Financial Services Commission

Commission des services financiers de l’Ontario

Neutral Citation: 1999 ONFSCDRS 33

Appeal P98-00035

Appellant

and

Respondent

Before:

David R. Draper, Director's Delegate

Counsel:

A. Wayne Edwards (for Traders General Insurance Company)

Allen J. Wynperle (for Amy Levey)

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 30, 1998 is confirmed.
Amy Levey is entitled to her reasonable appeal expenses, payable by Traders General Insurance Company.

February 25, 1999

David R. Draper

Director's Delegate

Date

This is an appeal by Traders General Insurance Company ("Traders") from an arbitration decision dated June 30, 1998. It contends the arbitrator erred in concluding that Amy Levey is entitled to ongoing income replacement benefits ("IRBs") from November 5, 1995, and in ordering a special award of $7,500.

Mrs. Levey worked for many years as a flight attendant for Air Canada. The arbitrator found that she had a good record, receiving many commendations and taking few sick days. On April 9, 1994, she was involved in an automobile accident. She was stopped at a red light when her car was hit from behind. According to the arbitrator, the evidence suggests that the impact was light, requiring only minor repairs to the car. However, Mrs. Levey has not returned to work since, claiming that her accident-related injuries have prevented her from doing her job.

Mrs. Levey sought medical assistance on the day of the accident. She went to a local health centre complaining of pain and stiffness on the left side of her neck radiating into her shoulders and arms. Over the next few years, she saw many health care professionals for assessment and treatment of both physical and psychological problems. Her most persistent physical problem involves spasms or twitches in her neck that limit her activities and affect her emotionally.

Initially, Mrs. Levey's injury was treated by her family doctor, Dr. William S. Liang, as a whiplash-type, soft tissue injury. However, approximately one year after the accident, she started seeing a chiropractor who was not convinced that this diagnosis adequately explained her ongoing symptoms. He made a number of referrals, including one to Dr. W.J. Oczkowski, a neurologist. In June 1995, fourteen months after the accident, Dr. Oczkowski agreed that Mrs. Levey's injuries were not limited to soft tissue injuries. He made a tentative diagnosis of post-traumatic torticollis, a subcategory of dystonia involving involuntary muscle spasms, a diagnosis which he later confirmed. The subsequent medical evidence sets out differing views about whether Mrs. Levey has torticollis, whether it was caused by the accident, and whether it is disabling.

Traders paid accident benefits, including IRBs, under O. Reg. 776/93, as amended, the Statutory Accident Benefits Schedule - Accidents after December 31, 1993 and before November 1, 1996 ("the SABS-1994").¹ However, in November 1995, nineteen months after the accident, it concluded that Mrs. Levey no longer qualified for IRBs, apparently relying on the opinion of Dr. Liang that she should return to work in Air Canada's modified work return program. Mrs. Levey then requested an assessment by a Designated Assessment Centre ("DAC"), as she was entitled to do.

The DAC assessment was done in March 1996 by Dr. D.K. Punthakee, an orthopaedic surgeon at the Independent Medical Assessment Corporation. In his initial report, Dr. Punthakee accepted the diagnosis of post-traumatic torticollis and found that it left Mrs. Levey "significantly dysfunctional." However, because torticollis is more within the expertise of neurologists, he recommended an assessment by Dr. A. Upton, a neurologist associated with Independent Medical Assessment Corporation.

Traders did not make a referral to Dr. Upton, but provided Dr. Punthakee with additional information about Mrs. Levey's pre-accident condition. Based on Dr. Liang's clinical notes, Dr. Punthakee revised his opinion. He provided an addendum to his report, stating that the torticollis was a pre-existing condition and that her accident-related injuries did not prevent her from working. Relying on this assessment, Traders refused to reinstate Mrs. Levey's IRBs. Following an unsuccessful attempt at resolving the dispute through mediation, Mrs. Levey applied for arbitration. The arbitration hearing took place over three days in the fall of 1997. The parties filed 28 exhibits, including numerous health care reports and records. Mrs. Levey testified, along with her psychologist (Dr. Ronald Kaplan) and a neurologist whom she saw on referral from Dr. Oczkowski (Dr. John E. Paulseth). Traders did not call any witnesses.

The arbitrator accepted the evidence of the neurologists, Dr. Oczkowski and Dr. Paulseth, finding that the accident materially contributed to the development of Mrs. Levey's spasmodic torticollis and the psychological problems arising from that condition. He went on to find that as a result of these accident-related problems, Mrs. Levey was substantially unable to perform the essential tasks of her pre-accident employment. As a result, he ordered Traders to reinstate IRBs from November 5, 1995, and ongoing, plus interest. In addition, he ordered Traders to pay a special award of $7,500, inclusive of interest, on the basis that it acted unreasonably in not arranging for a neurological assessment in the spring of 1996, as suggested by Dr. Punthakee. Traders appeals from these orders.

A. Stay

Shortly before the arbitration hearing, Traders made an appointment for Mrs. Levey to be examined by Dr. Sawa, a neurologist. On the advice of her counsel, Mrs. Levey refused to attend. Traders asked that the hearing be stayed pending an examination by Dr. Sawa. The arbitrator refused, finding it unreasonable that Traders waited so long to schedule the examination.

Traders contends that in denying the stay, the arbitrator erred in failing to ensure that the process was fair. I do not agree. Insurers do not have an absolute right to schedule examinations whenever they want. The examination must be reasonably necessary and scheduled at a time reasonably convenient for the insured person. As Director's Delegate Naylor held in F.S. and Belair Insurance Company Inc. , (OIC P96-00039, June 11, 1996), this involves a balancing of the interests of the parties, with the timing of the examination as an important consideration. Absent a clear explanation, examinations scheduled on the eve of the hearing suggest the kind of tactical brinkmanship that arbitrators have properly rejected as part of this system.

In this case, the evidence overwhelmingly supports the arbitrator's decision. Traders knew for more than two years about the diagnosis of spasmodic torticollis and for at least a year that there was a causation question. This is obvious from Dr. Punthakee's DAC report and addendum. After Traders' intervention, he changed his opinion about the contribution of the accident to Mrs. Levey's torticollis. However, he expressed clear reservations about his expertise in dealing with this disorder and specifically recommended an assessment by a neurologist. Despite this, Traders waited more than a year, scheduling the examination with Dr. Sawa two weeks before the arbitration hearing was to start, a date that was set at the pre-hearing more than six months earlier. I find no reason to interfere with the arbitrator's judgment that this was unreasonable.

Traders argues that it was not in a position to schedule a worthwhile examination until Mrs. Levey provided her pre-accident clinical records, some of which were not received until September 19, 1997. However, the record before me does not support this contention. Traders was able to provide Dr. Punthakee with Dr. Liang's "chart," indicating that Mrs. Levey complained before the accident about head twitches. Therefore, it was aware of the causation issue by April 1996 at the latest. Nevertheless, there is no suggestion in the record that Traders planned to schedule a neurological examination, or that it was waiting for further records before doing so.

Instead, Traders retained the Disability Claims Assessment Group to do an accident reconstruction. In its report dated February 10, 1997, it concludes that the collision occurred at an impact speed of only 8-13 kilometres per hour. Traders then sent this report and all the medical evidence to Dr. Arthur Ameis, a physiatrist. His report, dated February 20, 1997, expresses serious doubts that Mrs. Levey's torticollis was caused by the accident. He stresses the importance of reviewing her records before Dr. Liang began seeing her in February 1994, and states that he looks forward to reviewing this information.

In January 1997, before Dr. Ameis completed his report and before the pre-hearing, Traders sent Mrs. Levey's representatives the index to its medical brief and offered to provide any material they did not have. In exchange, Traders asked for their index and various clinical notes and records. This is a good practice. At the pre-hearing, however, there is no suggestion that there were any problems with the productions. The pre-hearing letter simply states that "the parties have had an opportunity to review and exchange production of documentation amongst themselves." This is somewhat surprising given Dr. Ameis clear guidance, available by then, about the information he felt was needed. The pre-hearing arbitrator scheduled the hearing for September 30, 1997, more than six months ahead, with no indication that Traders wanted to schedule an examination or that it was waiting for any specific records.

There is no evidence that the situation changed in the six months following the pre-hearing. Finally, in September 1997, Mrs. Levey was given 12 days notice that she was to attend an examination by Dr. Sawa on September 16, 1997. Because Traders did not receive the final batch of clinical records until September 19, 1997, it is hard to see how it was motivated to schedule the examination by this information.

Finally, it is not obvious why Dr. Sawa needed additional records to conduct an examination. It was already known that Mrs. Levey had complained of neck twitches before the accident. As the arbitrator states at page 5 of his decision, he was not shown anything in these records that would have materially affected a neurologist's opinion. If Traders had a different view and wanted someone to comment on the importance of these records, it could have asked Dr. Ameis to prepare a second report or testify at the hearing.

For these reasons, I am not persuaded that the arbitrator erred in refusing to stay the proceedings. Traders simply waited too long to advise Mrs. Levey of its intention to schedule an examination by a neurologist.

Mrs. Levey raised a number of more technical objections to the examination. While interesting, they are not essential to this decision and, therefore, will not be addressed.

B. Causation

Traders contends that the arbitrator did not pay sufficient attention to evidence that the accident did not cause Mrs. Levey's torticollis. In particular, it points to the following:

(i) evidence from the records of Dr. Liang, Dr. Ma and Dr. Wong that Mrs. Levey had pre-existing neck problems, suggesting that her torticollis was idiopathic rather than post-traumatic;

(ii) Dr. Paulseth's concession during cross-examination that Mrs. Levey's pre-accident complaints were "rather suspicious," and perhaps consistent with someone in the early stages of idiopathic torticollis; and,

(iii) the surveillance evidence and report of Disability Claims Assessment Group, dated February 10, 1997, dealing with the minor nature of the collision.

I find no suggestion that the arbitrator ignored the causation question or any significant evidence relevant to that issue. On the contrary, the decision provides a clear and thorough review. The arbitrator preferred the evidence Dr. Oczkowski and Dr. Paulseth, as he was entitled to do, and provided reasons for preferring it to the contrary opinion of Dr. Ameis.

The pre-accident medical records were put to Dr. Paulseth during his testimony. As a result, the arbitrator had to deal with them in assessing Dr. Paulseth's evidence. Traders relies on the following portion of Dr. Paulseth's cross-examination, where he is referred to the records of Dr. Liang and Dr. Ma:

The word "spasm" though is something that people throw around kind of loosely and if they have a discomfort, a tight feeling, they'll often use the word, gee, I think I have a muscle "spasm". So it doesn't prove that she had involuntary movements already at that stage, although it might be consistent with that. When she says about having to bend to the left, it's rather suspicious for someone who's starting to have involuntary movements, hasn't really quite realized what's going on, that it's involuntary, and sort of says, oh, I kind of do that to avoid embarrassment. But, I don't know, I be guessing at that stage. It's suspicious.

In my view, the arbitrator did not err in failing to treat this as a major concession. At its highest, Dr. Paulseth acknowledges the possibility that Mrs. Levey was developing a movement disorder before the accident. However, a review of his testimony reveals that he did not retreat from his opinion that the accident materially contributed to her condition. As he stated in re-examination: " to be quite as fair as I can be, it suggests that there was probably some mild involvement prior to the accident, but I still feel that there was a significant change around the time of the accident, and that's the major limitation for her now."

The arbitrator also dealt with the severity of the collision through his assessment of Dr. Ameis' report. At page 15 of the decision, he notes that the damage to Mrs. Levey's automobile was significantly greater than Dr. Ameis understood. Because Dr. Ameis did not testify, he was unable to explain how this would have affected his opinion.

In summary, I agree with Mrs. Levey's counsel that this decision was well within the arbitrator's authority. There was ample evidence to support his findings and, therefore, no reason for me to interfere on appeal.

Traders also objects to the "material contribution" test used by the arbitrator. In its submission, it would have been more appropriate to use a "but for" test: would Mrs. Levey be capable of working but for the accident? It contends the answer is no because the torticollis would have developed in any event.

Many decisions, including some of mine, have held that the accident need not be the sole or even the principal cause of the insured person's condition. If the accident materially contributes to the impairment, leaving the person unable to perform the essential tasks of his or her employment, weekly benefits are payable. I am not inclined to revisit this issue. In any event, Traders' argument depends on a finding that Mrs. Levey would have developed torticollis whether or not she was in an accident, and that it would have been disabling during the period for which she claimed benefits. There is no such finding here. The evidence accepted by the arbitrator was that, at best, Mrs. Levey might have been developing a movement disorder, although Dr. Paulseth described that as "guessing." Also, there is no evidence about the likely severity of this kind of idiopathic torticollis.

C. Special Award

Traders claims the arbitrator erred in ordering a special award. In its submission, it was entitled to rely on the opinion of the DAC (Dr. Punthakee). I agree that as a general proposition, insurers can rely on a DAC assessment. The SABS-1994 gives the DAC an important role. They are appointed by the Financial Services Commission of Ontario and are to provide a neutral assessment where the parties disagree about the insured person's disability. The legislation makes it clear that the report is meant to resolve the issue pending a decision of an arbitrator or the court.

However, in this case, there were problems with the DAC process. First, Dr. Punthakee's original report supported Mrs. Levey's position. It was only after Traders contacted him and provided additional information that he changed his view. Even if Traders was acting sincerely, this kind of one-sided contact undermines the neutrality of the DAC. According to the guidelines in effect at the time, Traders was responsible for preparing the package of material that the DAC required to do its assessment. It was not entitled to meet this obligation in a piecemeal fashion until it got the answer it wanted.

Traders' misunderstanding about its relationship to the DAC is also reflected in its response to Mrs. Levey's request for a copy of the DAC file. The DAC refused this request on the basis that the insurer is the "owner" of the file, and because Traders and its legal counsel instructed them not to release it. Although there may have been legitimate questions at that time about the status of the DAC file, there was reason to assume the insurer controlled it. Again, this would undermine the DAC's neutrality.²

The second problem with the DAC assessment is that Dr. Punthakee clearly expressed reservations about his ability to provide a definitive opinion about torticollis. Traders argues that whatever his reservations, he chose to express an opinion in the addendum that it was entitled to rely upon. With respect, this is a blinkered reading of Dr. Punthakee's reports. In his addendum, he repeats his caution that spasmodic torticollis is not an orthopaedic condition.

In my view, Dr. Punthakee's reports were sufficiently qualified that the arbitrator was within his authority to find that Traders should have arranged for further testing. In fact, Traders arranged its own investigation of the causation question, choosing an approach that did not involve Mrs. Levey or her counsel. It retained the Disability Claims Assessment Group and Dr. Ameis to provide it with their opinions about the accident and its likely contribution to Mrs. Levey's ongoing problems. Also, as noted by the arbitrator, Traders' later insistence that it needed an examination by a neurologist undermines its position that Dr. Punthakee was capable of providing the necessary opinion.

In the alternative, Traders submits that the amount ordered was too high. It argues that even if a special award was warranted, it should not have been at the high end of the range.

Subsection 282(10) of the Insurance Act allows the arbitrator to order a special award of "up to 50 per cent of the amount to which the person was entitled at the time of the award together with interest on all amounts then owing to the insured (including unpaid interest) at the rate of 2 per cent per month, compounded monthly, from the time the benefits first became payable under the Schedule. " The arbitrator found that approximately $13,000 was owing to Mrs. Levey and that interest would increase the amount by several thousand dollars. Because he found that the refusal or delay went back to the spring of 1996, when Trader's failed to follow-up the DAC report with a neurological assessment, he set the special award at $7,500.

Arbitrators are given a broad discretion in setting the amount of a special award. The length of the delay is certainly a relevant factor. In the circumstances, I am not persuaded there is any basis for interfering with the arbitrator's decision.

IV. APPEAL EXPENSES

Given the result, Mrs. Levey should receive her reasonable appeal expenses. The parties are encouraged to agree on the amount. If they are unable to do so, an assessment can be arranged by contacting the Registrar.