Fundamental fairness to allow insurer to post 104 assessments.

November 07, 2011, Kitchener, Ontario

Posted by: Robert Deutschmann, Personal Injury Lawyer


Arbitrator: Arbitrator Jeffrey Rogers
Decision Date: O
ctober 25, 2011

State Farm moved for an order determining that it is reasonable and necessary to require Mr. Albanese to attend an orthopaedic assessment by Dr. S on September 20, 2011 and a psychological assessment by Dr. C on September 22, 2011. State Farm also sought an order staying this arbitration if Mr. Albanese does not attend. The issues in this motion are therefore:

  1. Is it reasonable and necessary for State Farm to require Mr. Albanese to attend an orthopaedic assessment by Dr. S on September 20, 2011 and a psychological assessment by Dr. C on September 22, 2011, pursuant to section 44 of the Schedule?

  2. If Mr. Albanese's attendance is reasonable and necessary, should this arbitration be stayed, if Mr. Albanese does not attend?

  1. It is reasonable and necessary for State Farm to require Mr. Albanese to attend an orthopaedic assessment by Dr. S on September 20, 2011 and a psychological assessment by Dr. C on September 22, 2011.
  1. This arbitration is stayed, if Mr. Albanese does not attend.


This motion was originally scheduled to be heard on July 22, 2011 but it was adjourned to September 9, 2011 because Mr. Albanese had not yet received notices for the assessments. At the hearing of the motion counsel for Mr. Albanese advised that his client would not be attending the assessments.

In order to give Mr. Albanese the option of attending the scheduled assessments, the Arbitrator notified the parties on September 16, 2011 that he concluded it was reasonable and necessary for State Farm to require him to attend and that the arbitration would be stayed, if he did not attend. The following are reasons for concluding that the assessments are reasonable and necessary for a fair hearing.

Facts and Statutory Scheme

Mr. Albanese was injured in a motor vehicle accident on May 21, 2007. He applied for and received statutory accident benefits from State Farm, payable under the Schedule. Based on an orthopaedic assessment by Dr. S, State Farm terminated weekly income replacement benefits (IRBs) on May 14, 2008. Mr. Albanese claimed IRBs from the date of termination, to present and ongoing.

After 104 weeks of disability the test for entitlement to IRBs changes from "substantial inability to perform the essential tasks of the employment in respect of which he or she qualifies for the benefit" to "complete inability to engage in any employment… ".

In support of his claim for ongoing IRBs, Mr. Albanese relied on two medical/legal opinions that specifically addressed the post-104 test, orthopaedic surgeon Dr. A, dated July 26, 2009 and psychologist Dr. Y, dated March 8, 2011.

Section 44(1) of the Schedule gives an insurer the right to require an insured person to be examined by one or more health professionals of the insurer's choice for "the purposes of assisting an insurer determine if an insured person is or continues to be entitled to a benefit… ." These examinations may take place as often as is reasonably necessary.

State Farm had not conducted any post-104 assessments. Mr. Albanese attended a psychological assessment by Dr. C on April 19, 2011. But the purpose of that assessment was to determine whether psychological treatment Mr. Albanese proposed was reasonable and necessary. Dr. C did not address the post-104 test for IRBs.

Mr. Albanese filed this Application for Arbitration in February 2010. State Farm filed its Response in March 2010. In April 2010, counsel for State Farm wrote to counsel for Mr. Albanese and informed him that he had advised his client to arrange post-104 assessments by an orthopaedic surgeon and a psychologist. A pre-hearing was held on October 19, 2010. The pre- hearing Arbitrator scheduled the hearing to start on October 17, 2011.

In February 2011 State Farm served Mr. Albanese with notices for three post-104 assessments: A psychovocational assessment by Dr. M, a neurological assessment by Dr. D and an orthopaedic assessment by Dr. R. Counsel for Mr. Albanese advised that his client would not attend.

At the request of counsel for State Farm, the pre-hearing was resumed on May 20, 2011 to address the issue of Mr. Albanese's non-attendance. The pre-hearing Arbitrator scheduled this motion to be heard on July 22, 2011. He also adjourned the hearing to May 2012, on consent, in order to accommodate a scheduled mediation.

In its motion record, State Farm indicated that it was seeking to require Mr. Albanese to attend post-104 assessments by Dr. S, and by Dr. I, a psychologist. State Farm did not serve notices for these assessments. Mr. Albanese raised the issue of lack of service in his responding material. Mr. Albanese also suggested that State Farm had chosen Dr. I and not Dr. C who had assessed him earlier, out of concern that Dr. C's opinion would not support its position. After receiving Mr. Albanese's material, State Farm arranged the assessments with Dr. S and Dr. C and served the required notices.


Mr. Albanese argued that the assessments would not assist State Farm to determine entitlement to IRBs. Instead, they were to be used to bolster State Farm's case at arbitration. Mr. Albanese pointed to several facts to support this position:
1.      State Farm presented no evidence that it is continuing to adjust his claim;
2.      State Farm first mentioned post-104 assessments almost a year after the entitlement test changed and not until after he had applied for arbitration;
3.      The assessments were initiated by counsel for State Farm, not its adjuster;
4.      There has been no change in Mr. Albanese's circumstances since IRBs were terminated;

In two recent decisions, the Divisional Court defined an insurer's right to examinations in similar circumstances. They are State Farm Mutual Automobile Insurance Company v. Ramalingam [2009 ONSC 44115] and Certas Direct Insurance Company v. Gonsalves. [2011 ONSC 3986]The Arbitrator rejected Mr. Albanese's submissions by applying the following principles derived from those decisions:
1.      Fairness is fundamental to any administrative process. Procedural fairness requires that a party be able to respond to the position taken against it;
2.      An assessment may be required in order to have a fair hearing; and
3.      A change in the test for entitlement to a benefit post-104 weeks is a change in circumstances, giving an insurer a prima facie right to require an insured person to be assessed.

Mr. Albanese relied on post-104 orthopaedic and psychological assessments in this arbitration. State Farm had no post-104 assessments. State Farm was therefore not in a position to respond. State Farm has a prima facie right to the post-104 assessments it seeks. No evidence is needed to support that right. Ramalingam and Gonsalves focus the analysis on whether fairness requires that the assessments take place, and not on whether the insurer is adjusting its file. The fact that counsel initiated the assessments is of no consequence in this analysis. Although State Farm could have requested the assessments earlier, the delay had no impact on the hearing. The assessments could have taken place and the hearing could still have proceeded on May 7, 2012, as scheduled. The balance of procedural fairness weighs heavily in favour of State Farm.

Mr. Albanese argued that, even if the assessments were reasonable and necessary, State Farm had not shown that his attendance was required because it did not presented evidence that its assessors cannot form an opinion, without his attendance. In Wilson and Aviva Canada Inc. [FSCO A07-001278, March 5, 2008]the Arbitrator accepted that approach. The Director's Delegate rejected it on appeal. [FSCO P08-00007, Appeal, July 20, 2009] He stated as follows:

I disagree with the Arbitrator on another point. The arbitrator appeared to suggest that the insurer had to consider a paper review before it could require the insured to attend an IE. However, s. 42(4)(b) provides only that the insurer's notice has to state whether or not the person's attendance is required.
Section 44 replaced the section under which Wilson was decided. However, section 44(5)(b) contains the same provision. It only stipulates that the notice must state "whether the attendance of the insured person is required at the examination."

One difference between the two sections suggests that the discretion to require personal attendance is wider under section 44 than it was under section 42. Section 42(3) created a presumption that assessments to determine entitlement to certain benefits would be conducted by way of a paper review. Section 44(4) gives insurers the option of requiring personal attendance for assessments for the benefits previously covered by section 42(3).

Even if Mr. Albanese is correct in his submission that a paper review must be considered the first option, the Arbitrator found that his attendance was reasonably required because State Farm had no assessments that addressed the post-104 change in circumstances. State Farm had not had an orthopaedic assessment in over 3 years.  Mr. Albanese relied on assessments that were since done in-person. Mr. Albanese could reasonably argue that any opinion on his current ability to work formed without the benefit of an in-person; issue specific assessment should be given less weight than the opinions from his own assessments. That would give Mr. Albanese an unfair advantage in the hearing.
Posted under Accident Benefit News, Automobile Accident Benefits, Car Accidents, Disability Insurance, Treatment

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