Financial Services Commission

Commission des services financiers de l’Ontario

Neutral Citation: 1999 ONFSCDRS 173

Appeal P98-00031

OFFICE OF THE DIRECTOR OF ARBITRATIONS

STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY

Appellant

and

CARLOS J. LOPEZ

Respondent

Before:

Nancy Makepeace

Counsel:

Ian D. Kirby (for State Farm)

Juan F. Carranza (for Mr. Lopez)

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 arbitration order, dated June 16, 1998, is confirmed.
State Farm will pay Mr. Lopez' reasonable appeal expenses.

September 20, 1999

Nancy Makepeace Director's Delegate

Date

REASONS FOR DECISION

I. NATURE OF THE APPEAL

The arbitrator ordered State Farm to pay Mr. Lopez weekly income benefits from October 7, 1996 to November 20, 1997, interest on overdue benefits, a special award of $2,500, and his arbitration expenses, except for the expenses relating to his attendance at the pre-hearing. State Farm appeals the award of weekly benefits and the special award.

On August 24, 1998, State Farm's motion for a stay of the arbitrator's order was dismissed except with respect to the special award. There was some delay in the Insurer's payment of the benefits not subject to the stay, but they were finally paid in November 1998.

II. BACKGROUND

The arbitrator set out the factual background to this dispute in detail. Briefly, Mr. Lopez was involved in a rear-end collision on March 21, 1996. He sustained soft tissue injuries to his neck and low back. Physiotherapy, chiropractic treatment and exercise have provided only temporary benefit. Despite some improvement in his symptoms, Mr. Lopez claims that he cannot return to his pre-accident job as a mover and installer of office furniture because of ongoing neck and low back pain.¹ State Farm terminated his weekly benefits effective October 6, 1996 based on a disability DAC report that concluded he was not disabled.²

The arbitrator heard three days of oral testimony. Mr. Lopez testified, as did Dr. Howard Seiden, the general practitioner who performed the DAC assessment, Dr. E.P. Urovitz, an orthopaedic surgeon who assessed Mr. Lopez at State Farm's request and concluded he was not disabled, and Ms. Fatima Habib, a State Farm employee. Eleven exhibits were filed, including each party's medical brief.

The arbitrator allowed Mr. Lopez another year of benefits. In reaching this decision, he relied "heavily" on the job analysis done by Ms. Angela Badgley, R.N., as part of the disability DAC in August 1996. The arbitrator found that Ms. Badgley's analysis corroborated Mr. Lopez' evidence about his job.

Though Mr. Lopez' job title was "installer", the arbitrator accepted Ms. Badgley's evidence that his duties also included moving office furniture around the Multi Corp warehouse, loading it onto trucks and unloading it. The furniture included desks, cabinets, chairs, credenzas, tables, shelf units, coffee tables and sofas. Most pieces weighed more than 50 lbs. They were stored in ground-level and overhead compartments. Mr. Lopez was required to move items to the floor from an overhead compartment about six feet above the floor without mechanical aids. He did this by pushing the piece to the edge of the compartment then lowering it to the floor, where one or more other employees would assist. Once on the ground, the furniture would be carried 10-20 feet or lifted onto a dolly or panel cart. Assistance was available for heavy items.

The arbitrator accepted Ms. Badgley's report that the physical demands of Mr. Lopez' job included prolonged standing (80 percent of the time); frequent/repetitive stooping and bending; frequent/repetitive climbing ladders; frequent/repetitive reaching above, at and below shoulder height; frequent lifting, carrying and pushing up to 50 pounds without assistance; occasional lifting more than 50 pounds with assistance; frequent carrying more than 50 pounds with assistance. The arbitrator concluded that all the job tasks — including occasional demands — were "essential"³ because he "received no evidence that a worker might pick and choose what items one was required to move." "Indeed," he noted that "Ms. Badgley indicated in her report, that no modified work was not available at Multi Corp." [emphasis in original]

State Farm does not challenge these findings, which were amply supported by uncontroverted evidence. State Farm's dispute is with the arbitrator's assessment of the medical evidence.

Mr. Lopez was assessed by Dr. Urovitz, an orthopaedic specialist, on April 25, 1996, at State Farm's request. Dr. Urovitz diagnosed "fairly mild to moderate myofascial strains to the neck and lower back." He reported that "[t]he results of the physical examination failed to demonstrate any objective signs of impairment which would translate into disability for his pre-accident occupation as described to me today through the translator . . . . with respect to this gentleman's cervical injury, he would appear to have Grade 1 whiplash associated disorders according to the classification of the Quebec Task Force. Dr. Urovitz' opinion was that Mr. Lopez needed no further treatment for his neck injury, but another "week or so" of exercise for his low back and abdomen "would not be unreasonable."⁴

A disability DAC assessment was done at Malvern Independent Assessments in August 1996. It consisted of a Functional Abilities Evaluation ("FAE"), an assessment by Dr. Seiden, a general practitioner, and Ms. Badgeley's on-site job analysis.⁵ The opinion of the functional abilities evaluator was that the test results were unreliable "due to lack of consistent efforts and inappropriate and questionable pain behaviour on the part of the patient. Due to the patient's pain magnification and inconsistency levels during the assessment, it cannot be determined by the objective results whether this patient could fulfil the physical requirements of his employment. It is felt that he is physically capable of lifting and carrying more weight than was demonstrated in this FAE."⁶ Dr. Seiden diagnosed soft tissue injuries from which he felt Mr. Lopez had "made good recovery. " He concluded that Mr. Lopez was not "substantially disabled from performing the essential tasks of his occupation based on any objective information in my possession." He also accepted that Mr. Lopez "could perform better than he did on the FAE."⁷ It was on the basis of this report that Mr. Lopez' weekly benefits were terminated effective October 6, 1996.

The arbitrator found that Dr. Seiden and Dr. Urovitz understated or disregarded the "heavy physical" nature of Mr. Lopez' job. He did not accept the view that a person cannot be impaired without objective findings. He stated that while pain and suffering are not per se compensable under the SABS, an insured person may be entitled to benefits because of disabling pain resulting from the accident, though his impairment is not objectively confirmable. This approach to chronic soft tissue pain is well established in arbitration and appeal decisions, The arbitrator referred to Lee and Unifund Assurance Company (OIC P-000078, September 14, 1993) and Quattrocchi and State Farm (OIC, A-006854, September 29, 1997). See also: Bertsouklis and Liberty Mutual Fire Insurance Company (OIC P-006499, May 28, 1996), Marchildon and State Farm Mutual Automobile Insurance Company (FSCO A97-000643, November 3, 1998) and Hernandez and Zurich Insurance Company (FSCO P98-00045, April 12, 1999). The test is not whether returning to work is likely to help or hurt the insured person, but whether the insured person can reasonably and practically be expected to return to work, despite his pain. and State Farm did not challenge it on appeal.

In allowing benefits to November 20, 1997, the arbitrator relied on Mr. Lopez' continuing complaints of pain, and the reports of his treating doctors: Dr. Alexov, his family doctor, Dr. Sue-A-Quan, an orthopaedic specialist, and Dr. Innes, a chiropractor. However, the arbitrator declined to award benefits after November 21, 1997. On that day, Dr. Vlasta Hajek, a physiatrist who assessed Mr. Lopez at the request of his counsel, reported that "with the continuation of his exercise program, and with chiropractic treatment, Mr. Lopez should be now probably able to attempt to return to his pre-accident work."

According to State Farm, the only evidence that supports disability between October 1996 and November 1997 is Dr. Alexov's brief "addendum" report of June 18, 1997, which says "it is doubtful that [Mr. Lopez] will return to his pre-accident employment duties." However, the arbitrator expressly rejected this report on the basis that Dr. Alexov did not explain the "dramatic change" from his report of April 28, 1997, when he gave no opinion on disability. State Farm submits that there was no other medical evidence on which the arbitrator could rely in concluding that Mr. Lopez continued to be disabled to November 20, 1997, and accordingly the arbitrator erred in allowing further benefits.

State Farm also appeals the arbitrator's order that it pay a special award of $2,500. The special award was ordered on the basis that State Farm's refusal to pay the account of Jubilee Treatment and Rehabilitation ("Jubilee") contravened the pay pending dispute provisions of section 39 of the SABS-1994. State Farm submits that the arbitrator had no jurisdiction to make this order because it paid Jubilee's account shortly before the hearing.

III. ANALYSIS AND FINDINGS

A. Scope of the Appeal

State Farm's submissions on appeal are essentially identical to the position it took at the arbitration hearing. As the application for arbitration in this case was filed after November 1, 1996, the appeal is restricted to questions of law.⁸ I find that State Farm's challenge to the special award raises a question of law. While it is not obvious that the appeal of the weekly benefits award raises a "question of law," it is not necessary for me to decide that question because I find no error in the arbitrator's reasons in any event. As I was not provided with a transcript of the arbitration hearing, my review is limited to the decision and exhibits filed.

B. Weekly Benefits

In his brief (three sentence) report of June 18, 1997, Dr. Alexov said that Mr. Lopez "has developed a chronic back condition and it is doubtful that he will return to his pre-accident employment duties, which were as a furniture mover."⁹ In the first sentence, Dr. Alexov characterized this report as an "addendum" to his previous report of April 28, 1997, in which he said he expected Mr. Lopez' condition "to resolve in due course, without any surgical intervention" and that "it may take nine months to a year before resolution is complete."¹⁰ The arbitrator described the doctor's change of opinion over six weeks as "dramatic" and inexplicable. He contrasted Dr. Alexov's June 1997 report with a clinical note made by Dr. Innes five days earlier recommending that Mr. Lopez resume more activities. He concluded that Dr. Alexov's second report was "unsupportable." Nevertheless, he awarded Mr. Lopez ongoing benefits for five months beyond Dr. Alexov's report. State Farm's puzzlement about this result is understandable.

However, Dr. Alexov's June 1997 report is not the only evidence of Mr. Lopez' ongoing impairment between October 1996 and November 1997. Dr. Alexov's clinical notes also reflect Mr. Lopez' continuing and repeated complaints of neck and back pain. Moreover, there is no direct conflict between Dr. Alexov's two reports, though the second is stronger: both may be true. Although Dr. Alexov's first report is silent on the question of disability, it does review Mr. Lopez' diagnosis ("moderate-severe myofascial strain of his neck and back"), and predicts that his symptoms "may take nine months to a year before resolution is complete." At no point did Dr. Alexov opine that Mr. Lopez was able to return to work.

The arbitrator also considered Dr. Innes' clinical notes, which include multiple entries of low back pain and neck pain during the period at issue . Mr. Lopez first saw Dr. Innes on August 28, 1996. At the time of the arbitration hearing in February 1998, he continued to receive chiropractic treatment two or three times a week. Dr. Innes' notes indicate that Mr. Lopez reported some improvement in both his neck and back as early as the fall of 1996. However, improvement was intermittent, and his low back pain periodically flared up, especially after increased activity.¹¹ Throughout this period, Dr. Innes recommended that Mr. Lopez avoid forward flexion (reaching) or extension, or prolonged sitting or standing, while increasing other activities, especially walking and range of motion exercises. Dr. Innes' notes support the arbitrator's ultimate finding that Mr. Lopez remained disabled from his physically demanding job throughout this period.

Considering Dr. Innes' notes in their entirety, I understand the significance of the June 13, 1997 note to be that it tends to rebut the suggestion that Dr. Alexov wrote the report of June 18, 1997 because Mr. Lopez' symptoms had suddenly got worse. Reading the decision as a whole, I have the impression that the arbitrator thought Dr. Alexov's stronger report was prepared at the request of Mr. Lopez' counsel and without due consideration. Nevertheless, he found that Dr. Innes' notes "indicate a man in continuing distress, often with 'obvious pain'."¹² I find no error in this reading of the notes.

I reject State Farm's submission that the only evidence pertinent to Mr. Lopez' entitlement between October 6, 1996 and November 21, 1997 are reports prepared during that time. While contemporaneous reports will generally provide the best evidence of an insured person's medical condition, prior and subsequent reports may also be probative.

In July 1996, Dr. Alexov referred Mr. Lopez to Dr. Errol A. Sue-A-Quan, an orthopaedic surgeon. Dr. Sue-A-Quan found that Mr. Lopez showed "typical features of a soft tissue injury problem, having reasonable mobility of his neck and back, no neuropathy and only mechanical type backache in the lumbar area." He felt that "it may take 9 months to a year before resolution is complete," and recommended continuing therapy.

The arbitrator also reviewed the reports of Active Physiotherapy Rehabilitation Group ("Active"), who treated Mr. Lopez between March and May of 1996, Jubilee Treatment and Rehabilitation Centre Inc. ("Jubilee"), where Mr. Lopez was treated between May and mid-August of 1996, and ACT Health Group Corporation ("ACT"), where Mr. Lopez continued with physiotherapy in the fall of 1996. All these treatment-providers recorded Mr. Lopez' ongoing complaints of pain and functional limitations.

State Farm points out that on August 14, 1996, two months before benefits were terminated, Jubilee recommended another 4 weeks of treatment and work conditioning, followed by return to work. However, Jubilee also noted that "this client's lumbar spine strength has not reached his pre-accident status." Their functional abilities evaluation that month indicated that Mr. Lopez was still limited by pain in reaching (10 lbs.), carrying (20 lbs.), lifting (10 lbs.), kneeling, crouching, and stair climbing.

State Farm also relies on ACT's September 18, 1996 recommendation that Mr. Lopez return to work with modified hours (four hours a day, 3 days a week for 4 weeks). On discharge in November 1996, the ACT physiotherapist recommended that Mr. Lopez receive vocational training. He never received it. The arbitrator found, based on undisputed evidence, that modified work was not available at Mr. Lopez' pre-accident workplace.

In December 1996, a physiotherapist at the Canadian Back Institute ("CBI") conducted a paper review of the file at State Farm's request. She concluded that the persistence of symptoms confirmed that Mr. Lopez has "'a pain problem' as opposed to one in which there are any true physical findings."¹³ She recommended that this issue be addressed, and that Mr. Lopez be provided with four weeks of work conditioning, because "there were still some signs that this gentleman had not yet achieved a pre-accident level of function with respect to his work activities." The arbitrator noted that State Farm did not provide the rehabilitation programmes CBI recommended.

When Dr. Hajek examined Mr. Lopez on November 21, 1997, she noted that movement in his lower right back "consistently brought on pain." She found no muscle spasm, loss of movement or neurological deficits. Nevertheless, based on Mr. Lopez' history, her review of his medical file and her physical examination of him, Dr. Hajek accepted that Mr. Lopez had "not yet recovered from his back injury, probably a facet joint strain at the lower lumbar level." She recommended that "with continuation of his exercise program, and with chiropractic treatment, Mr. Lopez should be now probably able to attempt to return to his pre-accident work. Since he has not yet fully recovered from the sequelae of the motor vehicle accident, the success of his work re-integration is uncertain."¹⁴ Mr. Lopez continued to complain of disabling low back pain at the time of the arbitration hearing. In terminating benefits in November 1997, the arbitrator did not rely only on Dr. Hajek's report and his rejection of Dr. Alexov's report. He also considered "the subjective and observed improvements noted in Dr. Innes' clinical notes [and] the absence of objective findings."

The arbitrator considered all the medical evidence. He found that Mr. Lopez had made consistent complaints of low back pain since the accident. But the arbitrator's ultimate conclusion did not depend entirely on the medical evidence. The physical demands of Mr. Lopez' pre-accident job played a crucial role, as did his finding that Mr. Lopez was credible. The arbitrator did not accept that Mr. Lopez' inconsistent performance in the FAE indicated an intent to deceive examiners. State Farm did not directly challenge the arbitrator's finding with respect to credibility, and the written evidence offers no basis for doing so. An arbitrator's findings as to credibility are particularly deserving of deference, especially when they depend on the arbitrator's assessment of a witness.¹⁵ It is particularly difficult to challenge such findings in the absence of a transcript.

As Director's Delegate Draper has observed:

The determination of disability cannot be done with absolute precision, particularly in cases involving limitations based on pain. Although entitlement to weekly income benefits must be based on the test established in the Schedule, there is scope for the arbitrator to consider all of the evidence and reach a result that is fair in the particular circumstances of the case.¹⁶

Although another arbitrator might have come to a different conclusion, I find that there was sufficient evidence to support the arbitrator's finding that Mr. Lopez continued to be disabled after October 6, 1996 but ceased to be disabled by November 21, 1997. I find no error.

C. Special Award

(1) Jurisdiction

The arbitrator ordered a special award based on State Farm's refusal to pay the Jubilee account. State Farm submits that he had no jurisdiction to do so because the Jubilee account was paid just before the hearing, further to a settlement of the issue. State Farm relies on subsection 282(10) of the Act, which gives arbitrators power to order a special award "in addition to awarding the benefits and interest to which an insured person is entitled." As the arbitrator awarded no benefits in relation to Mr. Lopez' treatment at Jubilee, he had no power to order a special award based on refusing those benefits, according to State Farm.

This issue was recently considered in Jensen and GAN Canada,¹⁷ an appeal of my own decision as arbitrator. In that case, I found that the insurer's termination of benefits was unreasonable, but held that I could not order a special award because the insurer had accepted the applicant's ongoing entitlement to benefits just before the hearing. On appeal, Director's Delegate Naylor disagreed:

The threshold inquiry is whether payments have been unreasonably withheld or delayed. In ordinary parlance, payments "withheld" means payments not granted, payments "delayed" means payments paid late. It is difficult to see how the addition of "delayed payments" can be given any content if late payment strips the arbitrator of jurisdiction to make an award.

A special award under s. 282(10) is not part of the schedule of benefits.¹⁸ It is an aspect of an arbitrator's authority in relation to adjudication of a person's right to benefits or the amount of benefits. However, cases dealing with a party's right to withdraw an application or appeal have held that a party is not free unilaterally to end a proceeding.¹⁹ It would seem to follow that the unilateral action of GAN Canada in agreeing to pay the benefits in issue does not necessarily dispose of the question of a special award. It is, of course, different if the parties mutually enter into a legitimate settlement which terminates all or part of the proceeding. [emphasis added]

In Vo and Maplex and Insurance Bureau of Canada,²⁰ Director Sachs held that while arbitrators are bound by appeal decisions on questions of law, other appeal adjudicators are not. However, "a departure at the appeal level from a previous interpretation of a statutory or regulatory provision should only occur in clear and cogent circumstances." In my view, there are no "clear and cogent circumstances" that would justify my doing so in this case.

Director's Delegate Naylor began her discussion of special award jurisdiction with the observation that "the meaning of s. 282(10) is not straightforward. It is capable of being read a number of ways." I am persuaded that the express reference in s. 282(10) to benefits " unreasonably . . . delayed" reflects the legislative objective of early claims adjustment. This reading of the section is especially compelling in the context of the detailed procedural provisions introduced in the SABS-1994, which restrict the circumstances in which an insurer may delay payment of benefits. The legislature's failure to amend subsection 282(10) of the Act when it introduced the 1994 changes to the Regulation suggests that the reference to unreasonable delay in that section is to be read in context with the procedural provisions of the SABS-1994. For these reasons, I agree with Director's Delegate Naylor that an insurer's mere payment of outstanding benefits "does not necessarily dispose of the question of a special award."

In this case, State Farm submits that the parties reached a mutual settlement of the Jubilee issue before the hearing. Mr. Lopez submits that there was no settlement. According to Mr. Carranza, State Farm advised him on the morning of the hearing that it had paid Jubilee's account directly. State Farm bears the burden of leading evidence of a settlement that would oust the arbitrator's jurisdiction to give a special award. If there was a release or minutes of settlement — either between State Farm and Jubilee or between State Farm and Mr. Lopez — it is for State Farm to bring it forward. As no such evidence was presented, I find that the arbitrator acted within his jurisdiction in ordering a special award.

(2) The Process for Claiming Medical Benefits Under Part VII of the SABS-1994

The arbitrator found that State Farm contravened subsection 36(4) of the SABS-1994 in refusing to pay the Jubilee account. That provision is as follows:

Subjection to subsection (5), clause 39(11)(b) and subsection 39(12), the insurer shall pay an expense under subsection (1) pending resolution of a dispute relating to the expense in accordance with sections 279 to 283 of the Insurance Act.

State Farm does not suggest that subsection 36(5) or clause 39(11)(b) apply in this case.²¹ It relies on paragraph 39(12), which states:

The insurer is not required to pay the expense for the period that the insured person does not,

(b) provide information that is reasonably necessary for an assessment under this section and that the person or persons conducting the assessment have required the insured person to provide.

The arbitrator's findings of fact with respect to the history of the dispute were not challenged on appeal:

Jubilee first advised State Farm of its involvement on May 28, 1996, the day after their initial assessment. Jubilee was told by the assigned adjuster that direct billing would not be accepted. A week and a half later, Mr. Lopez's counsel forwarded to State Farm Jubilee's first account and initial assessment form (which set out their diagnosis, treatment plan and expected length of treatment).

State Farm responded almost two months later. By letter dated August 2, 1996, it requested a medical/rehabilitation DAC assessment (pursuant to section 39) with regard to unspecified "treatment." It did not indicate where or when the assessment was to occur. State Farm enclosed an OCF-14 consent form to be completed and returned.

The OCF-14 form was never returned. A DAC was never arranged. State Farm submits that the DAC was not arranged because the form was not returned. Mr. Lopez submits that it was not arranged because he was no longer being treated at Jubilee.

On September 11, 1996, State Farm requested a health practitioner's certificate ("HPC") with respect to Mr. Lopez' treatment at Jubilee. This request was made pursuant to subsection 37(1):

The insurer may require a person claiming payment of an expense under section 36 to furnish a certificate from the person's health practitioner stating that the expense is reasonable and is necessary for the person's treatment.

Mr. Lopez submits that State Farm had no right to require a DAC assessment under subsection 39(1) until it requested and received an HPC. It follows that State Farm cannot rely on Mr. Lopez' failure to provide a signed OCF-14 form required for an unauthorized DAC.

The arbitrator agreed with this analysis. He found that the requirement that the insurer obtain an HPC "is not merely a technical requirement, but rather reflects the economic and practical sense of requiring an insurer to first seek clarification from the treating care provider, before going to the far greater expenses and intrusion of a DAC assessment." I agree. The plain words of s. 39(1) support the arbitrator's conclusion. The section reads as follows:

If the insurer receives a certificate under section 37 in respect of an expense, the insurer may give the insured person a notice requiring the insured person to be assessed under this section. [emphasis added]

The arbitrator's decision is consistent with Arbitrator Palmer's approach to this issue in Luo and Guardian Insurance Company of Canada.²² She held that if the insurer "seeks to rely on the provisions of sections 39 and 39.1 of the Schedule to avoid paying for Mr. Luo's physiotherapy pending dispute, it must prove it took the proper steps set out in the Schedule," including a request that the insured person furnish an HPC. Since Guardian did not prove that it requested an HPC, "then it cannot access the DAC assessment procedures set out in section 39. It has to continue to pay the expenses according to the provisions of section 36."

In Defreitas and Travelers Indemnity Company,²³ the insurer argued that the applicant was barred from proceeding to arbitration under section 71.1 of the SABS-1994 on the basis that she failed to attend medical and rehabilitation DAC assessments at the insurer's request. Arbitrator Renahan relied on the arbitration decision in this case. He explained the purpose of the Health Practitioner's Certificate:

The certificate forms the basis upon which the Insurer assesses the reasonableness and necessity of the expense, and, if it denies the expense, it forms the basis upon which the DAC conducts its assessment and renders its opinion on the reasonableness and necessity of the expense claimed.

Arbitrator Palmer revisited the issue in Pintucci and Jevco Insurance Company²⁴ In that case, the Insurer terminated the applicant's physiotherapy benefits based on an Insurer Examination report that concluded he did not need further treatment. The arbitrator found that in terminating benefits without requesting an HPC or DAC, the insurer contravened the pay pending dispute provisions of section 36(4). In her view, the insurer's option upon receipt of the IE report was to request an HPC and a DAC after that. The insurer should have paid the benefits pending receipt of a DAC report supporting its position. In setting out the purpose of these procedures, the arbitrator reaffirmed the Commission's longstanding approach to rehabilitation:

It is important to the integrity of the operation of the Schedule that the parties comply with its terms. Prompt, continuing access to reasonable and necessary treatment, even while a dispute is underway, is a hallmark of the system. The initial gatekeepers of the treatment system are treating health practitioners, who are regulated health professionals, and the designated assessment centres. As Justice Catzman of the Court of Appeal noted in a recent decision, "Part VI of the Insurance Act represents the expression of a social policy adopted by the Legislature of this province to deal with automobile insurance."²⁵ Insurers cannot flout the terms relating to the provision of and payment for supplementary medical and rehabilitation benefits and substitute in their stead adjustment procedures that they find more convenient or suitable to their purpose.²⁶

State Farm submits that it had legitimate concerns about Mr. Lopez' claim for physiotherapy benefits. That does not answer Mr. Lopez' complaint. I find that Part VII of the SABS-1994 sets out a mandatory process that insurers must follow in adjusting claims for medical benefits. That process requires the insurer to request and consider a Health Practitioner's Certificate before requesting a DAC assessment. This is not just a technical requirement, but reflects the legislative objective of encouraging early payment of claims for medical benefits, which promotes rehabilitation. It also helps ensure that DAC assessments are reserved for more difficult disputes which the parties are unable to resolve on the basis of an HPC.²⁷ I agree with the arbitrator that State Farm's request for a DAC in August 1996 was unauthorized. It follows that State Farm cannot rely on Mr. Lopez' failure to provide the OCF-14 as justification for failing to pay the Jubilee claim pending resolution of any dispute.

For these reasons, I find no error in the arbitrator's conclusion that State Farm unreasonably withheld or delayed benefits with respect to the treatment Mr. Lopez received at Jubilee. State Farm did not dispute the amount of the special award.

IV. EXPENSES

State Farm will pay Mr. Lopez' reasonable appeal expenses.