Neutral Citation: 1992 ONICDRG 3

File Nos. A-000185, A-000076, A-000162, A-000250, A-000206, A-000355

ONTARIO INSURANCE COMMISSION

BETWEEN:

Amnon Ajzensztadt

Szilvia Antal

Edward Gresik

Vinette Harris-Peter

Frank Russo

Tracy Wallace

Applicants

and

CAA Insurance Company (Ontario)

Safeco Insurance

Chubb Insurance

Allstate Insurance

The Citadel Assurance

Canadian Surety

Insurers

DECISION

Issue:

The Applicants were all injured in motor vehicle accidents. They were insured under standard automobile owners' policies providing for the no-fault benefits specified in Ontario Regulation 273/90 ("No-Fault Benefits Schedule") enacted under the Insurance Act, R.S.O. 1990, Chapter I.8.

The Applicants applied for no-fault benefits under the No-Fault Benefits Schedule. As part of their benefits, they claimed legal fees charged for completing their applications for no-fault benefits, under Section 6(1)(f) of the No-Fault Benefits Schedule. The Insurers declined to pay for the legal fees claimed. The Applicants applied for mediation. The mediations were all unsuccessful and the Applicants subsequently applied for the appointment of an arbitrator under Section 282(1) of the Insurance Act. The applications for the appointment of an arbitrator were consolidated, pursuant to Section 16.1 of the Dispute Resolution Practice Code, since they dealt with the same issue.

The issue to be determined by the arbitrator is:

Are legal fees charged for the completion of the application for no-fault benefits recoverable under Section 6(1)(f) of the No-Fault Benefits Schedule?

Result:

The decision of the arbitrator is:

Legal fees charged for the completion of the application for no-fault benefits are not recoverable under Section 6(1)(f) of the No-Fault Benefits Schedule.

Documents before the Arbitrator:

Exhibit 1

Resumes of Plain Language Experts

Exhibits 2, 3, 4

Plain Language Evaluation of Claim Forms

Exhibit 5

Accident Benefits Claim Form Package

Exhibit 6

O.I.C. Application for Accident Benefits for Vinette Harris-Peter

Exhibits 7, 8, 9

Correspondence regarding claim of Vinette Harris-Peter

Exhibit 10

Accident Benefits Information Sheet regarding Frank Russo

Exhibit 11

O.I.C. Application for Accident Benefits for Tracy Wallace

The following documents with respect to each application were before the arbitrator, but not marked as exhibits:

• Report of Mediator

• Application for the Appointment of an Arbitrator

• Response of Insurer

Cases referred to:

Abado v. State Farm Mutual Automobile Insurance Company, (1982), I.L.R. 1-1607 (Ont. Co. Ct.)

Biddle v. Allstate Insurance Company Insurance Company, (1981), I.L.R. 1-1609 (Ont. C.A.)

Dzaja v. State Farm Automobile Insurance Company, (1987), I.L.R. 1-2212 (Ont. Prov. Ct.)

Joynes v. Canadian Home Assurance Co., (1989), 1989 CanLII 10442 (NB CA), 36 C.C.L.I. 191 (N.B.C.A.)

July et al. v. Neal et al., (1986), 1986 CanLII 149 (ON CA), 19 C.C.L.I. 230 (Ont. C.A.)

Lightstone v. Canadian Provincial Insurance Company, (1985), 1985 CanLII 1939 (ON HCJ), I.L.R. 1-1950 (Ont. S.C.)

McCuaig v. Unigard Mutual Insurance Co., (1978), 1978 CanLII 2207 (BC SC), 84 D.L.R. (3d) 607 (B.C.S.C.)

Masson v. Scottish & York Insurance Co., (1990), 1990 CanLII 13888 (ON HCJ), 44 C.C.L.I. 143 (Ont. Div. Ct.)

Re Robinson and Lumsden (1986), 1986 CanLII 2864 (ON HCJ), 32 D.L.R. (4th) 154 (Ont. Div. Ct.)

Trudgeon v. Pilot Insurance Co. et al. (1986), 1986 CanLII 7802 (ON HCJ), 21 C.C.L.I. 17 (Ont. H.C.J.)

Wigle v. Allstate Insurance Co. of Canada, (1984), 14 D.L.R. 404 (4th) (Ont. C.A.)

Statutes referred to:

Interpretation Act, R.S.O. 1990, Chapter

Workers' Compensation Act, R.S.O. 1990, Chapter W.11

Hearing:

A hearing was held at North York, Ontario on October 29, 1991, before me, Frederika Rotter, Senior Arbitrator.

Present at the hearing were:

Applicants' Representative:

Mitchell Schachter

Barrister & Solicitor

Insurers' Representative:

James Flaherty

Barrister & Solicitor

The Evidence:

Each Applicant had claimed legal fees that had been charged for the completion of their Application for No-Fault Benefits. The Applicants claimed that such legal fees were payable under Section 6(1)(f) of the No-Fault Benefits Schedule, which allows payment for "other goods and services, whether medical or non-medical in nature, which the insured person requires because of the accident".

Susan Laverno gave evidence under oath on behalf of the Applicants. She testified that she is employed as a legal assistant at the law firm of Gluckstein, Neinstein and has been so employed since approximately 1987 (that is, before the current amendments to the Insurance Act were introduced).

The witness testified that normally when a client first comes in to the law firm, a clerk and a lawyer meet with the client to obtain details of the accident. She is familiar with the no-fault benefits claims forms. She obtains from the client the information required to complete the forms. Then, she personally completes the form on behalf of the client. This first meeting takes about an hour and a half in its entirety.

The witness testified that she must complete the forms because some clients do not speak or write English. Some are illiterate. Some clients are prevented from filling out the forms themselves because of head injuries or broken wrists. Many clients lack the concentration to complete the forms, and are intimidated by the forms because they are complicated.

In cross-examination, the witness testified that Ed Gresik, one of the Applicants, had a head injury and was therefore incapable of filling out the accident claim forms himself. He was confused and disoriented.

The witness testified that the claim forms under the current legislation are more complicated and detailed than the old forms were. Under the former legislation, she rarely filled out a form, and the firm did not bill clients for completion of forms. The old forms did ask some of the same questions. However, the new forms are three pages long, with detailed questions, which are difficult for claimants. Many people do not even know who their insurer is.

The witness testified that although the questions are not intrinsically difficult, they may be hard for an individual who cannot speak English. Some of the questions pertaining to income from employment may be difficult. She testified that insurance companies have not offered to assist claimants in filling out the forms.

The witness testified that it is the practice of the law firm to fill out forms if clients request assistance. Claimants come to the law firm because they are not aware of their rights under the no-fault benefits legislation. They are not familiar with the new system and therefore they seek legal assistance.

Donna Michelle Chappel gave evidence under oath on behalf of the Applicants. She testified that she is a law clerk at Gluckstein, Neinstein and has been employed there for over six years. She testified that the practice at the law firm is that, under the supervision of a lawyer, she is in charge of a file from the inception of the claim until the discovery stage. She meets with the client, together with a lawyer, for the initial interview and assists the client by filling out the claim for no-fault benefits. On average, this process takes about an hour and a half. Clients require assistance because they may have physical problems, cognitive difficulties, or language problems.

They may simply be intimidated by the forms. The new no-fault benefits claims forms are more extensive than the old forms. There are more forms and waivers to fill out and clients do not know what to do with them.

The witness testified that problems with filling out the forms would result in delays in getting benefits. She testified that she is familiar with the file of Mr. Ajzensztadt, one of the Applicants. This individual had a head injury and a cracked pelvis. The witness testified that she went to see this gentleman in hospital, and at that time he could not physically fill out or sign the claim form. When she visited him in hospital, Mr. Ajzensztadt was not even able to answer all the questions on the form. She signed the form on his behalf. Mr. Ajzensztadt is 71 years old and could not sign the form because he was lying flat on his back, and hooked up to tubes. When she went to the hospital, she was not accompanied by a lawyer.

The witness testified that one does not need to be a law school graduate or expert to complete the claim forms. Anyone who can read and write could complete the forms. However, many individuals have difficulties with the forms. They are unsure of their rights and require assistance. Some individuals need help because some of the questions are not straightforward, especially the questions about employment.

The final item of evidence introduced on behalf of the Applicants was a plain-language evaluation of the claim forms. The documents were marked Exhibits 1, 2 and 3 to the hearing. The evaluation indicates that the forms are written in "legal-ese", and that they could be confusing, intimidating and problematic for many individuals.

Maria Victoria Garcia gave evidence under oath on behalf of the Insurers. She testified that she is a legal assistant with Gluckstein, Neinstein and dealt with the case of Vinette Harris-Peter. She testified that she completed the form for accident benefits on behalf of Ms. Harris-Peter, when Ms. Harris-Peter first consulted the law firm. She spent about an hour to an hour and a half at the initial interview. Ms. Harris-Peter is employed as a data entry person. She suffered soft tissue injuries in a motor vehicle accident. She felt intimidated and traumatised, and did not choose to complete the forms herself, although she could have.

The witness testified that she sent the completed claim form to the Insurer, Allstate Insurance. She was the author of two letters also sent to Allstate, marked Exhibit 7 to the hearing. When the forms were sent to Allstate, they were not all completed. Therefore, certain forms were sent later under cover of a letter marked Exhibit 8 to the hearing. Exhibit 9 is more correspondence in this matter.

The witness testified that it generally takes about half an hour to complete the benefit claim forms. If clients have questions along the way, it may take longer. The witness usually does not meet with clients alone. A lawyer is usually present. The witness testified that just because a person can read and write, that does not necessarily mean they understand the forms. She doubts that someone with a head injury could fill out the forms.

Richard Dubin gave evidence on behalf of the Insurers. He testified that he is the Ontario Claims Manager for The Citadel Assurance ("Citadel") and that Citadel is the insurer involved in the case of Frank Russo.

The witness testified that he is a graduate of the University of Ottawa Law School, with 14 years experience in insurance law. For the past five years, he has been the claims manager of the largest branch of Citadel. He has also taught insurance law at George Brown College for five years.

The witness testified that when the current No-Fault Benefits Schedule was implemented he went to Michigan to study that no-fault system. After returning from Michigan, he personally trained every adjuster and examiner with his company in Ontario.

He testified that Citadel attempts to assist insureds in filing their claims and attempts to expedite the payment of benefits. Citadel does not take an adversarial position towards its insureds under the No-Fault Benefits Schedule. It is the witness' view that insurers should handle claims promptly. In his firm, no-fault benefits claims forms are initially filled out by adjusters. That way the insurance company can make payments as soon as possible. The witness testified that in the initial telephone contact with an applicant, benefits are explained and afterwards benefits claims forms are mailed out. The witness testified that his company uses a coloured marker to mark on the claim form all the specific areas that the claimant is requested to complete.

The witness testified that the company sent all the forms to Frank Russo, but received the completed forms from the law firm. The information supplied by the law firm was further to the original information that Citadel had already received by telephone. He testified that Citadel did not receive the completed employer's form and medical forms from the law firm, but commenced payments regardless.

The witness testified that very often law clerks do not fully complete forms. In the Russo case, the medical report was not signed by a doctor and had to be returned to be completed. The witness testified that when the forms are not complete, Citadel's instructions are to commence payment, and then clarify the information required.

The witness testified that Mr. Russo signed his own application form for benefits. The fully completed form was not received until May 16, 1991, but Citadel started payments in March. The witness testified that Citadel received the bill from the law firm prior to actually receiving the completed claim forms. The bill was dated March 1, 1991.

The witness testified that if a claimant has difficulty with English, Citadel has no problems dealing with a family member or friend. Citadel does not insist that forms be signed. Citadel sometimes sends out a claims representative to meet with family if the case warrants. The witness also testified that Citadel has an in-house rehabilitation counsellor. This counsellor sees all individuals who are off work for more than two or three months.

The witness testified that he dealt with a 62 year old Lebanese lady who spoke poor English, and was not able to complete her own claim forms. In that case, her son acted as the claimant's representative. Her injuries were severe. She did not return to work for more than a year after the accident. Citadel met with her son to find out how the injury was affecting the claimant. Family members interpreted for the claimant. Based on the meeting, a settlement was structured for the claimant. The witness testified that he has not encountered a case where a claimant does not have someone to assist in the completion of the forms, if the claimant is not capable of completing them him or herself.

In cross-examination, the witness testified that he does not feel that the no-fault benefits claims forms are more complicated than the old forms. The current forms are quite similar to the old forms. He feels that the language is not difficult to follow. He testified that adjusters are trained to assist claimants in completing the forms.

Mary Clay Wright gave viva voce evidence under oath. She testified that she is a member of the claims specialty unit with Canadian Surety, and is involved in the Wallace claim. She testified that her first contact with the Applicant, Tracy Wallace, was through Ms. Wallace's father. The Applicant was in hospital with serious injuries. The witness testified that the adjuster met with Ms. Wallace personally, approximately one week later. The forms for Ms. Wallace were initially mailed to her father. They came back from the Gluckstein, Neinstein office, completed by a lawyer.

The witness testified that Tracy Wallace is capable in English. She is a university student, and would have no difficulty in filling out the forms. Tracy Wallace's application for benefits was marked Exhibit 11 to the hearing. The witness testified that her company often receives forms from law firms.

The Law:

For the sake of convenience, the relevant sections of the legislation are reproduced as follows:

PART II

SUPPLEMENTARY MEDICAL AND REHABILITATION BENEFITS AND CARE BENEFITS

SUPPLEMENTARY MEDICAL AND REHABILITATION BENEFITS

Section 6

(1) The insurer will pay with respect to each insured person who sustains physical, psychological or mental injury as a result of an accident all reasonable expenses resulting from the accident within the benefit period set out in subsection (3) for,

(a) medical, psychological, surgical, dental, hospital, chiropractic, nursing and ambulance services and the services of physiotherapists;

(b) prostheses, dentures, prescription eyewear, hearing aids and other medical or dental devices;

(c) rehabilitation, life-skills training and occupational counselling and training;

(d) transportation for the person to and from treatment, counselling and training sessions, including transportation for an assistant;

(e) home renovations to accommodate the needs of the nsured person;

(f) other goods and services, whether medical or on-medical in nature, which the insured person equires because of the accident;

(4) Subject to subsections (5) and (6), the insurer, before making a payment for an expense under subsection (1), may require the insured person to submit a statement signed by the insured person's qualified medical practitioner or psychological advisor stating that the expense is necessary for the insured person's treatment or rehabilitation.

Submission of Applicants

Counsel for the Applicants submitted that legal assistance was required under Section 6(1)(f) as a result of the accident. He submitted that the Applicants were required to fill out the application forms, otherwise they would not be entitled to treatment or rehabilitation benefits. He argued that many clients cannot fill out the forms themselves. Therefore, legal assistance is required.

Counsel submitted that the heading of Subsection 6 (Supplementary Medical and Rehabilitation Benefits) should not be considered part of the law when interpreting the section. He referred to the Interpretation Act which states that headings are inserted as a matter of convenience. He submitted that the meaning of Section 6(1)(f) is ambiguous. Because of the difference in the wording between Section 6(1)(f) and Section 6(4), he submitted that the meaning of the word "other" in Section 6(1)(f) is ambiguous. This ambiguity should be resolved in favour of the Applicants, pursuant to the contra proferentem rule.

Counsel also referred to the clear language study which, he submitted, shows that the claim forms are confusing. He submitted that the forms are intimidating and that is why lawyers must fill them out. Finally, counsel submitted that the Applicants are entitled to their costs in the hearing, since a bona fide interpretation issue exists.

Submission of Insurers:

Counsel for the Insurers submitted that legal fees for the completion of claim forms are not recoverable under Section 6(1)(f).

Counsel submitted that benefits under Section 6(1)(f) must be of a medical or rehabilitative nature, and that legal fees are not of this nature. He noted that the sub-title of this section indicates that it deals with medical and rehabilitation benefits. Further, Section 6(4) provides that the insurer may require a statement that the expense is necessary for the insured person's treatment or rehabilitation. He submitted that Section 6(4) would be absurd if legal costs are covered by Section 6(1)(f). It would mean that the drafters of the legislation intended to ask a medical practitioner for an opinion about whether legal assistance is required, something obviously not within a medical person's realm of expertise.

Counsel stressed that Section 6 does not specifically refer to legal expenses. Other kinds of expenses, such as medical, psychiatric and transportation expenses are specifically mentioned. Counsel submitted that if legal costs were meant to be included, the drafters of the legislation would have created a category for such costs.

Counsel submitted that Section 6(1)(f) refers to goods and services that an individual "requires", and that in this context the word "requires" means "essential". He argued that it is not essential that a lawyer fill out a benefit claim form. He submitted that, if a claimant elects to have a law clerk fill out a claim form, that election does not make the services essential.

Counsel submitted that the wording of Section 6 is neither ambiguous nor absurd. He referred to Re Robinson and Lumsden, (1986), 1986 CanLII 2864 (ON HCJ), 32 D.L.R. (4th) 154 (Ont. Div. Ct.).

In response to the contra proferentem argument, Counsel submitted that principle is not applicable because the No-Fault Benefits Schedule is a regulation enacted by the Legislature. He cited July et al. v. Neal et al., (1986), MacKinnon A.C.J.O. 230 (O.S.C., C.A.), in support.

Counsel also submitted that the purpose of the legislation is to contain premiums, control costs, and provide benefits to individuals as quickly as possible. Counsel submitted that a first-party service relationship exists between the insurer and the insured, where the insurer can assist the claimant. Counsel argued that the legislative scheme intended that legal costs not be incurred until arbitration is invoked, at which point the relationship becomes adversarial. He noted that legal costs are specifically provided for, in the legislation, with respect to arbitration hearings. He analogized with the Workers' Compensation system.

Counsel argued that the report of the clear language experts should be given little or no weight. He noted that the Applicants failed to comply with the Dispute Resolution Practice Code and did not give proper notice of their intention to file this report. The Insurers have had no opportunity to test the experts about their expertise.

Finally, counsel made submissions regarding the quantum of the award, should I find that legal fees are payable. Counsel submitted that on the evidence one half an hour was spent by the clerks filling out the forms. Therefore, a proper tariff, if I choose to award a fee, should be $11.50 which represents half of the $23.00 per hour legal aid tariff for a legal clerk.

Counsel for the Applicants made submissions in reply, arguing that the tariff should be one and a half to two hours of counsel time to fill out the forms, since the evidence was that the forms took one and a half to two hours to complete.

Reasons:

In this case, the Applicants have claimed that they are entitled to receive benefits under Section 6(1)(f) of the No-Fault Benefits Schedule, for their expenses incurred in having the applications for benefits (claims forms) filled out.

In each case, the application for no-fault benefits was completed by the Applicant's legal counsel. Counsel charged the Applicants a fee for this service, and it is this fee that is claimed under Section 6(1)(f).

The Applicants claim that legal fees for completing the applications for no-fault benefits can be claimed under Section 6(1)(f), which refers to "other goods and services, whether medical or non medical in nature, which the insured person requires because of the accident".

The Applicants submit that this section is ambiguous on its face, and that the ambiguity should be resolved in favour of the Applicants, pursuant to the contra proferentem rule of interpretation. That rule states that an ambiguous provision is construed most strongly against the person who selected the language. However, the contra proferentem principle applies to disputes about contracts at least in part privately drafted, and has no applicability where the terms of a contract are imposed by law, as is made clear in Abado v. State Farm Mutual Automobile Insurance (1982), I.L.R. 1-1607 (Ont. Co. Ct.).

Moreover, I do not accept that the wording of Section 6(1)(f) is ambiguous or susceptible of conflicting interpretation. The wording is plain, straightforward and easily understood. As I have indicated in a previous decision, Plows v. Jevco Insurance Company (O.I.C. File Nos. A-000175,A-000588 dated January 16, 1992), the legislation sets out three criteria that must be met before an Insurer's liability to pay for a good or service under subparagraph 6(1)(f) can be established. Those criteria are:

(1) it must be a reasonable expense resulting from the accident

(2) it must be required because of the accident

(3) a medical practitioner must provide a signed statement that the expense is necessary for the insured's treatment or rehabilitation, if the Insurer so requires

In each disputed case, whether those criteria are met is a question of fact to be determined by the decision-maker, taking into account the particular facts of the individual situation.

In this case, the Applicants argue that the services in question are reasonable expenses resulting from the accident and required because of the accident, since without these services, the Applicants would not be able to claim or obtain the no-fault benefits for which they are eligible.

I do not accept this argument.

I am not satisfied that, because of the accident, the services of a lawyer or a para-legal clerk are required by the individual applicants to complete an application for no-fault benefits.

The evidence is that certain individuals may have difficulties in completing an application for no-fault benefits. However, the reason for this difficulty often is not connected with the accident. Some individuals require assistance in completing the forms because of language barriers or lack of literacy skills - problems which have nothing to do with the accident.

Even where assistance is required as a result of the accident - that is, because the claimants' injuries prevent them from completing the forms - I am not satisfied that such assistance is required to be provided by a lawyer. The testimony was that most high school graduates could complete the forms: one does not need to be a college graduate or have a legal degree to complete them. In each of the Applicants' cases, in fact, the evidence was that a law clerk rather than a lawyer completed the forms.

The Applicants chose or consented to have the application form completed on their behalf by an employee of the law firm. The legislation imposes no requirement that the forms be so completed. Individuals are free to seek assistance as they choose: however, an insurer cannot be obliged to pay for such assistance, unless the service is required as a result of the accident.

The application forms may not be as "user friendly" as they should be, and might well benefit from revisions to make them clearer and easier to understand. However, I find as a fact that the services of a lawyer are not required to fill them out. The cost of such services do not constitute a reasonable expense resulting from the accident.

With respect to the third criterion, the provision of a statement by a medical practitioner, I find that this criterion sheds light on the nature of the expenses contemplated under Section 6(1)(f). That is, the goods and services available under that section must be such that a medical practitioner might validly opine as to their necessity. In this case, a medical practitioner could have no valid opinion about the necessity of the legal services claimed, as this issue is outside the realm of medical expertise.

The Applicants are entitled to an award for their ordinary expenses incurred in respect of participating in the arbitration proceeding, as prescribed in Ontario Regulation 275/90 and Schedule 1 of the Dispute Resolution Practice Code.

Order:

1. The Applicants are not entitled to be reimbursed for fees charged for the completion of their applications for no-fault benefits under Section 6(1)(f) of the No-Fault Benefits Schedule.

2. The Applicants are entitled to their expenses incurred in the arbitration proceeding under Ontario Regulation 275/90, and Schedule 1 of the Dispute Resolution Practice Code.

Feb. 6, 1992

Frederika Rotter Senior Arbitrator

Date

James M. Flaherty Gilbert, Wright & Flaherty Barristers & Solicitors 155 University Avenue Suite 1800 Toronto, Ontario M5H 3B7

A. Mitchell Schachter Gluckstein, Neinstein Barrister-at-Law 102 Bloor Street West Suite 500 Toronto, Ontario M5S 1M8

Amnon Ajzensztadt 630 Brock Avenue Toronto, Ontario M6H 3P2

Szilvia Antal 149 Glenmanor Way Thornhill, Ontario L4J 3A3

Edward Gresik 101 Scollard Street Toronto, Ontario M5R 1G4

Ms. Vinette Harris-Peter 79 Gasford Blvd., Unit #3 Downsview, Ontario M3M 2G9

Frank Russo 2 Hatherley Road Toronto, Ontario M6E 1V9

Ms. Tracy Wallace 434 Sheldon Avenue Oakville, Ontario L6J 1V3

Mr. Kenneth Dusenbury Claims Manager CAA Insurance Company (Ontario) 2 Carlton Street Toronto, Ontario M5B 1K4

Mr. David German Senior Claims Analyst Safeco Insurance Companies 2377 Dunwin Drive Mississauga, Ontario L5I 1T1

S. Welwood Claims Manager Chubb Insurance Company of Canada One Financial Place 1 Adelaide Street East Toronto, Ontario M5C 2V9

Philip Langford Senior Staff Claim Representative Allstate Insurance P.O. Box 5000 Don Mills, Ontario M3C 2T9

Richard Dubin Manager The Citadel Assurance 1075 Bay Street Toronto, Ontario M5S 2W5

Mary Wright Senior Adjuster in Charge Canadian Surety 6523 Mississauga Road Mississauga, Ontario L5N 1A6