Accident Benefit Blog

July 26, 2012, Kitchener, Ontario

Posted by: Robert Deutschmann, Personal Injury Lawyer

Heard Before: Honourable Justice Timothy Ray

Date of Decision: June 27, 2012

REASONS FOR DECISION

This application is brought under Rule 14.05(d) and (h) of the rules of civil procedure, by Tyrone Henry to determine a dispute that has arisen with Gore Mutual Insurance concerning the quantum of attendant care payable to the 18 year old applicant for services rendered by his mother, in light of the definition of “incurred” expense at section 3(7)(e) of the recently enacted SABS-2010, in order to calculate the amount payable for attendant care pursuant to the Insurance Act and the Statutory Accident Benefits Schedule, O. Reg. 34/10. Section 19.

Tyrone Henry is catastrophically injured as a result of a motor vehicle which occurred September 28, 2010. His significant attendant care needs were assessed at approximately $9,500 per month. Those are agreed. The maximum payable to Tyrone Henry by Gore under the SABS[1] for attendant care is $6,000 per month with a lifetime maximum 0f $1,000,000.00. That too is not in dispute.

Since Tyrone Henry has elected to have his mother provide attendant care, Gore has calculated that its liability for attendant care payments to Tyrone Henry are 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 takes the position that since the Form 1 Assessment is agreed to by Gore that, it should pay the maximum of $6,000, not a proportional amount based on Tyrone Henry’s mother’s number of lost hours from work.

Background

Tyrone Henry’s mother took a leave of absence from her fulltime employment as an assistant manager for a retail store in order to provide care to her son. It is accepted that she worked 40 hours per week with a salary of approximately $2,100 per month. As provided in the SABS, Gore sought and obtained the mother’s record of employment for the purpose of determining whether

 “...an expense in respect of goods or services referred to in this Regulation is not incurred by an insured person unless,

(iii) the person who provided the goods or services,

(B) sustained an economic loss as a result of providing the goods or services to the insured person;

Gore took the position that if the service provider (Tyrone Henry’s mother) could show that she had sustained an economic loss then the expense payable to Tyrone Henry would be to indemnify her “to the extent of their (her) financial loss”. However, rather than paying her lost income, it calculated her number of hours and paid her a proportion of the attendant care expense. That calculation can best be explained by quoting Gore directly from the motion record:

Based on the Form 1 submitted by Darlene Matheis dated January 17, 2011, I reviewed the amount of care required under each level of care each day and apportioned that into an 8 hour day. Care under level 1 amounted to 1.52 hours of the 8 hour day, care under level 2 amounted to 4.37 hours of an 8 hour day and care under level 3 amounted to 6.37 per day. I then multiplied by the hourly rate set out in the Form 1 “Assessment of Attendant Care Needs’* payable in respect of each type of care.

 .........Attendant care was calculated at $105.87 per week, or $2,117.40 per month...

Tyrone Henry continued to submit an OCF-6, Expenses Claim Form, claiming $6,000 per month on the basis that Tyrone Henry’s mother was providing all of the attendant care for Tyrone Henry.

Analysis

In 1990, Automobile Insurance in Ontario witnessed the advent of limits on tort compensation for innocent victims of automobile accidents, and replacement with a scheme of enhanced benefits for all injured parties without regard to fault.  Both the limitations on tort based damages as well as no-fault benefits have been revised on an almost continuous basis since then with the stated intent to maintain some limits on insurance costs, as well as to maintain limits on no fault benefits. This latest revision was apparently 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 insured without compensation.

The amended regulation retained the requirement that the insurer pay all “reasonable and necessary expenses” for attendant care, but required that they be incurred by or on behalf of the insured person.... “Incurred” is defined in the amended regulation to require that the insured person has “paid the expense, has promised to pay the expense, or otherwise legally obligated to pay the expense”, and that the person who has provided the service has “sustained an economic loss as a result of providing the goods or services........”.

 ‘Economic loss’ is not defined in the regulations. If the amount as opposed to the fact of the economic loss were intended to be relevant, then one would expect the regulations to be of assistance in calculating the amount, since economic loss has been defined in very broad terms in claims for compensation in tort law cases, and has been the subject of a great deal of jurisprudence because of the difficulty in quantification. This omission implies that no such calculation is relevant beyond a finding that the person has “sustained an economic loss” – or not. It is a threshold finding for “incurred expense”, but is not intended as a means of calculating the quantum of the incurred expense. Justice Ray accepted that the amended provisions now eliminate claims by non professional service providers who have not sustained an economic loss.

A plain reading of the section provides that if a family member stays home from work, loses income in order to provide all reasonable and necessary attendant care to the insured - and the insured is obligated to pay, promises to pay or does pay the family member, then the definition in section 19(1) has been met. All reasonable and necessary attendant care expenses must then be paid to the insured as described in the Form 1.

Justice Ray did not attempted to quantify or perform an accounting of what has or has not been paid by Gore for Tyrone Henry’s attendant care, and if the parties cannot agree and wish to make further submissions concerning the accounting, they may contact the trial coordinator to make those arrangements.

About Paquette Travers & Deutschmann

Paquette Travers & Deutschmann serve South-Western Ontario with offices in Kitchener-Waterloo, Cambridge, Woodstock, Brantford, Stratford and Ayr. The law practice of Robert Deutschmann and Doug O’Toole focuses almost exclusively in personal injury and disability insurance matters. For more information, please visit www.deutschmannlaw.com or call us toll-free at 1-866-414-4878.

It is important that you review your accident benefit file with one of our experienced personal injury / car accident lawyers to ensure that you obtain access to all your benefits which include, but are limited to, things like physiotherapy, income replacement benefits, vocational retraining and home modifications.