Neutral Citation: 1996 ONICDRG 48
File No.: A-014118
ONTARIO INSURANCE COMMISSION
BETWEEN:
MARIO ROCCHETTI
and
ROYAL INSURANCE COMPANY OF CANADA
DECISION ON PRELIMINARY ISSUE
Issue:
The Applicant, Mario Rocchetti, was injured in a motor vehicle accident on July 2, 1991 while on his way to work. Mr. Rocchetti originally applied for and received weekly income benefits from his motor vehicle Insurer, the Royal Insurance Company of Canada. He subsequently elected and received workers' compensation benefits for his injuries arising from the motor vehicle accident. The Insurer was repaid the required amount from the Workers' Compensation Board pursuant to an authorization signed by the Applicant in accordance with section 21(1)(a) of the Schedule.1 Subsequently the Applicant's workers' compensation benefits ceased and he reapplied for further weekly income benefits from the Insurer. The Insurer refused to pay further benefits on the basis that the Applicant could not re-elect under section 21 of the Schedule.
The parties were not able to resolve their dispute through mediation and the Applicant applied for arbitration under the Insurance Act, R.S.O. 1990, c.I.8, as amended.
The issue therefore is:
Is the Applicant permitted, after receiving weekly income benefits and then electing to receive workers' compensation benefits, to receive interim benefits pursuant to section 21 of the Schedule?
Result:
The Applicant is not entitled to receive further interim benefits pursuant to section 21 of the Schedule.
Hearing:
The preliminary issue was dealt with by written submissions filed on behalf of Mr. Rocchetti and Royal Insurance, as well as oral submissions by teleconference call held on January 29, 1996, by me, M. Guy Jones, arbitrator.
Applicant's Representative: Ms. Liz Francine Herlehy
Insurer's Representative: Mr. Mark Baker
Factums, document briefs and briefs of authority were filed by both parties.
Facts:
The facts in this case are relatively straightforward. On July 2, 1991, the Applicant, Mr. Mario Rocchetti, was injured in a motor vehicle accident while on his way to work.
Mr. Rocchetti applied for and received weekly income benefits from his Insurer, Royal Insurance, at a rate of $678.08 per week commencing on July 8, 1991.
On October 15, 1991, the Applicant executed an Election to Claim Workers' Compensation Benefits form and on November 25, 1991 the Workers' Compensation Board accepted his claim, retroactive to July 8, 1991. As required by section 21 of the Schedule, the Applicant executed an Assignment of Workers' Compensation Benefits in favour of the Insurer.
The Applicant continued to receive workers' compensation benefits until October 25, 1993. In the interim, on February 12, 1993, pursuant to the assignment, the Workers' Compensation Board reimbursed Royal Insurance to the extent to which it was required by law, for the benefits paid from July 8, 1991 to February 2, 1992.
On May 29, 1993, the Applicant delivered written noticed to the Workers' Compensation Board of his intention to withdraw his election to claim workers' compensation benefits, and on June 30, 1993 he commenced a tort action against the owner and driver of the other vehicle involved in the July 2, 1991 accident. The defendants in that action have admitted liability and the matter is on the trial list of the Ontario Court (General Division).
On October 29, 1993, the Workers' Compensation Board consented to the withdrawal of the Applicant's claim on the condition that he execute an assignment in favour of the Workers' Compensation Board, agreeing to repay workers' compensation benefits, and an Authorization and Direction to his counsel to repay the Workers' Compensation Board. These documents were executed on May 17th, 1994.
The Law:
The statutory accident benefits scheme was drafted so that the motor vehicle insurer would in essence be the insurer of last resort. If benefits were available from another insurance plan or other sources, they would be accessed rather than the motor vehicle insurance policy. This approach is reflected in section 20 of the Schedule, which states:
- The insurer will not pay benefits under this Regulation in respect of any insured person who, as a result of an accident, is entitled to receive benefits under any workers' compensation law or plan.
The only exception to this rule is found in section 21 (1) of the Schedule which states:
21.--(1) Despite section 20, the insurer will pay full benefits under this Regulation to a person described in that section until the resolution of any action brought by the person in any court to recover for personal injuries resulting from the accident under which the workers' compensation claims arose or until the person receives payments under a workers' compensation law or plan if;
(a) the person makes an assignment to the insurer of any benefits under any workers' compensation law or plan to which he or she is or may become entitled as a result of the accident, and;
(b) the administrator or board responsible for the administration of the workers' compensation law or plan approves the assignment.
This section allows a worker who has suffered a significant injury to pursue a tort claim and still have some level of income replacement, while he or she pursues the claim. The Applicant's counsel rightly pointed out that the Insurer in this case recognized its obligation under section 21 when it paid weekly income benefits from July 8, 1991 to February 2, 1992 pending the determination of the Applicant's Workers' Compensation Board claim. She further pointed out that if the Applicant had continued to receive weekly income benefits and had not elected to receive workers' compensation benefits, the Insurer would have had to continue to pay. If the Applicant were not successful in his tort action, he could then have applied for workers' compensation benefits and the Insurer could rely on the assignment to be reimbursed by the Workers' Compensation Board.
The question as to whether a person can receive interim benefits pursuant to section 21 of the Schedule after receiving weekly income benefits and then electing to receive workers' compensation benefits has not been directly dealt with in any earlier Ontario Insurance Commission decision. In RobertD. Roblin and Cooperators General Insurance Company and Zurich Insurance Company, March 14, 1994, OIC File Nos. A-004942 and A-005827, the issue was initially whether a person who had exhausted his eligibility for workers' compensation benefits could return to the motor vehicle insurer for additional benefits. However, in that case the Workers' Compensation Board decided that the applicant had been ineligible for any workers' compensation benefits and so the issue remained undecided.
In Stephen Salmon and the Toronto Transit Commission, December 20, 1991, OIC File No. A-000235, Senior Arbitrator Rotter decided that the applicant must have a bona fide tort action in order to receive workers' compensation benefits pursuant to section 21 of the Schedule, and that the applicant cannot simply start a tort action as a sham in order to gain entitlement to workers' compensation benefits. This decision was upheld by the Director on appeal.
In this particular case, for the purposes of the preliminary issue, there is no suggestion that the Applicant's tort claim is without merit, and so the bona fide nature of the tort claim does not arise.
In arriving at a decision in this matter, it is important to keep in mind the general principle established in the Schedule, that the insurer will not pay benefits under the Schedule if the person is entitled to workers' compensation benefits. It is only under very specific conditions laid out in section 21(1) of the Schedule that an exception will be made to the general rule. As such, the conditions set out must be strictly complied with.
I begin by pointing out that no provision specifically allows a person to, in essence, re-elect statutory accidents benefits after having received workers' compensation benefits.
Section 21(1) of the Schedule requires that the person may receive benefits "until the person receives payments under a workers' compensation law." That has clearly happened in the Applicant's case.
I would further point out that section 21(1)(a) requires that "the person makes an assignment to the insurer of any benefits under any workers' compensation law or plan to which he or she is or may become entitled as a result of the accident."
In this particular case, the Applicant has already made an assignment and irrevocable Authorization and Direction to the Workers' Compensation Board regarding any monies received from the tort action. As such, the Applicant is not in a position to comply with the requirement to make a meaningful assignment to the Insurer of the benefits, as required by section 21(1)(a).
In concluding that the Applicant is not entitled to rely on section 21 to receive further statutory accident benefits, I am influenced by the fact that the no-fault scheme was designed to be relatively simple, quick and easily managed. As Senior Arbitrator Rotter pointed out in Salmon:
Moreover, the no fault insurer would be obliged to keep records for a substantial time, monitor the progress of the tort claim by the applicant, and at some point attempt to recover from the Workers' Compensation Board the no-fault benefits paid out. The Insurer argued that this surely was not the intention of the legislation. The Insurer argued that the legislation instead intended a simple and easily managed scheme, where workers' compensation benefits are payable in minor injury cases, and no-fault benefits are payable as interim benefits in threshold cases where the injuries are more serious. This interpretation gives reasonable and cogent meaning to both Sections 20 and 21 of the legislation, without calling for complicated bookkeeping procedures...
While the result of this particular case may seem harsh, in my view the wording of the section is clear and it is not my role to usurp the function of the Legislature.
Expenses:
While the Applicant was not successful in this matter, the point raised was a novel one. Accordingly I am exercising my discretion and awarding him the cost of the arbitration.
Order:
The Applicant is not entitled to no-fault benefits under section 21 of the Schedule.
The Applicant is entitled to his expenses in respect of the arbitration.
March 29, 1996
M. Guy Jones Arbitrator
Date