Neutral Citation: 2000 ONFSCDRS 190
FSCO A00-001032
FINANCIAL SERVICES COMMISSION OF ONTARIO
BETWEEN:
JAMES FEDEROW
Applicant
and
KINGSWAY GENERAL INSURANCE COMPANY
Insurer
DECISION ON A MOTION FOR INTERIM BENEFITS
Before:
William J. Renahan
Heard:
By telephone conference call on October 19, 2000.
Appearances:
David A. Payne for Mr. Federow
Ronald Preyra for Kingsway General Insurance Company
Issues:
The Applicant, James Federow, was injured in a motor vehicle accident on July 1, 1998. He applied for and received statutory accident benefits from Kingsway General Insurance Company ("Kingsway"), payable under the Schedule.1 Kingsway refused to pay for certain rehabilitation services provided by the Anagram Treatment Centre. The parties were unable to resolve their disputes through mediation, and Mr. Federow applied for arbitration at the Financial Services Commission of Ontario under the Insurance Act, R.S.O. 1990, c.I.8, as amended.
Mr. Federow has brought a motion pursuant to section 65 of the Dispute Resolution Practice Code — Third Edition for interim benefits to be paid to him pending the resolution of his dispute with Kingsway.
The issue on this motion is:
- Is Mr. Federow entitled to interim benefits pursuant to section 279(4.1) of the Insurance Act to cover the expense of treatment at the Anagram Treatment Centre?
Mr. Federow also claims interest on any amounts owing and his expenses incurred on this motion.
Result:
Kingsway shall pay Mr. Federow interim benefits for treatment at the Anagram Treatment Centre at the rate of $526.37 per day from October 14, 2000 until November 1, 2000 pending further order of an arbitrator and without prejudice to Kingsway's right to repayment should an arbitrator determine the services provided by Anagram Treatment Centre were not reasonable and necessary within the meaning of section 15 of the Schedule.
The main hearing of this issue will be held on October 30 and November 1, 2000.
The issue of expenses is deferred until the main hearing.
EVIDENCE AND ANALYSIS:
Section 279(4.1) of the Insurance Act gives arbitrators the discretionary authority to make interim orders pending the final order in any matter. The overriding principle in most cases is that an order will be made only after a hearing which fully canvasses the evidence and positions of both sides. Arbitrators have applied different standards of proof that an applicant must satisfy in order to be entitled to an interim order for the payment of interim benefits. Arbitrators have noted that an interim order might prejudice an insurer if an arbitrator later determines that the insurer is entitled to a repayment which the insurer cannot recover. Arbitrators have also referred to the need of an applicant to demonstrate urgency. I believe the standard of proof varies depending on the urgency and the potential prejudice to the insurer in granting an interim order.
Mr. Federow is 49 years old. He suffered head injuries in a motorcycle accident on July 1, 1998. Kingsway concedes that Mr. Federow suffered a mild brain injury but argued that treatment did not become an issue until Mr. Federow changed counsel in May 2000 and Dr. Sherrie Bieman-Copeland, a psychologist, became involved in his case. Kingsway claims that Dr. Bieman-Copland recommended unreasonable and unnecessary treatment at a facility in which she is involved and that she is in a conflict of interest. Kingsway agreed to fund one month of treatment at Anagram without admitting liability. It agreed to fund a further week up to October 13, 2000 on condition that Mr. Federow would repay the funds if it was later determined the treatment was not reasonable or necessary. For the last week, Mr. Federow has received treatment at Anagram without any arrangements for payment.
Whether the Anagram treatment is reasonable and necessary is a difficult issue. It is common ground that the chance of successful treatment of organic damage to the brain significantly decreases with the passage of time. Two years and three months passed before Mr. Federow received this treatment. In a letter dated May 30, 2000, Dr. Cheryl Masanic, a specialist in physical medicine and rehabilitation reported to Mr. Payne:
In summary, Mr. Federow suffered multiple injuries as a result of the motor vehicle accident on July 1, 1998. Cognitive difficulties, pain and depression are all creating significant disability as he struggles with instrumental activities of daily living and in my impression he is not competitively employable at this time. Mr. Federow has not received adequate rehabilitation to date. He requires treatment for depression including monitoring by a psychiatrist. He will be working with a rehabilitation therapist from Brain Injury Community Re-entry Program in the near future. I trust the cognitive compensatory strategies, pacing and functional issues will be addressed.
Mr. Preyera could not point to any evidence that a person with a brain injury ceases to receive any significant organic benefit from treatment after two years and three months or that Mr. Federow would not suffer prejudice if the treatment was postponed. Nor did he point to any evidence that Mr. Federow would not benefit from this treatment.
Mr. Payne argued that Kingsway suffers no prejudice if it is determined that the Anagram treatment is not reasonable or necessary. He wrote and confirmed on the telephone that there is no issue that Mr. Federow is not at fault in the motor vehicle accident and the party that was at fault is uninsured. Accordingly, Mr. Federow will ultimately recover his tort damages on his uninsured motorist coverage with Kingsway. If it is determined in this proceeding that the expenses of the Anagram program is unreasonable and unnecessary, Kingsway can recover those expenses from Mr. Federow when it resolves its liability in the tort claim.
The risk to Mr. Federow is great if he has suffered organic brain injury which could have been successfully treated if dealt with in a timely fashion. The risk to Kingsway is not that significant if it can recover any order that Mr. Federow repay benefits from its liability arising out of the tort claim. The cost of the additional treatment from October 14, 2000 to the date of the hearing is less than $10,000. In these circumstances, I am satisfied that Kingsway should pay on an interim basis the cost of the treatment at Anagram until this hearing.
The parties agreed that the hearing will take place on October 30 and November 1, 2000 and that the issues for that hearing are as follows:
Is the treatment provided by Anagram Treatment Centre reasonable and necessary within the meaning of section 15 of the Schedule?
If the Anagram treatment is not reasonable and necessary, is Kingsway entitled to a repayment pursuant to section 47 of the Schedule?
Are the expenses described in three treatment plans contained in tab 19 of Mr. Federow's brief "Application for Mediation - Supporting Documentation" reasonable and necessary for Mr. Federow's treatment or rehabilitation?
Is Mr. Federow entitled to expenses of approximately $8,000 to $10,000 incurred for a case manager or co-ordinator pursuant to paragraph 14(2)(h) of the Schedule? Among other things, Kingsway relies on section 17 of the Schedule and argues that it is not liable to pay for case manager services unless Mr. Federow has sustained a catastrophic impairment within the meaning of section 2 of the Schedule.
Is either party entitled to their expenses of the arbitration proceeding?
October 20, 2000
William J. Renahan
Arbitrator
Date
Neutral Citation: 2000 ONFSCDRS 190
FSCO A00-001032
FINANCIAL SERVICES COMMISSION OF ONTARIO
BETWEEN:
JAMES FEDEROW
Applicant
and
KINGSWAY GENERAL INSURANCE COMPANY
Insurer
ARBITRATION ORDER
Under section 282 of the Insurance Act, R.S.O. 1990, c.I.8, as amended, it is ordered that:
Kingsway shall pay Mr. Federow interim benefits for treatment at the Anagram Treatment Centre at the rate of $526.37 per day from October 14, 2000 until November 1, 2000 pending further order of an arbitrator and without prejudice to Kingsway's right to repayment should an arbitrator determine the services provided by Anagram Treatment Centre were not reasonable and necessary within the meaning of section 15 of the Schedule.
The main hearing of this issue will be held on October 30 and November 1, 2000.
The issue of expenses is deferred until the main hearing.
October 20, 2000
William J. Renahan
Arbitrator
Date
Footnotes
- The Statutory Accident Benefits Schedule — Accidents on or after November 298, 1996, Ontario Regulation 403/96, as amended by Ontario Regulations 462/96, 505/96, 551/96 and 303/98.