there are few cases where physical and psychological impairments are catastrophic when combined but not when assessed separately. The class of persons who are CAT will therefore remain small; and
5. Combination promotes fairness and the objectives of the statutory scheme.

Although Kusnierz has the potential to open up the floodgates for catastrophic claims, it may be that the class of cases that fit into this situation remains small, as predicted by the Court of Appeal. It may take time before the full effects of Kusnierz are truly known.

- Tara Pollitt

Loss Transfer - Costs of Assessments

In Wawanesa v. Axa (2012), 107 O.R. (3d) 395 (S.C.J.), the issue was whether the cost of s. 42 assessments are recoverable in loss transfer, particularly in light of the legislative changes that came into effect March 1, 2006 (when DACs were eliminated). The underlying accidents occurred on August 21, 2006 and October 6, 2005.

The arbitrator held that the cost of s. 42 assessments are not recoverable under loss transfer. Justice Greer upheld the decision. The legislative changes had no impact on the principle that assessment expenses are not recoverable in loss transfer.

McQueen v. Echelon General Insurance Co. [2011] O.J. No. 4563 (Ont CA)

Appeal by the insurer from an award of accident benefits and damages for mental distress.

At trial, the plaintiff sought housekeeping, transportation, costs of medical assessments and damages for bad faith and mental distress.

The insurer made three major arguments on the issue of damages for mental distress:

1. That there was procedural unfairness based on the trial judge’s
consideration of conduct unrelated to rejected claims for statutory
accident benefits;

2. That merely denying benefits does mean that there was bad faith; and

3. That the trial judge lacked jurisdiction to make an award for mental
distress.

The trial judge quickly dismissed the initial two arguments by concluding that the plaintiff was seeking to recover damages for more than the SABS benefits and that this was not a case where the insured simply denied benefits.

In regards to the allegation that there was merely a denial of benefits the appeal judge agreed with the trial judge on the following points:

• The insurer had a duty to act in good faith in all its dealings with the
insured and had an additional duty not to inflict unnecessary mental
distress. Fidler v. Sun Life Assurance Co. Ltd. 2006 2 SCR 3 (Fidler);

• That the insurer repeatedly refused to provide benefits noting that they
were not “reasonable and necessary”, but never provided and reasons why
they were not reasonable and necessary;

• That damages were warranted because benefits were denied contrary to
medical recommendations;

• That the insurer took an adversarial approach to the plaintiff in the
beginning;

• That the one object of the insurance contract was to secure the plaintiff’s
peace of mind and that it was within the reasonable contemplation of the
parties that breach of peace of mind promise would bring about mental
distress; and

• That the plaintiff’s mental distress was palpable and accepted her evidence
that the change in her emotional and psychological conduct was the result
of her relationship with the insurer.

In regards to the jurisdiction argument, the insurer argued that the plaintiff was not a party to the insurance contract since it was her husband’s policy, and therefore, she was not entitled to claim for damages for mental distress.

It was further argued that Fider was distinguishable because Fidler dealt with LTD benefits not SABS benefits and that consequently, peace of mind cannot have been a contemplated term.

The appeal judge held that the reasoning in Fidler applies to an insured person under an automobile policy, whether the person is the named party or not.

“Mental distress to anyone insured under the policy upon breach would
have been within the reasonable contemplation of the insurer and the
insured and, thus, damages are recoverable pursuant to the basic
principle of compensatory damages.”

….

“People purchase motor vehicle policies to protect themselves from
financial and emotional stress and insecurity. An object of such
contracts is to secure a psychological benefit that brought the prospect
of mental distress upon breach within the reasonable contemplation of
the parties at the time the contract was made.”

In the end, the appeal judge affirmed all aspects of the trial judge’s decision only modifying the total awarded under the transportation head of damages as the trial judge provided inadequate reasons for the amount.

- Alison McBurney

New Minor Injury Guideline

The new Statutory Accident Benefits Schedule (SABS) came into effect September 1, 2010. Among the key amendments, there has been a reduction of medical and rehabilitation benefits from $100,000.00 to $50,000.00. In some cases, this will be further reduced to $3,500.00 under the new Minor Injury Guideline (MIG).

The MIG applies to accidents that occurred on or after September 1, 2010, and replaces the Pre Authorized Framework for Grade I and II whiplash associated disorders. Section 268.3 of the Insurance Act requires that the MIG be considered in any determination involving the interpretation of the SABS.

An insured person’s impairment comes within this Guideline if the impairment is predominantly a minor injury. “Minor injury” is defined in the new SABS as a “sprain, strain, whiplash associated disorder, contusion, abrasion, laceration or subluxation and any clinically associate sequelae”. Each of these conditions are further defined to specify the severity of each to move it out of the “minor injury” category. For example, “whiplash associated disorder” is defined as “a whiplash injury that does not exhibit objective, demonstrative, definable and clinically relevant neurological signs, and does not exhibit a fracture in or dislocation of the spine”.

The objectives of the MIG are to speed access to rehabilitation for persons who sustain minor injuries in auto accidents, improve utilization of health care resources, provide certainty around cost and payment for insurers and regulated health professionals, and be more inclusive in providing immediate access to treatment without insurer approval for those persons with minor injuries.

Many accident victims may now find their benefits reduced to $3,500.00 and if they do not have a tort claim, they may have little alternative for additional medical coverage. The Financial Services Commission of Ontario expects the MIG to capture 30%-40% of accident claims.

Section 18(2) provides for an exclusion from MIG if the insured person’s health practitioner determines and provides compelling evidence that the insured person has a pre-existing medical condition that will prevent the insured person from achieving maximal recovery from the minor injury if subject to the $3,500.00 limit. This exception raises the question of what the courts will consider to be “compelling evidence”.

- Kristen Dearlove, Student-at-Law

Deductibility of Statutory Accident Benefits

Sutherland v. Singh, [2011] O.J. No. 2901 (C.A.)

The plaintiff was eligible for income replacement benefits (IRBs) and caregiver benefits (CGBs). He elected to receive CGBs. Under s. 267.8(1) of the Insurance Act, damages are reduced by payments for statutory accident benefits that the plaintiff received or that were “available”. The issue on appeal was whether IRBs were “available” to the plaintiff (thus allowing the tort defendant to deduct them) even though he elected to receive CGBs. The Court of Appeal held that the answer is “no”.

Justice Gillese held that once the plaintiff elected to receive CGBs, IRBs were no longer available to him. The purpose of s. 267.8 is to prevent double recovery. The effect of allowing the defendants to deduct CGBs that the plaintiff received as well as IRBs that he never received would be to create a windfall for the defendant.

Public Transit

This blog was prepared by Jennifer Stirton.

The Insurance Act has been amended by Bill 173, the Better Tomorrow for Ontario Act (Budget Measures), 2011, which received Royal Assent on May 12, 2011.

The amendments relate to incidents involving public transit and make two major changes. First, owners and drivers of public transit vehicles are not protected by subsections 267.5(1), (3) and (5) of the Insurance Act, which provide threshold protections and limit income loss claims, if the public transit vehicle does not collide with another automobile or any other object in the incident. In other words, public transit drivers and owners are not protected defendants unless there is a collision. The second major change is the addition of subsection 268(1.1), which provides that occupants of public transit vehicles who are injured are not entitled to statutory accident benefits if the public transit vehicle does not collide with another automobile or any other object.

These changes are clearly aimed at passengers who allege injury arising from incidents that do not involve collisions, such as sudden start/sudden stop claims. While it will reduce the cost of accident benefits being paid, it may result in an increase in tort actions against defendants who are no longer entitled to statutory protections.

Fraudulent Car Accidents

In today's Globe and Mail (October 4, 2010) it is reported that the Insurance Bureau of Canada is warning about a "concerning trend" of insurance fraud.

"There has been a rise in crashes that are orchestrated to claim lucrative no-fault insurance payouts and, to avoid detection, perpetrators are increasingly involving innocent drivers in their pre-planned collisions."

According to the article, "Toronto is the hotbed, with organized crime being linked to several staged accidents. Insurance industry investigators involved in a recent probe, dubbed Project 92, say they’ve identified more than 40 staged car accidents carried out by one particular crime ring alone, 17 of which have already been criminally investigated. Police have laid 291 charges against 39 individuals in the sting, 20 of whom have been convicted."

http://www.theglobeandmail.com/report-on-business/insurers-beware-national-watchdog-raises-alarm-for-fraud/article1740676/