October 26, 2013, Kitchener, Ontario
Posted by: Robert Deutschmann, Personal Injury Lawyer
Decision date: September 17, 2013
Arbitrator: John Wilson
RJ was injured in a motor vehicle accident in July 2007. She applied for SABs and at the 104 week mark the question arose whether she was in fact catastrophically injured. She brought a motion pursuant to the Dispute Resolution Practice Code for interim benefits (cost of catastrophic assessment rebuttal report, arrears IRBs and ongoing payment, and special award) to be paid pending the resolution of her dispute with Dominion Insurance. RJ also claims interest on money owed and expenses on this motion.
The issue in question on this motion is whether RJ is entitled to the above benefits pursuant to the Insurance Act.
There exists a range of opinion amongst arbitrators on the grounds of granting IRBs in the arbitration process. Interim orders are discretionary, and in recent decisions emphasis has been made on a ‘whole case’ or ‘holistic’ approach to the award (Nguyen and State Farm, Gill v. Zurich and Edgar v. Wellington). Emphasis is also placed on fairness to those injured, and protection of the consumer.
RJ operated a restaurant franchise prior to her accident. She was driving her son home one night and accelerated at a stop sign rather than braked. As a result she hit a concrete wall of a garage and claims she was left with serious disabling psychological problems including pain, mood change, serious depression and substance abuse. She eventually lost her business, went bankrupt and ended up in a substance abuse programme. She attempted suicide three times, and became known to the CAS and police. Her family is of the opinion that she must be constantly supervised to avoid relapse.
Dominion stopped payment of benefits at the two year mark when the non-catastrophic housekeeping and attendant care benefits cease. She was required to prove her inability to perform any employment to which she may have been suitable to continue with IRBs. RJ requested designation as catastrophically impaired and was assessed twice by the same doctors; once on her behalf and once on behalf of the Insurer.
Dispute ensued over the psychiatric evaluation which deemed her wholly recovered from depression and substance abuse. This evaluation was in complete disagreement with the evaluations of her long term psychiatrist who in the opinion of the Arbitrator was better placed to evaluate her situation.
RJ sought rebuttal reports in order to make her claim for catastrophic benefits. Currently, the Schedule has removed the right for compensation of rebuttal reports on the basis they were abused by both assessors and injured parties to reap unjust benefits. In this case however, the Arbitrator ruled that a rebuttal report was not only reasonable but that it would facilitate the claims process and that if there is a basis to fund the report it should be paid for. The quandary lay in the fact the Regulation 403/96 reads “the benefits set out in this Regulation shall be provided under every contract evidenced by a motor vehicle liability policy in respect of accidents that occur on or after November 1, 1996 and September 1, 2010.” The accident in question took place on July 23, 2007. RJ’s claim for Rebuttal Reports was brought forward on April 19, 2011.
Arbitrator Wilson stated “the dichotomy between procedural and substantive can give rise to long debates, it is important to note that the payment of an indemnity is at the heart of any insurance contract. The provision authorizing the payment of rebuttal reports is one that provides an indemnity to an insured for an expense incurred in obtaining benefits.”
A review of previous decisions concluded that an ambiguity exists between the New Regulation and the Old Regulation. Delegate Blackman concluded “There is ambiguity and conflict in the transitional provisions in the Old Regulation and the New Regulation” and that “the Respondent, certainly as of August 13, 2010, had tangible concrete, vested and materialized rights to interest” which was a “crystallized private contractual right.”
RJs right to be compensated for a rebuttal report is a substantive contractual right. The New Regulation does not forbid the use of rebuttal reports; rather it limits compensation to the insured for the preparation of such reports.
Arbitrator Wilson found that an arbitrator will be more likely than not to accept Ms. J.’s argument that the contractual right to indemnity subsisted in cases like hers where a claim crystallized prior to the SABS reforms of 2010. Given this analysis and the fact that there were serious short comings in the initial psychiatric evaluation which underpinned Dominion’s determination of the catastrophic issue Arbitrator Wilson found this an appropriate situation for interim benefits to be awarded to fund disbursements for rebuttal report(s).