Insured lacked credibility but medical reports support catastrophic designation.

June 27, 2015, Kitchener, Ontario

Posted by: Robert Deutschmann, Personal Injury Lawyer

Heard Before: Adjudicator Jeffrey Rogers

Date of Decision: May 27, 2015




Paraloganathan Nadesu, 34, was injured in a car accident on September 7, 2003.  He was a front seat passenger in a car that was rear-ended. He was not taken to the hospital. He attended at his family doctor a few days after the accident, reporting pain and stiffness in his neck, lower back, and right shoulder. The family doctor diagnosed a Grade II, Whiplash Associated Disorder. He imposed limitations with regard to prolonged standing and bending.


Following the accident Mr. Nadesu applied for and received statutory accident benefits from Zurich, however disputes arose regarding Mr. Nadesu’s entitlement to further claimed benefits and Mr. Nadesu applied for arbitration at the FSCO.   


Mr. Nadesu has a Grade 10 education, and was married in 2000. At the time of the accident he lived in a one bedroom apartment with his wife who was pregnant with their first child. At the time of the accident he had a full time job (factory labour) and a part time job (furniture mover). Following the accident he returned to the full time job, but has not worked since February 2004. Zurich continues to pay him income replacement benefits.


The issues in this hearing are:


  1. Mr. Nadesu claims that he sustained a catastrophic impairment as a result of the accident.

  2. Mr. Nadesu claims monthly attendant care benefits at the rate of $850.37, from September 7, 2003 to February 12, 2007 and $5,210.40 from February 13, 2007 to present and ongoing.

  3. Mr. Nadesu claims $7,200 for Botox injections.

  4. Mr. Nadesu claims a special award based on Zurich’s failure to pay for the Botox injections.

  5. Interest: Mr. Nadesu claims interest on payments found to be overdue.




  1. Mr. Nadesu sustained a catastrophic impairment as a result of the accident.

  2. Zurich shall pay Mr. Nadesu monthly attendant care benefits as follows:

    1. $230.50: from April 4, 2006 to February 13, 2007; from April 1, 2007 to May 4, 2007; from May 17, 2007 to January 8, 2008; and from January 22, 2008 to October 30, 2009;

    2. $296.45: from November 1, 2009 to present and ongoing.

  3. Mr. Nadesu’s claim for payment for Botox injections is dismissed.

  4. Mr. Nadesu’s claim for a special award is dismissed.

  5. Zurich shall pay Mr. Nadesu interest on attendant care benefits owing, pursuant to section 46 of the Schedule, as amended.

  6. The Arbitrator remained seized of the issue of the amount of interest payable, if the parties are unable to resolve the question on their own.




Due to procedural issues Arbitrator Rogers was rehearing this case.


Mr. Nadesu’s health and function gradually declined after the car accident.  His functional limitations are now rooted in his mental status, and not in physical impairments.  The question of what caused the decline in Mr. Nadesu’s mental health is central to the dispute in this arbitration. His position is that his mental disorder was caused by the physical injuries he sustained in the accident. Zurich agrees that Mr. Nadesu suffers from a mental disorder but argues that Mr. Nadesu’s mental disorder was incorrectly diagnosed and that he actually suffers from a genetically based mental disorder which the car accident could not have caused. Zurich further argues that, in any event, Mr. Nadesu functions at a level that is not consistent with being catastrophically impaired.


For the reasons that follow, the Arbitrator found that the car accident caused Mr. Nadesu’s mental disorders, and that his ability to function is markedly impaired as a result of his mental disorders, within the meaning the Schedule. He therefore sustained a catastrophic impairment as a result of the accident, and he is entitled to monthly attendant care benefits.


The Guideline for treatment of WAD II injuries anticipates that Mr. Nadesu would have achieved functional recovery after a maximum of eight weeks of treatment.  Mr. Nadesu position is that he has never recovered from his injuries. Instead, he reported increasing pain, deterioration of his mental health, and consequential loss of function. There is no objective evidence supporting Mr. Nadesu’s claim of ongoing pain. The decision in this arbitration therefore turns on the credibility of Mr. Nadesu’s reports.


Mr. Nadesu testified at the hearing. The Arbitrator found his testimony to be of no use in determining his credibility. He displayed a very poor memory of what should have been memorable events like his upbringing in Sri Lanka, his immigration date to Canada, the dates of birth of his children, and whether he ever returned to work after the accident. He was unable to remember favourable and unfavourable facts to his case suggesting this was not a strategic construct. His memory failed both in examination-in-chief and cross-examination. His failing memory was documented in an insurer assessment, as early as October 2005. This makes his testimony unreliable. The viability of his claim rests on the history noted in the voluminous medical records and reports, and on the testimony of his wife.


Zurich argues that Mr. Nadesu’s subjective complaints should be discounted because he has provided misinformation about other matters. Zurich claims that it was not told about Mr. Nadesu’s return to work at the factory after the accident. It also claims that Mr. Nadesu inflated his account of the severity of the accident over the course of retelling.


The Arbitrator found Mr. Nadesu intended to mislead Zurich about the factory work, but that this misinformation does not adversely impact Mr. Nadesu’s credibility on the relevant issues in this proceeding. There are several reasons for this finding.


  1. All examinations post-accident concluded Mr. Nadesu could not resume work as a furniture mover.

  2. The physical demands of the factory job were light.

  3. Nothing in the record suggests that Mr. Nadesu ever resumed strenuous physical activity post-accident.


The Arbitrator gave no weight to Zurich’s suggestion that Mr. Nadesu was terminated from his position at the factory, and did not stop working there because of his accident. The Arbitrator determined their evidence was self-contradictory, and the third-hand information was unreliable.


Zurich suggests that later accounts of Mr. Nadesu of his injuries and the accident are exaggerated but the Arbitrator did not agree. The Arbitrator also agreed that the numerous accounts of Mr. Nadesu’s perception of his pain and functional limitations in his medical records (provided by numerous experts) were not explained by his physical injuries, and must be of psychological origin.  


Mr. Nadesu claims that the accident caused him to sustain a marked impairment due to mental or behavioural disorder. He claims that he therefore meets the definition of catastrophic impairment as set out in s. 2(1.1)(g) of the Schedule.  Zurich argues that the accident did not cause Mr. Nadesu’s mental or behavioural disorder and that even if it did, his function is not markedly impaired.


The Court of Appeal summarized the three-stage process required for deciding the issue of catastrophic impairment due to mental or behavioural disorder as follows. An assessment is carried out by reference to the American Medical Association’s Guides to the Evaluation of Permanent Impairment (the Guides).


  • The first stage is diagnosis of any mental disorders.

  • The second stage where the impact on daily life is identified.

  • The third stage is assessing the severity of limitations by assigning them into the four categories and determining their levels of impairment.


Thus, the dispute in this case is resolved by answering the following three questions:


  1. Did the accident cause Mr. Nadesu to suffer a mental or behavioural disorder?

  2. If it did, what is the impact of mental or behavioural disorders on his daily life?

  3. In view of the impact, what is the level of impairment?


The Arbitrator reviewed the voluminous medical evidence and determined that:


  1. The accident caused Mr. Nadesu’s mental disorders.

  2. The mental and behavioural disorder has had a steady and increasing impact on his daily life.

  3. The Arbitrator concluded that the accident caused Mr. Nadesu to sustain a marked impairment due to mental or behavioural disorder.


The Schedule requires an insurer to pay reasonable and necessary attendant care benefit to an insured person who sustains an impairment as a result of an accident. Pursuant to section 18 of the Schedule, a catastrophic impairment finding ualifies the insured person for payment of expenses incurred for reasonable and necessary attendant care more than 104 weeks after the accident.


 Mr. Nadesu did not tell Zurich that he required attendant care until February 2010.  He offered no reason for the delay.  Until then, it had been widely reported that he was independent with regard to self-care. Zurich argues that Mr. Nadesu is precluded from entitlement to attendant care benefits because he provided no explanation for the delay of more than six years in notifying Zurich of his need for attendant care. It also argues that Mr. Nadesu does not require the level of care he claims. Zurich consented to the claim being added to arbitration shortly after the hearing started. They did not advise Mr. Nadesu that it would rely on his breach of procedural requirements as a technical defense.


The Arbitrator found that Zurich’s technical defence fails but that, with a minor exception, the assessment conducted on Zurich’s behalf more accurately reflects Mr. Nadesu’s true needs than the assessment upon which Mr. Nadesu relies.


The Arbitrator found that Zurich’s failure to notify Mr. Nadesu of its position means that it cannot rely on Mr. Nadesu’s breach of time limits. Procedural fairness requires that Zurich give Mr. Nadesu reasonable notice of the case he has to meet.


In his review of the law, the Arbitrator further find that, sections 31, 32 and 39 of the Schedule do not operate to preclude entitlement to attendant care benefits in Mr. Nadesu’s circumstances.  The only penalty is delay in payment.


The Arbitrator found that initially there is nothing in the assessments or medical records from which it can reasonably be inferred that Mr. Nadesu needed attendant care immediately after the accident, but that as time progressed so did his psychological illness. He now does require care and attendant benefits which the Arbitrator ordered payed.


Mr. Nadesu is not entitled to Botox injections


Mr. Nadesu is entitled to interest on the overdue payment of the attendant care benefits found to be owing, pursuant to section 46 of the Schedule, as amended. The Arbitrator remained seized of the issue of the amount of interest to be paid, if the parties are unable to resolve it on their own.


Special award


In his opening remarks, counsel for Mr. Nadesu indicated that his client was seeking a special award based on Zurich’s unreasonable denial of attendant care benefits and the Botox injections. In submissions, this claim was limited to the denied Botox injections. The claim for a special award is moot, since Mr. Nadesu is not entitled to payment for Botox injections.

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

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