Neutral Citation: 1998 ONFSCDRS 18

FSCO A97-000834

FINANCIAL SERVICES COMMISSION OF ONTARIO

BETWEEN:

H. K.

Applicant

and

CANADIAN SURETY COMPANY

Insurer

DECISION

Issues:

The Applicant, H.K., was injured in a car accident on July 30, 1992 in Kentucky, while driving home from a Florida holiday. An oncoming driver lost control of his car, crossed the centre median of the highway and collided with H.K.'s vehicle. H.K.'s close friend, who was a front seat passenger, was killed, as was the other driver. H.K.'s three other passengers, including her daughter, were seriously injured. H.K.'s physical injuries included a fractured nose, eight fractured ribs and neck and back soft-tissue injuries.

H.K. applied for and received statutory accident benefits from Canadian Surety Company ("Canadian Surety"), payable under Ontario Regulation 672.¹ She returned to her pre-accident employment in January 1993. H.K. continued working, with some periods off due to pain, until September 1994. Weekly income benefits were then paid until March 22, 1995. In or about November 1996, weekly benefits were paid to the third anniversary of the accident (July 30, 1995), which the Insurer maintains is the proper demarcation point between what could be classified as "short-term" and "long-term" benefits under the Schedule. The parties agree, however, that if the demarcation point hinges on the number of weeks of disability or the number of weeks benefits were paid, then the "long-term" disability test begins January 31, 1997. The weekly benefit is agreed to be $365.59.

The Applicant seeks payment of ongoing weekly income benefits. The parties were unable 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 "Act").

The issues in this hearing are therefore:

1. When does the disability test for the "period in excess of 156 weeks" begin?

2. If the "period in excess of 156 weeks" begins January 31, 1997,

(a) did H.K. suffer substantial inability to perform the essential tasks of her occupation or employment, pursuant to subsection 12(1) of the Schedule, from July 31, 1995 to January 30, 1997; and,

(b) was H.K. continuously prevented from engaging in any occupation or employment for which she was reasonably suited by education, training or experience, pursuant to paragraph 12(5)(b) of the Schedule, from January 31, 1997?

3. If the "period in excess of 156 weeks" begins July 31, 1995, was H.K. continuously prevented from that date from engaging in any occupation or employment for which she was reasonably suited by education, training or experience, pursuant to paragraph 12(5)(b) of the Schedule?

4. Is H.K. entitled to interest on overdue payments, pursuant to subsection 24(4) of the Schedule?

5. Is H.K. entitled to a special award, pursuant to subsection 282(10) of the Act?

6. Is H.K. entitled to her expenses of this arbitration proceeding?

Result:

1. The "period in excess of 156 weeks" begins January 31, 1997.

2. H.K. was substantially unable to perform the essential tasks of her employment, pursuant to subsection 12(1) of the Schedule, from July 31, 1995 to January 30, 1997 and is entitled to weekly income replacement benefits of $365.59 for that period, together with interest on overdue payments in accordance with subsection 24(4) of the Schedule.

3. H.K. has been continuously prevented from engaging in any occupation or employment for which she is reasonably suited by education, training or experience, pursuant to paragraph 12(5)(b) of the Schedule, from January 31, 1997 and is entitled to weekly income replacement benefits of $365.59 from that date together with interest on overdue payments in accordance with subsection 24(4) of the Schedule.

4. H.K. is entitled to a special award, pursuant to subsection 282(10) of the Act, in the amount of $20,000.00, inclusive of interest.

5. I confirm that all issues in dispute, except expenses, have been decided and that the issue of the expenses of this arbitration proceeding may now be spoken to.

Hearing:

This hearing was held in London, Ontario, on March 31, April 1 and 2, 1998, before me, Lawrence Blackman, Arbitrator. Written submissions pertaining to the issue of a special award were received from the Applicant on May 29, 1998 and from the Insurer on June 10, 1998.

Present at the Hearing:

Applicant:

H.K.

H.K.'s Representative:

Mr. L. Scott Smith

Barrister and Solicitor

Canadian Surety's Representative:

Mr. Terry R. Shillington

Barrister and Solicitor

Canadian Surety's Officer:

Ms. Lynda Mantha

Witnesses:

1. H.K.

2. Dr. Michael R. MacDonald.

3. Dr. James E. Sweeney.

4. Dr. Marguerite A. Kuiack.

5. Dr. John C. Clifford.

H.K.'s evidence was received through an English/Polish interpreter, Mr. Andrew M. Knapinski.

Exhibits:

Exhibit 1

Applicant's Medical Brief.

Exhibit 2

Copy of report of Dr. M. Kuiack, dated March 26, 1998.

Exhibit 3

Copy of consultation note of Dr. R. Teasell, dictated November 6, 1997.

Exhibit 4

Applicant’s Rehabilitation Brief.

Exhibit 5

Curriculum Vitae of Dr. Michael Renford MacDonald.

Exhibit 6

Curriculum Vitae of Dr. Marguerite A. Kuiack.

Exhibit 7

Curriculum Vitae of Dr. John Charles Clifford.

Exhibit 8

Investigative reports for surveillance conducted January 1995 and February 1997, together with videotapes.

Exhibit 9

"Forensic Neuropsychological Examination of Mild Neurogenic Disability due to Head Injury," by Dr. James E. Sweeney.

Exhibit 10

Photocopy of letter from Crawford & Company Healthcare Management to Dr. B. Ragula, dated March 20, 1995.

Evidence and Findings:

1. When does the "period in excess of 156 weeks" begin?

The Schedule's initial income benefit disability test requires "substantial inability to perform the essential tasks" of one's occupation or employment. For "any period in excess of 156 weeks," however, one must be continuously prevented "from engaging in any occupation or employment for which [one] is reasonably suited by education, training or experience."

The Insurer submits that "the initial 156-week benefit period . . . expires on the third anniversary after the accident," in accordance with the decision of Senior Arbitrator Rotter in Lafleur.²

I respectfully disagree. I concur with Lissamen J. in Crooks v. Wawanesa Mutual Insurance Company,³ that this interpretation penalizes an insured's "good faith efforts to return to work," by counting such time within the initial period which is covered by a less onerous disability test. I agree with Director's Delegate Naylor that this runs counter to the overall intent of the Schedule which is to assist and encourage an insured's return to work.⁴

As noted above, the parties agree that if the term "any period in excess of 156 weeks" means weeks of disability or weeks benefits were paid, then the initial disability test applies to the period July 30, 1995 to January 30, 1997.

2. Did H.K. suffer substantial inability to perform the essential tasks of her occupation or employment from July 30, 1995 to January 30, 1997?

(a) What are the essential tasks of H.K.’s occupation or employment?

At the time of the accident, H.K. had been employed by Cuddy Farms for more than five years. Her job was to remove turkeys from an assembly line, cut both thighs, dispose of the skin, clean the thighs and return them to a conveyor belt. H.K. was required to stand the entire day. The room temperature was kept at approximately four degrees Celsius. Her hours were 7:30 a.m. to 4:00 p.m., with two half-hour breaks, including lunch. Only bathroom breaks were otherwise allowed. A job description indicated that "the line speed is set at 19 birds per minute," which translates to 8,550 turkeys being processed per shift.

(b) Was H.K. substantially unable to perform the essential tasks of her employment at Cuddy Farms from July 31, 1995 until January 31, 1997?

H.K. testified that although she did not yet feel ready to work, she returned to Cuddy Farms in January 1993 because she was afraid that she would lose her job. Her position was not modified for her.

In May 1993, H.K. stopped working for two weeks because of back pain and "severe weakness." Upon her return, Cuddy Farms' records confirm continuing complaints of pain. H.K. was off work a further month and a half until early August 1993. In a "sign-back letter" in May 1994 to Crawford & Company Healthcare Management ("Crawford"), H.K.'s family doctor, Dr. Ragula, indicated that "H.K. was highly motivated and that many people with the level of difficulties she was having would not have remained at work."

H.K. continued working at Cuddy Farms until September 1994. She described this period as her "most difficult" year. While her conscience told her that she had "to remain at work at any price," she still had significant nervous stress, especially regarding her daughter (who had sustained a significant head injury in the accident), as well as constant strong pain made worse by standing at the processing line. Due to her pain, she declined her seniority right to remain at work if there was a work shortage. She dreamt only of lying down and not having to think about anything. She testified that in the fall of 1994, her "pain won."

Randy Walker of Workright Inc. (to whom Crawford had referred H.K.), wrote in September 1994 that while H.K. possessed "the necessary physical capacity" to perform all employment activities at this time, general stress (especially concern for her daughter) was "a major distraction from personal symptom management." It was anticipated that "once she is able to regain 'control' over her life," H.K. could rapidly overcome her present symptoms through the techniques developed in the programme.

Ms. Yolanta Dobkowski, a physiotherapist with Acute and Chronic Injuries Centre, indicated in December 1994 that she "could not substantiate [H.K.'s] claim that she cannot return to her occupation because of physical injury," and that H.K. suffered from nothing more serious than a "dysfunction syndrome." Dr. Ragula, however, indicated in November 1994 that he found H.K. to be in a "state of total collapse." He did not feel that H.K. was malingering or avoiding work. On January 12, 1995, at the Insurer's request, H.K. was seen by Dr. John Clifford, a specialist in physical medicine and rehabilitation. He testified that he had "no trouble attributing [H.K.'s] neck, mid back and low back pain" to this car accident and that he did not correlate H.K.’s pain to her degenerative condition or to pre-accident notations.⁵

Dr. Clifford accepted that H.K. had chronic pain, which he defined as long term pain lasting more than three months. He felt that H.K.'s pain was benign, which in this context does not mean mild or gentle, but rather non-organic, in that there is no evidence of structural or functional changes in tissues or organs of the body causing the pain.

Dr. Clifford indicated that benign pain may be reported where depression or anxiety lower one’s pain threshold so that pain signals previously blocked are now received by the brain.

There is little, according to Dr. Clifford, that modern medicine can do to relieve chronic pain. Hence, it makes as little sense to make pain reduction a rehabilitation goal any more than to try to eliminate paralysis. Doctors should not reinforce pain complaints. Rather, their focus should be reintegration through muscular and cardiovascular conditioning, vocational rehabilitation and psychological support or pain counselling, with clear time lines and defined objectives.

Dr. Clifford testified that H.K.'s employment at Cuddy Farms was a "pretty onerous job to return to full time" and that he would "never" take a person who has to stand for eight hours and put them immediately back into that job. If there were no objective findings as to why the person could not return to work, he would put that person into a graduated reconditioning programme until it was "safe" to return.

Instead of following the rehabilitation and work hardening recommendations of the medical expert it had retained, the Insurer responded to Dr. Clifford’s report by phasing out the very limited services being provided by Crawford. Dr. Clifford’s recommendation that H.K. receive "appropriate psychological support" to deal with her daughter’s injuries and her friend’s death was addressed merely by having H.K. intermittently seen by a social worker.

Canadian Surety did, however, have H.K. watched for more than 27 hours over the course of eight days in January and February 1995. Both of the investigator's summaries for this period concluded that H.K. "was not observed participating in any strenuous physical activity around her residence and essentially remained inactive during the course of our surveillance."

A March 20, 1995 "sign-back letter" from Dr. Ragula indicated that H.K. had "likely progressed to chronic pain syndrome" but that she "should attempt a return to work." The letter states that H.K. would be "capable of working in a sedentary to light capacity [sic] involving no heavy lifting or above the shoulder reaching." H.K. had, in fact, contacted Cuddy Farms about returning to work a short time before. However, Dr. Ragula had written her employer that H.K. was to "avoid prolonged standing," which Cuddy Farms could not accommodate. Nonetheless, H.K.'s weekly benefits were terminated effective March 22, 1995, which was still within the "short-term" disability test period, even as conceded by Canadian Surety.

H.K. was subsequently seen at the Insurer's request by a psychologist, Dr. Tony Iezzi, who concluded in his April 17, 1995 report that:

Although [H.K.] appears to be suffering from genuine soft tissue pain, she is clearly experiencing many elements of a chronic pain syndrome . . . that appear to be out of proportion in relation to her soft tissue pain. It is my sense that she did her best in her attempt to return to work and perform her duties. However, as the number of stressors in her life and her daughter’s life began to accumulate, she reached a point where she "crashed" in September of 1994.

Dr. Iezzi felt that H.K.'s "emotional status is probably a bigger impediment to her return to work than is her physical health status." There did not appear to him to be "any pre-injury factors that may be causally related to her current pain and disability." He felt that her daughter's injuries were significantly contributing to H.K.'s "physical and psychological impairment."

Dr. Iezzi recommended that H.K. be referred to psychological management on a biweekly if not a weekly basis rather than continue with someone who is "not well versed in the psychological issues involved in rehabilitation cases." Dr. Iezzi concluded that:

If her emotional status can be improved upon, I then feel a vocational plan needs to be arranged in a coordinated fashion. If she cannot return to Cuddy Foods, some thought needs to be given towards pursuing other avenues. I understand that she has been released to a return to sedentary work. If her emotional status can be improved upon, I believe she is capable of at least part-time employment. At this point, it is hard to say if she will ever be capable of full-time employment. [emphasis added]

Dr. Ragula, in a letter dated May 12, 1995, indicated that he fully agreed with Dr. Iezzi's assessment, except that based on his longer relationship with H.K., he was of the opinion that "her symptoms are much deeper and more serious than Dr. Iezzi could appreciate." He indicated that her daughter would not "recover to her pre-accident mental abilities. One can only imagine how this would affect the mother." Dr. Kuiack, a neuropsychologist who saw H.K. in January 1998 at the request of the Insurer, testified that she had no basis to disagree with these opinions.

Canadian Surety, however, did not reinstate weekly benefits in April 1995, nor did it refer H.K. for any treatment as a result of Dr. Iezzi’s report. Only in November 1996, over a year and a half later, did Canadian Surety pay another four months of weekly income benefits to take H.K. to the third anniversary of the accident, based on its interpretation of "any period in excess of 156 weeks."

In July 1995, H.K. began taking English and computer classes. She testified that she would attend for two hours, then have a break during which she went home to lie down and then return to classes for another two hours. Towards the end of the course, a school counsellor referred her to Dr. M. MacDonald, a psychologist. Dr. MacDonald wrote in August 1996 that H.K. was "totally disabled for the foreseeable future" as a result of her psychological and physical injuries and her chronic pain.

Dr. R. Teasell, a doctor of physical medicine and rehabilitation who was treating her, wrote in July 1995 that H.K.'s restrictions included no repetitive bending or twisting at the waist and that she would have difficulty standing with her neck flexed forward for long periods of time. Although optimistic that she would be able to get back to "some sort of employment," it appeared that working at the "line" at Cuddy Farms was not appropriate.

An initial November 1996 assessment by H.K.'s treating psychiatrist, Dr. I. Nowicki, indicated that H.K. had developed a major affective disorder and unipolar depression. She immediately doubled H.K.'s dosage of Prozac.

H.K.'s employment at Cuddy Farms entailed full-time repetitive assembly line work requiring prolonged standing. The medical evidence clearly supports a finding that H.K. was substantially unable to perform the tasks of her pre-accident employment from July 30, 1995 until January 31, 1997. Canadian Surety's own expert, Dr. Clifford, testified that H.K. required a graduated reconditioning programme before being able to safely return to work, a programme which was never provided. The Insurer's own psychiatric expert, Dr. Iezzi, wrote that H.K. would be able to return to part-time work, only if her emotional health improved.

The Insurer cites the decision of Arbitrator Allen in Chudy and West Wawanosh Mutual Insurance Company (January 23, 1997), OIC A96-000924, to the effect that:

When a person returns to work and remains there for a period, the reasonable presumption is that he or she is able to do his or her job. This presumption, however can be rebutted by evidence to the contrary.

I find that this proposition should not be used to penalize persons who make legitimate efforts to return to work, but are unable to continue. In any event, the evidence in this case readily rebuts any such presumption.

3. Was H.K. continuously prevented from engaging in any occupation or employment for which she was reasonably suited by education, training or experience, pursuant to paragraph 12(5)(b) of the Schedule, from January 31, 1997?

(a) The case law

In my decision of Murray and Wawanesa Mutual Insurance Company (August 23, 1996), OIC A-003224, I cited the decisions⁶ of Arbitrator Draper (as he then was) and Arbitrator Manji as identifying pertinent criteria for determining whether an applicant is entitled to weekly income benefits after 156 weeks. I stated that:

I agree that the question of what is "suitable" will differ in each case. It may be extremely expansive. It may be restricted to the occupation or employment engaged in at the time of the accident. The evidence will vary according to the facts of each case. The range of "suitable" employment would encompass that which reasonably flows from an insured’s education, training or experience, and which is neither substantially different in nature, status or remuneration from the immediate pre-accident employment, nor would require more than a modicum of training or upgrading at the point in time of inquiry.

I further agree that "the disability cannot be seen in a vacuum, but should be viewed in the context of the applicant’s competitiveness in the existing marketplace⁷ and that the "question is whether the applicant is substantially able to do the alternative job, considered as a whole, including reasonable hours and productivity."⁸

I also stated in Murray that:

Recent arbitration decisions have grappled with what is the "positive obligation"⁹on insureds. Arbitrator Evans stated that applicants as part of discharging the onus of proof "must explore career options."¹⁰ Arbitrator Seife held that "the applicant must identify some sort of 'suitable employment, describe the physical demands of the work and demonstrate with credible evidence that their injuries continuously prevent them from engaging in such employment."¹¹ Arbitrator Manji in the Caruso decision required the Applicant (if unable to adduce strong medical evidence of total disability) to provide some evidence that he or she "has made a bona fide effort to identify, try to find or attempt some sort of 'suitable employment but failed because his or her injuries continuously prevent him or her from engaging in such employment."

(b) H.K.’s education, training and experience

H.K. was born in 1954 in Poland, where she completed four years of high school, followed by a one-year course in typing and stenography. She then worked for seven years as a typist and proofreader at a print shop. In 1985, she immigrated to Canada. At that time she could not write, read or speak English. After graduating from a six month English as a second language course, she found employment with Cuddy Farms in February 1987, which has been her only employer in Canada. She presently understands and reads a little English, but writes in Polish.

I find that "suitable" employment for H.K. for the period since January 31, 1997 would entail full-time employment approximating her remuneration at Cuddy Farms. The employment would require her to be competitively productive. Such employment would require little facility in English, which would essentially restrict her to the more physical type of work she was performing prior to the accident.

(c) Conclusion

The basis of the Applicant’s claim for ongoing weekly benefits rests in large part on psychological impairment.

Dr. Ragula wrote in March 1998 that H.K. has a "chronic pain syndrome and severe depression. Mainly as the result from the accident but aggravated by her daughter's condition." I accept that these symptoms, if disabling, are equally compensable if they arise either from H.K.'s own injuries or from her "psychological or mental injury" resulting from her daughter's physical injury, in accordance with section 2 of the Schedule.

Dr. MacDonald testified that H.K.'s daughter will probably never work or marry because of her injuries. Dr. Iezzi indicated in his report that H.K.'s "daughter did not want to go to Florida and had only gone at her mother's insistence." Dr. Kuiack wrote that H.K.'s mother had not forgiven the Applicant for the injuries which the granddaughter had sustained. H.K. testified that she feels very guilty about this accident. Her emotional pain never leaves her. She testified that her medication calms her, but "can't cure my conscience."

H.K. testified that "with my daughter, we have no solution," that "I had such a deep depression, there seemed to be no sense in doing anything" and it was "as if I was in a tunnel without an exit or entry." She became indifferent, saying that "if someone told me that I would be sentenced to death the next day, it wouldn’t matter to me."

H.K. described herself as having been self-reliant. As a single mother after one year of marriage, her daughter had always been dependant on her. She was angry that the accident did not allow her to pursue her pre-accident plans. She testified that she very much wants to do something and be useful, but queried what kind of job she could perform to support herself and her daughter, considering she does not "know the language," her problems with prolonged sitting or standing and her problems concentrating. She testified that standing for a longer period of time causes a strong pain in her low and mid back and "a kind of sucking kind of pain in my left leg."

I accept Dr. MacDonald’s opinion that H.K. is presently unable to return to any "suitable" competitive employment due to her chronic pain, depression, low energy, low tolerance for even minor stressors, inconsistent activity levels and decreased emotional control as a result of this accident.

I favour this opinion over that of the Insurer’s neuropsychological expert, Dr. Kuiack, who testified that although she accepted that H.K. had a chronic pain syndrome, she did not believe that her "level of depression [was] sufficient to render her completely disabled from any form of employment." This of course is not the correct disability test. The test is whether H.K. is capable of employment commensurate with her background, which I find to be productive competitive full-time employment. Dr. Kuiack did not address this test from the perspective of depression, although she stated that H.K. was not disabled from either her pre-accident employment or any other suitable employment "from a purely neurocognitive perspective."

Dr. Kuiack opined that H.K.’s "ongoing emotional difficulties . . . [are] highly disproportionate to actual injuries sustained." I find that this ignores not only the objective injuries sustained by H.K., but the horror of this accident, the death of two human beings and the traumatic head injury sustained by H.K.'s daughter.

Dr. Kuiack felt that "factors such as secondary gain in symptom maintenance cannot be fully ruled out," but no evidence of any intentional misrepresentation was provided. Furthermore, Dr. Kuiack agreed that her three hour meeting in January 1998 with H.K. was less optimum in assessing H.K.'s overall state than Dr. MacDonald's regular treatment sessions for almost two years. In addition, the focus of Dr. MacDonald's treatment was H.K.'s emotional state whereas Dr. Kuiack’s focus was neuropsychological impairment. Dr. MacDonald’s evidence is also consistent with that of Dr. Iezzi and Dr. Ragula, with whom Dr. Kuiack conceded she had no basis to disagree. Dr. MacDonald’s evidence that he found no evidence of malingering or lack of legitimacy was supported by Dr. Sweeney, another neuropsychologist, who stated that "[a]ny possibility of exaggeration or outright malingering is ruled out by the compatibility between background information and clinical data, the meaningful clinical profile demonstrated, and the absence of positive psychometric indices of malingering."

Dr. Kuiack felt that there "is no evidence that [H.K.] is experiencing Post-Traumatic Stress Disorder." Although it is not necessary for me to accept this diagnosis to find for the Applicant, I find that there is abundant evidence of the diagnostic criteria for this disorder, including exposure to a traumatic event involving both actual and threatened death, recurrent distressing dreams involving death and destruction, feelings of detachment and persistent symptoms of insomnia and difficulty concentrating.

Dr. Kuiack disagreed with Dr. Sweeney's opinion that H.K. had sustained a mild brain head injury which rendered her "unemployable competitively" for positions requiring normal verbal communicative skills, the ability to deal with surprise developments or rapid conceptual thought and problem-solving. I prefer Dr. Sweeney's opinion over Dr. Kuiack's as the latter's use of a "flexible battery" of tests has been "criticized in the literature as lacking empirical validity, the facility to carry out differential diagnosis and objectivity," unlike the recognized formal standardized test battery.

Some improvement has been noted in H.K.’s emotional condition. Dr. MacDonald indicated that H.K.’s depression has lessened a little bit, but was still moderate to severe. A March 1998 note in Dr. Nowicki’s records states that H.K.’s mood had stabilized and the "vegetative profile" had returned to normal limits. However, her note also indicates that H.K. continued to take medication for depression and insomnia. I see nothing in the note that detracts from Dr. Nowicki’s guarded prognosis in December 1997 and her encouragement that H.K. seek retraining to "make employment more feasible in the future." I also find that H.K. has attempted, on her own, to expand through education her presently very limited employment potential, but due to her ongoing physical and especially emotional impairments, is unable to engage in any competitive full-time employment for which she is reasonably suited.

4. Is H.K. entitled to a special award, pursuant to subsection 282(10) of the Act?

(a) The case law

Subsection 282(10) of the Act mandates that an arbitrator shall order a special award (up to a statutory maximum), if the arbitrator "finds that an insurer has unreasonably withheld or delayed payments."

Director’s Delegate Draper confirmed in Royal Insurance Company of Canada and Sandra Clark (September 26, 1997), OIC P97-00008, that:

Section 282(10) gives arbitrators the authority to impose a special award based on the evidence presented at the hearing, whether or not notice was given before the hearing. In other words, a special award is always a possibility if the arbitrator finds that the insurer unreasonably withheld or delayed the payment of benefits.

This decision followed the comments of Director's Delegate Naylor in Tagarin and Simcoe & Erie General Insurance Company (February 26, 1996), OIC P-004660, that an arbitrator may consider making a special award on his or her own initiative. Both cases, however, stressed that the requirements of natural justice and procedural fairness must be met.

In this case, I raised the issue of a special award, on my own initiative, after hearing the evidence of the last witness, Dr. J. Clifford, who was called by the Insurer. Dr. Clifford testified that he would never have suggested putting the Applicant immediately back to a job where she would have to stand for eight hours, without a graduated reconditioning programme. Dr. Clifford indicated that it was "bizarre" that the Insurer had not followed his recommendations concerning H.K.’s rehabilitation. He queried as to how insureds can be expected to improve if an insurer does not follow the recommendations of its medical experts. Dr. Clifford testified that the longer the delay in following his plan, the more difficult it would be to achieve the desired results.

Before hearing submissions, I advised the parties that I wished to consider the issue of a special award and asked them whether they wished to present any further evidence in this regard. Both parties declined to present any further evidence, the Insurer indicating that all of the pertinent facts had already been laid out. The parties did, however, request and were granted an opportunity to provide written submissions on the issue of a special award.

(b) Did the Insurer unreasonably withhold or delay payment of weekly benefits?

The Applicant first submits that in light of decisions from this Commission interpreting the words "any period in excess of 156 weeks," it was unreasonable for the Insurer to terminate weekly income benefits on the third anniversary of the motor vehicle accident.

I do not agree. The judicial interpretation of this ambiguous provision has not been finalized, the leading decision of Coles being presently under judicial review.

The Applicant further submits that the totality of the medical evidence before the Insurer confirmed ongoing physical and emotional disability.

The initial termination of weekly benefits followed almost immediately upon Dr. Ragula’s March 1995 "sign-back letter," which was within 156 calendar weeks of the accident. However, Dr. Ragula never released H.K. to return to her unmodified prior work at Cuddy Farms. Indeed, Dr. Ragula advised Cuddy Farms that H.K. was "to avoid prolonged standing," which the employer could not accommodate.

A month later, the Insurer’s own psychological expert, Dr. Iezzi, stated that H.K.’s "emotional distress is contributing significantly to preventing her from being more functional . . . her emotional status is probably a bigger impediment to her return to work than is her physical health status." He queried whether H.K. would "ever be capable of full-time employment" [emphasis added].

This report supports both pre- and post-156 week entitlement. It was unreasonable for the Insurer to disregard its own psychological expert and rely on any opinion of Dr. Clifford as to psychological disability,¹² without clarifying Dr. Clifford’s expertise, if any, in this area and whether or not he deferred to Dr. Iezzi’s opinion. There was no evidence that this was done. Dr. Clifford, in fact, testified that although he held a Masters of Psychology degree, he did not examine H.K. for depression, he was not a qualified psychiatrist or psychologist and that depression was not within his area of expertise.

I also do not think that Dr. Clifford's January 30, 1995 report gave the Insurer reasonable grounds to terminate weekly benefits in March 1995 even on the basis of physical disability alone, in view of the totality of the evidence. The entitlement test is not whether it is "safe" or in the "best interests"¹³ of the insured to "commence" a return to work, terms used by Dr. Clifford in his report. Rather, the test is whether this insured can immediately return to the essential tasks of her employment, which entails continuing employability at her regular hours.

It was incumbent on the Insurer, if it intended to rely on Dr. Clifford’s report solely regarding ongoing weekly entitlement, to first obtain confirmation that H.K. could return to her full-time pre-accident employment in the absence of any of his recommended work hardening, vocational rehabilitation and psychological support (which was never provided to the Applicant). There was no evidence that this was done and indeed if confirmation had been sought, it is clear that Dr. Clifford would not have agreed to an immediate, undirected return to full-time employment.

Under the Schedule, an insurer has different means of satisfying itself as to whether an insured meets the statutory requirements for entitlement to benefits. This Insurer took full advantage of those rights. It required H.K. to attend at medical examinations to delve into her physical, mental and emotional condition. It hired experts to monitor her condition including discussions with her treating practitioners and her employer. Independent of the Schedule, it engaged in extensive surveillance.

Rights have corresponding responsibilities. One responsibility of insurers is that they not take opinions a la carte from their own medical experts, picking those passages which might support termination of benefits and ignoring those portions which support ongoing impairment. It is not reasonable to ignore rehabilitation recommendations which are intertwined with commencing a return to work. More fundamentally, it is not reasonable to ignore psychological disability, which is as valid a basis for entitlement as physical disability under the Schedule.

Between Dr. Iezzi’s April 1995 report and Dr. Kuiack’s March 1998 report, I find nothing in the evidence which might provide any reasonable justification for the termination of weekly benefits. Further surveillance done in February 1997 is at best inconclusive as to the physical and emotional ability of H.K. to work full-time. However, even Dr. Kuiack stated that H.K. "may benefit from a vocational assessment to assist her in exploring interests and aptitudes for alternative employment." There was no indication that this had been pursued by the Insurer.

Although not argued, I do not find that it would have been reasonable for the Insurer to have relied on Ms. Dobkowski’s physiotherapy report, which commented on H.K.’s emotional state, over its own psychological expert. In light of Dr. Ragula’s May 1995 comments that Dr. Iezzi’s report understated the Applicant’s condition, it would not have been reasonable for the Insurer to have relied on the family doctor’s March 1995 "sign-back" letter to deny post-156 week benefits.

A special award may be assessed "up to 50 per cent to which the applicant was entitled at the time of the award together with interest on all amounts then owing to the insured (including unpaid interest) at the rate of 2 per cent per month, compounded monthly, from the time the benefits first became payable under the Schedule."

I calculate the weekly benefits presently owing from July 31, 1995 to be approximately $57,400.00. Simple interest, alone, at 2 per cent per month, on the accumulating arrears from July 31, 1995, is approximately $20,700.00, for a total of $78,100.00. This does not take into consideration the Insurer’s delay in paying weekly benefits between March and July 1995.

In exercising my discretion, I am guided by the comments of Senior Arbitrator Rotter that:

a special award, if ordered, must be substantial enough to have a deterrent effect. It should be more than a nominal amount, which could be viewed as a licence to act unreasonably.¹⁴

In some respects pertaining to the issue of the special award, this case mirrors the Murray decision. It appears that once the Insurer decided to terminate weekly benefits, it became largely inflexible in its position. It did subsequently pay a further four months of benefits, but only more than a year after they were due. However, this case does not contain any mitigating factor for the Insurer as in Murray, where the applicant failed to provide in a timely fashion, documentary evidence to support his quantum claim.

Considering all factors, including the need to ensure that insurers meet their statutory responsibilities, I find that a lump sum special award of $20,000.00, inclusive of interest, is appropriate in this case.

5. Is H.K. entitled to her expenses of this arbitration proceeding?

The issue of expenses of this arbitration proceeding was deferred until I confirmed to the parties that all issues in dispute, except expenses, have been decided, which I now do.

Order:

1. Canadian Surety shall pay H.K. weekly income benefits of $369.59 from July 31, 1995, together with interest in accordance with subsection 24(4) of the Schedule.

2. Canadian Surety shall pay H.K. a special award in the amount of $20,000.00, inclusive of interest.

3. The issue of expenses of this arbitration proceeding may now be spoken to.

August 11, 1998

Lawrence Blackman Arbitrator

Date

Footnotes

1. 1Prior to January 1, 1994, Ontario Regulation 672 was called the No-Fault Benefits Schedule. After that date it became the Statutory Accident Benefits Schedule — Accidents On or Between June 22, 1990 and December 31, 1993. In this decision, the term "Schedule" will be used to refer to Regulation 672.
2. 2Lafleur and Zurich Insurance Company (May 11, 1995), OIC A-004141.
3. 3(1996), 1996 CanLII 8036 (ON CTGD), 30 O.R. (3d) 244, (Ont. Gen. Div.).
4. 4Pina Coles and Dominion of Canada General Insurance Company (July 28, 1997), FSCO P-007416 (under appeal).
5. 5A June 3, 1992 entry in the records of Cuddy Farms states: "c/o low back ache radiating down . . . buttock & thigh - started 2 wks. ago - no job change - no incident - says she never had this before." I received no evidence that any disability resulted from this pain complaint and I accept Dr. Clifford’s opinion as to causation.
6. 6Spicer and State Farm Mutual Automobile Insurance Company (May 24, 1995), OIC A-010158 and Caruso and Guarantee Company of North America (May 9, 1996), OIC A-006856 respectively.
7. 7Mills and Canadian General Insurance Company (July 6, 1995), OIC A-005599 and Reid and Continental Insurance Company (July 27, 1995), OIC A-006022.
8. 8Spicer, ibid.
9. 9Gagnon and Jevco Insurance Company (May 1, 1996), OIC A-015357.
10. 10Gagnon, ibid, at page 5.
11. 11Wigle and Royal Insurance Company of Canada (January 12, 1996), OIC A-012312.
12. 12Dr. Clifford noted in his report that H.K.’s "possible psychological distress" did not "require any further time away from the workplace."
13. 13See Quattrocchi and State Farm (September 29, 1997), OIC A-006854.
14. 14Erickson and the Guarantee Company of North America (July 16, 1992), OIC A-000560.