Financial Services Commission
Commission des services financiers de l’Ontario
Neutral Citation: 1998 ONFSCDRS 39
Appeal P-006022
OFFICE OF THE DIRECTOR OF ARBITRATIONS
CONTINENTAL INSURANCE COMPANY
Appellant
and
SHIRLEY A. REID
Respondent
Before:
David R. Draper, Director’s Delegate
Counsel:
Patrick J. Mazurek (for Continental Insurance Company)
Michael S. Brown (for Shirley A. Reid)
APPEAL ORDER
Under section 283 of the Insurance Act, R.S.O. 1990, c.I.8, as amended, it is ordered that:
Shirley Reid is entitled to weekly income benefits from July 12, 1993, less benefits already paid for this period.
Interest on the weekly income benefits owing under paragraph 1 is payable from June 17, 1997, according to subsection 24(4) of the Statutory Accident Benefits Schedule - Accidents before January 1, 1994.
Shirley Reid is entitled to her reasonable appeal expenses.
September 23, 1998
David R. Draper Director’s Delegate
Date
REASONS FOR DECISION
I. NATURE OF THE APPEAL
This is not a typical appeal decision. It results from a full rehearing held at the appeal level on June 22 - 25, 1998, with oral submissions on August 13, 1998. The background details are set out below.
II. BACKGROUND
Shirley Reid was seriously injured in an automobile accident on July 5, 1990, while on a family holiday. She was travelling with her husband and two school-aged children from their home in Alberta to the east coast of Canada. Near Kenilworth, Ontario, an oncoming vehicle crossed the centre line and hit their van head-on. The two occupants of the other vehicle were fatally injured. Mrs. Reid, her husband and their daughter sustained significant injuries. Their son was not seriously hurt, although he had difficulty coping with what happened.
Mrs. Reid’s most serious injury involved a spinal displacement at C6/C7 that required surgery. She was initially treated in Ontario, starting a rehabilitation program at Lyndhurst Hospital under the care of Dr. N. Bharatwal. In September 1990, two months after the accident, Mrs. Reid returned to Alberta. Dr. Bharatwal referred her to Dr. L.A. Bellamy, a specialist in Physical Medicine and Rehabilitation, at Glenrose Rehabilitation Hospital (“Glenrose”). Besides her rehabilitation at Glenrose, Mrs. Reid saw her family doctor, Dr. John T.D. Morrissey, who was responsible for her general medical care.
Continental Insurance Company (“Continental”)1 paid weekly income benefits under subsection 12(1) of the Statutory Accident Benefits Schedule - Accidents Before January 1, 1994, R.O. 672/90, as amended ("the Schedule"). These benefits were paid on the basis that Mrs. Reid was substantially unable to perform the essential tasks of her pre-accident work as a nursing instructor. Effective July 12, 1993, however, weekly income benefits were cancelled. Although Continental accepts that Mrs. Reid has some residual limitations, it claims they are not sufficient to meet the stricter post-156 week test in paragraph 12(5)(b), which states:
12.- (5) The insurer is not required to pay a weekly benefit under subsection (1),
(b) for any period in excess of 156 weeks unless it has been established that the injury continuously prevents the insured from engaging in any occupation or employment for which he or she is reasonably suited by education, training or experience.
A three-day arbitration hearing was held in February 1995. The only issue was Mrs. Reid’s entitlement to weekly income benefits after July 12, 1993. There was no claim for rehabilitation expenses. Mrs. Reid and Ms. Nancy Stiso, Continental’s adjuster, were the only witnesses. In addition, the parties filed 26 exhibits.
The arbitrator released his decision on July 27, 1995, concluding that “until Mrs. Reid retrains, she continues to suffer injuries which continuously prevent her from working at any job for which she is reasonably suited by education, training or employment.” As a result, he ordered Continental to pay ongoing weekly income benefits after July 12, 1993.
Continental appealed the decision, claiming the arbitrator made errors of fact and law that undermined the result. In its Notice of Appeal, Continental also asked that the arbitrator’s order be stayed pending the outcome of the appeal. I denied this request. Consequently, Mrs. Reid’s benefits were reinstated, including the payment of benefits back to July 12, 1993.
The appeal did not proceed quickly because the parties wanted to discuss settlement. Oral submissions finally took place in late 1996. After reviewing the evidence and the parties’ submissions, I found that the arbitrator’s decision was based on significant factual errors. Most importantly, he treated Mrs. Reid as if she had been employed full-time before the accident, working “anywhere from 40 to 70 hours per week.” (Decision, p.9). Mrs. Reid conceded that this overstated her work hours, but argued it did not affect the outcome. I was unable to agree. In my opinion, the errors, particularly taken together, were sufficiently important that the decision could not stand.
In Calogero and The Co-operators General Insurance Company, (P-000251, February 13, 1992), the Director said that rehearings should be used sparingly. I agree. However, the particular circumstances in this case convinced me that holding a rehearing at the appeal level was the quickest and most sensible approach. Neither party suggested that the dispute go back to the same arbitrator, and the detailed appeal submissions left me familiar with the issues.
As a result, I issued an interim order rescinding the arbitrator’s order and directing a rehearing before me on the question of Mrs. Reid’s entitlement to weekly income benefit from July 12, 1993 to the date of the rehearing. The order also relieved Continental from its obligation to continue paying weekly income benefits pending the resolution of the appeal. As I understand it, Mrs. Reid has received weekly income benefits up to June 1997, with Continental claiming repayment of the benefits paid from July 1993 to June 1997.
The rehearing was adjourned twice, in part because the parties wanted to continue settlement discussions. However, the dispute was not resolved and the rehearing went ahead. It was agreed that the transcript of the first arbitration proceeding would be included in the appeal record. The arbitration exhibits were marked as the first 26 appeal exhibits, with an additional 23 exhibits filed during the rehearing. There were five witnesses: Mrs. Reid; Mr. Ronald Reid (her spouse); Dr. Morrissey and Dr. Bellamy (both by telephone); and Mr. Martin Koretsky (the adjuster currently handling the file for Continental).
III. ANALYSIS
To succeed, Mrs. Reid had to prove on a balance of probabilities that her accident-related injuries have continuously prevented her from engaging in any occupation or employment for which she is reasonably suited by education, training or experience. For the following reasons, I conclude that she met this burden.
A. Pre-accident employment
An insured person’s pre-accident work history is important in evaluating what types of alternative employment can be considered reasonably suitable. Mrs. Reid worked in nursing from 1970, when she received her degree, until the accident. She initially worked as a general duty nurse in hospitals, being promoted to head nurse on an obstetrics/gynaecology unit. With the birth of her first child in 1975, Mrs. Reid moved into teaching. She worked as a clinical instructor in the nursing program at Grant MacEwan Community College (“Grant MacEwan”), where she continued until her accident.
The parties disagree about the time involved in Mrs. Reid’s pre-accident employment at Grant MacEwan. Continental argues that she was a part-time instructor with few structured hours and significant periods of the year free. In contrast, Mrs. Reid claims that her job was nearly equivalent to full-time employment.
Mrs. Reid did not have a permanent appointment at Grant MacEwan. Instead, she worked for fifteen years through a series of one-term contracts. She was paid an hourly rate based on the number of Lecture Equivalency Hours (“LEHs”) assigned to the course. Each academic year was divided into three parts: a fall term from September to December; a winter term from January to April; and an intensive clinical session during May and June. At the time of her accident, Mrs. Reid had just finished the intensive session and had a contract to teach in the fall term.
Mrs. Reid described her typical work pattern in the fall and winter terms as involving a two-week cycle. She worked one week at the hospital where her students were doing their clinical placements, with the following week being lighter. During the clinical week, she posted assignments on Monday and then went to the college to meet with students and attend department meetings. She spent Tuesday, Wednesday and Thursday at the hospital supervising and helping her students during their shifts. On Thursday night or Friday, she prepared progress reports for each of her students (8 - 15 students per term). During her lighter weeks, she went to the college on Monday to meet with students and attend meetings. On the other days, she marked assignments, had occasional lab sessions to provide instruction in lab techniques, and was generally on call to the students.
The schedule was different for the May-June session. Mrs. Reid testified that this was an intensive clinical session without any “light weeks.” The instructor had to spend long days at the hospital with the students throughout the term. However, as she did in 1990, Mrs. Reid often worked only one month of the May-June session, splitting it with another instructor.
Continental contends that Mrs. Reid’s account exaggerates the demands of her job, claiming she worked more like half-time for only three quarters of the year. Continental submits that Grant MacEwan considered her a part-time instructor and, in addition, her LEHs do not suggest full-time employment. For example, she was credited with 124.5 LEHs for the 1990 spring term. In a 15-week term, this is an average of 8.3 hours per week. Even allowing for preparation, Continental argues this is half-time, not full-time employment.
While I generally accept Mrs. Reid’s description of her duties, I find that she approached her job diligently and probably worked longer hours than strictly required by her contract. However, it clearly was not a full-time job. As Mrs. Reid acknowledged, some instructors taught more than one course per term. In fact, she taught two sections of the same course in 1988.
This means that part-time employment may be suitable employment for the purposes of the post-156 week test in paragraph 12(5)(b) of the Schedule. However, I find that Mrs. Reid’s job at Grant MacEwan was a challenging and rewarding professional position that offered her a reasonable income and the kind of flexibility she wanted while her children were young. These are factors that must be considered in evaluating the suitability of alternative work.
B. Disability
The parties agree that as a result of the accident, Mrs. Reid suffered injuries to her spinal cord at C6/ C7. There is some question, however, whether she remains neurologically impaired.
Mrs. Reid’s treating physicians, Dr. Bellamy and Dr. Morrissey, have proceeded on the basis that her ongoing problems of fatigue and spasm result from a mild, but persistent neurological impairment. However, Dr. Bohdan Marynowski, a neurologist who examined Mrs. Reid in November 1997 at Continental’s request, reached a different conclusion. He was unable to find any signs of neurological impairment, describing the ongoing symptoms as “subjective.”
Dr. Marynowski did not testify at the hearing and although his curriculum vitae was filed, it is quite brief. In contrast, Dr. Bellamy testified that approximately 90% of her practice involves patients with neurological injuries. She did not find it surprising that Mrs. Reid’s neurological signs might not be observed in a single examination. As she put it, she knows where to look as a result of examining Mrs. Reid over many years. During the hearing, Dr. Bellamy maintained her view that Mrs. Reid shows mild signs of neurological impairment that account for her ongoing problems.
I was impressed with Dr. Bellamy’s evidence. It was considered and non-partisan, and based on a familiarity with Mrs. Reid that Dr. Marynowski does not have. In addition, I note that in 1995, a different neurologist, Dr. M.J. McIlroy, also found “a mild but permanent spinal cord injury.” As a result, I accept that Mrs. Reid’s ongoing problems of fatigue and spasm are neurologically based.
The diagnosis is important because the rehabilitation strategies and expectations are different than for soft-tissue injuries. As Dr. Bellamy explained, the body must find ways to compensate for a neurological impairment, leaving it less resilient in dealing with stress and exertion. There was a striking similarity between Dr. Bellamy’s general description of the problems faced by people with neurological injuries and Mrs. Reid’s testimony about her own experience. Both spoke about a limited pool of energy and the need to find a proper balance between too little and too much activity. Unlike soft-tissue injuries, therefore, it is not a matter of building up endurance by working through the pain.
Clearly, not all neurological impairments prevent the injured person from working. The critical question is whether Mrs. Reid’s injury has continuously prevented her from engaging in any suitable employment. Continental argues that during the early stages, there was no suggestion that she would not be able to return to some type of employment, perhaps even active duty nursing. However, that has not happened. Continental submits that Mrs. Reid is either exaggerating her limitations, or has made lifestyle choices incompatible with returning to work and, therefore, has not pursued appropriate rehabilitation or retraining.
This decision turns on credibility. In short, I was impressed with the evidence of Mrs. Reid and her witnesses. Given the time that has passed since the accident, her testimony about the impact of the accident on her life was remarkably clear and consistent. It was also supported in all material respects by her husband and treating physicians. Consequently, I accept Mrs. Reid’s description of her limitations without reservation.
Mrs. Reid is not someone who has maintained her general pre-accident lifestyle while claiming she cannot cope with the demands of employment. She has dramatically restricted her non-work activities due to her limited endurance and spasms. I reject Continental’s suggestion that her activities, such as exercising at the “spa,” reading and participating in a reading group, playing the piano, doing some housekeeping and maintaining her family responsibilities, doing some volunteer work, and taking classes, demonstrate that she could handle a part-time job. All these activities are done on a limited basis to the extent she is able to manage. In my view, they reflect the sincere efforts of a formerly active woman to maintain a healthy level of activity, keeping herself within the narrow balance of too little versus too much exertion.
I also have no hesitation in relying on the testimony of Dr. Bellamy and Dr. Morrissey. Both answered questions in a reasonable, even-handed manner, displaying a good understanding of Mrs. Reid’s situation. I find that they encouraged her to remain as active as possible, including pursuing her interest in returning to work, even though they were unsure whether she would be able to do so. They found her efforts admirable and never felt she was ignoring or avoiding reasonable options available to her. Even today, Mrs. Reid and her doctors have not ruled out a return to work. However, they are unable to identify any suitable employment she could do now, or a realistic retraining program that would be likely to lead to employment she could handle. I accept their view.
I will now deal with Continental’s specific arguments.
(i) The post-156 week test
Continental submits that paragraph 12(5)(b) of the Schedule is meant to create a strict test, recognizing that an innocent accident victim with long-term injuries can sue the tortfeasor. While it does not quarrel with the criteria identified in previous arbitration and appeal decisions, except perhaps the role of the job market, Continental suggests that they should be applied somewhat more strictly. In my opinion, however, this case is not on the borderline, making it unnecessary to rule on the precise limits of the test. Mrs. Reid has an ongoing neurological impairment that dramatically restricts her activities, including her ability to work on anything other than a sporadic basis, falling well short of competitive employment comparable to what she did before the accident.
Continental also contends that Mrs. Reid’s failure to return to work is due to the lack of job openings in nursing, not her inability to do those jobs. While I accept that the focus must be on the insured person’s capacity to engage in suitable employment, not the current availability of jobs, the evidence does not support Continental’s position. There was evidence that the job market for nurses has changed, but not that nursing jobs are scarce. More importantly, Continental did not identify any work that Mrs. Reid was capable of doing, even part-time, that she has not pursued due to a lack of openings.
(ii) Lifestyle choices
Continental claims that Mrs. Reid has refused to compromise her lifestyle, thereby limiting her ability to pursue employment. I reject this characterization of her actions. Insured persons are expected to make reasonable efforts to return to work that may require some changes in their personal life, but the non-work side cannot be ignored. Someone with limited endurance cannot be expected to exhaust it on work-related activities, leaving no ability to participate in his or her family life. This is particularly true where, as here, other family members were also seriously injured in the accident. As indicated above, I find that Mrs. Reid’s activities since the accident are a positive attempt to remain active, not an excuse for avoiding work.
(iii) The functional capacity evaluations
Mrs. Reid underwent two functional capacity evaluations (“FCEs”), one in June 1993, just before the 156-week mark, and the second in September 1997. The findings were quite similar. The first report states that Mrs. Reid could work in a sedentary job provided she could change positions frequently and did not work more than four hours in one day or more than one four-hour day in a row. Even this was qualified. The report also says that if Mrs. Reid worked, she would need more assistance at home. The conclusion in the second FCE report is that Mrs. Reid is not competitively employable in any suitable occupation due to her reduced endurance and functional limitations.
Continental argues that the FCEs should not be taken as definitive, but are only factors to be considered. I agree. However, I am not persuaded that Dr. Bellamy or Dr. Morrissey gave the reports undue importance. They accepted the results because they were satisfied with the testing and the conclusions fit their own observations.
Continental also claims that the FCE results are invalid because Mrs. Reid was asked to perform standard tests that the evaluators should have known would trigger spasms, compromising her performance on subsequent tests. This criticism was made as if Mrs. Reid and her treating physicians arranged the FCEs. However, that is not the case. The first FCE was arranged by the rehabilitation company retained by Continental. If Continental had concerns about the testing, it could have raised them it with evaluators or arranged another assessment, steps it did not take.
In any event, I am satisfied that the FCEs reasonably reflect Mrs. Reid’s functional capacity. As Dr. Bellamy said, the results would be of little value if the evaluators simply accepted Mrs. Reid’s own views about her limitations. They had to test her abilities, using their professional judgment about how far to go. I find no basis for finding that they did otherwise. Mrs. Reid testified that although some of the testing caused spasms, she was allowed to rest and was able to complete the assessment. She rejected counsel’s suggestion that once the spasms started, her ability to perform the tasks was thoroughly compromised for the rest of the day. I accept her evidence.
(iv) Failure to pursue rehabilitation/retraining
Continental submits that Mrs. Reid has failed to make reasonable efforts to put herself in a position to return to work. In previous decisions, adjudicators, including me, have held that a failure to pursue rehabilitation can undermine an insured person’s claim in two ways. First, it can lead to a finding that the disability is not as serious as he or she claims.2 Second, in extreme cases, the person’s ongoing disability may result more from inactivity than from any ongoing effect of the accident.3 In this case, however, I find that Mrs. Reid has made reasonable efforts.
Effective rehabilitation requires cooperation between the insured person and the insurer. One persistent source of confusion and conflict is over which party is responsible for taking the initiative in identifying the person’s rehabilitation needs and appropriate programs to address them. I accept that the insured person must make a claim and that the insurer cannot simply take over the rehabilitation process, but the parties’ particular obligations depend on the facts. In some cases, the insured person will want and need the assistance of the insurer. In others, particularly where the insured person is represented by counsel, it may be appropriate for the insurer to take a more passive role.
Unfortunately, there were some misunderstandings here. While Continental claims it never knew what Mrs. Reid wanted, she felt that Continental was responsible for arranging appropriate rehabilitation. I find Mrs. Reid’s confusion understandable given the fact that Continental retained two different rehabilitation companies to coordinate her rehabilitation. The rehabilitation services ended when her weekly income benefits were terminated, leading her to the conclusion that Continental was not prepared to assist her further.
I also find that Mrs. Reid cooperated with the rehabilitation workers even when she had doubts about their proposals. This is to her credit and should not be used against her. For example, Continental suggests that by looking for employment, Mrs. Reid acknowledged that she was capable of returning to the workforce. However, in the summer of 1992, she was asked by the second rehabilitation company to sign an agreement stating that she would participate in a job search, which she did. I find that her job search activities reflect a genuine desire to return to work and to cooperate with the rehabilitation services, not an acknowledgment of her capabilities that she later retracted based on lifestyle decisions, as Continental suggests.
A major problem with the rehabilitation services arranged by Continental is that they were based in Toronto and Vancouver, making it difficult to establish any personal rapport with a client in Calgary. This may have been due to a lack of local services, but it was far from ideal. I find that this led to unrealistic and unproductive rehabilitation efforts. In particular, the second rehabilitation company focussed on getting Mrs. Reid back to work immediately, without a thorough evalucation of her functional abilities. When the FCE was eventually done, no effort was made to deal with the serious limitations set out in the conclusion, apparently because Mrs. Reid’s weekly income benefits were being terminated.
I would be more concerned with Mrs. Reid’s actions if she had simply waited for Continental to provide her with rehabilitation services, but that is not the case. She took many steps on her own, including discussing her options with her doctors, taking a number of courses, getting involved in volunteer activities, seeing an employment counsellor, and arranging for her own work shadowing session. Sadly, she struggled in all of these activities, finding that her lack of endurance was a serious impediment.
With the advantage of hindsight, I find it unfortunate that Mrs. Reid’s non-work activities were viewed with suspicion. In particular, her volunteer work would have been a good opportunity to assess her ability to function in an employment-like setting, perhaps leading to more cooperative and productive rehabilitation efforts.
(v) Failure to respond to the arbitration decision
As stated above, the arbitrator concluded that “until Mrs. Reid retrains, she continues to suffer injuries which continuously prevent her from working at any job for which she is reasonably suited by education, training or employment.” Continental claims that its lawyer followed up on the arbitrator’s suggestion of rehabilitation, but received no response from Mrs. Reid or her lawyer, demonstrating her lack of interest in returning to work.
Continental’s overtures must be viewed in context. The appeal was proceeding, with Continental arguing that the arbitrator had no business commenting on rehabilitation because it was not an issue before him. In addition, a number of settlement meetings took place. Mrs. Reid settled her tort claim as a result of a meeting of all the litigants, including Continental. However, her accident benefits claim was not resolved. Two pre-hearings were then held at the Financial Services Commission of Ontario, but no agreement was reached. In view of Mrs. Reid’s participation in these meetings, I am not persuaded that she failed to respond to Continental’s settlement initiatives. Rather, I accept her assertion that she remained interested in rehabilitation, but had run out of ideas and, therefore, was unable to tell Continental what kind of assistance she wanted.
IV. CONCLUSION
Continental argues that even if its appeal is unsuccessful, it should not be worse off than if it had not appealed. I do not agree. Continental cannot rely on the arbitrator’s comments about rehabilitation while disputing his right to make them. It argued with considerable strength that because rehabilitation was not in issue, the arbitrator did not hear the evidence required to make proper findings. I am in the same position. However, based on the evidence I heard, it is not clear what rehabilitation or retraining expenses, if any, would be appropriate at this point. In my view, Mrs. Reid spoke clearly to the problem of identifying a program she can do in a reasonable time period, that is not unduly expensive, and is likely to lead to employment sufficiently remunerative to make the investment worthwhile. The parties may want to involve a vocational expert to consider all the evidence now available, including this decision, but I make no such order.
IV. APPEAL EXPENSES
Mrs. Reid has been successful in her claim and did not delay or prolong the dispute. Therefore, she is entitled to her reasonable appeal expenses, including her expenses related to the initial appeal hearing if they have not already been paid. The parties are encouraged to agree on the amount, but if they are unable to do so, an assessment can be arranged through the Registrar.
September 23, 1998
David R. Draper Director’s Delegate
Date