Neutral Citation: 2000 ONFSCDRS 178

FSCO A00-000111

BETWEEN:

CATHY ONNO and PAUL ONNO

Applicants

and

WAWANESA MUTUAL INSURANCE COMPANY

Insurer

DECISION ON A PRELIMINARY ISSUE

Before:

Nancy Makepeace

Heard:

August 14, 2000, at the Offices of the Financial Services Commission of Ontario in Toronto.

Written submissions were completed on August 30, 2000.

Appearances:

Gary Spector for Mr. and Mrs. Onno

Darrell P. March for Wawanesa Mutual Insurance Company

The Applicants, Cathy Onno and Paul Onno, were injured in a motor vehicle accident on April 20, 1999. They applied for medical benefits from Wawanesa Mutual Insurance Company ("Wawanesa"), payable under the Schedule.¹ The parties were unable to resolve their dispute through mediation, and the Applicants applied for arbitration at the Financial Services Commission of Ontario under the Insurance Act, R.S.O. 1990, c.I.8, as amended (the "Act"). The Insurer submits that the Applicants are barred from proceeding to arbitration under section 50(c) of the Schedule because they failed to make themselves available for an assessment by a Designated Assessment Centre ("DAC") pursuant to section 38 of the Schedule.

The preliminary issues are:

Did Mr. and Mrs. Onno make themselves reasonably available for a Medical Benefits Designated Assessment Centre ("Med DAC") assessment on August 17 and 19, 1999?
If not, what are the consequences of their failure to do so?

Mr. and Mrs. Onno made themselves reasonably available for assessment, but the Insurer refused their reasonable request to reschedule the assessment.
The arbitration hearing may proceed as scheduled.

Background and agreed facts

I heard from Sophie Eng, the Claims Adjuster with Wawanesa who handled the Applicants' file, and from Mrs. Onno. Mrs. Onno testified that her husband was not able to appear because he is in school full-time and working part-time. Neither party suggested that anything in this proceeding turns on any differences in the Applicants' circumstances.

I make the following findings, which were agreed or undisputed.

The Applicants were injured in a motor vehicle accident on April 20, 1999. Both were employed by Sears Canada before the accident. Mr. Onno worked 372 hours per week as a materials handler/shipper/receiver. Mrs. Onno worked as an administrative assistant 30 hours a week. They have two children, aged 9 and 5.

After the accident, Mr. and Mrs. Onno were treated by Dr. Somers, their family doctor. He referred them to a chiropractor, Dr. S.L. Bourassa. Dr. Bourassa provided both Applicants with daily chiropractic treatment in his office for about three weeks. A treatment plan dated April 28, 1999 was submitted and approved ("the first treatment plan").²

Dr. Bourassa diagnosed Mrs. Onno with a severe Grade II Whiplash-Associated Disorder ("WAD"),³ neck, mid-back and low back sprain/strain, headaches, dizziness and problems sleeping. He recommended three to four weeks of daily chiropractic treatment, massage therapy and physiotherapy, followed by referral for active rehabilitation at the Canadian Active Rehabilitation Centre ("CARC").

The diagnosis for Mr. Onno was a Grade III WAD, with neck, upper back and low back sprain/strain, as well as headaches. Prescribed treatment was three weeks of daily chiropractic therapy, electrotherapy, soft tissue therapy, massage therapy, home exercise and a cervical pillow, followed by referral to the CARC.

The CARC submitted treatment plans dated May 10 (Mrs. Onno) and May 16, 1999 (Mr. Onno), ("the second treatment plan").⁴ The CARC recommended a program that combined chiropractic treatment, physiotherapy and massage therapy, to be given on a declining basis, as well as active physical conditioning (stretching, strengthening, cardiovascular training) and education. The program would last a maximum of eight weeks. The total estimated cost for Mrs. Onno was $3,997.00, and for Mr. Onno, $3,791.95.

By letter dated June 11, 1999, the Insurer refused both plans on the basis that they were "not acceptable."⁵ The Applicants were referred for a Med DAC assessment, in accordance with section 38(12)(a) of the Schedule.⁶

On July 27, 1999, the Med DAC, Canadian Rehabilitation Institute ("CRI"), notified Mr. Spector that appointments had been arranged for both Applicants on August 17 and 19, 1999.⁷ The first appointment was stated to be for the purpose of a chiropractic assessment, and was to begin at 10:15 a.m. The second was to be a two-hour physiotherapy assessment starting at 11:00 a.m. on August 19, 1999.

Ms. Eng's log notes indicate that on July 26, 1999, "Cathy" from Sears advised her that Mrs. Onno had returned to work half days on May 17, 1999, and had returned to full-time work on June 7, 1999. Mrs. Onno testified that while she could not remember exactly when she returned to work, this sounded about right, and "Cathy" was likely Cathy L. from Sears' Human Resources Department. According to Mrs. Onno, her husband returned to modified duties about three weeks after the accident. He continues to work at Sears part-time while completing an electronics engineering technician course at DeVry College.

On July 30, 1999, Ms. Eng received a fax from Mr. Spector stating in part:

Mr. Onno also wishes to receive confirmation that he will receive his lost wages to attend the DAC. Otherwise the examinations must be arranged after our client's work hours when it is convenient for them as per the SABS.

We continue to await your reply. Should you have any comments or questions please contact the undersigned.

Although the first sentence refers only to Mr. Onno, the second sentence and the "re" line indicate the request concerned both Applicants. Any confusion would have been clarified by Mr. Spector's fax of August 11, 1999:

Further to our fax of July 30, 1999, we continue to await your reply. We acknowledge that Wawanesa has cancelled the IE [insurer examination] for Cathy Onno, however we have not heard from you regarding our settlement concerns or the DAC appointments.

Cathy Onno has requested her appointment at CRI be changed to the following week. They both request confirmation that Wawanesa will reimburse them for lost wages to attend the assessments and both request that the appointments be held on the same day for each of them (both of Cathy's on one day and both of Paul's on another). In the alternative, please reschedule the appointments for after our client's work hours.

We await your reply. Should you have any comments or questions please contact the undersigned.

Ms. Eng testified that she did not respond to either fax.

Mr. Spector also faxed the August 11, 1999 letter to the CRI. Ms. Eng's activity log indicates that someone from the CRI called her on August 16, 1999. Her note of that conversation is as follows:

MEDDAC FOR CATHY ONNO IS FOR TOMORROW - THEY MAY NOT SHOW

RE: LETTER FROM LAWYER

ADV I WOULD HAVE NO PROBLEMS WITH RE-SCHEDULING IF THERE IS A VALID REASON

IF INS WILL NOT ATTEND DUE TO MISSING WORK TO ASSESSMENT - THAT TO ME IS NOT A VALID REASON [emphasis added]

The Applicants did not attend the DAC assessment. The Insurer then sent each of them a letter, dated September 17, 1999, stating that the chiropractic therapy, physiotherapy and massage therapy claimed would not be funded due to their failure to attend the DAC assessment. The Insurer relied on section 43(3) of the Schedule, which permits an insurer to stop payments where an insured person fails to make himself or herself reasonably available for assessment.

The Applicants continued to attend the CARC for treatment between April 21 and June 17, 1999. An invoice in the amount of $3,786.05 was submitted with respect to Mrs. Onno's treatment.⁸

A third treatment plan was submitted in December 1999, again for treatment by Dr. Bourassa. The Insurer refused to pay, and required the Applicants to attend at the CRI for a Med DAC assessment. The Applicants did attend, and the assessment was performed on January 25 and 28, 2000. As a result of the DAC report, the Insurer paid for the treatment covered by the third treatment plan.

The dispute about the DAC arrangements

Mrs. Onno's testimony

Mrs. Onno testified that she and her husband were not consulted about when the DAC assessment should be held, and the CRI's letter of July 27, 1999 was the first notice they received about the scheduled appointments. She testified that they were concerned because the two assessments required her and her husband to lose four days pay in a single pay period. Sears does not provide for paid sick days. Because of their concerns about taking time off work, Mrs. Onno testified that both she and her husband attended treatment before or after work hours. Another concern was that she had been promoted to a new job in payroll, and she was scheduled to attend a software training session on one of the two days scheduled for the assessment. Mrs. Onno also referred to concerns about childcare and commuting. I am not persuaded these concerns were significant at the time. I am, however, satisfied that Mr. and Mrs. Onno were genuinely concerned about losing four days' wages in order to attend the assessments.

Mrs. Onno testified that the DAC assessment performed in January of this year was also scheduled at similarly inconvenient times. However, after receiving the notice, she and her husband called the CRI and agreed on a more convenient time. The Insurer suggested that the Onnos could just as well have contacted the CRI directly in order to reschedule the August 1999 DAC assessment. In support of this is Mrs. Onno's testimony that she understood the appointment could be rescheduled if necessary. The CRI's letter of notice to Mr. Spector includes the following paragraph:

If your client is unable to attend the above, please contact our office 4 business days prior to their assessment time otherwise a cancellation feel will be charged. By copy of this letter we will also be apprising [the Applicants] of the appointment times.⁹

Questioned about this in cross-examination, Mrs. Onno testified that she and her husband wanted to handle everything through Mr. Spector, and they wanted everything documented because they were having problems with the Insurer. She testified neither she nor her husband had direct contact with CRI or the Insurer at that time. As far as she knew, Mr. Spector contacted the Insurer about her concerns. The Insurer's counsel then suggested to Mrs. Onno that she had testified in chief that she had contacted the CRI directly concerning the January 2000 assessment. Mrs. Onno explained that this was a conference call made from Mr. Spector's office. I accept Mrs. Onno's explanation, which I find consistent with the Applicants' overall conduct of the claim. I accept as plausible and reasonable Mr. Spector's suggestion that by the time the Applicants rescheduled the January 2000 assessment, they had decided to handle the matter in a different way, given the events of the summer of 1999. In the circumstances, I find no fault in the Applicants approach.

Ms. Eng's testimony

Sophie Eng, an accident benefits adjuster with Wawanesa, handled the Onnos' file from the time the claim was reported.¹⁰ She testified that the Insurer had no role in setting the dates for the DAC assessment.

Ms. Eng testified that Mr. Spector called her on August 13, 1999 to discuss possible settlement of the matter prior to the Applicants applying for mediation. Since he did not raise an issue about the scheduled assessments, she assumed the Applicants would attend. She testified she had no further contact with Mr. Spector until September 22, 1999, when he called after receiving the Insurer's notice of refusal following the Applicants' non-attendance at the DAC. The Insurer submits that Ms. Eng's assumption coloured her interpretation of her subsequent conversation with the CRI on August 16, 1999: she thought the Applicants would attend, despite their misgivings about the scheduled time.

The Insurer's counsel submitted that I am bound to accept Ms. Eng's testimony on this point in the absence of evidence to the contrary from Mr. Spector. I do not agree. An adjudicator must assess the weight to give each piece of evidence in accordance with a number of factors, including its internal consistency, inherent plausibility, the credibility and reliability of the witness, whether the evidence is corroborated by other oral or documentary evidence, and whether it is consistent with the evidence taken as a whole.

Ms. Eng's August 13, 1999 conversation with Mr. Spector is not recorded in her log notes. She testified that she scribbled a note about the conversation on another memo on file; she read her scribbled note in the hearing. She testified she probably did not enter the conversation into the activity log because she was in the middle of other work on the computer when Mr. Spector called, or could not access the appropriate program. I accept her explanation, which is consistent with the realities of office work.

However, this does not advance the Insurer's case. By August 13, 1999, Ms. Eng had received two faxed letters from Mr. Spector requesting that the assessment be rescheduled. But Ms. Eng did not see fit to raise the issue on August 13 any more than Mr. Spector did. Nor did Ms. Eng reduce her scribbled notes to a more formal form once she knew the Applicants had failed to attend the DAC. In fact, her subsequent log notes, and particularly her notes of the conversation she had with Mr. Spector on September 22, 1999, make no reference to a conversation on August 13. Evidently, Ms. Eng did not regard that conversation as significant. Neither do I.¹¹

Ms. Eng also testified about her conversation with the CRI on August 16, 1999. In cross-examination, she testified that she asked the CRI whether it was possible to reschedule the assessments for after hours or on Saturday, and was told this was not possible. This exchange is not recorded in the activity log, which simply records Ms. Eng's advice that she "would have no problems with re-scheduling if there is a valid reason" but missing work was not a valid reason. Ms. Eng testified that she asked about the possibility of rescheduling after she advised the CRI that she did not consider missing work a valid reason to reschedule. Asked what she would consider a valid reason, Ms. Eng answered "perhaps, a court appearance or physical illness."¹²

I am not persuaded that Ms. Eng made a serious enquiry as to whether the DAC could reschedule the Applicants' assessments. I find that her position is most reliably set out in her log notes of her conversation with Mr. Spector on September 22, 1999. These notes were made in the normal course of business and more or less contemporaneously with the conversation:

GARY SPECTER [SIC] CALLED HAVE RECEIVED LETTER FROM ADJUSTER INSUREDS DID NOT ATTEND MEDDAC = NON-COMPLIANCE SPECTOR ACCUSED THE ADJUSTER OF NOT RESPONDING TO HIS FAXES AND PHONE MESSAGES TO CHANGE THE MED DAC THE CLIENTS DID NOT ATTEND ASSESSMENT BECAUSE ADJUSTER DID NOT RESPOND INS WANTS ASSESSMENTS TO BE RE-SCHEDULED BECAUSE DID NOT WANT TO MISS WORK WOULD HAVE ATTENDED ASSESSMENT IF WAWA WOULD PAY WAGES TO INS ADV NO WHERE IN THE SABS DICTATES THAT INSURER HAVE TO PAY WAGES TO CLAIMANTS WHEN THEY ATTEND ASSESSMENTS SPECTOR SAID THE SABS DOES NOT SAY INSURERS HAVE TO PAY OR NOT TO PAY ADV SPECTOR THAT WE WOULD NOT HAVE RE-SCHEDULED ASSESSMENTS GIVEN THAT THE INSUREDS DOES NOT WANT TO MISS WORK SPECTOR SAID THE MEDDAC ARE SUPPOSE [SIC] TO BE SCHEDULED AT THE INSURED'S CONVENIENCE ENQ WHERE IN THE SABS SAYS THAT SPECTOR SAID "DO I HAVE TO READ THE POLICY TO YOU TOO!!"

ADV SPECTOR - YES! SPECTOR READ SECTION 43(1)(B) - AND SAID THAT DAC DID NOT CALL HIS CLIENTS TO ARRANGE FOR THE ASSESSMENT ADV HIS CLIENTS AND HIS OFFICE WERE NOTIFIED OF THE ASSESSMENTS SINCE HIS CLIENTS DID NOT ATTEND THE ASSESSMENTS = NON-COMPLIANCE ADV IF HE WANTS TO PROCEED TO MEDIATION OR ARBITRATION – UP TO HIM ADV WE WILL MAINTAIN OUR POSITION AS FAR AS THE NON-COMPLIANCE ISSUE IS CONCERN [SIC]

Reasons and Conclusion:

I find that the Applicants refused to attend the DAC at the scheduled time, and that the DAC, on the Insurer's instructions, refused to reschedule it. The only issue is whether the Applicants made themselves "reasonably available" for the assessment. I find that the DAC contravened the DAC Guidelines in failing to consult the Applicants in scheduling the assessments and refusing to reschedule the assessments. I find that the Insurer failed to satisfy its obligations to the Applicants under the Schedule in instructing the DAC to refuse the rescheduling request. Accordingly, I find that the Applicants made themselves reasonably available for assessment, and are not precluded from proceeding to arbitration. My reasons follow.

The DAC process must be understood in historical context. Prior to enactment of the Statutory Accident Benefits Schedule - Accidents on or before December 31, 1993 (the "SABS-1990"), an insured seeking resolution of an accident benefit dispute had to commence an action in the civil courts, an expensive, slow and adversarial process. Where an insured person commences an action for accident benefits, thereby putting her physical or mental condition in question, a court may, on the insurer's motion, order him or her to undergo a physical or mental examination.¹³ A court order is required, and a limited number of examinations are permitted.

In 1990, the package of legislative amendments known as the Ontario Motorists Protection Plan ("OMPP") restricted accident victims' right to sue, expanded accident benefits payable on a "no fault" basis, and created an alternative dispute resolution system, while preserving the right of accident victims to commence a civil action for accident benefits.¹⁴ An important difference between the benefit scheme and the tort scheme is that the statutory accident benefits scheme provides for ongoing periodic benefits rather than a one-time-only claim for damages. For this reason, the SABS-1990 and its successor Schedules allow an insurer to have an insured examined by a qualified expert with respect to an ongoing claim, where reasonably required. An arbitral order is not required; in fact, it is established that an arbitrator does not have power to order an insured person to attend an insurer examination ("IE"). However, arbitration and appeal decisions have confirmed that this right is not absolute and that the insurer's request is subject to arbitral review. For example, in an early decision, Arbitrator Rotter held that the requirement that the insured make himself "reasonably available"

does not speak to unconditional availability. This wording suggests that an insurer must schedule medical appointments with due regard to the insured person's convenience and particular circumstances. Also, the wording suggests that the Insurer must fairly consider a reasonable excuse for failing to attend the scheduled examination.¹⁵

Director's Delegate Naylor reaffirmed the supervisory role played by arbitrators with respect to IE's in Belair Insurance Company Inc. and F.S.:¹⁶

In the arbitration process, the insurer's right to require an examination is subject to the general discretion of the tribunal to control its own processes in the context of the overall objectives of the system. These include adequate disclosure, settlement of cases and a fair, informed hearing of the issues remaining in dispute. These objectives are generally served by permitting insurers to arrange timely medical examinations, in appropriate cases.

The Director's Delegate concluded that an Arbitrator's power under the SABS, the Insurance Act, and the Statutory Powers Procedure Act includes authority to adjourn a hearing in order to allow an insurer time to conduct an examination, in appropriate circumstances. Discussing the insured person's submission that the insurer's request was an exercise in trial brinkmanship, the Director's Delegate reaffirmed the arbitral principle that the purpose of an insurer examination "is to enable an insurer to fairly and effectively assess a claim . . . this was not merely an insurer's right, but an obligation it owed to its insured." She stated:

Determining the appropriateness of a request for an examination requires a balancing of the interests of the parties, in the context of the particular facts.

This decision codified the approach taken in numerous arbitration and appeal decisions. Subsequent decisions have maintained that balanced approach.¹⁷

It was in the context of the Commission's jurisprudence concerning insurer examinations that the DAC system was put into place by the legislative amendments of January 1, 1994. The underlying legislative objective was to ensure that both parties have access to independent, neutral and balanced assessments. Significantly, the new DAC provisions retained the requirement that the insured person make himself or herself "reasonably available" for assessment.¹⁸

Pursuant to section 7 of the Act and section 52 of the Schedule, the Minister's Committee on the Designated Assessment Centre System has established a number of guidelines concerning the assessment process. The general purpose of the DAC system is described in the Guidelines for DACs conducting assessments for accidents on or after November 1, 1996:

Since January 1994, Designated Assessment Centres (DACs) have been in place across Ontario for insurance companies and claimants to use when they need a neutral third-party opinion about a claimant's injuries and the accident benefits that apply to those injuries.

DAC's are authorized to conduct independent assessments that are designed to balance the interests of both insurance companies and claimants.¹⁹

The neutrality, independence and balanced nature of DAC assessments are their most important features. Neutrality is emphasized again in General Guideline #4, Ensuring Neutrality of the Designated Assessment Centre System, which begins with a "Statement of Intent":

Designated Assessment Centres (DACs) must not only be neutral, they must also be perceived to be neutral.²⁰

After setting out the general purpose of the DACs, the General Guideline discusses a number of practice questions in relation to neutrality. About verbal communications with the parties, it has this to say:

Except during the DAC assessment itself (when the claimant is present for and involved in an examination), there should be no one-sided verbal communication between the DAC and either of the parties unless the DAC confirms the details of the discussion in writing and copied to the other party. This includes all telephone communications before the assessment to set up the appointment, verbal reminders to the parties to provide necessary documentation, etc. All other questions or concerns that are posed to a DAC, by either party, should be in writing.

The impropriety of one-sided communications between a DAC and either party to a dispute has also been discussed in arbitration and appeal decisions. In Traders General Insurance Company and Levey, the initial report of the DAC assessor, an orthopaedic surgeon, indicated that the insured person was "significantly dysfunctional" because of spasmodic torticollis. Because this condition was outside the area of his expertise, he recommended that she be assessed by a neurologist. The insurer did not make that referral, but instead sent the DAC assessor some additional medical records: the pre-accident clinical notes of the insured person's family doctor. The DAC assessor then issued an addendum to this report, stating that the torticollis was a pre-existing condition and that the insured person's accident-related injuries did not prevent her from working. The Arbitrator found that he could not rely on the DAC report, and ultimately concluded that the insured person was entitled to further benefits, as well as a special award. The insurer appealed, but Director's Delegate Draper confirmed the Arbitrator's order. The Director's Delegate agreed with the Arbitrator that the value of the DAC report was undermined by the problems with the DAC process, including one-sided communication between the DAC and the insurer:

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.²¹

The issue of one-sided communications was raised again in Dhir and Non-Marine Underwriters, Members of Lloyd s:

Mr. Dhir argued that the assessment performed by Dr. Grossman was biased. Dr. Grossman is a designated assessor for disability under the guidelines of the Ontario Insurance Commission. In a letter to the Insurer's adjuster, Dr. Grossman wrote that he was trying to write his report "so as to be of maximal benefit when he takes you to mediation/arbitration." I agree that Dr. Grossman appears to have taken on the role of advocate for the Insurer and I place little weight on his report.²²

In this case, I find that the DAC was non-compliant with the Guidelines in that it did not consult with the Applicants in scheduling the assessments. In addition, it did not respond to Mr. Spector's request that the assessments be held on the same day or rescheduled for a more convenient time. Instead, someone from the CRI telephoned Ms. Eng and had a private conversation with her without the participation of the Applicants or their representative. The CRI's actions undermined any appearance of its neutrality in this assessment process.

Ms. Eng also misunderstood her obligations under the Schedule and the Guidelines. As the DAC Guidelines make clear, the DAC system is intended to be neutral, independent and balanced. It is not owned or controlled by either the insured person or the insurer. The Schedule requires insured persons to make themselves "reasonably available" for assessment. This is not an absolute obligation to submit to any assessment requested by the Insurer. The assessment is to be scheduled at a time that is, as much as possible, mutually convenient for the insured person and the DAC. Apart from the requirements set out in the Guidelines, this is common courtesy. Insured persons cannot be expected to be available at all times any more than DAC assessors or insurance adjusters. They may have medical or therapy appointments, job interviews, family commitments, or important social or recreational plans.²³ In this case, the Applicants asked to reschedule the appointments to accommodate their work schedules. One of the fundamental objectives of the accident benefit system is to facilitate the insured person's return to work.²⁴ This also assists insurers, since it reduces their exposure to payment of income replacement benefits. Ms. Eng's refusal to cooperate with the Applicants in the DAC assessment process was inconsistent with the spirit and the letter of the Schedule.

I find that the Applicants request to reschedule the DAC assessments was reasonable, and that the refusal of the DAC and the Insurer to reschedule them was not. Accordingly, I find that the Applicants made themselves reasonably available for the DAC assessment and are not barred from proceeding to arbitration under section 50(c) of the Schedule.

Failure to refer the second treatment plan to the DAC in January 2000

The Applicant's representative submitted, in the alternative, that even if the Applicants failed to make themselves reasonably available for DAC assessments concerning the second treatment plan in August 1999, the Insurer could have mitigated its losses by referring the same questions to the CRI in January 2000, when the Applicants were assessed with respect to the third treatment plan. The Insurer's representative submitted that this was not possible because section 38(1) of the Schedule requires prior approval of treatment before expenses are incurred; the treatment covered by the second treatment plan was completed by mid-June 1999. Given my finding that the Applicants did not fail to make themselves reasonably available for the August 1999 DAC assessments, it is not necessary for me to decide this question.

Were the applications for benefits timely?

After hearing the Insurer's counsel's submissions about section 38(1),²⁵ I invited submissions on the effect of sections 38(17) and (18) of the Schedule, a saving provision that contemplates treatment expenses being incurred prior to submission of an application:

38(17) If an insured person incurs expenses in respect of which a medical or rehabilitation benefit may be payable without complying with subsection (1), (2) or (3), the insured person shall submit to the insurer an application for payment of the expenses that complies with subsections (2) and (3) within 30 days after incurring the expenses.

(18) Despite subsection (1), if the insurer receives an application under subsection (17), the insurer shall, within 30 days after receiving the application,

(a) pay the expenses; or

(b) give the insured person notice of its reasons for not paying the expenses.

At the request of the Insurer's counsel, I gave the parties an opportunity to make written submissions on this point following the hearing. Only in his post-hearing submissions, dated August 18, 2000, did the Insurer's counsel argue that the Applicants' claims could not proceed to arbitration because they were not submitted in accordance with either section 38(1) or the 30-day limit in section 38(17). The Insurer's counsel stated, in his submissions, that the Insurer did not receive the treatment plans until June 2, 1999. The Applicants' representative disputed that claim, and requested an opportunity to present further evidence on the point.

I received limited evidence about when the treatment plans were submitted. Mrs. Onno's treatment plan was dated May 10, 1999, and date-stamped by the Insurer on May 28, 1999. Mr. Onno's treatment plan was dated May 16, 1999 and date-stamped by the Insurer on June 3, 1999. Ms. Eng testified that she received Mrs. Onno's plan on May 28, 1999. She did not testify as to when she received Mr. Onno's plan. The only evidence I received about the expenses incurred is the CARC's invoice for Mrs. Onno, dated June 29, 1999. It indicates billings for April 21, May 4, May 10 and regularly after May 10, 1999.

Section 38(17) provides relief where the insured person "submit[s]" an application "within 30 days after incurring the expenses." I am inclined to believe this establishes a "rolling time limit," consistent with the adjustment process in a periodic benefits system. In any event, whenever the clock starts ticking, it stops when the insured person submits the application, not when the insurer receives it. This is consistent with the purpose of this provision, which is to require certain actions on the part of insured persons, not insurers. The Insurer bears the onus of proving that the Applicants' claims are statute-barred. The Onnos' treatment plans were dated May 10 (Mrs. Onno) and May 16 (Mr. Onno). Although I received no direct evidence about when the applications were mailed, I find there is no reason to doubt that they were mailed shortly after they were prepared. The Insurer has not satisfied the onus of proof. This is sufficient to dispose of the matter.

In any event, I find that the Insurer waited far too long before raising this objection. Despite the parties' long dispute about the Insurer's DAC request, the Insurer's counsel first argued that the claims were statute-barred in his post-hearing written submissions. If this objection had been raised earlier, the Applicants would have had an opportunity to adduce evidence to challenge the Insurer's allegation that the applications were untimely, and to make submissions as to the nature and effect of the time limits in sections 38(1) and 38(17). The Insurer did not move to reopen the hearing. In the interests of finality, I would have declined such a motion, in any event, because there is no reason the Insurer could not have raised the matter earlier.

Reasons for refusal

The Applicants submit that in refusing the second treatment plan as "not acceptable," the Insurer failed to provide reasons for refusal, as required by the Schedule. Section 38(12)(b)(i) of the Schedule states that the insurer "shall include" in the refusal notice "a statement of the insurer's reasons for not agreeing to pay for all goods and services contemplated by the treatment plan." At the hearing, Ms. Eng testified that the Insurer refused the second treatment plan because the Whiplash Guideline allows for four-to-six weeks of chiropractic and physiotherapy treatment for this type of injury. Unfortunately, these reasons were not included in the refusals. Numerous arbitration and appeal decisions have emphasized the importance of insurers giving clear and unequivocal written notice of any termination or refusal with reasons. However, the Applicants' representative did not raise the issue until he made written submissions after the hearing. For the same reasons I gave with respect to the Insurer's timeliness argument, I do not find it appropriate to re-open the hearing to deal with this issue.

Conclusion

As I find the Applicants made themselves reasonably available for assessment, the arbitration proceeding is not barred under section 50(c); nor will it be stayed or adjourned.

EXPENSES:

I may be contacted if the parties are unable to agree about arbitration expenses.

September 27, 2000

Nancy Makepeace Arbitrator

Date