Unrepresented insured unable to provide necessary proof for Catastrophic Impairment designation.

June 30, 2016, Kitchener, Ontario

Posted by: Robert Deutschmann, Personal Injury Lawyer

Date of Decision: June 6, 2016

Heard Before; Adjudicator John Wilson


Zuhail Khan was injured in a car accident on February 4, 2010.  He applied for and received some statutory accident benefits (SABs) from State Farm, but when the parties were unable to resolve their disputes through mediation Mr. Khan applied for arbitration at the FSCO. Mr. Khan took on the prosecution of his claim for accident benefits, on his own, without the benefit of counsel.


The issues in this hearing are:


  1. Is Mr. Khan entitled to a catastrophic impairment designation?

  2. Is Mr. Khan entitled to further housekeeping benefits?

  3. Is Mr. Khan entitled to further non-earner benefits?




  1. Mr. Khan has not proven entitlement to a designation of catastrophic impairment.

  2. Mr. Khan is not entitled to further housekeeping benefits.

  3. Mr. Khan is not entitled to further non-earner benefits.


This case is complicated by Mr. Khan’s personal history. Mr. Khan has had many challenges in his life. Although his early life was spent in Afghanistan, he travelled, first to Pakistan, then the United States, and finally Canada, arriving here as a refugee claimant seeking respite from the horrors of the ongoing war in his homeland. At the time of the car accident Mr. Khan found himself in an anomalous situation. His refugee claim was not accepted, but he was not deported since it was not Canadian policy to send failed refugee claimants back to war zones where their lives might be threatened. As a result, Mr. Khan continued to live in Toronto, although officially barred from working or otherwise obtaining remunerative employment. As a result of his lack of official status, Mr. Khan believed that he had no medical coverage, a belief that appeared to be reinforced by his interactions with the health care sector in Toronto which included billings to him personally for medical services rendered by health professionals that might normally be covered by OHIP. Prior to the motor vehicle accident itself, Mr. Khan had a series of interactions with the mental health system and he was subject to involuntary detentions in hospital and was treated for symptoms believed to relate to schizophrenia.


In this arbitration Mr. Khan advances a claim for catastrophic impairment as well as ongoing claims for housekeeping and non-earner benefits that are closely linked to the catastrophic impairment claim. Mr. Khan’s claim for catastrophic impairment appears to be linked to the serious aggravation of his schizophrenic or schizo-affective condition which, he claims, significantly deteriorated following, and more controversially because of the accident. Mr. Khan`s mental health condition apparently deteriorated significantly to the extent that even his shelter became at risk.


State Farm raised the issue of whether Mr. Khan was capable of and indeed had the legal capacity to proceed with the arbitration on his own, given the severity of the psychological disability complained of post-accident. In pre-hearings it was ruled that Mr. Khan had the legal capacity as defined by Rule 10 of the Dispute Resolution Practice Code to carry on with the arbitration process. Arbitrator Wilson kept an open mind as to this issue during the arbitration and had regard for medical opinion that Mr. Khan had the ongoing mental capacity to carry on with this arbitration.


According to the current legislation it is the Insurer who is required to make the determination of whether or not a person is catastrophically impaired, based on the assessment criteria set out in section 45 of the Schedule. The insured person can institute the determination process by a request to the Insurer duly signed by a physician or other designated health professional who conducted an examination in support of the application for catastrophic impairment.


Mr. Khan submitted an Application for Determination of Catastrophic Impairment signed by Dr. L who opined that Mr. Khan developed symptoms of Schizophrenia, with hallucinations, paranoia, disorganization, and an inability to handle his daily activities.  The request identified Mr. Khan`s whole body impairment, the major component of that impairment was psychiatric. To that end, Dr. L included a report by two physicians from St. Michael’s Hospital Department of Psychiatry. The report spoke of evidence of delusional disorder, a long-standing history of delusions, a history of auditory hallucinations, limited insight and fair judgement but of cognition that was “grossly intact.” The report listed under the heading of “impression”, “1. Schizophrenia, 2. Cannabis use disorder 3. Antisocial personality traits.”


The doctors at St. Michael’s had some doubts as to whether the accident was the sole cause of Mr. Khan’s disability, but it appears that they were open to the possibility that there was some link between the accident and the worsening of Mr. Khan’s condition. They did not explore whether there was a potential link because the report was not a medical legal report but simply an update report recording Mr. Khan’s interaction with the department of psychiatry at St. Michael’s Hospital.


State Farm properly gave notice that it required its own assessments in order to make a determination of catastrophic impairment and it set up a series of assessments, including psychiatric, psychological, neurology, physiatry and occupational therapy assessments.


Mr. Khan therefore attended an assessment with Dr. JJ who was retained by State Farm to examine Mr. Khan. Dr. JJ found that Mr. Khan was not catastrophically impaired, but acknowledged Mr. Khan was “quite seriously psychotic”, and that he suffered from a cannabis-induced psychosis and “In actuality he was dysfunctional before the MVA”. Dr. JJ observed “Therefore it does not make any sense to use the AMA Guidelines in respect of the motor vehicle accident.”, and as a result he gave no impairment rating for Mr. Khan in his assessment. Relying on the opinions of Dr. JJ and the other assessors State Farm made the determination that Mr. Khan did not meet the criteria for a designation of catastrophic impairment. In relation to the needed threshold of 55%, the 8% rating Mr. Khan had was so far off the mark as to be insignificant.


Mr. Khan disagreed with the determination made by State Farm and applied for arbitration.


The jurisprudence is consistent that the arbitration is rather a request for a determination of an issue in dispute, with the Applicant in the matter having the full burden of proof of convincing an arbitrator on the balance of probabilities that he or she meets the criteria for catastrophic impairment as set out in the Schedule whether or not the Insurer approached the determination of catastrophic impairment in the manner outlined in the Schedule and the Guides.


Mr. Khan triggered the process of determination of catastrophic impairment by way of a request, and

State Farm’s response to the request also made sense. 


The Arbitrator reviewed the regulations and various definitions of the word ‘determination’ along with previous cases and determined that the legislation assigns the obligation of making the “determination” to the Insurer rather than, as in the past, to the collective decision of a panel of expert physicians, certain responsibilities devolve on the Insurer in taking that step. An insurer in making a determination cannot ignore credible evidence that is available to it.


Mr. Khan’s record of mental health interventions after the accident speaks for itself. Dr. L testified as to significant mental distress following the accident. Even Dr. JJ recognized, in a backhanded manner, that Mr. Khan’s mental status at the time was impaired since he noted that “this man is quite seriously psychotic” a state which Dr. JJ attributed to marijuana use. Dr. JJ, however did not explore whether the “excessive use” of marijuana might be in any way related to the “relatively minor accident”. It was clear from his testimony that Dr. JJ had no truck with the medical use of marijuana even though documents filed by Mr. Khan suggest that he may have had a valid prescription for just that use, however unwise.


Whether impaired by schizophrenia, or marijuana, there appears likely to have been some measurable mental impairment that was not reflected in Dr. JJ’ rating. Whether due to his abhorrence of drug use or his belief in the inappropriateness of the Guides to such cases Dr. JJ’ failure to assign a percentage for Mr. Khan’s impairment was a major deviation from the process set out in the Guides.


The duty of good faith requires an insurer to deal with its insured's claim fairly. The duty to act fairly applies both to the manner in which the insurer investigates and assesses the claim and to the decision whether or not to pay the claim. In making a decision whether to refuse payment of a claim from its insured, an insurer must assess the merits of the claim in a balanced and reasonable manner. It must not deny coverage or delay payment in order to take advantage of the insured's economic vulnerability or to gain bargaining leverage in negotiating a settlement. A decision by an insurer to refuse payment should be based on a reasonable interpretation of its obligations under the policy.


No-one testified from State Farm as to the process of making the determination that Mr. Khan was not catastrophically impaired. Presumably someone in authority reviewed the materials, both those submitted by Mr. Khan and those created by State Farm’s own assessors before applying the statutory test to the facts so assembled. Or maybe not. If State Farm did in fact review the documentation thoroughly they would have noted that the major factor relied upon by Mr. Khan in support of his claim is the worsening of his psychological condition that he believed arose from the accident.


The Arbitrator noted that Schedule requires that the assessments take place in accordance with the AMA Guides which form the basis of any consideration of catastrophic impairment. He or she would also note that the primary assessor, Dr. JJ, in assessing the psychological impairment specifically rejected the approach taken by the Guides, and consequently accorded a rating of zero impairment to Mr. Khan. Dr. JJ’ comments on the applicability of the AMA Guides should have set off alarm bells.  Whether or not Mr. Khan’s accident-related impairments were obscured by the use of marijuana and a previous history of psychosis, it was both the assessor’s and ultimately State Farm’s responsibility to deal with those issues in the context of the AMA Guides and not to develop a different assessment process just because there were complications present.


This appeal involves a straightforward application of the thin skull rule. The pre-existing disposition may have aggravated the injuries, but the defendant must take the plaintiff as he finds him. If the defendant's negligence exacerbated the existing condition and caused it to manifest in a disc herniation, then the defendant is a cause of the disc herniation and is fully liable. It has long been clear that the thin skull rule can apply to a fragile personality or psyche as well as purely physical weaknesses such as a compromised disc.  Because of the so-called "egg-shell" or "thin-skull" principle, the appellant has to take his victim as he finds him, a psychologically vulnerable individual.


It was surprising that State Farm was not aware of this jurisprudence when it read Dr. JJ’ report. Indeed it was unlikely that State Farm ever considered that Dr. JJ might have missed the mark in assessing Mr. Khan since it put the same questions to him at the hearing, and seemed satisfied with the same responses.


In Mr. Khan’s case in the absence of credible positive expert evidence that reflects the evaluation process in the Guides makes the evidence of Dr. L less helpful when it comes to assessing the technicalities of catastrophic impairment. The clinical notes of Mr. Khan’s hospitalisations again show clear impairment following the accident, and to some degree support Mr. Khan’s position that the crisis of impairment worsened following the accident, but do not address either the Guides rating or the issue of legal causation of the impairments. While there is at least a coincidence of timing of impairment that suggests that Mr. Khan may have been the proverbially “thin-skull plaintiff”, Mr. Khan did not specifically raise this theory of causation. As well, there is no medical evidence directly examining this issue.


Although the Arbitrator was sensitive to Mr. Khan’s unrepresented status and lack of familiarity with the law, in the absence of positive evidence, he was not prepared to draw the inferences necessary to make a causation finding on the basis of either a thin skull theory or some more direct causation. As a result, for these reasons and those elaborated later in this decision, the Arbitrator found that Mr. Khan has not met the burden of proving that his impairments arose as a consequence of the accident.


Mr. Khan claimed an ongoing Housekeeping claim at the rate of $100 per week. Once again Mr. Khan has the evidentiary burden of demonstrating on the balance of probabilities what was normally done before the accident, what was changed following and because of the accident and what services were reasonably required to address any increase in disability due to the accident. While certainly Mr. Khan`s mental illness would have been a significant barrier to the performance of many housekeeping tasks after the accident, it is also likely that it had the same or similar effect prior to the accident. In any event State Farm has paid the entire non-catastrophic benefit of $10,400 and has not filed any request for repayment. Given the findings with regard to the issue of catastrophic impairment, the Arbitrator was unable to make any further order for Housekeeping benefits, since the non-catastrophic benefits have been exhausted.


A non-earner benefit is one of the more difficult benefits to claim in the accident benefit system. It involves a claimant establishing that he or she suffers from a complete inability to carry on a normal life as a result of a motor vehicle accident. It would be hard to argue with Mr. Khan`s contention that his ability to carry on a normal life is presently substantially impaired; that is, if normal is taken to mean conforming to the standard of the general population, Mr. Khan`s combativeness with neighbours, landlords and roommates, his expressed fear of water and  consequentially bathing, his forgetfulness which limits the ability to safely use stoves, and his paranoia make for a significantly atypical lifestyle when compared to most of  his contemporaries. His unfortunate habit of “trashing” his accommodation also points to the challenges of carrying on a “normal” life. Notwithstanding Mr. Khan’s assertions of a better life pre-accident, there is more darkness than light as to concrete evidence of greater capabilities in the period immediately prior to the accident. While Mr. Khan’s perceived inability to pay for medical treatment and his consequent reluctance to voluntarily engage with the medical system may have skewed the availability of documentary evidence by limiting routine treatment and focussing on that arising from involuntary or emergency contact with the mental health system, this series of “snapshots” is the nature of much of the documentary record presented. In summary these interactions show a deeply troubled life but there is still a remarkable consistency between the impressions made between September 2009 and June 2014, notwithstanding the intervention of the accident.


The Arbitrator concluded that Mr. Khan has not met the burden of proving that his post-accident disabilities arose from the accident or were precipitated by a worsening of his condition following the accident.




Mr. Khan has not been successful in advancing his most recent claims as State Farm, after a battery of examinations, determined that Mr. Khan’s disabilities did not seem to arise because of the motor vehicle accident and ceased payment of benefits. However prior to that determination, even in the face of doubt, they made payments to Mr. Khan.


While the accident benefit system and State Farm were able to address some of Mr. Khan’s most immediate needs following the accident in the longer term, Mr. Khan would be well advised to continue searching for the assistance that he clearly needs from those other parts of Ontario’s social safety net which do not require a direct link to a motor vehicle accident as a pre-condition to ongoing benefits.

Posted under Accident Benefit News, Automobile Accident Benefits, Car Accidents, Catastrophic Injury, Chronic Pain, Fractures, Pain and Suffering, Treatment, Truck Accidents

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Deutschmann Law serves South-Western Ontario with offices in Kitchener-Waterloo, Cambridge, Woodstock, Brantford, Stratford and Ayr. The law practice of Robert Deutschmann focuses almost exclusively in personal injury and disability insurance matters. For more information, please visit or call us toll-free at 1-866-414-4878.

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