Financial Services Commission

Commission des services financiers de lander

Neutral Citation: 1999 ONFSCDRS 137

P97-00022

OFFICE OF THE DIRECTOR OF ARBITRATIONS

J. D.

Appellant

and

KINGSWAY GENERAL INSURANCE COMPANY

Respondent

Before:

Susan Naylor, Director's Delegate

Counsel:

Tom David (for J.D.)

Guy Farrell (for Kingsway)

APPEAL ORDER

Under section 283 of the Insurance Act, R.S.O. 1990, c.I.8, as amended, it is ordered that:

The appeal is dismissed and the arbitrator's order dated March 27, 1997 is confirmed, except in respect of the arbitration expenses award.
Paragraph 2 of the arbitrator's order is rescinded and the following substituted:
J.D. is entitled to expenses incurred in respect of the hearing on November 5, 6 and 7, 1996.
The parties will bear their own appeal expenses.

July 15, 1999

Susan Naylor Director's Delegate

Date

REASONS FOR DECISION

I. NATURE OF THE APPEAL

This appeal relates to the reasonableness of an account for physical rehabilitation services rendered by Get Well Rehabilitation Centres ("Get Well"). The arbitrator allowed 120 hours of therapy at $90 an hour, for a total of $10,800. This represents only a third of the expenses claimed. The arbitrator also rejected a claim for travel expenses. J.D. appeals these orders.

The arbitration hearing was lengthy. The proceedings were complicated by the fact that J.D.'s lawyer, Tom David, was the sole shareholder and officer of Get Well, with an interest in the outcome. He was summoned by Kingsway to testify. The propriety of these arrangements is not an issue before me.

After the first day of the hearing, the parties managed to settle a number of outstanding issues, including weekly benefits, leaving Get Well's bill the only matter remaining.

To accommodate J.D., the appeal was conducted by written submissions. A full transcript of testimony at the arbitration hearing was provided. In the end result, I conclude that the arbitrator's partial award is justified. It was fair and, if anything, on the generous side. J.D.'s submissions essentially boil down to a disagreement with the weight the arbitrator attributed to the evidence. He also makes a number of fresh submissions on appeal that should have been made, if at all, at the arbitration.

II. BACKGROUND

Insurers must pay for occupational therapy and physiotherapy services, and for transportation to and from therapy, if the expenses are "reasonable expenses incurred by or on behalf of the insured person as a result of the accident."¹ That was the issue before the arbitrator.

Because J.D.'s arbitration was commenced before November 1, 1996, he is free to appeal a factual issue.² Even so, an arbitrator's findings of fact are not lightly disturbed. Assessing evidence is a core function of the arbitrator and to successfully challenge findings of fact, the appellant must show that the arbitrator erred in some material way. An arbitrator is allowed considerable scope in exercising his or her judgement whether an expense is reasonable.

SABS-1994 contains important safeguards to avoid treatment delays. Under section 36(4), subject to certain qualifications including an insurer's right to ask for an assessment by a designated assessment centre, insurers must pay expenses for medical treatment, including physiotherapy, pending resolution of a dispute. J.D. told the arbitrator that he was not raising any issue respecting Kingsway's compliance with these rules.³ It was not until he filed his Reply submissions on appeal - after Kingsway had filed its appeal submissions - that he complained about a breach, and asked for a special award on this ground. I find, in the circumstances, that it would be inappropriate to allow the dispute to be re-framed at such a late stage of what have been, largely to accommodate J.D., already protracted proceedings. Therefore, I will not consider this question further.

III. THERAPY EXPENSES

J.D. hurt his lower back in the accident on May 7, 1994. According to the medical evidence, his injuries were soft tissue in nature. Although he understood that he sustained a bone chip in his back and was fearful of damaging his back further, this turned out to be incorrect.

Until the end of March 1995, J.D. was treated by Dr. Paul Grant, a family practitioner. During this time, Dr. Grant referred him to three rehabilitation clinics. J.D. dropped out of the first two early on. A third clinic, the Health Recovery Clinic, assessed his condition in November 1994, but concluded he would not be an appropriate candidate for its functional restoration and pain management program until he got treatment for substance abuse.

In early January 1995, Kingsway sent J.D. for an assessment, physical therapy and a work hardening program at Toronto West Rehabilitation Clinic ("Toronto West"). Toronto West's rehabilitation plan⁴ anticipated the need for 120 hours of treatment, 1 to 2 hours a day, 5 days a week, building up to 4 hours a day. According to the evidence, J.D. was progressing well and clinic staff were optimistic about his improvement. His pain and substance abuse were noted to have declined significantly and his condition had substantially improved. This is confirmed by Dr. Grant's notes when he last saw him on March 28, 1995.

In early March, 1995, J.D. stopped going to Toronto West. Without telling Kingsway, he switched to Get Well, where he was apparently referred by a law clerk at Mr. David's firm which by then had been retained to act for him. He was assessed at the new clinic on March 16, 1995 and March 31, 1995. Get Well recommended 1 to 2 hours of physical therapy a day, to be increased when tolerated. These recommendations were not that different in modality or frequency from Toronto West's proposed plan but there was no suggested time-frame for the length of the program.

J.D. received physiotherapy and work conditioning at Get Well, and ultimately progressed to a work hardening program. His condition was re-assessed from time to time, but the time-frame for treatment was always left open. He was finally discharged on February 19, 1996 after Get Well concluded it could no longer carry the cost of his treatment.⁵ By that point, according to the arbitrator's calculations, J.D. had received 373.55 hours of treatment from Get Well, spanning ten months.

The first Kingsway knew about Get Well's involvement was when it was sent a bill by Get Well for the March assessment and then for treatment in April, 1995. Mr. Gunnell, the claims supervisor, sent a letter replying that there was already a pre-approved program in place. At the arbitration hearing, J.D.'s counsel challenged this explanation. While he was attending Toronto West, J.D.was told that his income replacement benefits were being terminated because he was restored to his pre-accident condition. His counsel suggested, therefore, that Kingsway must have concluded that there was no further need for therapy and so would not have approved Get Well's involvement in any event. However, the arbitrator found - supported by the evidence - that at the time J.D. stopped going to Toronto West, Kingsway was prepared to pay for further treatment there and more therapy was envisaged.

The arbitrator held that, notwithstanding the gains J.D. had made, his desire to change clinics was understandable and reasonable. She cited a number of factors complicating his situation, including his fear of re-injury, the absence of substance abuse programming, a change in rehabilitation consultants resulting in a hiatus in treatment arrangements and J.D.'s general mistrust of the system. She concluded that at that point, some further therapy was still reasonably necessary, but that the duration of treatment at Get Well, which involved three times the number of hours projected at Toronto West, was not. She settled on Toronto West's anticipated total as a reasonable basis for determining J.D.'s treatment needs and allowed him 120 hours of physiotherapy at Get Well.

On appeal, J.D. objects to the arbitrator's approach to the evidence. He argues that she should have accepted the prescriptions of Dr. Shields and the prescription and provision of therapy by Get Well's physiotherapist and occupational therapist as proof of the necessity and reasonableness of the treatment it provided. He bolsters this argument by reference to those practitioners' professional and ethical obligations to provide only necessary treatment. He states, citing various cases, that such evidence is prima facie proof of the reasonableness of the expense and shifts the onus to Kingsway to rebut it.

Under SABS-1994, the recommendations of treating health professionals with respect to treatment expenses are given a great deal of importance. Before having to pay an expense, an insurer can require a certificate from a doctor or other prescribed health practitioner, such as a physiotherapist, confirming the person's need for the treatment.⁶ Receipt of such a certificate also puts in motion the process for accessing independent assessments under the designated assessment centre system.⁷

A prescription from a health professional qualified to treat the insured's condition is significant evidence of the reasonableness and necessity of an expense. The cogency of such evidence in an individual case will depend on the circumstances and is for the arbitrator to assess, based on the totality of the evidence before him or her. Characterising such evidence as prima facie proof or prima facie evidence does not advance the inquiry much. Put succinctly, it means that the evidence creates a justifiable inference as to the facts in issue, which, if nothing is done to answer it, will result, either as a matter of legal doctrine or as a matter of sensible adjudication, in judgement in favour of the person putting forward the evidence.⁸ Here, however, there was more than sufficient evidence from which to conclude that the extended treatment provided was not reasonable or required. It was greatly in excess not only of Toronto West's ultimate projections but also Dr. Galea's (8 to 10 weeks)⁹ and, particularly, Dr. Grant's (6 weeks conditioning, 6 weeks work hardening). Indeed, even after ten months of treatment, there appeared to be no end in sight. Treatment was discontinued only because Get Well was not getting paid.

I would add that, in so far as the legal onus is concerned, as the authors of The Law of Evidence in Canada¹⁰ state, the issue of onus as a determining factor of the whole case only comes into play if the trier of fact cannot come to a sure conclusion on the evidence. Here, the arbitrator weighed the evidence and came to the conclusion, based on all the evidence before her, that the hours claimed were not reasonable or required. I do not view this case as turning on who had the burden of proof.

J.D. complained that the arbitrator treated the 120 hours anticipated in Toronto West's rehabilitation plan as fixed, rather than the estimate it was. I do not find merit in this submission. The arbitrator's decision shows she did not infer that 120 hours were "maximum therapy requirements" for J.D. In fact, she allowed J.D. 120 hours at Get Well, without discounting any gains he had previously made at Toronto West.

J.D. argues that Kingsway's failure to provide him with a substance abuse or pain management program or other psychological and behavioural intervention explained his need for extended treatment. However, these factors were taken into account by the arbitrator. The explanation offered also ignores the significant gains J.D. made while at Toronto West. Furthermore, according to their records, neither Dr. Shields nor Get Well's therapists identified a need for such rehabilitative intervention to address any barriers to the efficacy of the therapy he was receiving. I do not find it necessary to address the balance of J.D.'s arguments. They amount to an attempt to re-argue his case and have greater weight allocated to his choice of evidence. I find no error in the arbitrator's handling of the evidence or otherwise. This aspect of the appeal is therefore dismissed.

IV. TRANSPORTATION EXPENSES

Get Well also provided J.D. with parking coupons and TTC tokens, for which he sought reimbursement from Kingsway. J.D. filed a series of accounts prepared by Get Well, setting out a running list of the amounts, totaling $523.35. The charges were identified as parking stamps or TTC coupons but the amounts were not consistent from day to day. No evidence was called from the clinic explaining the amounts listed or the basis on which they were paid.

For example, what was billed as an hour's therapy session could give rise to two parking stamps (April 26, 1995, $2.50), three (April 17, 1995, $3.75), or four (April 18, 1994, $5.00). The usual charge for TTC tickets was $3.00, representing, presumably, 2 tickets for a return trip, but sometimes $2.60, $4.50 or $6.00 was charged. When J.D. was asked about the $6.00 TTC charges, he explained that Get Well was giving him tickets "to go and see his doctor and things like that," (Transcript, p. 179, para. 331).

J.D. testified that he thought Get Well's records were "fine" but could not go further than to say he "recalled getting parking tickets, and ...TTC tickets at different times" (Transcript, p. 177, para. 325-326). The arbitrator concluded, given the paucity of the evidence, that it was impossible to determine whether the charges were reasonable or required. She therefore denied the claim in its entirety.

There may be an explanation for the amounts charged. In his appeal submissions, J.D. offered a partial explanation or justification for some reimbursement. However, the time for an explanation was at the arbitration hearing, through properly adduced evidence. There is no basis on which I can conclude that the arbitrator erred in her determination. This aspect of the appeal therefore fails.

V. SPECIAL AWARD

J.D. requested a special award under section 282(10) of the Insurance Act on the basis that Kingsway unreasonably withheld or delayed payments. I have previously addressed the argument that it breached its obligation to pay Get Well's bills until entitlement was adjudicated. J.D. also relies on the arbitrator's findings that he was not provided with a substance abuse or pain management program, therapy had been "put on hold" for a period and that he was entitled to part payment of his claim, as being tantamount to a finding that expenses had been unreasonably withheld or delayed.

J.D. did not pursue a special award at the arbitration. Indeed, his submissions at arbitration contradict the position he took on appeal. In response to the arbitrator's questions, he stated specifically that he was not saying Kingsway should have provided drug and alcohol rehabilitation.¹¹ The transcript indicates that the arbitrator was cognisant of her authority to consider a special award on her own initiative. She did not make a finding that Kingsway unreasonably withheld or delayed payments.

I do not accept J.D.'s argument that the arbitrator's findings implicate Kingsway, as suggested. They do not lead to a necessary inference that treatment was unreasonably withheld or delayed, nor does the evidence dictate such a finding. The appropriate forum to make submissions respecting Kingsway's actions was at the arbitration where both parties would have an opportunity to lead evidence on the issue and to address their arguments to the arbitrator who heard such evidence. Therefore, J.D.'s request for a special award is denied.

VI. ARBITRATION EXPENSES

The arbitrator awarded J.D. his arbitration expenses for one day of hearing, stating that the parties agreed that the only issue was expenses for the one day. Both parties agree the arbitrator was wrong in this and that she should have considered J.D.'s entitlement to his expenses for two-and-a-half days of hearing. These represented his expenses of attending the hearing after settlement was reached mid-way though the second day.

In its Response, Kingsway suggested that the arbitrator intended to make a partial award commensurate with her order that limited benefits were owing. It did not expand on this in written submissions. It initially filed a cross-appeal taking issue with an award of any expenses but dropped this later on.

I am satisfied from reading the arbitrator's decision that it does not reflect an intention to limit J.D.'s expenses to one day but to award him his full expenses for the hearing in so far as she could, subject to her understanding of the parties' agreement. The arbitrator's order, therefore, is varied to allow J.D. to recover his reasonable expenses incurred in respect of two-and-a-half days of hearing.

VII. APPEAL EXPENSES

J.D. claims his expenses of the appeal. He submits that he at least should recover the costs of ordering a transcript of the hearing. He states that he was put to the cost of ordering transcripts because Kingsway did not admit that the arbitrator had made a mistake with respect to the expenses order until it was confirmed by the transcript.

J.D. first raised the arbitrator's mistake in his response to Kingsway's cross-appeal. In his initial Notice of Appeal, he asked for his full arbitration expenses, without specifying why. Kingsway responded, defending the arbitrator's partial order as justified. Kingsway then filed a cross-appeal, (later withdrawn), disputing the award of expenses in its entirety. Kingsway's stance on whether the arbitrator had misunderstood the parties' agreement was therefore unclear.

I find J.D.'s suggestion that ordering the full transcript was the only option open to him difficult to accept. The issue could have been clarified, if not resolved, had he taken the relatively simple step of contacting Kingsway to confirm its position. In all the circumstances, I am not persuaded that ordering a transcript of the entire hearing to prove the point was necessary or represents a reasonable appeal expense.

The arbitration and appeal were conducted under the expenses rules as they applied before November 1, 1996. Under those rules, an insurer cannot recover its expenses. An insured is exposed to payment of an amount up the insurer's assessment but only if his or her application for arbitration is found to be frivolous or an abuse of process.¹² While I view the appeal as having dubious merit, particularly to the extent it represents a reversal of the position J.D. took at the arbitration, I would not characterise it as frivolous or an abuse of process. Therefore, each party shall bear their own appeal expenses.