Neutral Citation: 2001 ONFSCDRS 127

FSCO A01-000333

FINANCIAL SERVICES COMMISSION OF ONTARIO

BETWEEN:

LORNA HOWDEN

Applicant

and

PEMBRIDGE INSURANCE COMPANY (PAFCO INS. CO.)

Insurer

DECISION ON A MOTION FOR INTERIM BENEFITS

Before:

Janice Sandomirsky

Heard:

August 21, 2001, at the offices of the Financial Services Commission of Ontario in Toronto.

Appearances:

David S. Wilson for Ms. Howden

Grant R. Dow for Pembridge Insurance Company (Pafco Insurance Co.)

Issues:

The Applicant, Lorna Howden, was injured in a motor vehicle accident on October 5, 1998. She applied for and received statutory accident benefits from Pembridge Insurance Company (Pafco Insurance Co.) ("Pembridge"), payable under the Schedule.¹ Pembridge terminated weekly income replacement benefits on October 25, 2000. The parties were unable to resolve their disputes through mediation, and Ms. Howden applied for arbitration at the Financial Services Commission of Ontario under the Insurance Act, R.S.O. 1990, c.I.8, as amended.

Ms. Howden has brought a motion pursuant to section 67 of the Dispute Resolution Practice Code —Fourth Edition for interim benefits to be paid to her pending the resolution of her dispute with Pembridge.

The issue on this motion is:

Is Ms. Howden entitled to interim benefits pursuant to section 279(4.1) of the Insurance Act?

Ms. Howden also claims interest on any amounts owing and her expenses incurred on this motion.

Result:

Ms. Howden is not entitled to interim benefits.
The issue of expenses may be addressed by the hearing arbitrator.

Background:

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 issue in dispute in this arbitration proceeding is Ms. Howden's entitlement to income replacement benefits beyond the 104 week period. Entitlement to those benefits falls under subsection 5(2)(b) of the Schedule, which provides that:

5(2) The insurer is not required to pay an income replacement benefit,

(b) for any period longer than 104 weeks of disability, unless, as a result of the accident, the insured person is suffering a complete inability to engage in any employment for which he or she is reasonably suited by education, training, or experience.

The arbitration hearing to consider this matter is scheduled for November 19, 20, 21 and 22, 2001. The motion for interim benefits was scheduled to be heard on the same date as the pre-hearing, June 19, 2001. Ms. Howden requested an adjournment of the motion at that time in order to have the opportunity to respond to a report presented by Pembridge. The motion was re-scheduled for August 21, 2001.

Ms. Howden filed two affidavits which contained background information relating to her claim. Briefly, Ms. Howden was injured in a motor vehicle accident on October 5, 1998. At the time of the accident, she was 43 years old and employed as a health care aide earning $14.61 an hour.

Ms. Howden applied for and was paid income replacement benefits. She underwent an independent medical examination with Dr. P. Parker, a physiatrist, on January 26, 2000. Dr. Parker concluded in a follow-up report dated June 5, 2000, that Ms. Howden had achieved the maximum medical benefit from her physiotherapy treatment, and was unable to return to her pre-accident work activities.

The Insurer then arranged for Ms. Howden to undergo a functional ability evaluation (FAE) at the Merit Assessment Centres on September 15, 2000, to determine her physical capabilities. Kendra Robinson, the kinesiologist who conducted the FAE, confirmed that, from a functional perspective, Ms. Howden did not demonstrate sufficient ability to perform her reported occupational tasks as a health care aide. She was found to be able to function at the light level of physical demands.

The Insurer then arranged for a vocational assessment with Dr. J.E. Siegel, psychologist, on September 21, 2000. Dr. Siegel identified seven occupations he felt Ms. Howden was capable of performing without any additional course work or specialized training, other than on the job training. This list included admitting clerk, bookstore clerk, dispensary assistant, post office clerk, retail sales clerk, tele-marketer, and video store clerk. Dr. Siegel recommended that a physician and kinesiologist review the job demands to determine whether Ms. Howden has the physical ability to perform the jobs.

Mr. Robinson, the kinesiologist who performed the FAE, then reviewed this list of jobs and confirmed that each of them fell under the sedentary to light levels of physical demands. She noted, however, that without having the exact physical demands of each job, it was impossible to provide a definitive answer about whether she could perform all the duties for each job.

The Insurer terminated Ms. Howden's benefits on October 25, 2000, on the basis that she was capable of returning to work. Ms. Howden claims entitlement to further benefits pursuant to section 5(1)(b) of the Schedule on the basis that she suffers a "complete inability to engage in any employment for which she is reasonably suited by education, training or experience."

Both parties obtained additional vocational rehabilitation assessments after the termination of benefits. Reports obtained by Mr. Wilson concluded, in essence, that Ms. Howden's vocational options were to either return to work at a low-skill job, such as a video rental clerk, or retrain for a more highly skilled position drawing on her background in health and human services. The reports stated that she could find suitable unskilled work, but her pay would be in the $6.85 to $9.00 an hour range. If she upgraded her skills and retrained, she would earn closer to her pre-accident earnings of $14.61 an hour.

The Insurer's report included information about Ms. Howden's income potential based on the employment options outlined in Dr. Siegel's report. This report confirms that the entry level salary for the seven jobs identified by Dr. Siegel range from $6.86 to $9.36 per hour. There was a disagreement between the parties about whether Ms. Howden would be paid at the lowest entry level or the average level for the positions identified by Dr. Siegel.

Analysis:

The principles for making an interim order have been set out in a number of arbitration decisions. Ioannidis and Canadian General Insurance Group reviewed a number of decisions and summarized the considerations as follows:

Generally an insured person's entitlement to benefits is to be determined after a full hearing of all the evidence.
Novel or difficult questions of law should be dealt with in a full hearing and not within an interlocutory proceeding.
Interim benefits are not to be awarded on a routine basis, but only in certain unusual circumstances.
An interim order, by its very nature, is intended to cover a short period of time between the making of the order and the final order.
An application for an interim order must be heard in a summary fashion and the order made expeditiously. At the arbitration hearing, after a full hearing of all of the evidence, the arbitrator may well come to the conclusion that a substantially different order should be made.
An interim order is subject to the final order and an arbitrator may order interim benefits be repaid.
Subsection 279(4.1) of the Act does not change the onus of proof. The onus of proof remains the insured person's.²

The Ioannidis case confirmed that an order for interim benefits may be issued where the insured person establishes that the merits of the case for entitlement, coupled with the urgency of the situation, present unusual circumstances that demand an expedient remedy. It also establishes that a blatant disregard of the Act or Schedule by the insurer may also give rise to an order for interim benefits.

Arbitration decisions have diverged when addressing the question of the standard of proof required to review the merits of a case in an interim benefit application. Most decisions have held that an interim order for payment of benefits requires that the insured person present a prima facie case for entitlement.³ This has been interpreted to mean that the insured person must produce evidence, which, if unanswered and believed, is sufficient to render reasonable a conclusion in favour of entitlement.⁴

Other arbitration decisions have held that the an interim order for payment of benefits requires that the insured present a "convincing case" for entitlement.⁵ In Cripps and AXA, Senior Arbitrator Rotter articulated this higher standard of proof as follows: "On all the materials presented, the arbitrator should find it not only reasonable, but also very probable, that an applicant will be found to be entitled to the benefits sought."⁶

In Kolonjari and Co-operators, Arbitrator Bayefsky further articulated this higher standard of proof on the basis that, "interim benefits should only be ordered in cases of clear financial or other need and where, after hearing from both parties, an arbitrator is satisfied that the applicant will probably be successful at a full hearing on the merits."⁷

The Kolonjari decision also discussed the standard to be met to establish urgency, stating that, given the temporary and extraordinary nature of interim benefit orders, the urgency of the matter must clearly be established.

In the Federow and Kingsway decision, Arbitrator Renahan concluded that the standard of proof may be somewhat flexible, depending on the matter in issue, the urgency and prejudice to the insurer in granting an interim order.⁸

Mr. Wilson submitted that the issue in this case is whether the jobs identified by the Insurer represent employment for which Ms. Howden is reasonably suited by education, training or experience. He argued that, given her tested level of ability in math and other reportedly below average aptitudes, the jobs identified by Dr. Siegel are not reasonable employment options. Mr. Wilson argued further that she was not trained in the areas of work she had an interest in, and, without further training, her options consisted of dead-end jobs that paid significantly less than her pre-accident employment.

In addition, Mr. Wilson submitted that there was no review of the physical demands of the jobs recommended by Dr. Siegel. He argued that the kinesiologist only reviewed the jobs to the extent that they fell within the sedentary to light levels of physical demands, and that Ms. Howden was capable of performing at that level. There was no analysis of the physical demands of each job and whether her lifting and carrying limitations were within the job demands.

After hearing the parties submissions on the case, I concluded that it raises some difficult questions of law regarding what constitutes "a complete inability" to engage in employment for which the insured is "reasonably suited by education, training or experience." Recent arbitration decisions have discussed this provision and the change in wording under the current Schedule. Those decisions have concluded that the "complete inability" requirement in section 5(2)(b) is intended to mean a higher degree of disability than the pre-104 week "substantial inability" test.⁹

As noted in the Ioannidis decision, novel or difficult questions of law should be dealt with in a full hearing, not within an interlocutory proceeding. In my view, the issues raised at the hearing on the motion require a detailed interpretation of the factors that ought to be considered in determining whether the employment options are so unsuitable that they represent a "complete inability" to engage in employment. An application for interim benefits is based on a summary review of the case. The necessary detailed analysis can only be done after hearing and considering all the evidence in this case. Given the recent decisions dealing with entitlement under this section, I cannot be satisfied that the Applicant has made out a prima facie case.

Is this a matter of urgency?

Ms. Howden has not received income replacement benefits since October 25, 2000. She lives at home with her husband and four children. It appeared from the information filed that her husband earned approximately $60,000 annually and two of their children were earning some income as well. The Howdens also have accumulated a number of debts, both before and after the termination of benefits. They recently took out another loan of approximately $8,000 in order to meet their financial obligations.

Mr. Wilson argued that the family's financial status has worsened since the termination of benefits. The family has increased its debt in the amount of $14,000, which is approximately the same amount as Ms. Howden's weekly benefits. He submitted that the direct correlation between the termination of benefits and the amount of the increasing debt establishes the urgency of the situation.

Mr. Dow referred to arbitration decisions in interim benefit cases where the applicants were living in poverty, dependant on welfare, and had not been in receipt of benefits for many years.¹⁰He argued that in those types of situations an applicant may establish the urgency of their circumstances.

Ms. Howden is claiming that the matter is urgent because her family's debt is increasing as a result of her inability to work and the Insurer's decision to terminate benefits. It goes without saying, however, that in most cases an insured person's financial situation will deteriorate when benefits are terminated. Does that make the situation urgent? It may in some circumstances. In this case, however, with the hearing on the merits scheduled to begin in three months, I was not satisfied that there was sufficient evidence of urgency to justify an interim order.

Expenses:

The question of expenses of this motion may be addressed by the hearing arbitrator.

August 31, 2001

Janice Sandomirsky Arbitrator

Date