Ontario Insurance Commission
Neutral Citation: 1994 ONICDRG 143
File No. A-007147
BETWEEN:
DAVID SENATER
Applicant
and
SIMCOE & ERIE GENERAL INSURANCE COMPANY
Insurer
DECISION
Fact & Issues:
The Applicant, David Senater, was injured in a motor vehicle accident on March 4, 1992. He applied for and received weekly benefits from the Simcoe and Erie General Insurance Company (Simcoe and Erie), under Ontario Regulation 6721.
Mr. Senater was a student at the time of the accident. His weekly benefits were increased during the summer to reflect a summer job that he was unable to undertake as a result of the accident. At summer's end, Simcoe and Erie reduced his weekly benefits. Mr. Senater claims that his weekly benefits after September 4, 1992 should continue to be based on his summer job.
The parties did not resolve this dispute at mediation. Mr. Senater applied for arbitration under the Insurance Act, R.S.O. 1990, c.I.8, as amended.
The issues in this hearing are:
What is the correct amount of Mr. Senater's weekly benefit after September 4, 1992?
Mr. Senater also claims interest on any outstanding amounts owing, and his expenses incurred in the hearing.
Result:
Mr. Senater's weekly benefits after September 4, 1992 are $185.60, under section 12 of the Schedule.
Mr. Senater is entitled to his expenses of the arbitration.
Hearing:
The matter proceeded by way of an Agreed Statement of Facts, and upon the parties' submissions at North York, Ontario, on June 16, 1994, before me, Fred Sampliner, arbitrator.
Present at the Hearing:
Applicant:
David Senater
Applicant's Representative:
Ian Little Barrister and Solicitor
Insurer's Representative:
Ralph D'Angelo Barrister and Solicitor
Findings:
Mr. Senater was a high school student at the time of the accident. He was not employed or self-employed. However, he did have plans for a summer job. He was supposed to begin working at a jewellery manufacturing company on June 15, 1992. According to the employer, the job was seasonal, and it would have ended on August 28, 1992.
Simcoe and Erie began paying Mr. Senater weekly benefits under section 13 of the Schedule, which provides weekly benefits of $185.00 to insured persons who are not deemed to be employed or self-employed at the time of the accident.
Simcoe and Erie increased Mr. Senater's weekly benefit to $400.00 for the period of his summer employment, in accordance with section 12 of the Schedule. Section 12 provides for payment of weekly benefits to eligible insureds, who are considered to be employed or self-employed at the time of the accident.
Insured persons who are not working at the time of the accident may also qualify for weekly benefits under section 12 if they have an expectation of employment. Section 12(2) of the Schedule provides that the insured person may qualify as an employed or self-employed person if they are:
(iii) entitled to start work within one year under a legitimate offer of employment made before the accident and evidenced in writing.
Mr. Senater had a legitimate offer of employment at the time of the accident, and his claim for weekly benefits properly falls within section 12 of the Schedule.
Simcoe and Erie switched Mr. Senater from section 13 weekly benefits to section 12, when his summer job began. The Schedule provides no mechanism for alternating between weekly benefits categories. In my opinion, the insured person's work situation at the time of the accident determines the category of weekly benefits, for the entire length of the claim. Since Mr. Senater initially qualified as an employed person under section 12(2) of the Schedule, his eligibility and benefits, from the accident date forward, should be determined by that section.
The date that the insurer commences payment of weekly benefits to individuals who qualify under section 12(2) is set out in section 12(6) of the Schedule:
The insurer is not required to pay a weekly benefit under subsection (1) to a person described in subparagraph iii of paragraph 1 of subsection (2) until the day the person would have been entitled under the contract to begin employment unless before that day the person is qualified for a benefit under another paragraph of that subsection.
Simcoe and Erie increased Mr. Senater's benefits at the commencement date of his summer employment in accordance with this section. But no corresponding section specifically provides for the reduction of benefits to claimants qualifying under section 12(2)1iii. The operation of the Schedule under these circumstances is not obvious.
Mr. Senater reasons that because the legislation contains no specific authority allowing insurers to reduce weekly benefits to insureds who qualify under section 12(2)1iii, the benefit rate continues for the period of eligibility. Mr. Senater contends that, in this way, insured's are offered certainty of benefits, consistent with the spirit of the legislation.
The result of this interpretation recognizes the remunerative aspect of an employment offer, while disregarding the length of the offered employment. Using this logic could potentially mean that if a claimant was scheduled to begin a one day job the day after the accident, his or her weekly benefits during the disability, would be based upon that day's rate of pay. Similarly, a claimant who was set to begin a new business might have many short-term jobs set to commence after the accident. Assuming Mr. Senater's theory is correct, does the insurer use the first job, second or third to calculate weekly benefits? Practically speaking, not recognizing the whole contract inevitably leads to problems in the determination of benefits for those claimants qualifying under section 12(2) It does not, in fact, lead to consistency, as Mr. Senater suggests.
Mr. Senater's interpretation would also treat insureds qualifying under section 12(2)1iii more favourably than other section 12 claimants. Section 12 provides that a claimant who is actually employed or self-employed at the time of the accident has a choice of averaging his or her total gross earnings during either the four or 52 week period before the accident to arrive at a basis for calculating the weekly benefit. The recognition that the length of employment is a factor in the calculation of pre-accident earnings for section 12 claimants convinces me that the Legislature intended time to be considered in the calculation of benefits for claimants with post-accident job offers, under section 12(2)1iii.
Income averaging cannot be used to calculate benefits for insureds who qualify under section 12(2)1iii. Unlike other section 12 claims, no experience is available since the contract or offer of employment is unfulfilled. Averaging the future work of an employee paid by the hour over some period after the accident would be complete speculation. Therefore the Legislature recognized that the employment offer or contract provides reasonable guidance to the insured person's potential income.
The logic is realized through Section 12(7) of the Schedule:
- When a person becomes qualified to receive an income benefit under subparagraph iii of paragraph 1 of subsection (2), the person's gross weekly income shall be deemed to be the greatest of,
i. if the person was qualified under either subparagraph i or ii of paragraph 1 of subsection (2), his or her gross weekly income as determined under paragraph 1,
ii. the gross weekly income payable under the contract of employment, [emphasis added]
iii. $232.
In specifically identifying "the contract of employment" as determinative of benefits, I believe that the Legislature has chosen to recognize that some offers of employment may be time-limited.
This language contemplates that Mr. Senater has the advantage of basing his claim for weekly benefits upon the amount of remuneration he expected to receive from the employment offer, but only for the period that he expected to work at the time of the accident.
If I had been presented with credible evidence that Mr. Senater would have continued employment, my findings might be different. But a case for continuing employment was not presented. Thus, I confine this case to its facts.
Moreover, I am concerned that my decision in this matter may lead some insurers to ask how far they may speculate about post-accident employment terminations or reductions of income. I would suggest a cautious approach, recognizing that insureds whose claims are based upon pre-accident work are treated differently than those who fall under section 12(2) liii of the Schedule.
Conclusion:
In this case, the facts are quite clear. Mr. Senater had a limited expectation of employment at the time of the accident, whereby he was scheduled to receive no income after September 4, 1992. Accordingly, the basis for calculating Mr. Senater's weekly benefits under section 12 of the Schedule is the minimum $232.00, and his benefit is $185.60 per week.
Special Award:
Simcoe and Erie paid Mr. Senater weekly benefits of $185.60 after September 4, 1992, which is consistent with my findings. Therefore, since no additional benefits are awarded, there is no basis for a special award.
Expenses:
This was a novel legal question. I think it is appropriate to exercise my discretion, and grant Mr. Senater his expenses of the arbitration. I remain seized if there is a dispute about the particulars.
Order:
Mr. Senater's weekly benefits after September 4, 1992 are $185.60, under section 12 of the Schedule.
Mr. Senater is entitled to his expenses incurred in respect to the arbitration.
Fred Sampliner Arbitrator
Date