Neutral Citation: 1999 ONFSCDRS 209

FSCO A97-001565

BETWEEN:

VESNA GULEVSKI

Applicant

and

PILOT INSURANCE COMPANY

Insurer

REASONS FOR DECISION

Before:

Eban Bayefsky

Heard:

July 12, 13 and 14, 1999, at the Offices of the Financial Services Commission of Ontario in Toronto.

Appearances:

Michael J. Henry for Ms. Gulevski

Grant E. Black for Pilot Insurance Company

Issues:

The Applicant, Vesna Gulevski, was injured in a motor vehicle accident on June 30, 1994. She applied for and received statutory accident benefits from Pilot Insurance Company ("Pilot"), payable under the Schedule.¹ Pilot terminated weekly income replacement benefits on June 29, 1996. The parties were unable to resolve their disputes through mediation, and Ms. Gulevski applied for arbitration at the Financial Services Commission of Ontario under the Insurance Act, R.S.O. 1990, c.I.8, as amended.

The issues in this hearing are:

Is Ms. Gulevski entitled to income replacement benefits from June 29, 1996 onward, pursuant to section 7 of the Schedule?
Is Ms. Gulevski entitled to medical, rehabilitation and housekeeping benefits for various services recommended in the Future Care Cost Associates' report dated June 23, 1998, pursuant to sections 36, 40 and 55 of the Schedule?
Is Pilot liable to pay a special award for unreasonably withholding or delaying the payment of benefits to Ms. Gulevski, pursuant to section 282(10) of the Insurance Act?

Ms. Gulevski also seeks interest on any amounts owing, as well as her reasonable expenses of the arbitration.

Result:

Ms. Gulevski is entitled to income replacement benefits, with interest, from June 29, 1996 onward, pending a Loss of Earning Capacity offer from Pilot and subject to deductions for post-accident income and collateral benefits.
Ms. Gulevski is entitled to medical, rehabilitation and housekeeping benefits for medication, travel expenses for three medical trips per year, housekeeping and special footwear and orthotics, as outlined in the June 23, 1998 Future Care Cost Associates report.
Pilot is not liable to pay a special award.
Ms. Gulevski is entitled to her reasonable expenses of the arbitration.

EVIDENCE AND ANALYSIS:

Background:

Ms. Gulevski was seriously injured in a motor vehicle accident on June 30, 1994. She suffered a number of injuries, including fractured ribs, fractured vertebrae, temporary partial paralysis of her legs and feet, a closed head injury and soft tissue injuries to the neck and back. She underwent surgery and three months of intensive medical and rehabilitation treatment. Despite her injuries, Ms. Gulevski recovered to the point that she was capable of attempting a return to work at the end of 1995 (roughly a year and a half post-accident). However, she has continued to suffer from significant neck, shoulder and back pain to the present day which she maintains substantially disables her from performing the essential tasks of her pre-accident employment.

At the time of the accident, Ms. Gulevski was a full-time hairstylist at the Images Hair Salon in Toronto. The following were the essential tasks of her employment. Ms. Gulevski worked approximately eight and a half hours per day, five or six days a week. She primarily did hairstyling, but she also did facials and make-up. She shampooed, coloured, cut, permed, straightened and dried clients' hair. This involved using a variety of hand-held instruments and required her to keep her hands and arms elevated to just below shoulder height for half an hour to forty-five minutes at a time. Ms. Gulevski stood virtually the whole day, taking infrequent breaks to sit and rest (approximately two to five minutes each). Her job involved frequent walking, stooping and twisting. It also required frequent bending to wash clients' hair or to do children's hair. She took half-hour lunch breaks and was responsible for cleaning her work station at the end of her shift. She earned $20,965.80 in 1993 (excluding tips of $2,000 to $2,500) and $9,192.71 (excluding tips) in the six months preceding the accident in 1994.

While there is some question as to the extent to which Ms. Gulevski experienced anxiety before the accident, I find that she did not suffer from any significant and/or debilitating pre-accident medical conditions. I further find that any difficulties Ms. Gulevski might have experienced prior to the accident did not play a role in her ability to return to work following the accident.

Section 7 of the Schedule states that Ms. Gulevski is entitled to a weekly income replacement benefit if she suffers a "substantial inability to perform the essential tasks" of her pre-accident employment. Arbitration decisions have interpreted these words to mean a "sizable," "considerable" and "significant" inability and a "large and important impairment of ability."² I also note the comments in Pisani and Simcoe & Erie General Insurance Company³ that "the determination of disability cannot be done with absolute precision, particularly in cases involving limitations based on pain [and that] 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."

In my view, the issue of "substantial inability" must take into account not only the specific tasks of the job, but the number of the hours over which those tasks were performed. The amount of income an insured earns both before and after the accident may also be relevant. Also, in my view, an employer's willingness to accommodate an insured's return to work is only significant to the extent that it enables the insured to substantially perform his or her pre-accident tasks.

By letter dated June 12, 1996, Pilot terminated Ms. Gulevski's income replacement benefits effective June 29, 1996, one day before the two year anniversary of the accident. The parties differed somewhat as to the nature of any arbitration award in this case, were I to find that Ms. Gulevski was substantially disabled from performing the essential tasks of her pre-accident employment. Ms. Gulevski argued that income replacement benefits ought to be paid on an ongoing basis pending a Loss of Earning Capacity offer from Pilot and subject to a determination that she was able to return to her pre-accident tasks following the two-year mark. Pilot agreed that income replacement benefits should be paid, but maintained that it should either be from the date of the hearing or from the date benefits were terminated with deductions for Ms. Gulevski's post-accident income and/or collateral benefits.

I find that if Ms. Gulevski establishes entitlement beyond the 104-week mark, then she should be paid ongoing income replacement benefits pending a Loss of Earning Capacity offer from Pilot or until such time as she is determined to be substantially capable of performing her pre-accident job. I see no reason to begin the payment of benefits from the date of the hearing. Benefits would commence from the date they were terminated. Any award would be subject to deductions for post-accident income and collateral benefits. The parties indicated that they would attempt to resolve any quantum issues, were I to find that Ms. Gulevski remained disabled beyond the 104-week mark.

Pilot submitted that Ms. Gulevski was able to perform the essential tasks of her employment prior to the two year anniversary of the accident and that, in any event, her subsequent return to work demonstrated significant ability on her part, such that she would only be entitled to continuing income replacement benefits for a limited period of time. For the following reasons, I find that Ms. Gulevski was disabled from her pre-accident employment at the 104-week mark and continues to be so.

Disability to the 104-week mark:

In August 1995 and May 1996, Dr. M. Devlin, a physiatrist, examined Ms. Gulevski at the request of Pilot Insurance. Dr. Devlin found that Ms. Gulevski felt herself more disabled than she needed to be and that her limitation was due to pain, not to a neurological deficit or spinal instability. In August 1995, Dr. Devlin said that Ms. Gulevski could gradually return to full-time work by October 1995. In May 1996, Dr. Devlin reiterated that Ms. Gulevski's ongoing limitations were due to "self limitation as a pain avoiding mechanism," that there were no biomechanical factors preventing her from working full-time and that she should return to her job with appropriate pacing and scheduling. At the hearing, Dr. Devlin acknowledged that Ms. Gulevski's pain was entirely credible and that it was not uncommon for people with pain to limit their activities. However, he stated that Ms. Gulevski would be "best served" by returning to her pre-accident job and made the (quite surprising) statement that people should "at all costs" work through even "excruciating pain."

A Functional Abilities Evaluation ("FAE") conducted in March 1996 concluded that Ms. Gulevski was "somewhat pain-focused" and limited primarily by "subjective reports of pain in the absence of objective signs of biomechanical strain or physiological challenge." However, the assessors found that Ms. Gulevski put forward a consistent effort and that the data collected was reliable. The assessors found that Ms. Gulevski could gradually return to full-time work within one to two months.

As of June 30, 1996, Ms. Gulevski had only returned to her job as a hairstylist on a part-time basis. She initially returned to work in December 1995, working one day a week for a couple of hours, as part of a return-to-work trial initiated by Crawford & Company Healthcare Management, the case management service retained for Ms. Gulevski by Pilot Insurance. By the end of June 1996, Ms. Gulevski had worked up to four days per week for three hours per day. Her total employment income for 1996 was $7,279.

In February 1996, Dr. N. Bharatwal (Ms. Gulevski's treating physiatrist since the accident), reported that Ms. Gulevski continued to suffer from restricted mobility in her spine with chronic pain. Dr. Bharatwal confirmed that Ms. Gulevski had only been able to return to work for approximately three and a half hours a day, three times a week. Dr. Bharatwal recommended that Ms. Gulevski attempt to increase her work hours, but that if she were unable to do so, she would likely require retraining for a more sedentary position. Dr. Bharatwal testified that while Ms. Gulevski has worked part-time following the accident, her continuing pain symptoms and failed attempts to work full-time suggest that she should retrain for another profession.

In June 26, 1996, Ms. Julie Vaughan, Ms. Gulevski's physiotherapist, reported that while Ms. Gulevski had progressed to part-time work during her rehabilitation, due to continuing symptoms, as well as the hectic and demanding nature of her job, it would be "very optimistic" for her to quickly increase her work hours beyond the level she had reached. Ms. Vaughan supported further attempts to return Ms. Gulevski to full-time employment, but felt that, as of June 1996, it would take a considerable period of time.

In February 1998, Dr. S. Sharma, an orthopaedic surgeon, examined Ms. Gulevski and reported that she had suffered quite significant injuries and impairments as a result of the accident and that, due to spinal disalignment and increased stress in other areas of her spine, Ms. Gulevski was not able to stand in an unsupported position for the amount of time required by her job. At the hearing, Dr. Sharma testified that Ms. Gulevski could return to work, but that she would have difficulty continuing on a daily basis at full hours. Dr. Sharma testified that surveillance of Ms. Gulevski in 1998 and 1999 showing her bending, lifting, walking, sitting and driving was consistent with his examination of Ms. Gulevski and did not suggest that she could return to work on a full-time basis.

On the basis of this evidence, I find that, as of the two-year anniversary of the accident, Ms. Gulevski continued to be disabled from performing the essential tasks of her employment. Ms. Gulevski had not returned to full-time employment and was earning substantially less than she had before the accident. I find that she had made an honest and significant attempt to return to full-time employment (despite having suffered serious injuries in the accident) but that she continued to be disabled by ongoing and credible symptoms of pain.

Regarding Ms. Gulevski's credibility, she testified openly, honestly and consistently on a variety of subjects, including the nature of her pain, the course of her recovery, the content of her work and her attempts to return to it, the extent of her general physical abilities and her activities outside the workplace. She consistently reported her symptoms and progress to numerous medical and rehabilitation practitioners and co-operated fully in all examinations and assessments. While Dr. Devlin and the FAE assessors noted her as being "pain focused," all practitioners found her to be credible, reliable and co-operative. None of the practitioners considered that the surveillance showed Ms. Gulevski to be dishonest about the nature and extent of her symptoms. Ms. Gulevski fully acknowledged her medical progress since the accident and that she could perform the activities shown in the 1998 and 1999 surveillance. I find that the surveillance does not show Ms. Gulevski to have any more ability than she had described to the doctors, or in relation to which she had testified at the hearing. The surveillance was, of course, conducted well after the two-year mark. I, therefore, see no reason to doubt Ms. Gulevski's claim that she attempted to return to full-time employment, but was disabled from doing so by her pain.

I agree with Dr. Sharma and Dr. Bharatwal that the mere fact, as Dr. Devlin noted, that Ms. Gulevski restricted her activities because of her pain, does not mean that she was not legitimately disabled by it. In any event, I find that Dr. Devlin's assessment of the significance of Ms. Gulevski's pain is substantially weakened by his comment that people should work through excruciating pain at all costs. In my view, this bears no resemblance to the test under the Schedule, it being sufficient for insureds to establish that their pain is credible and that it disables them from performing the essential tasks of their employment. They are not required to return to their employment no matter how, or to what degree, their pain affects them. Further, Dr. Devlin based his opinion on his view that Ms. Gulevski would be "best served" by returning to her job. However, the test is not whether Ms. Gulevski would improve as a result of returning to work, but whether her pain disabled her at the relevant time. In any event, Ms. Gulevski did attempt to return to her pre-accident state, but could not.

I find Dr. Sharma's, Dr. Bharatwal's and Ms. Vaughan's assessment of Ms. Gulevski's ability to return to full-time work more reasonable, and more consistent with Ms. Gulevski's actual experience, than that of Dr. Devlin and the FAE assessors. In light of Ms. Gulevski's very credible complaints of pain, as well as the fact that she had only managed to increase her work hours to roughly three per day for four days a week since December 1995, I do not find it reasonable to conclude that she could more than double that work rate in one to two months from March or May 1996. I find that Dr. Sharma, Dr. Bharatwal and Ms. Vaughan took a more reasonable approach in concluding that, while Ms. Gulevski should continue to be encouraged to return to full-time work, it would take a considerably greater period of time than one to two months to complete the process, if at all.

Drs. Devlin, Sharma and Bharatwal disagreed about the precise nature and source of Ms. Gulevski's pain complaints, specifically whether her symptoms emanated from a spinal disalignment. I do not find it necessary to determine this issue. The physicians consistently found that Ms. Gulevski's pain originated with the injuries she suffered in the motor vehicle accident. In any event, Dr. Devlin appeared simply to dispute whether a spinal disalignment would, due to increased pain, require Ms. Gulevski to work in a job where her back was supported. I find that while the specific diagnosis of her pain may be unclear, she experienced pain as a result of the accident and that it was sufficient to substantially disable her from performing her pre-accident functions.

I, therefore, find that Ms. Gulevski was disabled at the 104-week mark and that Pilot was consequently required to make a Loss of Earning Capacity offer to Ms. Gulevski, pursuant to section 21 of the Schedule.

Disability beyond the 104-week mark:

Ms. Gulevski's situation improved following the two-year anniversary of the accident. However, I find that she continued to be disabled from performing the essential tasks of her employment.

Ms. Gulevski increased her hours of work from late December 1995 to late September 1998. Instead of a regular salary, Ms. Gulevski was paid on commission following her return to work. She was, therefore, able to earn roughly eighty percent of her pre-accident salary.⁴ However, she was only able to increase her workload to twenty-five hours per week, a maximum of approximately two-thirds of her pre-accident capacity. She discontinued work in late September 1998, when she was five to six months pregnant and experiencing too much back pain. She has not returned to work since. Ms. Gulevski testified that by approximately late March 1999 (six weeks after her baby was born), the effects of her pregnancy had ended. She maintains that she continued to be incapable of returning to full-time work.

Ms. Gulevski requested a Designated Assessment Centre ("DAC") assessment in February 1998. It was completed in May 1999. While the overall conclusion of the DAC was that Ms. Gulevski could return to the essential tasks of her pre-accident employment, the therapists who performed a Functional Capacity Evaluation ("FCE") as part of the DAC assessment concluded that "the best route to success for her would be along the same lines as what she is planning: a gradual return to work with an increase in her hours based on her pain tolerance." Ms. Gulevski had told the DAC therapists that she wished "to return to her work as a hairdresser in June for three days a week at four hours per day." Dr. Mayer, a neurosurgeon and one of the DAC assessors, testified that as of May 1999, Ms. Gulevski could return to the twenty-five hours a week she was working in September 1998 and gradually work herself back to full-time as her strength and endurance improved. He also testified that she could work eight hours a day, but that appeared to be predicated on her only working twenty-five hours a week. Finally, in June 1999, Ms. Gulevski's treating physiatrist, Dr. Bharatwal, reported that Ms. Gulevski continued to suffer from chronic and disabling neck and back pain. While Dr. Bharatwal concluded that Ms. Gulevski could not work as a hairdresser on a part-time, as well as a full-time basis, she testified that due to Ms. Gulevski's continuing difficulties in working even part-time, she should retrain for a new type of job.

Although Ms. Gulevski's abilities clearly improved after the 104-week mark, I find that she remained disabled within the meaning of the Schedule. Ms. Gulevski was able to come close to her pre-accident earnings level. However, I find the determining factor to be that she only managed to reach two-thirds of her previous work capacity. She had maintained this level for roughly a year before she left during her pregnancy. There is nothing to suggest that she would have been able to further increase her workload had she not become pregnant. I, therefore, find that she continued to be disabled by the effects of the motor vehicle accident at the time she left work during her pregnancy. However, the quantum of Ms. Gulevski's benefits during her leave will be reduced by the collateral benefits she received at that time.

Once the effects of her pregnancy ended (in late March 1999), I find that Ms. Gulevski continued to be disabled from the essential tasks of her pre-accident employment. The available medical evidence at most establishes that she could return to work on a part-time basis (namely, the twenty-five hours per week she was doing prior to her pregnancy leave) and gradually work her way back to full-time employment. I note that there is no time frame in which this return to full-time duties was expected to occur. I find that this substantially echos Dr. Devlin's views prior to the termination of benefits in June 1996. However, I find that, as of the date of the hearing, Ms. Gulevski's credible pain symptoms continued to prevent her from working at substantially the same level she did prior to the accident.

Although Ms. Gulevski did not return to work following her pregnancy leave, I find that she was not completely disabled from resuming her job. On the basis of all of the evidence, I find it reasonable to consider that she was capable of performing the twenty-five hours per week she had reached prior to her pregnancy leave. The parties shall, therefore, apply this in their deliberations on the quantum of Ms. Gulevski's benefits.

As noted earlier, I do not find that Ms. Gulevski's ability to perform the precise functions of her job determines the matter. She must be able to do this for substantially the same period of time she did before the accident. Further, while a number of practitioners said Ms. Gulevski's return to work depended to a certain degree on the flexibility of her employer, and while her employer (Mr. Aldo Ditacchio) was willing to accommodate her needs by allowing her to work fewer hours, I do not find that this alters the fact that she was incapable of working at substantially the same level as she was prior to the accident. I note, in this regard, that Mr. Ditacchio testified that he treated his employees as part of a family and (as suggested by counsel for Pilot) that he had no objection to allowing Ms. Gulevski to work the first four hours of her shift in the morning and then to come back later in the afternoon to work the remaining four hours. However, Mr. Ditacchio felt that this would be a very difficult schedule and one which he "personally couldn't see as happening." I find the employer's willingness to assist Ms. Gulevski's return to productive employment laudable. However, even assuming Ms. Gulevski could complete her work under the proposed arrangement, I find Pilot's suggestion that Ms. Gulevski complete an eight-hour shift over the course of a 10 or 12-hour day by going home to rest half way through the day to be entirely untenable and unreasonable, particularly in light of the busy and sometimes unpredictable pace of Ms. Gulevski's job, as well as the travelling involved to and from the salon.

Pilot suggested that, based on Ms. Gulevski's activities outside of work, she was capable of returning to full-time employment. Ms. Gulevski openly acknowledged that she had taken certain hairstyling and personal interest courses,⁵ that she had participated in a hairstyling competition and had, on occasion, gone dancing with friends. She testified that she was attempting to live as normal a life as possible. In a manner similar to the surveillance videotapes, I do not find that these activities alter the finding that Ms. Gulevski was incapable of sustaining her hairstyling tasks over the course of a full day. I find that these were limited and isolated events consistent with Ms. Gulevski's efforts to return to a normal and productive life, and not indicative of her physical ability to perform at her pre-accident level of employment.

Pilot also pointed to Ms. Gulevski's own assessment of her situation as suggesting that she was capable of returning to her pre-accident employment, specifically Ms. Gulevski's testimony that she could work full-time with the assistance of medication and despite being in pain. However, Ms. Gulevski also said that she had tried to push herself to six hours per day (while using medication) but, due to her pain, found it too hard to maintain. Ms. Gulevski also indicated that even if, despite her condition, she could work full-time, doing so would leave her in too much pain and too fatigued to do any of her non-work activities (specifically, household and family obligations). I do not find that Ms. Gulevski's testimony suggests that she was, in fact, capable of returning to full-time employment. I again find it merely indicative of her positive attitude to returning to the workforce, but consistent with her evidence that, despite her efforts, she had not been able to reach her pre-accident level of work. I am also not prepared to find that the test of "substantial disability" is to be determined in a vacuum, without any regard for the impact of work on the balance of a person's life. While not determinative of the matter, I find it relevant (and accept Ms. Gulevski's evidence) that attempting to return to work would significantly interfere with her non-work activities.

Finally, I recognize that Ms. Gulevski was capable of doing a considerable amount of work following a very serious accident and that her employer was willing to make adjustments to allow her to continue in her employment. In this sense, Ms. Gulevski was not as disabled as many other accident victims. However, I find that the question of whether Ms. Gulevski was substantially disabled must be determined in all of the circumstances of the case. I find that despite a relatively positive recovery and return to work, Ms. Gulevski, on balance, continued to suffer a substantial inability to perform the essential tasks of her pre-accident employment.

Medical and Rehabilitation Benefits:

In June 1998, at the request of her counsel, Future Care Cost Associates ("FCCA") reviewed Ms. Gulevski's medical and rehabilitation needs and produced a report listing a variety of devices and services. They included: housekeeping, lawn care and home maintenance, transportation, a two-year vocational retraining programme and placement assistance with associated travel expenses, medications, massage, a walker, special footwear and orthotics, and psychological counselling.

In June 1999, on behalf of Pilot Insurance, DeeGee Rehab Technologies Ltd. ("DRT") prepared a report responding to FCCA's report. DRT concluded that Ms. Gulevski was capable of performing her job as a hairstylist as well as other activities and that she, therefore, did not require a number of the services and devices recommended by FCCA. However, DRT found that Ms. Gulevski should still be provided with medications, travel expenses and orthotic shoes.

While I have concluded that Ms. Gulevski remains disabled from her job as a hairstylist, I find that she is only entitled to housekeeping, travel expenses, medications and special footwear and orthotics. I find that Ms. Gulevski requires assistance with the heavier aspects of her housekeeping as recommended by FCCA. Based on DRT's report, Pilot consents to the medication, travel⁶ and footwear expenses. I am not satisfied that the lawncare and home maintenance costs are functions that Ms. Gulevski, as opposed to her husband, would perform at their home.

Although I have found that Ms. Gulevski continues to be disabled from her previous job, I am not satisfied that a two-year retraining programme is currently a reasonable or necessary expense. Ms. Gulevski seeks retraining to work in the fields of social services or health and nutrition, specifically, the positions of child social worker or chef. I do not find that Ms. Gulevski is currently able to manage the physical requirements of these positions or that she would be able to do so in two years' time. Dr. Sharma and Dr. Devlin appeared to agree that changing careers would not necessarily alleviate the degree of Ms. Gulevski's pain. In any event, Dr. Sharma only recommended vocational retraining in relation to a general career change; he did not address Ms. Gulevski's ability to perform the specific positions of chef or child social worker. Dr. Bharatwal simply recommended retraining for a more sedentary job, but there is no evidence concerning the specific requirements of the noted positions and/or that they would be sufficiently sedentary for Ms. Gulevski. I find it premature to consider such a change in career given that Ms. Gulevski may yet be able to return to her full-time duties as a hairstylist, a position for which she is currently most suited and from which she derives great enjoyment.

There is no evidence that Ms. Gulevski currently requires an assistive device for walking. The recommendation for massage was made in June 1998 on a trial basis. I am not satisfied that Ms. Gulevski currently requires the recommended and significant trial of two massage sessions per week for three months. However, Ms. Gulevski may nevertheless require some massage treatment in the future and the parties are encouraged to resolve any issues that this might raise.

Finally, while Ms. Gulevski may continue to experience some emotional difficulties as a result of the accident, I am not satisfied that they are sufficiently serious to warrant the recommended course of psychological counselling. The available psychological evidence does not establish that Ms. Gulevski is currently in need of treatment. In any event, the recommendation for psychotherapy appears to be in anticipation of future emotional problems arising, for example, from the development of degenerative arthritic changes. In these circumstances, I find it premature to order payment of expenses for psychological treatment. However, I would again encourage the parties to co-operatively address any issues arising in the future in this area.

Special Award:

By letter dated June 12, 1996, Pilot terminated Ms. Gulevski's benefits effective June 29, 1996, one day before the two-year anniversary of the accident. Pilot relied on Dr. Devlin's May 1996 report in terminating benefits. At the hearing, Ms. Gulevski submitted that she was entitled to a special award because Pilot had terminated benefits in anticipation of the 104-week mark and despite the continuing rehabilitation treatment she was receiving from Pilot's designated case management service, Crawford & Company Healthcare Management. Pilot responded that while its June 1996 letter specifically mentioned Dr. Devlin's May 1996 report, it, in fact, also had Dr. Devlin's August 1995 report, as well as the FAE of March 1996, both of which anticipated an early return by Ms. Gulevski to full-time duties. Pilot, therefore, submitted that despite the ongoing rehabilitation treatment, it was justified in terminating benefits in late June 1996.

I am not prepared to order a special award in this case. In my view, Pilot had provided rehabilitation services to Ms. Gulevski and was also entitled to conduct reviews of her condition through insurer medical and functional abilities examinations. While I have found that Pilot erred in its assessment of Ms. Gulevski's disability at the two-year mark, I find that it was entitled to rely on the IMEs and FAE, despite the ongoing rehabilitation treatment it had sponsored. I note that Ms. Gulevski sought legal advice as a result of Pilot's June 1996 termination letter, but did not request a DAC until February 1998, more than a year and a half later. While Pilot should have continued paying Ms. Gulevski income replacement benefits and then made her a Loss of Earning Capacity offer, I am not prepared to conclude that Pilot unreasonably withheld or delayed benefits in the circumstances. In my view, significantly more serious conduct on Pilot's part would be required to substantiate a special award in this case.

EXPENSES:

In light of my findings, I find that Ms. Gulevski is entitled to her reasonable expenses of the arbitration. The parties may apply for an assessment should they be unable to agree on the amount owing.

October 29, 1999

Eban Bayefsky Arbitrator

Date