Neutral Citation: 1996 ONICDRG 204

OIC A96-001420

ONTARIO INSURANCE COMMISSION

BETWEEN:

CECIL HARKNESS

Applicant

and

ECONOMICAL MUTUAL INSURANCE COMPANY

Insurer

DECISION ON INTERIM BENEFITS

Issues:

The Applicant, Cecil Harkness, was injured in a motor vehicle accident on January 27, 1994. He applied for and received statutory accident benefits from Economical Mutual Insurance Company ("Economical"), payable under the Schedule.¹ Economical paid weekly income replacement benefits at the rate of $633.20 per week under section 7 of the Schedule until October 1, 1995, when benefits were terminated. Mr. Harkness seeks ongoing income replacement benefits after that date at a higher rate. He also claims expenses for transportation in relation to medical appointments. Economical claims a repayment of benefits from Mr. Harkness. The parties were unable to resolve their disputes through mediation and Mr. Harkness applied for arbitration under the Insurance Act, R.S.O. 1990, c.I.8, as amended. These issues are scheduled to be heard on May 5, 6, 7, 8 and 12, 1997.

Mr. Harkness seeks an order for interim benefits.

The issue to be decided on an interim basis is :

1. Is Mr. Harkness entitled to weekly income replacement benefits on an interim basis from October 1, 1995 pending the outcome of a DAC assessment?

Result:

1. Mr. Harkness is not entitled to weekly income replacement benefits on an interim basis.

Procedure:

Mr. Harkness' counsel requested that the motion be heard orally on October 29, 1996, the time originally set for a pre-hearing. Accordingly, she filed the motion record with the Commission on October 25, 1996 and served it on Economical, but failed to serve it in time for Economical to respond by the date of the pre-hearing. I understand that Economical's counsel received service of the motion record on the morning of the pre-hearing. I therefore ordered that written submissions on the motion be filed by the parties by November 8, 1996. Economical filed its response on November 8, but neither party filed submissions. On November 18, 1996, the parties agreed that I should determine the matter based on the materials filed without the benefit of their submissions.

Legal Representatives:

Mr. Harkness's

Leslie J. Dorrett

Representative:

Barrister and Solicitor

Economical's

Edmund W. Kent

Representative:

Barrister and Solicitor

Exhibits:

Exhibit 1

Motion record of Mr. Harkness containing affidavit in support by Nancy Ralph of Gluckstein & Associates, dated October 24, 1996, with attached exhibits. (28 tabs)

Exhibit 2

Affidavit of Elizabeth Buss of Economical, dated November 8, 1996, with attached exhibits (7 tabs).

Caselaw:

Mr. Harkness referred me to the following arbitration decisions:

Fernanda Oleiro and Commercial Union Assurance Company of Canada (September 13, 1996), O.I.C. No. A-009132.

Anand Boodhai and Allstate Insurance Company of Canada (June 14, 1995), O.I.C. A-004002.

Douglas P. Gibson and York Fire & Casualty Insurance Company (January 4, 1995), O.I.C.A-0061150,

Evidence and Findings:

Factual Background:

Mr. Harkness, age 64, was involved in a motor vehicle accident on January 27, 1994. At the time he was self-employed in a home renovation/construction business. At about 12:30 p.m. on that day he was driving his one-ton dump truck in downtown Toronto when a van struck his truck on the passenger's side. Mr. Harkness apparently struck his head upon impact, but there is no clear evidence of a loss of consciousness. Mr. Harkness reported to a number of medical practitioners that immediately after the accident, he drove his truck to a garage. Several hours after the accident, Mr. Harkness attended at the emergency unit of Humber Memorial Hospital which released him after a few hours. Since the accident, he has complained of pain in his cervical and lumbar spine, between his shoulders, in his left elbow and both knees. He has also complained of cognitive problems related to his memory and concentration.

Economical paid Mr. Harkness weekly income replacement benefits at the rate of $633.20 until October 1, 1995. Based on documentation provided by Mr. Harkness, Economical's accountants recalculated Mr. Harkness' benefits at a lower rate and stated that further financial data was required. By letter dated October 6, 1995, Economical advised Mr. Harkness of an overpayment and terminated his benefits effective October 1, 1995 for his alleged failure to provide specific financial documentation.

In her affidavit, Ms. Nancy Ralph stated that despite Mr. Harkness' attempts to provide further financial data, Economical did not reinstate Mr. Harkness' benefits. The amount of Mr. Harkness' income replacement benefit remains in dispute.

Several months later, Economical presented Mr. Harkness with another ground for benefit termination. By letter dated January 25, 1996, Economical advised Mr. Harkness that benefit termination was based on the opinions of Dr. Snow, Dr. Furlong and Dr. Horsey (discussed below) who, according to Economical, concluded that Mr. Harkness no longer suffered from an accident-related disability.

Medical Evidence:

Medical documents filed by both parties conclude that Mr. Harkness suffers from cognitive deficiencies. The parties also concur that Mr. Harkness did not sustain a brain injury in the January 27, 1994 accident.² The question, however, is whether Mr. Harkness' cognitive deficiencies result from the accident. Some of the medical evidence cites age-related dementia as a possible cause for this condition.

On March 21, 1994, neurologist Dr. O. Veidlinger determined that Mr. Harkness suffered from a post-concussive state. However, he noted in his report dated May 9, 1994 that the CT scan conducted shortly post-accident revealed no abnormalties.

Mr. Harkness underwent five medical assessments and a work hardening program ordered by Economical. He underwent a neurological assessment by Dr. Horsey at the request of Dr. Fried, his family doctor. Mr Harkness filed copies of the related reports, the results of which I summarize as follows:

1. Neuropsychological Assessment - by Dr. W. Gary Snow, June 7, 1994 concluded that Mr. Harkness suffered from significant cognitive deficits with the result that he would likely have difficulty performing his job at his pre-accident level.

2. Psychological Assessment - by Dr. W.G. Ford, July 22, 1994, concluded that Mr. Harkness' attentional, concentration and organizational difficulties serve as obstacles to his recovery. He agreed with Dr. Snow that Mr. Harkness should undergo an individualized retraining program.

3. Neuro-Educational Assessment - by Ford and Associates, July 20, 1994 and August 25, 1994, concluded that Mr. Harkness has significant attention and concentration problems and, as a result, is not presently ready for a return to work. Ford recommended that Mr. Harkness receive pre-vocational rehabilitation.

4. Work Hardening Program - by Health Recovery Clinic, October 19, 1995 concluded that functionally Mr. Harkness was disabled from returning to his pre-accident employment as a self-employed construction/renovator because his cognitive difficulties prevented him from fully complying with treatment. The treatment team recommended that he continue with cognitive rehabilitation.

5. Psychiatric Assessment - by Dr. F.W. Furlong, September 7 to 9, 1995 concluded that Mr. Harkness suffers from a dementing process possibly related to aging and expressed doubt that cognitive deficits were accident-related.

6. Neuropsychological Assessment - by Dr. W. Gary Snow, December 11, 1995 concluded that Mr. Harkness displayed only a mild improvement in his cognitive skills over his performance during the previous assessment. However, Dr. Snow expressed doubt that his condition is attributable to the residual effects of a head injury and did not rule out the effects of aging or cerebral vascular disease. Dr. Snow reported that it is unlikely that the current deficits are attributable to a concussion.

7. Neurological Assessment - by Dr. J. Horsey, December 21, 1995 suggested Mr. Harkness did not experience a concussion and concluded that he suffered multiple soft tissue injuries with no evidence of brain injury. Dr. Horsey opined that Mr. Harkness' behavioral deterioration is related to a cause other than a brain injury.

Mr. Harkness also filed a health practitioner's Assessment of Disability form dated October 5, 1995, prepared by Dr. Fried, certifying that Mr. Harkness remained disabled physically and functionally after benefit termination on October 1, 1995.

Economical filed letters from Dr. Furlong dated September 24, 1995 and Dr. Horsey, dated December 29, 1995. Dr. Furlong reiterated his opinion that Mr. Harkness' cognitive problems were not caused by his accident. Dr. Horsey confirmed his opinion that there is no evidence of Mr. Harkness having sustained a brain injury.

In summary, Mr. Harkness filed medical documents by two of his own medical practitioners, Dr. Fried, his family doctor and Dr. Horsey, a neurosurgeon recommended by Dr. Fried. In his certificate, Dr. Fried stated that due to physical pain and his cognitive problems, Mr. Harkness is not able to return to his former employment. However, Dr. Horsey concluded that Mr. Harkness sustained soft tissue injuries in the accident and that his cognitive problems were not brain injury related, but likely resulted from non-accident related causes.

The balance of the medical evidence Mr. Harkness filed was prepared by medical practitioners and facilities commissioned by Economical. Basically, these reports conclude that Mr. Harkness' cognitive difficulties do not result from a brain injury. Some of the medical evidence raises the possibility that the cognitive problems may be attributable to a post-accident cause such as age-related dementia.This evidence suggests that the accident, as Mr. Harkness has described it, does not support a finding of a causal connection to his ongoing cognitive problems. Although the Health Recovery Clinic concludes that, due to his cognitive problems, Mr. Harkness is disabled from returning to his pre-accident employment, this assessment still begs the question of the cause of the cognitive problems.

Criteria For Making Interim Orders:

The Basis of Mr. Harkness' Claim:

Mr. Harkness has founded his claim for interim benefits strictly on Economical's failure to terminate benefits in compliance with section 64 of the Schedule. (Section 64 is reproduced in Schedule "A"). In presenting their respective cases, neither party made legal submissions nor were they guided by the legal principles developed by arbitrators who have made decisions in exercise of their authority to make interim orders. ( I will discuss these concerns more fully below.)

Mr. Harkness' counsel presented the claim as follows:

In a letter to Economical dated May 30, 1996, she pointed out that Economical's October 6, 1995 letter to Mr. Harkness was not in compliance with the notice requirements of section 64 (2) and (4) of the Schedule. She submitted that since section 64 (2) provides that the insurer shall give the insured notice of benefit stoppage, and section 64 (4) provides that the insurer shall not stop payment earlier than 14 days after the insured receives the notice, the insured was entitled to receive benefits until October 25, 1995 - the 14 statutorily mandated days, plus an additional deemed five mailing days for receipt of the notice.

Mr. Harkness' counsel further stated that section 64 (3) permits the insurer to stop payments unless the insured provides written notice of a request to be assessed by a DAC. Accordingly, she requested that Economical accept the May 30, 1996 letter (referred to above) as a formal request on behalf of Mr. Harkness for a DAC assessment. Relying on section 64 (11), she also contended that Economical was precluded from terminating Mr. Harkness' benefits unless a DAC assessment were to conclude that he was no longer suffering from an accident-related disability.

Mr. Harkness' counsel conceded that, since the benefit amount is in dispute, Economical is only required to pay benefits at the minimum rate of $185.60 until the final disposition of the quantum issue. Mr. Harkness, therefore, requests an order that:

1. Economical pay income replacement benefits at $185.60 per week from October 1, 1995 to October 24, 1995, in the total amount of $569.88, plus interest;

2. Economical retroactively pay income replacement benefits at $185.60 per week for the period October 24, 1995 to date and ongoing pending the receipt of a DAC assessment which concludes that Mr. Harkness no longer suffers from an accident-related disability.

On behalf of Economical, Ms. Buss claims in her affidavit that following the receipt of Mr. Harkness' counsel's May 30, 1996 letter, Economical issued, with cover letter dated June 5, 1996, the statutorily required Permission to Disclose Health Information to the Assessment Centre form (OCF-14 form), requesting that Mr. Harkness execute the form in order that a DAC assessment might be set up. According to Ms. Buss, as of the date of her affidavit, November 8, 1996, Mr. Harkness has not returned the executed OCF-14 form.

Statutory Authority and Legal Principles Guiding Interim Orders:

An arbitrator's power to order interim benefits through interlocutory proceedings derives directly from the power conferred by section 279 (4.1) of the Act. This provision states:

279.(4.1) The Director and every arbitrator may make interim orders pending the final order in any matter before the Director or arbitrator.

Interlocutory proceedings are summary in nature and are designed to result in the delivery of an expeditious order and speedy relief, providing the party seeking the order can establish the urgency of his or her claim. For this reason, interlocutory proceedings are intended: to consider limited issues on a prima facie basis; to affect a limited period of time - often the period between the date of the interlocutory and the final order; and to hear matters where time considerations are a factor. With applications for interim benefits, then, it is understandable why in the interest of speed and urgency the applicant is required to present only a prima facie case for entitlement and to show the urgent nature of the relief sought. Issues that require decisions on novel legal arguments are the normal preserve of the full hearing. Arbitrator Manji, in the Malabanan decision, found that particular provisions in section 64 had not yet been interpreted and should be addressed in the full hearing.

Criteria for the award of interim benefits under section 279 (4.1) of the Act have been developed in a number of arbitration decisions of the Commission. In the Malabanan and Canadian General Insurance Company, the Lucas and Dominion of Canada General Insurance Company and the Osbourne and Allstate Insurance Company and York Fire & Casualty Company cases³the arbitrators found that, where the applicant has established a prima facie case, it is appropriate to order the payment of interim benefits. Osbourne held that the prima facie case test is a threshhold criterion which, if met, is sufficient for an arbitrator to reasonably find entitlement.

The arbitrators in the Gomez and Pilot Insurance Company and the Cobby, et al. and Non-Marine Underwriters, Members of Lloyd's cases held that an order for interim benefits should normally be made when an applicant has made "a convincing case" for entitlement.⁴

I find that the appropriate threshhold test to be met by an applicant seeking interim benefits is the prima facie case test. I agree with Arbitrator Manji in the Malabanan case where she concluded that the "convincing case test" is too onerous a test to meet on an application for entitlement to interim benefits since, without presenting his or her entire case, it would be difficult for an applicant to satisfy this test.

In Osbourne, Arbitrator Palmer referred to need, necessity or a sense of urgency on the part of the applicant and held that these factors need not be of a financial nature. Several arbitration decisions have followed Osbourne on this point and I find no reason to depart with this view.

Senior Arbitrator Rotter in the Sweete and Jevco Insurance Company case⁵ considered the insurer's non-compliance with the section 64 benefit stoppage provisions in her decision to award interim benefits to the applicant. In this case, the insurer requested an adjournment of the hearing to allow an opportunity for a neuropsychological DAC assessment to be conducted. The insurer had breached the section 64 benefit stoppage provisions by not giving notice to the insured of his right to request a DAC assessment. The insurer terminated benefits without first receiving a DAC assessment that the insured was no longer disabled. Arbitrator Rotter awarded reinstatement of the insured's benefits until the hearing resumption date.

In the Sweete case Arbitrator Rotter held that the applicant had established a bona fide case since there was no dispute that he had suffered a head injury caused by the accident. She found financial urgency caused by the benefit termination; however, she held that her order for interim benefits was not based on this factor but on the insurer's non-compliance with section 64.

While I find that a breach of section 64 by the insurer might be factor to be considered in determining an applicant's entitlement to interim benefits, the applicant must first meet the threshhold prima facie test and establish the urgency of his or her claim.This, I believe, is in keeping with the purpose an interlocutory proceeding in a system which itself offers fast determination of disputes.

Accordingly, in order for Mr. Harkness to succeed in his application he must first present prima facie evidence of entitlement and a sense of urgency to his claim.

Reasons for Decision:

Has Mr. Harkness established a prima facie case for entitlement?

In order to establish entitlement to income replacement benefits after October 1, 1995, Mr. Harkness must prove, as a result of the January 27, 1994 accident, he is substantially disabled from performing the essential tasks of his pre-accident employment.

To make his case, Mr. Harkness relied solely on the affidavit of Ms. Ralph and the exhibits he filed in support of the motion. While Mr. Harkness filed medical documents pertaining to his post-accident disability, he presented no evidence to show the urgency of his application nor legal arguments to establish prima facie entitlement. He based his claim solely on Economical's alleged breach of section 64.

I carefully reviewed the documents filed by the parties and found the materials filed by Mr. Harkness in support of his application failed to establish his claim for interim benefits. Mr. Harkness' failure to present evidence and legal arguments on pertinent legal issues was particularly problematic for his case since he bears the burden to establish his entitlement to interim benefits.

The medical evidence filed by Mr. Harkness raises the possibility that his cognitive problems might result from non-accident related causes. Hence, Mr. Harkness has failed to persuade me that he has a prima facie case for entitlement to income replacement benefits after October 1, 1995.

CONCLUSION:

Since Mr. Harkness has failed to satisfy me that he met the threshhold prima facie test for entitlement, I need not go on to determine the effect of his failure to support his application with evidence of urgency. For the same reason, I need not consider the effect of Economical's conduct in terminating Mr. Harkness income replacement benefits. However, in the event Mr. Harkness succeeds at the hearing on the entitlement issue, his remedy against Economical might well lie in a claim for a special award pursuant to section 282 (10) of the Act. Previous arbitration decisions⁶ have imposed awards against insurers who have breached their section 64 obligations.

Order:

1. Mr. Harkness is not entitled to an interim order for the payment of weekly income replacement benefits. Therefore, his application for the interim order is dismissed.

December 10, 1996

Beth Allen

Arbitrator

Date

SCHEDULE "A"

Stoppage in Weekly Benefits

64.-(1) An insurer shall not stop payment of weekly benefits under Part II, section 15, Part IV or Part V on the ground that the insured person no longer suffers from the disability in respect of which the benefits are paid, except in accordance with this section.

(2) An insurer may, as often as reasonably necessary, give an insured person a notice requiring the person to provide the insurer with a certificate from a health practitioner of the insured person's choice stating that the insured person continues to suffer from the disability in respect of which weekly benefits are paid under Part II, section 15, Part IV or Part V.

(3) The insurer may stop payment of the weekly benefits thirty days after the insured person receives the notice unless, before that date, the insured person provides the insurer with a certificate from a health practitioner of the insured person's choice stating that the insured person continues to suffer from the disability in respect of which the benefits are paid and the notice referred to in subsection (2) shall inform the insured of this information.

(4) If an insurer stops payment under subsection (3) and the insured person subsequently provides the insurer with a certificate from a health practitioner stating that the insured person continues to suffer from the disability in respect of which the benefits were paid, the insurer shall,

(a) resume payment of the benefits; and

(b) pay any benefits that were not paid.

(5) If the insured person provides the insurer with a certificate under subsection (3) or (4), the insurer may, on notice to the insured person, require the insured person to be examined by,

(a) a health practitioner of the insurer's choice; or

(b) a person selected in accordance with subsections (11) and (12).

(6) An examination under clause (5)(a) by a health practitioner of the insurer's choice shall be scheduled by the insurer and, for that purpose, the insurer shall make reasonable efforts to schedule the examination for a time that is convenient for the insured person and shall provide the insured person with reasonable notice of the examination.

(7) The health practitioner who conducts an examination under clause (5)(a) shall prepare a report and provide a copy of the report to the insurer and to the insured person.

(8) If a report under subsection (7) states that the insured person is no longer suffering from the disability in respect of which the benefits are paid, the insurer may give the insured person notice that the insurer will stop paying the benefits on a date specified in the notice and the notice shall provide the information contained in subsections (9) to (12).

(9) The insurer may stop payment of the weekly benefits on or after the date specified in the notice unless the insured person gives the insurer written notice that he or she wishes to be examined by a person selected in accordance with subsections (11) and (12).

(10) Despite subsection (9), the insurer shall not stop payment earlier than fourteen days after the insured person received the notice under subsection (8).

(11) If the insurer gives a notice under clause (5)(b) or the insured person gives a notice under subsection (9), the insurer and the insured person shall endeavour to agree on a health practitioner to conduct the examination.

(12) If the insurer and the insured person cannot agree on a health practitioner to conduct the examination within fourteen days after the insured person received notice from the insurer under clause (5)(b) or within fourteen days after the insurer received notice from the insured person under subsection (9), the examination shall be conducted by the designated assessment centre nearest to the insured person that is authorized to assess impairments of the type sustained by the insured person.

(13) If the examination is required to be conducted by a designated assessment centre,

(a) the insurer shall, within fifteen days, notify the designated assessment centre; and

(b) the centre shall promptly notify the insured person and arrange for the examination.

(14) For the purpose of the examination,

(a) the insured person and the insurer shall provide the person or persons who conduct the examination with such information as is reasonably necessary; and

(b) the insured person shall submit to such reasonable physical, psychological and mental examinations as are requested by the person or persons who conduct the examination.

(15) After conducting the examination, the person or persons who conducted the examination shall prepare a report and provide a copy of the report to the insurer and to the insured person.

(16) If the report states that the insured person is no longer suffering from the disability in respect of which the weekly benefits are paid, the insurer may stop paying the benefits.

(17) If the report states that the insured person continues to suffer from the disability in respect of which the weekly benefits are paid, the insurer may dispute the obligation to pay the benefits in accordance with sections 279 to 283 of the Insurance Act and, pending resolution of the dispute, the insurer shall pay the benefits.

(18) Nothing in this section prevents an insured person from disputing a stoppage in the payment of weekly benefits in accordance with sections 279 to 283 of the Insurance Act and, if it is finally determined that payment of the benefits should not have been stopped, the insurer shall,

(a) resume payment of the benefits; and

(b) pay any benefits that were not paid.

(19) If the insured person fails or refuses to submit to an examination under subsection (5) or (9), the insurer may withhold payment of the weekly benefits until the person submits to the examination and, when the person submits to the examination, the insurer shall,

(a) resume payment of the benefits; and

(b) pay any benefits that were not paid.

Footnotes

1. 1The Statutory Accident Benefits Schedule — Accidents on or after January 1, 1994, called "the Schedule" in this decision. The Schedule is Ontario Regulation 776/93, as amended by Ontario Regulation 635/94.
2. 2Economical filed a letter dated October 16, 1996 and signed by Dr. Fried (Mr. Harkness' family doctor) from a rehabilitation consultant with Nancy Halston & Associates Inc. which confirms Dr. Fried's opinion that Mr. Harkness did not sustain a brain injury in the accident.
3. 3Bienvenido Malabanan and Canadian General Insurance Company, (July 26, 1996), O.I.C. A 96-000084; Norman Lucas and Dominion of Canada General Insurance Company, ( March 23, 1995), O.I.C. A-009670; Nadine Osbourne and Allstate Insurance Company and York Fire & Casualty Company, ( November 18, 1994), O.I.C. A-009110 and A-009111 (decisions on preliminary motions).
4. 4Miguel Gomez and Pilot Insurance Company (May 10, 1995), O.I.C. A-013080; Evelyn Cobby et al. and Non-Marine Underwriters, Members of Lloyd's, London, England (October 13, 1995), O.I.C. A-014259, A-014260 and A-014261 (decisions on preliminary motions).
5. 5Paul Vernon Sweete and Jevco Insurance Company (October 24, 1996), O.I.C. A96-000614,
6. 6See for example, Allan Richardson and Jevco Insurance Company (April 22 , 1996), O.I.C. A-015750.