Neutral Citation: 1998 ONFSCDRS 106

FSCO A97-001970

FINANCIAL SERVICES COMMISSION OF ONTARIO

BETWEEN:

HUNG P. LE

Applicant

and

PILOT INSURANCE COMPANY

Insurer

DECISION

Issues:

The Applicant, Hung P. Le, was injured in a motor vehicle accident on October 15, 1996. He applied for and received statutory accident benefits from Pilot Insurance Company ("Pilot"), payable under the Schedule.¹ Pilot terminated weekly income replacement benefits on March 27, 1997. The parties were unable to resolve their disputes through mediation, and Mr. Le applied for arbitration under the Insurance Act, R.S.O. 1990, c.I.8, as amended.

The issue in this hearing is:

1. Is Ms. Le entitled to proceed with this Arbitration, as a result of his failure to attend for a disability DAC assessment scheduled for May 12, 1997?

Mr. Le also claims his expenses incurred in the hearing.

Result:

1. Mr. Le is precluded from proceeding with this arbitration, until he submits to the assessment requested under section 64 of the Schedule.

Hearing:

The hearing was held at the offices of the Ontario Insurance Commission in North York, Ontario, on July 7, 1998, before me, M. Kaye Joachim, Arbitrator.

Present at the Hearing:

Applicant:

Hung P. Le

Mr. Le's

Elizabeth A. Ramsden

Representative:

Barrister and Solicitor

David Pham

Law Clerk

Pilot's

Rudolph Lobl

Representative:

Barrister and Solicitor

Interpreter:

Tri Nguyen

Omnicom

Exhibits:

An Agreed Statement of Facts was the only exhibit filed.

Evidence and Findings:

This preliminary issue hearing proceeded on the basis of an Agreed Statement of Facts and other documents. No witnesses testified.

By letter dated March 3, 1997, the Pilot Insurance Company (the "Insurer") provided written notice to the Applicant and his representative, Action Accident Benefits, that benefits would be terminated effective March 23, 1997. This notice advised the Applicant that benefits would be continued if he requested an assessment by a Designated Assessment Centre in accordance with Section 64(5) and (6) of the Statutory Accident Benefits Schedule. The notice also advised that he was entitled to dispute the stoppage of benefits by filing an Application for the Appointment of a Mediator with the Ontario Insurance Commission.² There is no dispute that this notice complied with the requirements of section 64, and advised the Applicant of his rights to request a DAC assessment or proceed directly to mediation.

By letter dated March 13, 1997, Action Accident Benefits advised that the Applicant intended to dispute the termination of weekly benefits and requested a DAC assessment. The Applicant signed the Permission to Disclose Health Information to the Assessment Centre (an OCF14) on March 13, 1997.

By letter dated April 25, 1997 the Insurer advised the Applicant and his representative that the DAC assessment was scheduled for May 12 to May 15, 1997. The notice advised that five clear business days notice of cancellation was required to avoid a cancellation fee.

The Applicant retained a new representative and on May 7, 1997 at 7.00 p.m., that representative advised the Insurer in writing that the Applicant would not be attending the DAC, and requested the Insurer to cancel the appointment. The letter stated that the Applicant had not requested a DAC. As less than five clear business days notice was provided to the Insurer, they incurred a cancellation fee of $1,900 from the DAC assessment centre. On May 20, 1997 the Applicant filed an Application for Mediation with the Ontario Insurance Commission.

As the Applicant chose not to testify (despite the presence of a Vietnamese interpreter), I base my findings solely on the agreed Statement of Facts and the documentary evidence. I find that the Applicant requested a DAC assessment. The Applicant subsequently obtained new representation on or about May 7, 1997, and terminated the services of his former representative on or about May 8, 1997. The Applicant subsequently took the position, through his new representative, that he no longer intended to attend at the DAC. As that notice was given on the evening of Wednesday, May 7, 1997 and the DAC was scheduled commencing Monday, May 12, 1997, that was only two clear business days notice. As a result of the Applicant's actions, the Insurer incurred a loss of $1,900 in the form of a cancellation fee.

The Insurer argued that the Applicant is precluded from commencing mediation and hence arbitration, because he failed to follow through with the requested DAC.

Upon being provided with a notice of termination of weekly benefits pursuant to section 64,³ an applicant must elect to proceed in one of two ways. First, an applicant may proceed directly to mediation at the OIC to dispute the termination of benefits.

Alternatively, an applicant may elect to request a DAC Assessment, in which case the insurer is required to continue the payment of weekly benefits until the assessment is performed. If an applicant so elects, he or she is bound by that election, such that a failure to complete the DAC process, whether by failing to attend the assessment or by failing to submit required documentation, has two consequences. First, by virtue of section 64(14), if the insured fails to follow through with a requested DAC assessment, the insurer may cease payment of weekly benefits. Second, by virtue of section 71.1(b),⁴ if an insured fails to follow through on a requested DAC assessment, he or she is precluded from commencing a mediation proceeding, and hence precluded from proceeding to arbitration. Having chosen this route, an applicant must complete the assessment process before proceeding to mediation, and if necessary, arbitration.

The Insurer acknowledged that the arbitral case law contemplates than an applicant may withdraw a request for a DAC Assessment. (Worthman and Axa Insurance (Canada) January 30, 1997, OIC A96-000486). However, the Insurer distinguished that case on the basis that the applicant in that case did not have legal representation at the time she requested the DAC assessment and was not aware of her right to proceed to mediation. The Insurer emphasized the different facts here, as the Applicant was represented at the time of making the request for the DAC Assessment and was advised of his right to proceed directly to mediation. Further, the Insurer alleged two forms of prejudice. First, the receipt of relevant medical evidence is delayed or denied by the Applicant's refusal to attend at the DAC. Second, the Insurer has incurred a cost of $1,900 in the form of the cancellation fee.

The Insurer relied on the case of Lopez and Canadian General Insurance Group (April 8, 1998, OIC P-97-00041) in which an arbitrator held that the applicant was precluded from commencing an arbitration proceeding in respect of his statutory accident benefit claim because he failed to make himself reasonably available for medical examinations.

Counsel for Mr. Le argued that he had a bona fide change of mind after obtaining new representation. The Applicant relied on the decision in Worthman, supra, for the proposition that nothing in the Schedule prevents a bona fide change of mind regarding a DAC assessment.

In Worthman, supra, the arbitrator initially requested a DAC assessment, and subsequently changed her mind prior to attending the assessment. The insurer in that case also argued that the applicant was precluded from entering the arbitration system since she failed to follow through on her DAC assessment. The arbitrator rejected that argument. In my view, the basis of her decision was her finding that a request for a DAC Assessment is revocable. At paragraph 17 of her decision she stated:

Nothing in the Schedule prevents a bona fide change in this regard. Had the Legislature intended that an election be irrevocable, it could easily have stated so. For example, under section 61(7) of the Schedule, an insured person's right to change the category of weekly benefit, once elected, is specifically restricted. I am not persuaded that the absence of a procedure detailing the steps to be taken by an insured person who no longer wishes to undergo an assessment by a designated assessment centre which he or she originally requested, means that the Legislature intended to preclude a bona fide change of mind.

In the Worthman case, the arbitrator found it significant that the applicant changed her mind after obtaining legal representation and upon becoming aware of her right to proceed directly to mediation. However, I am satisfied that there is nothing in the Worthman decision which suggests that is the only circumstance in which a insured would be permitted to revoke a request for a DAC Assessment. The crucial issue is whether the change of mind was bona fide.

There is an evidentiary onus on the Applicant to establish that he experienced a bona fide change of mind. Mr. Le initially suggested that he had never requested a DAC assessment, which I have found is not the case. This is indicative of bad faith. Mr. Le chose not to testify. Therefore, there is no evidence before me to explain why he changed his mind. Accordingly, I conclude that the Applicant has not satisfied the evidentiary onus of establishing that he experienced a bona fide change of mind with respect to his election to proceed by way of a DAC assessment. Therefore, Mr. Le is precluded from proceeding to mediation, and hence, arbitration, until he completes the process he elected, and submits to a DAC assessment.

Although Mr. Le was unsuccessful, this is not well settled law. Mr. Le raised a legitimate question about the application of the Worthman case. Accordingly, I exercise my discretion to award Mr. Le his expenses of this arbitration.

Order:

1. Mr. Le is entitled to his expenses incurred in respect of the arbitration.

M. Kaye Joachim

Arbitrator

Date

Appendix

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 a disability as a result of the accident in respect of which weekly benefits are paid, except in accordance with this section.

(2) The insurer may give notice to the insured person that the insurer will stop paying benefits on a date specified in the notice and the notice shall provide the information contained in subsections (3) to (7) and the reasons for the stoppage in payment.

(3) 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 assessed in accordance with subsections (5) and (6).

(4) The insurer shall not specify a date for stopping payment under subsection (3) earlier than 14 days after the insured person receives the notice mentioned in subsection (2).

(5) If the insured person gives a notice under subsection (3) and if, within 100 kilometres of the residence of the insured person, there is no designated assessment centre that is authorized to assess impairments of the type sustained by the insured person, the insurer and the insured person shall endeavour to agree on one or more people, at least one of whom shall be a health practitioner, to conduct the assessment.

(6) If there is a designated assessment centre within 100 kilometres of the residence of the insured person or if, within 14 days after the insurer received notice under subsection (3), the insurer and the insured person cannot agree under subsection (5) on who shall conduct the assessment, the designated assessment centre nearest to the residence of the insured person shall conduct the assessment.

(7) If, before the assessment has commenced, the designated assessment centre nearest to the residence of the insured person has disclosed to the insurer and the insured person that it has a conflict of interest with either of the parties within the meaning of that term in the guidelines established by the accident benefits advisory committee under subsection 38 (2),

(a) the designated assessment centre or another centre shall conduct the assessment, if the parties agree; or

(b) the designated assessment centre that is next nearest to the residence of the insured person shall conduct the assessment, if the parties do not agree under clause (a).

(8) If a designated assessment centre is required to conduct the assessment,

(a) the insurer shall, within 15 days, notify the designated assessment centre; and

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

(9) For the purpose of the assessment,

(a) the insured person and the insurer shall provide the person or persons who conduct the assessment 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 assessment.

(10) After conducting the assessment, the person or persons who conducted the assessment shall prepare a report and provide a copy of the report to the insurer, the insured person and the insured person's health practitioner.

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

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

(13) 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 the benefits that were not paid.

(14) If the insured person does not submit to an assessment that he or she requests under subsection (3) or does not comply with the requirements of subsection (9), the insurer may withhold payment of the weekly benefits until the person submits to the assessment or complies with subsection (9) respectively, after which time the insurer shall,

(a) resume payment of the benefits; and

(b) pay the benefits that were not paid if the assessment report determines that benefits should continue to be paid.

Assessment Before Mediation

71.1 No insured person shall commence a mediation proceeding under section 280 of the Insurance Act unless he or she,

(a) has complied with section 59;

(b) when required, has submitted to and provided the information required for an assessment under section 23, 25, 39, 45, 50 or 64, as the case may be; and

(c) has made himself or herself reasonably available for an examination under section 65.

Footnotes

1. 1The Statutory Accident Benefits Schedule —Accidents after December 31, 1993, and before November 1, 1996, called "the Schedule" in this decision. The Schedule is Ontario Regulation 776/93, as amended by Ontario Regulation 635/94 and 781/94.
2. 2The Ontario Insurance Commission was merged into the Financial Services Commission of Ontario on July 1, 1998.
3. 3Section 64 is set out in full in the Appendix.
4. 4Section 71.1 is set out in full in the Appendix.