Financial Services Commission

Commission des services financiers de l’Ontario

Neutral Citation: 2001 ONFSCDRS 106

Appeal P00-00061

OFFICE OF THE DIRECTOR OF ARBITRATIONS

TTC INSURANCE COMPANY LIMITED

Appellant

and

ADOSINDA CORREIA

Respondent

Before:

Susan Naylor, Director's Delegate

Counsel:

Franceen Rogovein (for TTC Insurance)

A. Wayne Edwards (for Mrs. Correia)

APPEAL ORDER

Under section 283 of the Insurance Act, R.S.O. 1990, c.I.8, as amended, it is ordered that:

The appeal is dismissed and the arbitration order dated October 27, 2000 is confirmed.
Adosinda Correia is entitled to her appeal expenses.

July 16, 2001

Susan Naylor Director's Delegate

Date

REASONS FOR DECISION

I. NATURE OF THE APPEAL

This appeal deals with a claim under the Statutory Accident Benefits Schedule - Accidents on or after November 1, 1996, O. Reg. 403/96, as amended ("SABS-1996"). The issue is whether someone who was injured in an automobile accident is eligible for benefits in respect of different injuries sustained in a later rehabilitation assessment.

II. BACKGROUND FACTS

Adosinda Correia was employed by a community organization, providing home care services to sick and elderly clients in their own homes. On September 3, 1998, she was hurt in an incident while travelling on a TTC bus. Ms. Correia was exiting the bus when the doors closed on her. As they reopened, she fell on to the sidewalk. She suffered soft tissue injuries to her right leg, hip and ankle in the fall. On the advice of her doctor, she started a course of physiotherapy in mid-September 1998, at the College Street Physiotherapy Clinic ("clinic"). The TTC, as the insurer, approved the treatment plan, but the choice of clinic was Ms. Correia's.

After a handful of sessions, Ms. Correia felt ready to return to work, but her employer required a discharge certificate from the clinic. Since her therapist was unwilling to clear her for work without a functional capacities evaluation, ("FCE"), she was assessed on September 25, 1998.

The arbitrator found that Ms. Correia was injured in the course of the FCE. Ms. Correia attributed her injuries to being required to utilize improper lifting techniques during the assessment. The evidence of what happened was limited. Ms. Correia's therapist no longer worked for the clinic and no one from the clinic testified. Some cursory records were available but none relating to the FCE. The records did not indicate that anything untoward had happened.

The arbitrator stated that she preferred to rely on Ms. Correia's account of the events leading up to her discharge, finding that her testimony was believable on its face and placing weight on the fact that Ms. Correia told others that she was hurt during testing in the FCE due to what she felt were improper practices.

The arbitrator found that Ms. Correia suffered soft tissue injuries to her shoulders, elbows, low back and wrists and that these were different injuries than those injured in the original accident. She concluded that Ms. Correia's original injuries had substantially resolved and were not disabling, but that her treatment-related injuries (together with intermittent right leg problems) disabled her from work on an ongoing basis. The arbitrator then turned to whether those new injuries were sufficiently connected to the accident to qualify Ms. Correia for benefits, concluding that they were. The arbitrator awarded Ms. Correia ongoing IRBs up to the 104-week mark, and other benefits. Ms. Correia's entitlement to IRBs after that time was not in issue before her.

The only issue before me is whether the arbitrator was correct as a matter of law on the issue of causation.

III. STATUTORY CONTEXT

"Accident" is defined in s. 2(1) of SABS-1996 as follows:

"accident" means an incident in which the use or operation of an automobile directly causes an impairment or directly causes damage to any prescription eyewear, denture, hearing aid, prosthesis or other medical or dental device;

This definition is new to SABS-1996. Under earlier versions of the SABS, it was sufficient that the use or operation of the vehicle directly or indirectly cause an impairment.¹

Under section 2(1), "impairment" means "a loss or abnormality of psychological, physiological or anatomical structure or function." For readability, I refer in this decision to injury rather than impairment.

The criteria for eligibility for IRBs is set out in Part II, section 4.1 as follows:

The insurer shall pay an insured person who sustains an impairment as a result of an accident an income replacement benefit if the insured person meets any of the following qualifications:

The insured person was employed at the time of the accident and, as a result of and within 104 weeks after the accident, suffers a substantial inability to perform the essential tasks of that employment.

Provisions containing similar language, providing for payment to an insured person "who sustains an impairment as a result of an accident," govern eligibility for other benefits. For example, section 14(1) provides that:

The insurer shall pay an insured person who sustains an impairment as a result of an accident a medical benefit.

All told, the phrase "as a result of" appears some 70 times in SABS-1996. "Results in" or resulting from" is occasionally used. "Cause" is found in section 34(2), dealing with the content of medical certificates and "directly causes" is found only in the definition of accident.

IV. THE ARBITRATOR'S DECISION

There was no dispute that an "accident" happened. It was the incident in which Ms. Correia was hurt exiting the bus. However, these are not the injuries in respect of which she claims benefits. She relies on the injuries she sustained in the assessment. The TTC argues that these injuries do not qualify her to receive benefits because they were not "directly caused" by the use or operation of the bus. Furthermore, to the extent there was a causal connection between those injures and the accident, it was superseded by the therapist 's improper treatment which represented an intervening cause.

The arbitrator held that, once it is established that an accident occurred, coverage of the consequences of those injuries, including new injuries, is governed by broader causal language in section 4.1. That subsection provides for IRBs to be paid to an insured person "who sustains an impairment as a result of an accident ...if the insured person ..as a result of and within 104 weeks after the accident, suffers a substantial inability to perform the essential tasks of ... employment."

At page 24, the arbitrator stated:

Nothing in the wording of these sections limits benefits to those impairments directly caused by the accident. Moreover, in enacting the Bill 59 amendments to the SABS, the legislature chose not to amend the provisions setting out the entitlement criteria which retain the "as a result of " test... Reading subsection 2(1) and 4(1) together, I find that once the insured person proves that she sustained an impairment in an accident, the test for entitlement to benefits is whether the impairments giving rise to the claim for benefits were sustained "as a result of" the accident.

She concluded at page 39:

...the extent of coverage for the consequences of an accident is governed by the "as a result" test, which requires proof that the accident materially or significantly contributed to the disability or impairment that gives rise to the claim for benefits.

In her decision, the arbitrator canvassed arbitration decisions under previous SABS regimes and jurisprudence from tort law and workers' compensation. She concluded that the words "as a result of in SABS-1996 should be construed in a consistent manner. She also cited policy favouring her construction.

The arbitrator held that the impairment Ms. Correia sustained at the clinic was an impairment sustained as a result of an accident, because her attendance at the clinic had a reasonable rehabilitative purpose. She was not satisfied that anything done at the clinic represented a new or intervening cause of the injury.

V. DISCUSSION

This case involves the relationship between the definition of accident, the definition of insured person and language conferring entitlement to benefits where an insured person sustains an impairment "as a result of an accident."

Accident benefits are payable only where there has been an accident. "Accident" is defined in section 2(1) as an incident in which the use or operation of an automobile directly causes an impairment or directly causes damage to eyeglasses or other listed devices. "Accident" describes the event triggering coverage. Benefits are payable where an "insured person" sustains an impairment as a result of an accident. "Insured person" describes who is covered and the terms of the entitlement sections describe when benefits are paid.

The requirement of "direct cause" in the definition of accident is new to SABS-1996. Under SABS-1994 and SABS-1990, the definition of accident is met if the injuries were caused, directly or indirectly, by the use or operation of an automobile. Courts and adjudicators, relying on this language, gave expansive scope to the meaning of "accident." The test was equated, for practical purposes, to the broad test established in Amos v. Insurance Corp. of British Columbia, 1995 CanLII 66 (SCC), [1995] 3 S.C.R. 405 (S.C.C.) in relation to injuries caused by accident "arising out of" the use or operation of an automobile. Amos confirmed that "cause" language is narrower than "arising out of" language.

Under the Amos test, accident benefits are payable provided there is some causal connection between the injury and the use or operation of the automobile, other than a merely incidental or fortuitous one. A direct or proximate relationship is not required. Decisions under earlier SABS regimes have concluded that the inclusion of indirect cause also takes the analysis beyond proximate cause.²

The change to the definition of "accident" was part and parcel of the legislative changes effected under the Automobile Insurance Rate Stability Act, 1996, S.O. 1996, c. 21, which were intended to stabilize premiums costs. The changes redrew the balance in the "exchange of rights" between statutory benefits and tort. Access was broadened on the tort side, restoring, subject to limited exceptions, the right to recover damages for pecuniary loss, which had been removed under the Bill 164 scheme. The scope and level of accident benefits were reduced.

The conclusion is inescapable that by removing the word "indirectly" from the definition of accident, the drafters intended to move in the direction of a more exacting causal connection. This was recognised by Lederman J. in Saharkhiz v. Members of Lloyds (1999), 1999 CanLII 15099 (ON SC), 46 O.R. (3d) 154, aff'd (2000), 2000 CanLII 5719 (ON CA), 49 O.R. (3d) 255 (C.A.), who remarked that the change "undoubtedly significantly narrows the causation link." It is safe to say that the test now is more restrictive than that articulated in Amos and that it is more restrictive than that delineating the scope of the protection from liability in tort for protected defendants under the Insurance Act.³ This narrowing of scope is reflected in arbitration decisions to date.⁴

The arbitrator emphasises the phrase "an impairment as a result of an accident," noting that while the definition of "accident" changed, that language remained essentially unchanged. She concluded that the "direct cause" test determines whether an accident has occurred, but does not define the extent of the consequences for which an insurer is liable to pay benefits. The TTC focuses on the changed definition of "accident", arguing that the impairment giving rise to the claim must be directly caused by the use or operation of the automobile, and that only losses directly flowing from the accident are contemplated. In other words, what is captured by the words "directly causes" in the definition of accident and how does "an impairment as a result of an accident" relate to or add to it?

Part I of the SABS-1996 contains generally applicable provisions, including definitions. Section 3 provides that the benefits set out are to be provided in every motor vehicle liability policy in respect of accidents occurring on or after November 1, 1996, and it deals with geographical scope. The balance of the Parts deal with benefits payable.

"Accident" is a defined term. It is not expressed as a stand-alone provision. The definition of "accident" "insured person" and ""impairment" are embedded in the eligibility provisions. IRBs are paid under section 4.1. It supplies the link between an accident, an insured person and the disability in respect of which benefits are paid. The section describes criteria giving rise to entitlement that contemplate various connections and relationships. The obligation to pay is in respect of an insured person, the definition of which refers to someone who is "involved in an accident" or who "is not involved in accident but suffers psychological or mental injury as a result of an accident that results in a physical injury" to defined family members. Benefits are paid in respect of such a person where they sustain "an impairment as a result of" an accident provided they also sustain a substantial inability to perform their essential employment tasks "as a result of" an accident and within a certain time frame (104 weeks) of that accident. Within the "as a result of an accident" causal test, there is a requirement that an incident, constituting an accident, must have occurred, in relation to which there must be a direct causal relationship - "directly causes" - between the use or operation of an automobile and an impairment.

For there to be an accident, there must be an incident in which the automobile's use or operation directly causes an impairment. What does "directly causes" mean? Is it used in the sense of the extent to which an event leads straight or immediately to its consequences or is it oriented towards proximate cause - the moving or effective cause, as opposed to remote cause?

Dictionary definitions of "direct" capture both senses of meaning. The Concise Oxford Dictionary includes in the definition of "direct,"

in a direct manner extending or moving in a straight line; .. 3. Without intermediaries or the intervention of other factors.

The adverb "directly" includes

in a direct way or manner; without an intermediary or intervening factor.

"Cause" includes

a. That which produces an effect, or gives rise to an action, phenomenon or condition. b. a person or thing that occasions something.

In the context of private insurance policies, direct cause language signals proximate cause.⁵Indeed, there is plenty of authority for the proposition that "direct cause" and "proximate cause" are interchangeable.⁶ If the insured peril is the originating factor, the test of proximity is the whether the loss was a direct result of that peril. The test for directness is whether there has been a new intervening cause.⁷ Used in this sense, direct cause speaks to the quality of the relationship between the use or operation of the automobile and the injury, not simply to their closeness in time.

Arbitrators addressing whether an accident has occurred have adopted the definition of "direct cause" in Black's Law Dictionary:⁸

The active efficient cause that sets in motion a train of events which brings about a result without the intervention of any force started and working actively from a new and independent source.

While the test applied involves a "moving" cause type of analysis, it has not been equated with "liability focused" proximate cause in which the interposition of a new act of negligence necessarily breaks the "chain of causation" between the automobile's involvement and the injury.⁹ In other words, if someone is hurt in a car crash attributable to substandard highway maintenance, their injuries nonetheless are considered to be directly caused by the vehicle’s use or operation.

Under the principles of proximate cause, absent explicit language in a policy, if injury or death results from treatment necessitated by an accident, providing there is no intervening cause, the accident remains the direct or proximate cause.¹⁰ Direct cause does not mean the only cause or the most immediate cause. The thin-skull rule in insurance law essentially is a function of the principle of proximate cause.

There appear to be surprisingly few cases comparing "results" and "cause" language. A perusal of case law on causation suggests that judges freely move between the two. I was referred to one or two decisions suggesting that the former is either broader than the latter or the latter weaker than the former, although they involve contexts different than here. A leading workers compensation tribunal decision referred to by the arbitrator, Decision 915 (1986) 7 W.C.A.T.R. 1 at p. 100, construing legislation providing for the payment of benefits where disability "results from" an injury, held that such language connoted a broader based connection than "causes" and imported a standard that was "at least no less embracing than the courts' conception of causation." C. Brown and J. Menezes, Insurance Law in Canada (Toronto:Carswell, 2001) at page 17-2 suggest that the SABS definition restricts losses to those following directly from the use or operation of the automobile.

The meaning of "as a result of" was discussed in Sklar v. Saskatchewan Government Insurance Office (1965), 1965 CanLII 388 (SK QB), 54 D.L.R. 455 (Sask. Q.B.) cited in the Dictionary of Canadian Law (Toronto: Carswell, 1995) at page 1079. The court considered whether accident benefits were payable in respect of an insured who died from carbon monoxide after his car became stuck in a snowdrift. The question was whether the man's death was "loss resulting from bodily injury sustained by him directly, and independently of all other causes, through accidental means excluding suicide ....provided that the bodily injuries are suffered as a result of driving, riding in or on or operating a moving motor vehicle," under the Province's Act. The court stated at page 474:

Let us consider for one moment the words "as a result of." A result is something that follows as an actual consequence. If one has a chain of causation starting with the accident, each cause the result of a preceding cause leading up to the death, then death can be said to result solely from the primary cause. Unless the chain of causation is broken by a novus actus interveniens, an act which is independent of the chain of causation, or which is not also a result of a previous cause, forming part of the chain, then death is a sequela of the accident.

It is well established that SABS is to be given a liberal construction. In the Amos decision, the Supreme Court of Canada held that no fault benefits are not to be given a narrow or technical meaning that defeats the object and insuring intent of the scheme providing coverage. The court also held that approaches taken under private policies, although not determinative, can provide useful guidance to the interpretation of statutory language in the no fault context.

"Accident" is defined in terms of an incident or event involving an impairment. Certain consequences may result from or flow from such an event, giving rise to entitlement to benefits. I find it most plausible that the move to direct cause was intended to reinforce the involvement of the automobile in relation to an injury in the context of an original accident. In any event, I conclude, as did the arbitrator, that the position of the TTC that injuries sustained in the course of a rehabilitation assessment are not covered because they are not "directly caused" by the use or operation of the automobile is too narrow a reading of the language of section 4.1. Not only, as pointed out in other cases, is the word "result" suggestive of a more tensile quality than "cause," but the statutory language must be seen against the historical backdrop of the reach of the principle of proximate cause. Also, the definition of "insured person" specifically contemplates that someone who was not involved in an accident at all but who suffers mental or psychological injury as a result of an accident involving physical trauma to a family member can recover benefits.

New injuries clearly may be related to an impairment sustained in the accident. The arbitrator gave examples of cases in which someone fell down the stairs due to dizziness related to, or a knee weakened from, the effects of an accident and sustained new injuries. Those new injuries can be viewed as a direct consequence of the accident and a result of it. Likewise, if someone undergoes surgery for accident-related problems and, through no one's fault, suffers new impairment in the course of the operation, such consequences are directly traceable to the accident.

The same applies to injuries sustained in rehabilitation assessments. As the arbitrator notes, participation in reasonable treatment and rehabilitation is not only to be encouraged, but is mandatory under section 55 of SABS-1996 as a condition of receiving full benefits. Those injured are expected to make efforts to go back to work as soon as they safely and reasonably can, and the arbitrator found that Ms. Correia was motivated to do so. Ms. Correia attended the FCE because of injuries she sustained in the accident. Those injuries prompted the initial need for treatment. I agree with the arbitrator that Ms. Correia attended the FCE for the legitimate purpose of having her functional abilities evaluated and confirmed, and preparatory to returning to work. She was hurt in that process. Unless something happened at the clinic that disengaged the connection between the injuries she suffered there and the accident, there is a clear and direct link between them.

Although the context is not identical, the principles developed in tort cases where there has been intervening medical error are relevant. Negligent motorists are held liable, in some circumstances, for the consequences of treatment mismanagement, with contribution allowed as between wrongdoers. In Papp v. Leclerk (1977) 77 D.L.R. (3d) (C.A.), the court explained at page 539:

Every tortfeasor causing injury to a person placing him in the position of seeking medical and hospital help, must assume the ordinary risks of complications, bona fide medical error or misadventure, and they are reasonable and not too remote.

The court held the defendant has the onus of showing that the conduct meets the requisite standard to escape liability for it.

The arbitrator and both parties relied on this body of jurisprudence. It was considered in the no fault context in Mitchell v. Rahman [2000] M.J. No. 419, a decision of the Manitoba Queens Bench coming to my attention after the appeal hearing. That Province's pure no fault system bars actions in respect of bodily injury caused by an automobile. The case involved an unsuccessful attempt on the plaintiff's part to proceed with a medical malpractice suit against some doctors who had seen him shortly after the accident. The court dismissed the action on the basis that on the given facts, the role of the doctors did not amount to an intervening cause at common law.

The Insurance Act does not bar Ms. Correia's remedy against negligent health care professionals. However, those injured should not be deterred from attending rehabilitation programs or submitting to assessments for fear that if there are complications or problems, their benefits might be jeopardised. It is for an insurer to establish that intervening error on the part of a health professional is of a nature and degree that relieves it from further liability to pay benefits. It is well established, in the tort context, that the kinds of risks mentioned in Papp v. Leclerk, where they do not amount to negligence, do not constitute an intervening cause, and there is support for the view that this may be so even where there is some negligence, if the character and degree of the substandard treatment is within the realm of a reasonably forseeable risk.¹¹ Given that the accident benefits scheme contemplates fast-track payment, a focus on rehabilitation, and an orientation towards co-operative rather than contrary practices, it lends itself to an approach that allows for some flexibility.

I am invited to presume that, accepting the arbitrator's findings, the assessment must have involved negligence, even gross negligence. While I accept that common sense and experience may be brought to bear in deciding these matters, I was not pointed to any expert evidence relevant to the issue, whether in regards to the risks of assessments, standards of practise or otherwise. To succeed in showing that the arbitrator erred as a matter of law, the TTC needs to show that she had no room to arrive at the result she did or approached it from a wrong perspective. I am not convinced that it has established such an error.

The arbitrator did not conclude that anything done at the clinic represented an intervening cause. She made no clear finding that the assessment involved impropriety, but even assuming a finding that clinic staff did something that ought not to have been done or should have been done differently, the evidence does not compel the conclusion that the conduct necessarily amounted to a level of mis-treatment which would interrupt the causal connection. In short, I am not satisfied that the arbitrator was wrong in law in concluding that Ms. Correia's assessment-related injuries were sustained as a result of an accident.

Ms. Correia is entitled to her appeal expenses.