January 05, 2008, Kitchener, Ontario
Posted by: Robert Deutschmann, Personal Injury Lawyer
Arbitrator: Joyce Miller
Decision date: November 28, 2007
Sophia Sun was injured in a car accident and had been diagnosed with a WAD II injury. Wawanesa had terminated her income replacement benefits after 16 weeks. This matter was reviewed in a prior blog entry. Wawanesa was required to reinstate income replacement benefits (IRBs) as Ms. Sun was also suffering from psychological injury which entitled her to a continuation of her IRBs. The issue to be decided in this decision was the amount of the special award to be awarded to Ms. Sun.
The arbitrator noted that Ms. Sun was diagnosed as suffering from anxiety within 10 days of the accident and Wawanesa was aware of this diagnosis. The arbitrator concluded that the basis for Wawanesa´s termination of Ms. Sun´s IRBs was not supported by statutory interpretation and was both unreasonable and irrelevant on the facts of Ms. Sun´s case.
There are a number of interesting observations that were made by the arbitrator in this case regarding the duty owed by the insurer to the insured.
The arbitrator noted that it iw well settled law that an insurer owes a duty of good faith towards an insured. This duty includes treating all insured persons in a fair manner. This requires that the insurer approach an insured´s claim with an open mind, to reasonably investigate the information presented and to assess it fairly. In this case the arbitrator determined that Wawanesa did not meet its duty of good faith to Ms. Sun.
Instead of trying to help Ms. Sun in her recovery from the car accident in a reasonable fashion, Wawanesa was seen to have placed hurdles in her way:
1. denying a chiropractic treatment plan that was later approved by a designated assessment centre (DAC),
2. denying a request for a psychological assessment which it eventually paid on the second day of the arbitration,
3. denying a psychological treatment plan that was later approved by a DAC,
4. improperly advising that a DAC found a treatment plan not to be reasonable and necessaryand then not properly advising Ms. Sun of the DAC report in her favour until requested by counsel 5 months later,
5. requiring the completion of a disability certificate when there was medical evidence that confirmed Ms. Sun was substantially disabled from the essential tasks of her employment,
6. choosing to ignore a disability certificate that confirmed that Ms. Sun was disabled from the essential tasks of her employment,
7. requiring Ms. Sun to attend an Insurer´s Medical Examination and then ignoring the conclusion of its own Insurer´s Examination report that she had a substantial inability to perform the essential tasks of her pre accident employment.
The arbitrator was of the belief that if Wawanesa had adjusted the file in a good faith manner, providing the insured with the early proper support that she required, rather than working to thwart her in every way it could, then it is likely that Ms. Sun would not be in such a deteriorated condition that she cannot return to work.
As the arbitrator noted regarding Special Awards, an award at the higher end of the range are generally reserved for cases where the insurer´s conduct has been egregious and where there are no mitigating factors. Where a special award is warranted, it must be large enough to deter insurers, who become aware of the decision, from engaging in similar conduct in the future.