March 17, 2009, Kitchener, Ontario
Posted by: Robert Deutschmann, Personal Injury Lawyer
Arbitrator: John Wilson
Decision Date: February 9, 2009
H.T. was injured in a motor vehicle accident on September 8, 2003. She applied for and received statutory accident benefits from Security National Insurance Co./ Monnex Insurance (Security).
H.T. subsequently developed what Dr. T.B., her treating psychologist, described as a major depressive disorder with psychotic features. She was noted as experiencing suicidal ideation. There were also reports of unusual physical, cognitive and psychological reactions during and subsequent to various assessments.
H.T. applied for catastrophic impairment designation on August 13, 2008, based principally on her psychological impairments.
Security, in an effort to make a determination on the issue requested further medical assessments, which counsel for H.T. rejected on the basis that there had been numerous assessments to date and that further assessments created a serious risk to the life and well being of H.T. This position was based primarily on the opinion of the treating psychologist, Dr. T.B.
Dr. T.B.'s conclusion was that H.T. suffered significant setbacks when faced with the stress of assessments. With each setback it took longer to bring her back to her pre-assessment status and she felt increasingly hopeless. While in this state, H.T. became actively suicidal and asked health professionals to assist in ending her life. She also attempted to hoard medication (which was monitored by her partner) for several days in an effort to overdose herself. In Dr. T.B.’s opinion, anything that risked a setback for H.T. risked her life.
The preliminary issue was to determine if H.T. needed to make herself available for further catastrophic assessments at the time of the hearing, or if the issue could have been dealt with by a reference to Dr. L.J. who had last assessed H.T. on September 12, 2008.
The normal procedure to request catastrophic impairment is to file a request for determination of catastrophic impairment in accordance with section 40(1) of the Schedule.
In H.T.'s case this was done on August 13, 2008. This request was supported by a report from Dr. T.B. who opined that H.T. met the test for catastrophic impairment. The principal grounds for such a finding were the serious psychological consequences of the accident.
On September 12, 2008, H.T. attended an insurer's examination performed by Dr L. J., a psychiatrist. Dr. L.J.'s report had been filed in this matter. In the report the psychiatrist reported that H.T.'s current function was significantly impaired with evidence of delusional thinking and hallucinatory experiences with Major Depression and Anxiety symptom burden in association with chronic pain. She was at times quite confused and incoherent and suicidally preoccupied and unable to function in most areas.
Dr. T.B.'s considered opinion was that continued exposure to insurer's examinations would have been harmful to H.T., since it would have triggered suicidal ideation, a risk that was consistent with her recent history. In Dr. T.B.'s opinion, further insurer's examinations posed a significant risk to H.T.'s health and well being.
Security, at the time of the hearing, had scheduled a further battery of examinations relating to the claim for catastrophic impairment.
It is clear even from a reading of the legislation itself that an insurer's discretion to order section 42 examinations is not unfettered. Any examination must be for the purposes of determining an entitlement of ongoing entitlement to benefits for which an application is made. In addition, such examinations can only be held as often as is reasonably necessary.
Arbitrator Blackman commented in Campeau and Liberty Mutual Insurance Company that IME [independent medical examinations] and DAC [Designated Assessment Centre] examinations are not defense medical examinations. They do not arise because the physical or mental condition of an adverse party in an existing legal proceeding is in question. They are legislatively mandated as part of a statutory scheme of first-party contractual rights and obligations, to clarify, as part of the normal adjusting process, whether an applicant has met the applicable entitlement requirements.
H.T. had taken the position that the discretion of an insurer to schedule examinations pursuant to section 42 was circumscribed by its obligations to its client. Indeed the relationship between an insured and his or her own first party insurer, (as is the case in accident benefit matters) can be more than just a simple arms-length commercial relationship.
It has often been said that in general the relationship between an insured and an insurer is one of uberrimae fideis, utmost trust.The duty of good faith also 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.
This does not necessarily follow that these obligations translate into a fiduciary duty between the insurer and its insured.While there is not a generalized fiduciary obligation between insurers and insured, it remains a question that must be decided on the facts of each case.
Although the insurer/insured relationship is contractual and not prima facie a fiduciary relationship, it is important to note that the provisions relating to insurer's examinations are mandatory provisions in the policy. H.T. could not contract for automobile insurance in Ontario without being subject to those provisions. While an insurer may waive the benefit of relying on section 42 examinations, H.T., or any other insured in Ontario have no choice when faced with a properly framed request for an insurer's examination.
Given the medical evidence in the form of reports from Dr. T.B., which had not been seriously challenged, H.T. was peculiarly vulnerable to the stress of further examinations. If her treating psychologist was to be believed, the risk of suicide was a real potential consequence of further examinations.
Consequently, the arbitrator found that in the context of arranging further section 42 examinations, the relationship between this insurer and H.T. was fiduciary in nature. Security, in deciding whether or not to proceed with assessments, and the manner in which they were to be held had to not only consider H.T.'s interests, and balance them with its own, but also had to give preference to H.T.'s interests over those of its own company.
Even if the arbitrator was wrong the jurisprudence had long been that an assessor, at the very least, must avoid injuring the examinee.
In examining the role of an assessor in Ontario, Power, J. in Worthman observed that Matlow J. was correct in holding that although many of the authorities cited seemed to establish the principle that a doctor retained by a third party to examine and report on a person to the third person owes no legal duty to the person other than to avoid injuring her.
Thus in this case where there was unquestioned evidence that further testing potentially created or raised a suicide risk, it was incumbent upon an assessor, and the insurer retaining that assessor to proceed in a manner that would avoid harming the insured. To do otherwise would not only have been unreasonable but a breach of the specific obligations that an insurer has to its insured in such situations of vulnerability.
There was a dilemma for both the Insured and in the Insurer in this matter. The Insurer was under an obligation to do no harm to its insured, even if that entailed restricting its right to medical examinations. The Insurer was also under an obligation to make a fair determination on the issue of catastrophic impairment once that was raised by H.T. It said that it could not fairly consider the request without more information, information that would have been obtained from the insurer's examinations that it had scheduled.
The arbitrator did not accept however that it was impossible to develop a protocol for the determination of catastrophic assessment that would have avoided putting H.T. in danger while still providing Security with sufficient information to make its determination.
While there was no problem with Security delegating the conduct of assessments to experts, it remained responsible to determine the nature of the investigation, and to make the ultimate determination as to entitlement.
The arbitrator noted that in this matter there was no evidence as to why in-person examinations were contemplated, or even as to whether any consideration had been given as to the sufficiency or not of a paper review.
The arbitrator accepted that on the evidence before him, H.T. had made a credible case that further assessments as planned would likely have caused her harm or increased the risk of suicide. The arbitrator also accepted that, as noted earlier, Security had an obligation in setting up the assessment of catastrophic impairment determination in such a way that any examinations at the very least did not harm H.T. Consequently, the further assessments outlined in the OCF-25 dated September 10, 2008 were not reasonable.
Nor were they necessary. It was noted that Dr. L.J.'s psychiatric IE had not yet taken place at the time that the OCF-25 was signed. Security, had it acted promptly could have consulted Dr. L.J. and the other consultants with regard to catastrophic impairment, obviating the need for further examinations.
The arbitrator simply did not accept that Security had led the necessary evidentiary foundation to suggest that its proposed assessment plan was reasonable or that it was the only reasonable alternative at the time of the hearing, or the least intrusive way to proceed in the unusual circumstances.
It was clear also that in the choice of such an independent expert, one party's strategic interests did not trump issues of fairness. Given the first-party relationship in accident benefit matters, the responsibilities of experts chosen to assist in the determination of benefit entitlement should be no less than for unrelated parties in an adversarial situation. In this matter it was not enough for Security to have an unexplained preference for a new and different psychiatrist, when such an abrupt change in assessors could have led to the inference of expert-shopping for a more favourable report.
Consequently the arbitrator found that, in this matter, Security's professed interest in finding yet another psychiatrist to examine H.T. as to catastrophic impairment did not trump its obligations to both make a fair determination as to catastrophic status and to avoid harm to H.T. arising from the process.
The arbitrator accepted that the evidence and the submissions made in this matter would support Mr. Payne's contention that his client was justified in not attending the further assessments arranged by Security, that Security was aware of the risk to the health and life of H.T. of further assessments at that time, and that Security categorically refused to explore alternative methods of obtaining the necessary medical opinions to make a determination as to catastrophic impairment.
Consequently, the arbitrator found that the purported determination based on non-attendance was of no effect, since it was made in the light of facts that suggested that H.T. was not obliged to attend the assessments it had arranged.
The arbitrator noted, in this context that Security neither attempted to cross-examine Dr. T.B. on her reports or her opinions as to risk, nor was there evidence that Security ever tried to obtain an opinion from its own psychiatric assessor, Dr. L.J., as to the risk arising from further assessments.
Since it was generally accepted that the arbitrator had no authority to order an insured to undergo a medical assessment, a reasonable corollary of that statement was that the arbitrator had no authority to mandate that an insurer undertake a specific examination. However, the arbitrator could comment on what would be reasonable and necessary in the circumstances, both retrospectively and prospectively.
A reasonable first start in the determination process was to refer the questions related to catastrophic impairment to practitioners who had previously examined H.T., together with any updates of information that were currently available. That especially included a reference to Dr. L.J., who had only recently examined H.T.
Unless there was a significant change in H.T.'s condition, further direct assessments, however necessary continued to be unreasonable.
The alternative to a co-operative approach to assessment would have been that the parties proceeded to arbitration on the basis of a less-than-complete record, and leave the decision to the arbitrator who would ultimately hear the substantive issues in this matter.