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Limitation Period for Personal Injury Claims

May 22, 2009, Kitchener, Ontario

Posted by: Robert Deutschmann, Personal Injury Lawyer

Arbitrator: Arbitrator Denise Ashby
Decision Date: April 6, 2009

 
Kalachandran Kanapathipillai was injured in a motor vehicle accident on July 21, 2003. He applied for and was denied income replacement benefits and housekeeping and home maintenance benefits by Personal Insurance Company
The preliminary issue of the hearing was to determine ifMr. Kanapathipillai was prevented from proceeding to arbitration in respect of his claims for an income replacement benefit and a housekeeping and home maintenance benefit because his application for arbitration was filed beyond the two-year limitation period set out in subsection 281(5) of the Insurance Act and section 51 of the Schedule.

Chronology

The following list is a factual chronology of Mr. Kanapathipillai's claim:

1. On August 20, 2003, Mr. Kanapathipillai submitted an Application for Accident Benefits to Personal claiming entitlement to benefits arising from a motor vehicle accident on July 21, 2003.

2. On September 23, 2003, Personal received Mr. Kanapathipillai's Application for Benefits. Mr. Kanapathipillai did not submit either a Disability Certificate or an Employer's Confirmation of Income with his Application.

3. Mr. Kanapathipillai was represented by counsel at all times material to this proceeding.

4. On October 3, 2003, Personal issued an Explanation of Benefits Payable advising Mr. Kanapathipillai that it had not received an Employer's Confirmation of Income and a Disability Certificate stating: "You are not eligible for an income replacement benefit as we have not received the Employer's Confirmation of Income OCF-2/59. Submit this for further consideration of this benefit. We also require a completed Disability Certificate OCF-3."

5. On October 23, 2003, Personal sent another Explanation of Benefits Payable to advise Mr. Kanapathipillai that he was not eligible for Income Replacement Benefits because an Employer's Confirmation of Income had not been received. Personal invited him to submit one for further consideration of his entitlement.

6. On November 5, 2003, Personal sent a further Explanation of Benefits Payable to Mr. Kanapathipillai, advising that the Employer's Confirmation of Income received on October 27, 2003 was incomplete. Personal provided Mr. Kanapathipillai with another form.

7. On October 16, 2004, Personal issued a Notice of Stoppage of Weekly Benefits and Request for Assessment purporting to stop payment of Mr. Kanapathipillai's income replacement benefit. Personal relied on an assessment conducted by Health Recovery Clinic on its behalf. The assessors concluded that Mr. Kanapathipillai was no longer substantially disabled from performing the essential tasks of his pre-accident employment. Personal advised that the termination was effective November 3, 2004. It provided information on requesting a DAC assessment and information regarding the dispute resolution process set out in the Insurance Act.

8. Mr. Kanapathipillai underwent a DAC assessment at the Sheppard East Assessment Centre between November 23, 2004 and January 31, 2005. The assessors concluded that Mr. Kanapathipillai was able to perform the essential tasks of his pre-accident employment.

9. On December 15, 2004, Personal issued an Explanation of Benefits Payable to Mr. Kanapathipillai purporting to deny Mr. Kanapathipillai's claim for Housekeeping and Home Maintenance benefits, for the period from November 1, 2003 to November 30, 2004, on the basis that the claim was not received within 30 days pursuant to section 32 of the Schedule. Mr. Kanapathipillai was also advised that if he were to provide a reasonable explanation for the delay he might be eligible for the benefit pursuant to sections 31 and 33.

10. On January 20, 2005, Personal received a Declaration of Post-Accident Income and Benefits (OCF 13) dated December 10, 2004 from Mr. Kanapathipillai. It indicated that Mr. Kanapathipillai was employed after the accident and had access to Long Term Disability Group Benefits through Canada Life. He started to receive those benefits on February 27, 2004 and had received a total of $14,205.60.

11. On February 5, 2005, Personal issued an Explanation of Benefits Payable advising that the completed Employer's Confirmation of Income (OCF 2) and the Declaration of Post Accident Income (OCF 13) had been received. Based on the information Mr. Kanapathipillai provided, his weekly income replacement benefit was calculated to be $0.00. Personal asked Mr. Kanapathipillai, pursuant to section 33 of the Schedule, to provide documentation indicating whether he was continuing to receive the Group Benefits and whether they were taxable or non taxable.

12. On February 25, 2005, Personal issued an Explanation of Benefits Payable advising Mr. Kanapathipillai that pursuant to the DAC report he was not substantially disabled from performing the essential tasks of his pre-accident employment and consequently the stoppage date of November 3, 2004remained in effect.

13. On October 28, 2005, Personal issued an Explanation of Benefits Payable purporting to deny Mr. Kanapathipillai's claim for Housekeeping and Home Maintenance benefits for the period from April 1, 2005 to September 30, 2005, on the basis that he was not substantially disabled from performing his pre-accident housekeeping and home maintenance tasks.

14. On February 15, 2007, Mr. Kanapathipillai applied for mediation. The Application was received by the Commission on February 20, 2007. The Application for Mediation identified the issues in dispute as a weekly Income Replacement Benefit and Housekeeping and Home maintenance Benefits.

15. On September 7, 2007, the Report of Mediator was released. The Mediator reported that a Weekly Income Replacement Benefit, claimed at the rate of $332.80 from July 28, 2003 to July 21, 2005, and Housekeeping and Home Maintenance Expenses in the amount of $2,870.00, for the period from April 1, 2005 to September 30, 2005, remained in dispute.

16. On December 4, 2007, Mr. Kanapathipillai applied for arbitration. The application was received by the Commission on December 5, 2007. Mr. Kanapathipillai disputed Personal's denial of his claim for Income Replacement Benefits from the date of loss to July 21, 2005 and Housekeeping and Home Maintenance Benefits from April 1, 2005 to September 9, 2005

The Law
 
The two-year limitation period for applying to arbitration is triggered by the insurer's "refusal" of a benefit. Arbitrators at the Commission have determined that a valid refusal requires that the denial be clear and unequivocal. The Schedule requires insurers to inform applicants of the dispute resolution process under sections 279 to 283 of the Insurance Act. This information must be provided in straightforward and clear language that can be understood by an unsophisticated person. At a minimum, the information must include a description of the most important elements of the dispute resolution process, such as the right to seek mediation, that a mediation must be conducted before resorting to arbitration or litigation, the right to arbitrate or litigate if mediation fails, and the relevant time limits that govern the entire process.

Income Replacement Benefits

Personal submitted that it properly terminated Mr. Kanapathipillai's income replacement benefits on October 16, 2004 effective November 3, 2004. Therefore, Mr. Kanapathipillai would have had to commence the arbitration by October 16, 2006.

Mr. Kanapathipillai filed for Mediation on February15, 2007. The Report of Mediator was issued on September 7, 2007 and 90 days from that date was December 6, 2007. Personal submitted that as all of the dates were beyond the expiry of the limitation period on October 16, 2006, Mr. Kanapathipillai was not assisted by the provisions of subsection 51(2).

However, Mr. Kanapathipillai chose to attend a Disability DAC; and the limitation period does not begin to run until the insurer confirms that it is refusing to pay the benefit on the basis of the DAC report.
 
The arbitrator agreed that the notice period did not commence to run until Personal confirmed its refusal to pay Mr. Kanapathipillai's income replacement benefit because the Disability DAC assessors had concluded that Mr. Kanapathipillai was not substantially disabled.

The arbitrator found that the Explanation of Benefits Payable issued by Personal on February 25, 2005, was sufficient confirmation of its refusal of October 16, 2004. Therefore the two-year limitation period commenced to run on February 25, 2005 and ended on February 25, 2007. Mr. Kanapathipillai applied for mediation on February 15, 2007. The report of mediator was released on September 7, 2007. Ninety days from its release was December 5, 2007, the date upon which Mr. Kanapathipillai's Application for Arbitration was received by the Commission. Therefore, the arbitrator found that Mr. Kanapathipillai was not prevented from proceeding to arbitration in respect of his claim for an income replacement benefit.

Housekeeping and Home Maintenance

Personal issued two Explanation of Benefits Payable in which it purported to deny Mr. Kanapathipillai's claims for housekeeping and home maintenance benefits. On October 28, 2005, Personal purported to refuse to pay Housekeeping and Home Maintenance expenses for the period from April 1, 2005 to September 30, 2005 on the basis that Mr. Kanapathipillai was not substantially disabled from performing his pre-accident housekeeping and home maintenance tasks.

Personal submitted that the effective date for termination of Housekeeping and Home Maintenance benefits was December 15, 2004 because its denial of that date was a valid refusal, Mr. Kanapathipillai failed to provide a reasonable explanation and his subsequent application for the benefit was invalid because there is no rolling limitation period.

Mr. Kanapathipillai submitted that he did not seek to arbitrate a housekeeping and home maintenance benefit for the period from November 1, 2003 to November 30, 2004. Therefore Personal's denial of December 15, 2004 was not relevant to these proceedings. As a consequence, the only relevant refusal was that dated October 28, 2005 in respect of the period from April 1, 2005 to September 30, 2005. Therefore, the earliest the limitation could have expired was October 28, 2007. As the report of mediator was released on September 7, 2007 and Mr. Kanapathipillai applied for arbitration on December 5, 2007, he applied within 90 days of the Mediator's report. Therefore he was entitled to proceed to arbitration.

Personal's denial dated December 15, 2004, relied on Mr. Kanapathipillai's delay in presenting his claim. Personal advised him if he provided a reasonable explanation for the delay within 14 days he may had been eligible to claim the benefit. The arbitrator found that this was not a proper denial. It was inaccurate. Failure to provide the explanation, assuming it was reasonably required information, merely provides for the benefit not to be paid for the period that the insured fails to provide the information. Such a denial is thereby equivocal and is not a "refusal" within the meaning of subsection 281(5) or section 51 of the Schedule. Had Personal written to Mr. Kanapathipillai confirming its denial of his claim for housekeeping and home maintenance benefits in respect of the accident on July 21, 2003 on December 15, 2004 and included the requisite information about the dispute resolution process the arbitrator would have determined that there had been a proper refusal.

In conclusion, the arbitrator found that the denial of October 28, 2005 was not a valid refusal because the Claims Advisor failed to provide a basis for her conclusion that Mr. Kanapathipillai did not meet the substantial inability test.
Posted under Accident Benefit News, Automobile Accident Benefits, Car Accidents, Catastrophic Injury, Disability Insurance

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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 www.deutschmannlaw.com or call us toll-free at 1-866-414-4878.

It is important that you review your accident benefit file with one of our experienced personal injury / car accident lawyers to ensure that you obtain access to all your benefits which include, but are limited to, things like physiotherapy, income replacement benefits, vocational retraining and home modifications.

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