Catastrophic Impairment Appeal

April 06, 2010, Kitchener, Ontario

Posted by: Robert Deutschmann, Personal Injury Lawyer

Director’s Delegate: Lawrence Blackman

Decision Date: December 22, 2009

Anna Pastore was a pedestrian when injured in a November 16, 2002 motor vehicle accident. Sustaining, amongst other injuries, a fracture of her left ankle that required a number of surgeries, Ms. Pastore sought statutory accident benefits from her first-party motor vehicle insurer, Aviva Canada Inc. A five-day arbitration hearing was held in April 2008 before Arbitrator Nastasi (the "Arbitrator") to determine whether Ms. Pastore had sustained a catastrophic impairment
The Arbitrator's February 11, 2009 decision found that Ms. Pastore had not sustained a catastrophic impairment under clause 2(1.1)(f) of the Schedule, in that Ms. Pastore's combination of impairments did not result in 55 per cent or more impairment of the whole person in accordance with the American Medical Association's Guides to the Evaluation of Permanent Impairment, 4thEdition. The Arbitrator, however, did find that Ms. Pastore had sustained a catastrophic impairment as defined by clause 2(1.1)(g) of the Schedule, having a class 4, marked impairment, in one of the four areas or aspects of functioning set out at page 14/301 of the Guides.

Aviva submitted that (1) the arbitrator erred in law in finding that it was sufficient for Ms. Pastore to have suffered a marked impairment in only one of the four areas of functioning on page 14/301 of the Guides. Rather, Aviva argued that to meet the clause 2(1.1)(g) definition of catastrophic impairment Ms. Pastore must have suffered, overall in the four assessment areas,aclass 4 or 5 impairment. Also, Aviva submitted that (2) the Arbitrator erred in law in finding that Ms. Pastore suffered a marked impairment in the one area of assessment, the Arbitrator having erred in including physical impairments with mental or behavioural impairments. Succinctly, the first ground of appeal concerned the word "a" in clause 2(1.1)(g), highlighted above. The second ground of appeal was about the words "due to mental or behavioural disorder."


The four areas or aspects of functioning are activities of daily living, social functioning, concentration and adaption.

Aviva argued that the Arbitrator's decision led to an absurd result and, therefore, must have been wrong in law, as:
(a) The Arbitrator found that Ms. Pastore's physical impairments, by themselves, were not catastrophic;
(b) The Arbitrator found that Ms. Pastore's physical and psychological impairments, when combined, were not catastrophic; yet,
(c) The Arbitrator found that when Ms. Pastore's psychological impairments were considered by themselves, Ms. Pastore was catastrophically impaired.

Ms. Pastore submitted that on a plain reading of clause 2(1.1)(g) of the Schedule, using the ordinary meaning of "a" as a singular indefinite article, only one class (marked) impairment rating is necessary for a catastrophic designation.

Ms. Pastore cited, in support, the arbitration decisions in H and Lombard General Insurance Company of Canada, (October 4, 2007) and McMichael and Belair Insurance Company Inc., (FSCO A02-001081, March 2, 2005), and the decision of Spiegel J. in Desbiens v. Mordini (2004) O.J. Ms. Pastore submitted that there had been no other interpretation of clause 2(1.1)(g).

Arbitrator Muir, in McMichael, stated that: “Following my conclusion that Mr. McMichael has suffered Class 4 impairments in three of the spheres of assessment under Chapter 14, I find that he has met the standard of paragraph (g) of the definition of catastrophic impairment, however, were I required to decide this question, I would agree with the approach adopted, but not decided, by the court in Desbiens (that a Class 4 or marked impairment in any one area of assessment was sufficient to meet the standard of paragraph (g)).”

Ms. Pastore argued that the Arbitrator took this same remedial approach, consistent with the objective of consumer protection in automobile insurance stated by the Supreme Court of Canada in Smith v. Co-operators General Insurance Co.
Ms. Pastore also submitted that the Arbitrator's approach was consistent with Arbitrator Wilson's statement in Augello and Economical Mutual Insurance Company (December 18, 2008), that "if a determination of the threshold to allow a higher level of coverage in catastrophic cases is a coverage issue, then given competing interpretations of the provisions, any confusion or discrepancy in the legislative scheme, and hence in the contract should be interpreted in a manner that favours the insured."

Ms. Pastore further argued that the Arbitrator's decision did not lead to an absurd result. Rather, each of the provisions under subsection 2(1.1) of the Schedule are to be considered independently when determining catastrophic impairment. Clause 2(1.1)(f) of the Schedule, as stated by Spiegel J. in Desbiens, is a "catch-all provision for the benefit of those who were likely in the greatest need of health care."

The Guides do not state anywhere that one must look at all four spheres of functioning together. Nor, submitted Ms. Pastore, do they provide any guidance on how one should combine all four spheres to arrive at an overall rating.

Ms. Pastore cited Arbitrator Wilson in Augello that: “Spiegel J's approach to the guidelines was to treat them as part and parcel of the legislation which incorporated them … rather than as a free-standing text. As legislation, the Guides are then subject to the well-known principles of legislative interpretation that govern any legislation in a common law context.”

Arbitrator Wilson further stated that: “Whatever the original creators may have intended when they developed the AMA Guides, the Guides, as included in the Statutory Accident Benefits Schedule have developed a life of their own, independent of the wishes and opinions of their creators. Since the Guides, as included in the Schedule, are necessarily seen as part of subsidiary legislation, the courts judges and arbitrators have, through their decisions over time, added a gloss, or an interpretation that is helpful in integrating them into the scheme as a whole. This is exactly how jurisprudence in the common law provinces of Canada is meant to develop. There is no reason why the AMA Guides, as incorporated, should be subject to any different rule.”
As noted previously, the first issue in the appeal was whether clause 2(1.1)(g) contemplates "a" single class 4 or 5 impairment or "a" combined or overall class 4 or 5 impairment. The word "a" in clause 2(1.1)(g) of the Schedule means any or one single marked or extreme impairment out of the four areas of functioning, each of these specific areas being addressed in accordance with the Guides.

In Desbiens, Justice Spiegel stated that: “To be charitable, I will assume that the government intended that the catastrophic impairment threshold would be interpreted in a manner that would not deprive an innocent victim of much needed health care expenses.”

In McMichael, Arbitrator Muir stated that: “Significantly there is nothing in the language of paragraph (g) to suggest that the approach taken by the Court in Desbiens, is incorrect. If the provision is ambiguous and I find that it is, that ambiguity ought to be resolved, in the absence of anything pointing elsewhere, in a liberal manner having regard to the ultimate remedial purpose of the legislation.”
The Delegate concluded that:

1. Aviva essentially conceded in oral argument that from its perspective, at best the statutory language was ambiguous, submitting that "my friend's interpretation of the definition is no more compatible with the purpose of the legislation than is our definition" and "my friend is correct that the Guides do not anywhere say in bold print or otherwise that they are conducting an overall assessment."
2. As stated by Mackinnon J. in Arts v. State Farm, 91 O.R. (3d) 394, the "Guides were clearly not designed by the AMA for the purpose directed by the Ontario Legislature." To the extent there is any conflict between the Guides on the one hand and the Schedule and the Insurance Act on the other, the Insurance Act and the Schedule take precedence, being the superior legislation.
3. Aviva argued that to use a single marked impairment in clause 2(1.1)(g) is inconsistent with clause 2(1.1)(f) that uses an overall psychological impairment rating and would give clause 2(1.1)(g) psychological impairments undue weight. Implicit in Aviva's argument was that if one does not meet the "catchall" clause 2(1.1)(f) definition of catastrophic impairment, one cannot meet the narrower definition of clause 2(1.1)(g). This, however, ignores (1) the individual clauses of subsection 2(1.1) are separated by the word "or;" (2) therefore, the individual clauses are disjunctive; and, (3) nowhere does the legislation state that meeting the clause 2(1.1)(f) definition is a prerequisite to meeting any of the other definitions of catastrophic impairment.

4. If Ms. Pastore had met the higher category of "severe limitations impeding useful action in almost all social and interpersonal daily functions" (approximating a class 4 marked impairment on page 14/301), the WPI rating would have been 30 to 49%.
The Arbitrator found that Ms. Pastore had a 20% WPI for her right knee and a 2% WPI for her left ankle. If a Table 3, 35% WPI was given for her psychological impairment, Ms. Pastore's combined WPI of 49% would still not meet the 55% catastrophic impairment threshold under clause 2(1.1)(f). The Delegate was not persuaded by the Aviva's argument that a narrow interpretation of clause 2(1.1)(g) is still preferred because there would still be fewer "inconsistencies" between clauses (f) and (g).

5. Any "inconsistency" between clause (f) and (g) is because the Legislature has chosen different wording. One combines impairments in clause 2(1.1)(f) because that is what the provision explicitly mandates. Nowhere does clause 2(1.1)(g) state, in "bold print or otherwise," that the ratings for the four areas of function are to be combined.

6. None of the medical witnesses presented by either side at the arbitration hearing were qualified by the Arbitrator in any area of expertise. This was explained by counsel as a means of short-circuiting the process to move the arbitration quickly.
The Arbitrator's error in failing to qualify witnesses and to keep qualified experts within their areas of expertise as properly established by the adjudicator augmented the problem in this case, as stated by counsel, that "witnesses are hard to control once they get rambling." The parties submitted that the medical witnesses were not produced to "tell us how to interpret" the Schedule. But, in truth, that is precisely why the witnesses were produced, by both sides, to tell us how the Insurance Act and the Schedule were to be interpreted, either directly, or indirectly through the back door of the Guides.
7. The CAT DAC Guideline upon which Aviva relied that required at least two areas of marked impairment could not be located at the appeal hearing. The recommendation of that Guideline that there be two marked impairments to render a catastrophic determination under clause 2(1.1)(g) was inconsistent with Aviva’s argument that there must be at least an overall marked impairment rating.

The Delegate was not persuaded that the Arbitrator erred in law in finding that Ms. Pastore required a class 4, marked impairment, in only one of the areas of functioning set out on page 14/301 of the Guides.


Aviva did not take issue with the Arbitrator's finding that Ms. Pastore had
significant limitations in her activities of daily living. Aviva submitted that the
Arbitrator erred in law in concluding that these significant limitations were the result of psychological impairments. Aviva argued that the Arbitrator failed to take into account that she had already assigned significant limitation of Ms. Pastore's activities of daily living to the latter's physical pain.

Aviva submitted that Ms. Pastore had "real and continuing" orthopaedic injuries causing real pain and functional limitations and complaints. Aviva detailed Ms. Pastore's testimony as to her limitations caused by her knee and ankle injuries. Aviva argued that depression and anxiety did not cause these limitations. Rather, depression and anxiety were the result of the impact of these limitations.

Aviva argued that there was no evidence to refute its submission that Ms. Pastore's physical impairments were the main cause of her limitations in her activities of daily living.

Ms. Pastore submitted that she clearly articulated to the Arbitrator her level of emotional impairment. The CAT DAC team included a psychologist, Dr. S., and a psychiatrist, Dr. H.R. Dr. H.R. found that Ms. Pastore met the criteria for an Adjustment Disorder with Depressed Mood. Secondary to her depressed mood, he believed that "psychological factors were playing a significant role in her chronic pain issues and therefore a diagnosis of Pain Disorder Associated with Psychological Factors was made."
Ms. Pastore submitted that the Arbitrator's decision was in accordance with the evidence presented and that her findings of fact ought to have been accorded deference.

Aviva argued that one "must separate the impairments that are related to pain that is the consequence of the physical impairments ... that pain has been counted so you can't count that pain again when you move into the mental and behavioural disorder."
Aviva noted that the Arbitrator, at page 28 of her decision, stated that: “For Ms. Pastore, the combination of physical limitations and the associated pain are intertwined. They both play an integral part in having transformed her life from being a completely self-sufficient and independent individual and caregiver to her husband to becoming almost completely dependent on him and others for her most basic personal care needs. I agree with the CAT DAC conclusions that it is not possible to factor out the impact of any such discrete physical impairments and associated pain limitations, and that any impairment rating should incorporate both on a "cumulative basis."
It was submitted that Aviva, rather, should have determined whether the impairment rating would have been lower when considering the impairments related "solely" to her psychological impairments.

Aviva conceded that the word "solely" is its own word, and that "solely" does not appear in clause 2(1.1)(g) of the Schedule. Nor does the clause use the words "due to mental or behavioural impairment." Rather, the Legislature has chosen the words "mental or behavioural disorder."

Thus, during oral submissions, the Delegate posed the following question to Aviva: “There was a finding, by the Arbitrator, that there was a mental or behavioural disorder; namely pain disorder associated with both psychological factors and a general medical condition. The question I have: Why is it then necessary to dissect that mental or behavioural disorder and to tweeze – to tweeze out those parts that are purely psychological from those that are not when the pain disorder encompasses both?”
It was not disputed that Ms. Pastore suffered a marked impairment in the sphere of activities of daily living. The dispute was whether this sphere of marked impairment was "due to mental or behavioural disorder," which turned on what the Legislature meant by the latter words. Possibilities included:

1. Solely or only due to a psychological impairment, as argued by Aviva;
2. Due to combined physical and psychological impairments;
3. The "but for" test reiterated in Resurfice, applied to mental or behavioural disorders; or,
4. The material or significant contribution test, similarly applied.

The plain language of clause 2(1.1)(g) of the Schedule requires an impairment that, in accordance with the Guides, results in a class 4 (marked) impairment or a class 5 (extreme) impairment due to mental or behavioural disorder. There is no statutory requirement that the Arbitrator dissect the mental or behavioural disorder into supposed constituent parts, as advocated by Dr. Leclair. The Delegate was not persuaded that clause 2(1.1)(g) of the Schedule incorporates the word "solely" or uses the word "disorder" interchangeably with the word "impairment."

The Arbitrator, at Footnote 49 of her decision, noted that the American Psychiatric Association: Diagnostic and Statistical Manual of Mental Disorders (Fourth Edition, Washington, DC, American Psychiatric Association, 1994) (DSM Text Revision) ("DSM-IV"), at page 499, includes as a Pain Disorder "307.89 - Pain Disorder Associated With Both Psychological Factors and a General Medical Condition." Both psychological factors and a general medical condition are judged to have important roles in the onset, severity, exacerbation, or maintenance of the pain.

The Arbitrator found that Ms. Pastore was diagnosed with a Pain Disorder Associated with both Psychological Factors and a General Medical Condition. There was a basis for this factual finding, being the medical report opinions of Dr. S. and Dr. H.R. within their undisputed areas of expertise.

 The Arbitrator found that Ms. Pastore's “Pain Disorder Associated With Both Psychological Factors and a General Medical Condition” had caused her to suffer impairments that properly fall within Chapter 14." At page 28 of her decision, the Arbitrator stated, based on the medical documentation and Ms. Pastore's testimony, that the impact of Ms. Pastore's emotional, behavioural and mental disorders "significantly impede her daily living tasks and the resulting impairment falls within a Class 4 marked level of impairment."

The Concise Oxford Dictionary (Oxford University Press, 1990) defines "due to" as "because of, owing to." There was ample support for the Arbitrator's finding on causation, on a "but for," "material or significant contribution," or "because of" or "owing to" (or, as ultimately put forward by the Appellant, "result of") basis. As stated in Kasap, it is not the Delegate’s role as an appellate officer to second guess the Arbitrator's evaluation of the evidence or to substitute their own view of the weight to be attributed to it.

The Arbitrator having made the above-noted findings, Ms. Pastore met the statutory definition of catastrophic impairment and the Arbitrator's ruling must stand. The Delegate was, thus, not persuaded that the Arbitrator erred in law in her conclusion. Accordingly, this second ground of appeal was also rejected
Posted under Accident Benefit News, Automobile Accident Benefits, Car Accidents, Catastrophic Injury, Chronic Pain, Fractures, Pain and Suffering, Pedestrian Accidents, Slip and Fall Injury

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