Neutral Citation: 2001 ONFSCDRS 193

FSCO A00-001286

BETWEEN:

DONNAHOQUE (DONALD) PALMER

Applicant

and

STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY

Insurer

REASONS FOR DECISION

Before: Beth Allen

Heard: October 10 and 11, 2001, at the offices of the Financial Services Commission of Ontario in Toronto.

Appearances:

Tammy Ring for Mr. Palmer

Todd McCarthy for State Farm Mutual Automobile Insurance Company

Issues:

The Applicant, Donnahoque (Donald) Palmer, was injured in a motor vehicle accident on November 1, 1997. He applied for and received statutory accident benefits from State Farm Mutual Automobile Insurance Company ("State Farm"), payable under the Schedule.¹ The Applicant made a number of benefit claims, including claims for psychological treatment, nerve block injections and the cost of a vocational assessment. The parties were unable to resolve these disputes through mediation, and the Applicant applied for arbitration at the Financial Services Commission of Ontario ("FSCO") under the Insurance Act, R.S.O. 1990, c.I.8, as amended.

At the pre-hearing discussion held on June 19, 2001, the parties agreed to add the issues of the Applicant's entitlement to botox injections and massage treatment if a dispute were to result from the findings of the then upcoming Designated Assessment Centre (DAC) assessment. The DAC report was unfavourable to the Applicant in respect to the botox and massage treatment claim. State Farm denied benefits for these treatments and, by agreement, these issues were added to the arbitration.

Days before the arbitration hearing, the parties settled the psychological treatment and vocational assessment issues. However, the Applicant indicated that he would still raise a special award claim at the hearing because, in his view, State Farm ought to have paid for these services some time ago when his treating psychologist recommended them in January 2000.

In dispute for this arbitration, therefore, are the outstanding cost of the nerve block injections, the cost of the proposed botox injections and massage treatments, and a special award.

The issues in this hearing are:

Is the Applicant entitled to payment for the outstanding cost of nerve block injections claimed pursuant to section 14 of the Schedule?
Is the Applicant entitled to the cost associated with botox injections and massage treatments pursuant to section 14 of the Schedule?
Is State Farm liable to pay a special award pursuant to subsection 282(10) of the Insurance Act on the basis that it unreasonably withheld or delayed benefit payments for psychological treatment and a vocational assessment?
Are the parties entitled to their respective arbitration expenses pursuant to subsection 282(11) of the Insurance Act?

The Applicant also claims interest on any overdue payments pursuant to section 46 of the Schedule.

Result:

State Farm shall pay the $800 fee for the five sessions of nerve block injections with interest pursuant to section 46 of the Schedule.
The Applicant is not entitled to the cost of either botox or massage treatments.
State Farm is liable to pay a special award of $1,170 together with interest calculated pursuant to subsection 282(10) of the Insurance Act.

If the parties do not settle the expense issue, I can be approached for a hearing on the matter.

EVIDENCE AND ANALYSIS:

The Accident and Injuries

There is no dispute that the Applicant was seriously injured in a head on collision on November 1, 1997. He sustained a fractured sternum and left shoulder and an injury to his left knee. The Applicant testified persuasively, and I accept, that as a result of his accident-related injuries, he has suffered from chronic pain in various parts his body, particularly in his head, neck, chest, left arm and knee and his upper back, for which he has undergone various active and passive treatment modalities and has taken pain and anti-inflammatory medications.

Surgery on the Applicant's left knee in 1999 has relieved pain in that area. However, the Applicant continues to complain of persistent and severe headaches, neck, upper back, chest and left shoulder and arm pain, which is exacerbated with activity. The Applicant testified that his physiotherapy treatment made his pain worse. He stated, however, that he would undergo any treatment that would relieve his pain. Nerve block injections were administered to address particularly his head, neck and shoulder pain. Botox injections and massage were recommended for pain relief in the same areas.

The Applicant has also suffered from psychological problems following the accident. He has had considerable difficulty coping with his chronic pain and diminished financial situation, which has resulted in secondary anxiety and depression.

The Applicant underwent behavioural psycho-therapy from late 1999 to early 2000 which he found very beneficial. Some months later, in the fall of 2000, he returned to work with his brother on a part-time basis as a supervisor on construction sites, where he continues to work about 20 hours per week.

Medical Benefits - Section 14 of the Schedule

Section 14 of the Schedule provides for medical benefits for insured persons involved in motor vehicle accidents who meet certain requirements. The relevant part of this provision states:

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

(2) The medical benefit shall pay for all reasonable and necessary expenses incurred by or on behalf of the insured person as a result of the accident for, ...

(b) chiropractic, psychological, occupational therapy and physiotherapy services;

(h) other goods and services of a medical nature that the insured person requires.

(3) The insurer is not liable to pay a medical benefit for goods or services that are experimental in nature. [emphasis added]

There is no question that the Applicant sustained an impairment as a result of the accident. The issue before me is whether the nerve block injections he received and the proposed botox and massage treatments are reasonable and necessary forms of treatment for the Applicant's chronic headaches, neck, shoulder and chest pain.

Nerve Block Injections

The Applicant received nerve block treatments in November 1998. Dr. Shane Fainman, a general practitioner who works in the area of headache and pain management treatment, recommended these treatments in a treatment plan dated August 19, 1998 and a report dated August 21, 1998.

On August 11, 1998, Dr. Fainman examined the Applicant and diagnosed chronic whiplash syndrome with cervical headaches, probable mild traumatic brain injury, a fractured sternum, left shoulder trauma, with possible left thoracic outlet syndrome, mechanical low back pain and mood and sleep disturbances.

Dr. Fainman testified that he conducted the Adson's Test and found that the Applicant demonstrated the main features of thoracic outlet syndrome. The purpose of this assessment method is to test for obstruction of the blood vessels going through the thoracic outlet. This test involved examining the Applicant's reflexes, sensation, grip strength and motor strength. According to Dr. Fainman, the Adson's Test revealed a positive result in that the Applicant's pulse rate changed when his left shoulder was abducted at 90°. There was restriction of blood flow to the left arm which resulted in decreased pain symptoms. Dr. Fainman also noted that the Applicant reported decreased sensation in his left 3^rd^, 4^th^ and 5^th^ digits compared to his other hand, which he concluded is a feature of thoracic outlet syndrome.

Dr. Fainman also found abnormalities in the Applicant's neck, head, chest and upper back. He found significant tenderness around his head and neck regions, especially at the occipital nerve site at the back of his head. The Applicant also demonstrated pain in his trapezius and scalene muscles bilaterally and restriction in left shoulder abduction, with limitation to 110° due to pain. He also displayed tenderness along the lateral aspect of his neck along the cervical facet joints.

In 1998 Dr. Fainman recommended a series of nerve block injections. He explained that the Applicant had only gained limited success with physiotherapy, analgesics, anti-inflammatories and muscle relaxants. He testified that he recommends nerve blocks for patients in daily, constant pain to provide a break in the pain cycle to promote short and long-term pain relief.

Dr. Fainman testified that on November 28, 1998, he gave five sessions of local trigger point injections, which involved injecting a local anaesthetic at the identified pain trigger points. He administered trigger point blocks to the left side of the Applicant's neck, targeting the trapezius and scalene muscles; nerve blocks to his left side occipital nerve to treat the headaches; and administered motor nerve and spinal accessory blocks to his spinal accessory nerve to temporarily paralyse the muscles and alleviate muscle spasms.

The Applicant testified that he experienced temporary relief of his shoulder and neck pain and a reduction in the frequency and intensity of his headaches. The Applicant testified that he got a "couple of weeks" of significant relief from pain in his head, neck and upper back, but not in his left arm and shoulder, and then the pain returned. He stated that his worse pain continues to be in his left arm, shoulder, neck and upper back. He testified that the injections were stopped because they did not result in long-term relief.

In testimony, Dr. Fainman referred to the Applicant's clinical notes. He pointed out that the Applicant reported a "lasting benefit" after the nerve block injections with a decrease in frequency and intensity of pain. Dr. Fainman stated that a February 15, 2001 clinical note entry recorded that his headaches continued to be "improved". However, looking at the clinical notes for several months after the November 28, 1998 injections, I find Dr. Fainman's evidence was essentially consistent with the Applicant's. That is, the injections had little or no effect on the left arm and shoulder pain and provided about two weeks relief of headaches and neck pain.

Concerning the cost of the nerve block treatments, Dr. Fainman testified that the greatest portion of this treatment is not covered by OHIP - the nerve block medication and other medications, the preparation of the nerve block medication, the telephone calls regarding the medication are not covered. He indicated that he set an $800 block fee for the five treatments, at $175 per session. The injection procedure is covered by OHIP at $16 for the first injection and $9.75 for each subsequent injection.

State Farm disagrees with Dr. Fainman's diagnosis of the Applicant's condition and relies on the medical opinions of Dr. V. Campbell, a neurologist and vascular surgeon, and Dr. Michael Devlin, a physiatrist who assessed the Applicant for the DAC assessments.

Dr. Campbell² assessed the Applicant for thoracic outlet syndrome in November 1999. He concluded in his November 30, 1999 report that the Applicant has symptoms in his left arm and fingers that "mimic" thoracic outlet syndrome because, unlike "true" thoracic outlet syndrome, the symptoms are not activity produced or position dependent. Dr. Campbell reported that with true thoracic outlet syndrome the symptoms resolve completely with rest and the assumption of a neutral arm position. He concluded that the Applicant's condition is a chronic case that would not be significantly assisted by any treatment modality at this time. Dr. Campbell supported the Applicant's participation in pain management psychotherapy which Dr. Campbell felt benefited the Applicant.

Dr. Devlin assessed the Applicant on June 30, 1999 and June 11, 2001. State Farm called Dr. Devlin as a witness.

His June 30, 1999 examination revealed restricted range of motion in the left shoulder.

He concluded that, given it was two years post-accident, further therapy would not make any significant difference to the shoulder condition. He recommended no formal therapy. He testified that nerve block treatment is not effective for chronic pain and is only beneficial for focal muscular problems to improve function in a specific area. He opined that treatment for chronic pain does not lead to elimination of pain and, therefore, elimination of pain should not be the goal of treatment. According to this view, a reasonable goal should be to increase the level of function while teaching the person how to live as normal a life as possible with pain.

Dr. Devlin's June 11, 2001 assessment was requested in response to Dr. Fainman's recommendation of botox and massage treatments and his diagnosis of cervical dystonia (involuntary movement of the cervical muscles) in his February 15, 2001 treatment plan. Dr. Devlin reported that the Applicant's physical examination was essentially the same as it was during the previous DAC assessment. He disagreed with Dr. Fainman's cervical dystonia diagnosis, stating that "there are no findings on examination today to indicate the presence of any involuntary movement or posturing of his neck, nor is there any in his history." Dr. Devlin confirmed the chronic pain syndrome diagnosis in respect to the head, neck, left shoulder, left arm and sternum pain and found restricted range of movement in the left shoulder.

After careful consideration of the parties' evidence and submissions, I allow the Applicant's claim for nerve block injections.

The actual diagnosis of the condition for which the Applicant seeks medical treatment is in dispute. I accept Dr. Devlin's expert opinion as a physiatrist, over Dr. Fainman's opinion as a general practitioner, that the Applicant does not suffer from dystonic neck muscles, but rather has a chronic pain condition affecting his head, neck, chest, left shoulder and left arm. I also accept, over Dr. Fainman's opinion, Dr. Campbell's neurological assessment that the Applicant suffers from a chronic condition rather than thoracic outlet syndrome.

Based on Dr. Devlin's assessment, State Farm argues that it is not obligated to fund the nerve block treatments because the remedial effects were short-lived and are not effective for the treatment of chronic pain. It contends that because the injections were stopped due to their short-lived effect, the treatment should be found to be unreasonable and unnecessary. State Farm submits that, to be reasonable and necessary, the treatment should promote a return to the pre-accident level of function.

I do not accept these submissions. Clearly, none of the treatment modalities the Applicant has undergone, including the nerve blocks, have cured his pain. However, I find that complete, long-term recovery is not the only legitimate goal of treatment and rehabilitation. The nerve blocks did relieve the Applicant's pain for a short term. I agree with FSCO decisions that have held that the relief of pain in and of itself is a legitimate medical and rehabilitative goal.³

I therefore do not accept the DAC premise, as reflected in Dr. Devlin's opinion, that because the nerve block treatments do not eliminate chronic pain, it is not a reasonable and necessary form of treatment. I find that relief of chronic pain is also a legitimate goal of treatment.

I also accept the Applicant's evidence that one cannot predict in advance how beneficial this type of treatment will be to a patient. Dr. Fainman testified that he had performed many nerve block treatments, and observed that outcomes are different with different patients. He explained that the Applicant had no previous experience with nerve blocks and that unless a patient has had previous experience, it would not be possible to foresee the effectiveness of the injections. Dr. Fainman indicated that he recommended the injections because he thought they would help the Applicant in the short or long-term.

Section 14 of the Schedule provides that insurers are not obligated to pay for treatments that are experimental in nature. The policy behind this is clearly to preclude insurers having to pay for treatment when the therapeutic outcome is unknown. I find however that the Schedule did not intend to relieve insurers of the responsibility to pay for more conventional treatment - the therapeutic result of which may not be predictable in some cases - simply because the outcome might have turned out to be less successful than hoped for.

I agree with and adopt the words of the Arbitrator in the Grewal⁴ case. Although she was dealing with claims for rehabilitation benefits, I think the principle enunciated is applicable to the case before me.

I do not agree that the Schedule imposes the test of success. Insured persons must make decisions to pursue rehabilitation programs, and insurers must make decisions as to whether to fund or not to fund and dispute the payment of such programs prospectively, not with the benefit of hindsight.

In this case, the Applicant could not have known in advance which, if any, of the five injections would have had a favourable effect and for how long. He testified that he agreed to the injections on the advice of Dr. Fainman who told him they would promote pain relief. It so happened that the occipital injection was more effective than the others in that it relieved the intensity and frequency of his headaches. I find that the Applicant should not be made to bear a financial burden for undergoing treatment that in retrospect was not as successful as he might have hoped. By extension, in determining the insurer's obligation to pay, I find a distinction should not be made between the more and less successful injections and accordingly State Farm should pay for all five sessions.

I therefore find that the nerve block treatments were charged at a reasonable fee of $800 for the five sessions and were a reasonable and necessary form of treatment to relieve the Applicant's chronic pain. In arriving at this decision, I considered that the Applicant took the reasonable step of stopping the treatment when he felt it had lost its effect in relieving his pain.

State Farm is therefore required under section 14 of the Schedule to fund the outstanding $800 for nerve block injections.

Botox Injections and Massage

As noted earlier, Dr. Fainman recommended botox injections combined with massage as a treatment for the Applicant's chronic pain. State Farm refused to fund this treatment and the treatment plan was submitted to Dr. Devlin for a DAC opinion.

Dr. Fainman did not prepare a medical report for the hearing, setting out his opinion on the proposed botox treatment. This left State Farm at some disadvantage in preparing its case on this issue and on that basis State Farm objected to this issue being considered in this arbitration. I ruled that I would hear the botox claim, but would take State Farm's objection into consideration in assigning weight to Dr. Fainman's evidence. I took into account that State Farm had the benefit of Dr. Devlin's DAC opinion on botox injections and his presence at the hearing to testify.

Dr. Fainman stated that he had taken a training course in the administration of botox injections and that he has been using this treatment for about one and a half years, although he admitted he was not an expert in administering this treatment. He opined that botox injections are effective for dystonia of cervical and other muscles and for thoracic outlet syndrome.

Dr. Fainman testified that when botox is injected into a muscle, it decreases muscle spasticity by paralysing the muscle. He indicated that the injections should be combined with physiotherapy such as massage to break up the muscle spasms. The first step in this treatment, according to Dr. Fainman, is to conduct diagnostic investigation by injecting botox into a muscle in the affected area. If the pain is totally relieved by the injection, then the injected muscle is identified as the source of the pain. Dr. Fainman testified that to reach the point of identifying the affected muscle, several trial sessions might be necessary. Following the diagnostic stage, the botox injections are administered for treatment. Dr. Fainman stated that the pain relief benefits can last between three to six months, but he indicated that he could not warrant success in the Applicant's case since this can only be determined following treatment. However, according to Dr. Fainman, trial botox treatment is reasonable in order to determine whether the Applicant would benefit.

Dr. Fainman testified that the cost of botox treatment depends on how many vials of the medication are required to be administered during the trial phase - that is, how the patient responds to the first set of injections. The cost of the powdered form of botox is $400 per vial, plus a $10.99 dispensing fee, which are not covered by OHIP. Also not covered by OHIP is his professional fee at $250 per session. Dr. Fainman explained that two to eight vials might be required over two trial sessions.

Dr. Fainman testified that he was not familiar with the literature to which Dr. Devlin referred in his June 11, 2001 DAC report, where he (Dr. Devlin) explains that medical literature reveals that botox injections have been used experimentally in the treatment of WAD (whiplash associated disorders). Dr. Fainman responded that he reads the literature to say that botox has been used for over 20 years for the treatment of cervical dystonia and thoracic outlet syndrome.⁵

In cross-examination, counsel for State Farm questioned Dr. Fainman about the fact that he had not diagnosed a history of a dystonic cervical muscle condition until the February 15, 2001 treatment plan, nearly four years post-accident. Dr. Fainman agreed that he had not previously diagnosed cervical dystonia, but stated that he had previously diagnosed muscle spasticity and thoracic outlet syndrome. Counsel for State Farm put to Dr. Fainman Dr. Campbell's opinion that the Applicant did not suffer from thoracic outlet syndrome. Dr. Fainman indicated that he was familiar with Dr. Campbell's report and, in spite of Dr. Campbell's expertise in neurology, Dr. Fainman disagreed with him, declining to defer to his opinion.

In testimony, Dr. Devlin enlarged on his opinion about whether botox injections are experimental for use with chronic pain. He testified that since his June 11, 2001 report, he conducted an internet search for research literature on the medical use of botox injections. He indicated that he found one article which discusses a research study⁶ (not before me) on its use for myofascial pain⁷ (pain caused by the inflammation of a muscle and its fascia.). He characterized the use of botox for myofascial pain as experimental since to date the results of the research are not conclusive and, in his opinion, no convincing evidence currently exists on the usefulness of botox for this condition or any other WAD conditions. Dr. Devlin testified, however, that botox injections are used with some success for muscle dystonia, spasmotic torticollis, involuntary movements of the eyelids and involuntary movements associated with cerebral palsy, conditions which are not relevant to the Applicant's case.

Dr. Devlin also criticized the reasonableness of massage treatments in conjunction with botox injections. He testified that it makes no medical sense to paralyse or weaken a muscle with a botox injection and then to perform a form of physiotherapy on that muscle, the usual purpose of which is to strengthen muscles.

Dr. Devlin concluded that botox injections and massage treatments are not reasonable for the Applicant's conditions and that, in any event, no treatment intervention would change his condition four years post-accident.

After considering the evidence and submissions, I do not allow the Applicant's claim for botox injections and massage pursuant to subsection 14(3) of the Schedule. I find that the botox injections would be an experimental treatment for chronic pain.

Neither the Insurance Act nor the Schedule define "experimental," and I was provided with no authority for a definition of the term. The Arbitrators in the Caruso and Arbeau cases⁸(dealing with a similar provision to subsection 14(3) in a predecessor Schedule) considered the meaning of "experimental in nature." Caruso held and the Arbitrator in Arbeau concurred:

I do not accept that the drafters of section 36(2) intended to give insurers an absolute right to refuse a medical benefit claim just because medical experts disagree about the therapeutic value of the benefit claimed. Such a broad interpretation of the term "experimental" could apply to many treatment modalities for which insurers currently pay benefits.

I agree with this statement insofar as it applies to disputes over the therapeutic value of a treatment modality. In the case before me, the dispute over nerve block injections can be characterized in that manner. However, on the botox issue, I distinguish the present case from the circumstances in Caruso and Arbeau. In the Applicant's case, the dispute centres on a disagreement about the condition for which botox has been recommended. The Applicant claims botox injections for cervical dystonia and thoracic outlet syndrome - botox being a conventional treatment for the former condition. Since I found earlier that the Applicant did not suffer from either cervical dystonia or thoracic outlet syndrome, and I accepted the chronic pain syndrome diagnosis, the question then becomes whether botox treatment is experimental for the treatment of chronic pain.

Leaving aside for the moment my finding about the diagnosis, Dr. Fainman did not prepare a report on the usefulness of botox treatment for the conditions he diagnosed. Nor, in my view, did he provide any persuasive oral evidence to support his opinion that botox was not experimental for the Applicant's conditions.

I accept Dr. Devlin's evidence that botox has been used for some time in the treatment of dystonic muscles, spasmotic torticollis, involuntary movements of the eyelids and involuntary movements associated with cerebral palsy, and that there is no convincing evidence of its usefulness for chronic pain or any other WAD condition. I therefore accept Dr. Devlin's opinion over that of Dr. Fainman that the use of botox injections for treatment of chronic pain is experimental.

Regarding Dr. Fainman's recommendation for combined botox and massage treatments, I accept Dr. Devlin's opinion as a physiatrist that this treatment would not be reasonable. I accept his view that it makes no medical sense to paralyse or weaken a muscle with a botox injection and then perform a form of physiotherapy on that muscle that is traditionally used to strengthen.

State Farm is therefore not required pursuant to subsection 14(3) of the Schedule to fund the recommended botox injections.

SPECIAL AWARD:

The Applicant claims a lump sum special award of 50 percent of the cost of the psychological treatment and vocational assessment on the basis that State Farm unreasonably denied payment of these benefits recommended in two treatment plans dated January 7, 2000 by Dr. Philip C. Miller, the Applicant's treating psychologist. The parties settled these issues just before the hearing whereby State Farm agreed to pay benefits toward these claims. The Applicant argues, however, that State Farm should not be relieved of liability for a special award because at the "eleventh hour" before the hearing, it settled the claims.

The Applicant argues that his special award claim arises from the manner in which State Farm dealt with his request for further psychological and vocational benefits. Subsection 282(10) of the Insurance Act provides arbitrators with the authority to consider an insurer's conduct in deciding whether to impose an award under certain circumstances.

282.(10) If the arbitrator finds that an insurer has unreasonably withheld or delayed payments, the arbitrator, in addition to awarding the benefits and interest to which an insured person is entitled under the No-Fault Benefits Schedule, shall award a lump sum 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 facts germane to this issue are as follows:

By two treatment plans, both dated January 7, 2000, Dr. Miller recommended psychological treatment and a vocational assessment. He recommended 12 sessions of psychological treatment, one session every two weeks which, combined with the cost of a progress report, amounted to $2,340. The cost claimed for the vocational assessment and report is $1,620.

State Farm declined these claims by Explanations of Benefits Payable by Insurance Company ("Explanation of Benefits") forms dated February 2 and 11, 2000 on the basis that these benefits are not reasonable or necessary.

State Farm did not request a DAC assessment for the January 2000 treatment plans as required under the Schedule.⁹ At that time, State Farm indicated through correspondence and the Explanations of Benefits, that it relied on the previous psychological DAC assessment conducted on July 5, 1999. That DAC assessment recommended a first segment of four to six sessions of psychotherapy, and a further segment of six sessions, pending a review of the outcome of the first segment. On recommendation by Dr. Miller in his November 3, 1999 report, State Farm paid for both segments. The Applicant completed the 12 recommended treatment sessions on January 5, 2000.¹⁰ State Farm indicated in the February 2, 2001 Explanation of Benefits that it would not pay for the further treatments claimed in the January 7, 2000 treatment plan on the basis that it had satisfied the DAC recommendations.

The Applicant's position is that State Farm unreasonably denied the vocational and psychological benefits and should have submitted the treatment plans in question to a DAC assessment before it finally denied the benefits. The Applicant's counsel submits that State Farm's conduct amounted to a breach of the prescribed DAC assessment process which resulted in an unreasonable denial of the Applicant's benefits and, as such, ought to attract a special award.

The Applicant's counsel further argues that the success of the past treatment ought to be taken into account. She pointed to the Applicant's testimony and Dr. Miller's reported findings that he benefited greatly from Dr. Miller's treatment. She submitted that the need for further treatment is reflected in Dr. Miller's January 3, 2000 report where he concludes that, while the Applicant had learned pain management strategies during the first 12 sessions, his depression condition deteriorated, necessitating further treatment. The Applicant's counsel submitted that the interruption in the Applicant's psychological treatment after January 2000 has produced a negative impact on his progress.

Dr. Miller also recommended vocational rehabilitation to address the fact that, in his opinion, the Applicant's injuries prevent him from returning to his pre-accident job.

State Farm conceded at the hearing that it had not handled the January 2000 treatment plans in accordance with the prescribed DAC process. Counsel for State Farm submits in retrospect that the adjuster on the file at that time was misguided in her conclusion that State Farm was not required to refer the Applicant for a further DAC following its denial of benefits. State Farm's counsel further argues that State Farm should not be judged harshly by the imposition of a special award since it has realized its error and has sought to correct it by paying for further treatment and a vocational assessment through a settlement agreement.

State Farm argues that a DAC assessment is not the final determinant of entitlement, but is rather one piece of evidence among others to be considered in deciding entitlement. State Farm further submits that, although it erred in not referring the Applicant to a further DAC, it cannot be foreseen in any event whether the DAC would have been favourable to the Applicant. For this reason, according to State Farm, it should not be penalized through a special award for unreasonably withholding or delaying benefit payments.

Regarding psychological treatment, State Farm points out that it had no knowledge of any detrimental impact on the Applicant from not having further treatment. State Farm submitted that it thought the Applicant had not been negatively affected by this, but had actually "gotten on with his life" in absence of psychological treatment.

Regarding the request for a vocational assessment, State Farm argues that it was not presented with an income replacement benefit claim. The Applicant had been excluded from entitlement to these benefits because at the time of the accident, he was an uninsured, unlicensed driver.¹¹ Counsel for State Farm argues that it did not anticipate this type of claim, but if income replacement benefits were an issue, it might have accepted Dr. Miller's treatment plan for a vocational assessment as within the scope of his purview on assessment.

In considering the special award issue, I adopt the approach in the Jensen¹² appeal decision, followed in the subsequent Graper¹³ arbitration decision. These cases establish that a payment of benefits by an insurer on the eve of a hearing does not necessarily dispose of the question of a special award. I find therefore that in spite of the settlement of the psychological and vocational assessment claims, I have authority to decide the special award issue.

After reviewing the parties' submissions, I conclude for the following reasons that State Farm is liable to pay a special award.

State Farm stopped benefits for psychological treatment in January 2000 after the recommendations of the July 5, 1999 psychological DAC were satisfied. However, Dr. Miller's January 3, 2000 report, prepared just days before the last of the 12 treatment sessions, recommends ongoing psychological therapy for depression. In this report, prepared in conjunction with the treatment plan dated January 7, 2000, Dr. Miller explains the reason for the 12 proposed sessions. The report states:

He [the Applicant] has learned pain management strategies, and no further treatment is needed in this regard. However, he is still significant depressed [sic] secondary to pain and inability to work, and social isolation. He will require psychotherapy to reduce resolved impairments due to depression.

I find the Applicant's testimony confirmed the value of Dr. Miller's past treatment in improving his outlook and his activity level by his words: "My personality is different. I used to be outgoing. If it wasn't for the counselling, I wouldn't be here. Dr. Miller helped me out."

I find that State Farm's conduct in the face of his treating psychologist's recommendation for psychological treatment to be of such a nature as to be deserving of a special award.

State Farm received the January 7, 2000 treatment plan and does not dispute having received Dr. Miller's January 3, 2000 report. State Farm had an opportunity at this point to have the Applicant assessed by an insurer's examination to determine his psychological needs, and it apparently chose not to do so. State Farm refused the psychological treatment claim one month later by the February 2, 2000 Explanation of Benefit. At this point, State Farm was required by the Schedule to notify the Applicant of his right to DAC assessments in respect of the denied benefits and to schedule DAC assessments at the Applicant's request. I find that State Farm's concession at the hearing that it had breached the provisions of the Schedule, does not excuse it from a special award.

State Farm has presented no medical evidence to support its denial of psychological treatment. Although the parties settled the psychological and vocational assessment issues, I find this does not prevent me from looking at the entitlement issue to decide the special award matter. In fact, subsection 282(10) of the Insurance Act requires me to determine this issue.

In terms of evidence on the psychological issue, I have before me the Applicant's oral evidence, the January 7, 2000 treatment plan and Dr. Miller's January 3, 2000 report which clearly point out the success of the past treatment and the need for more psychological treatment. To its credit, the report is very particular about the purpose for the 12 proposed sessions - the past 12 treatments dealt effectively with pain-coping strategies and the proposed treatments were to be directed specifically at his depression. I find this detail lends strength to the report.

In the absence of any evidence to the contrary, I accept Dr. Miller's assessment and find that the Applicant continued to require treatment for depression after January 2000. Accordingly, I find that the recommended psychological treatment and progress report and the associated cost of $2,340 are reasonable and necessary as required by section 14 of the Schedule.

I further find that State Farm's denial of these benefits was unreasonable and detrimental to the Applicant's progress. State Farm was met with Dr. Miller's report which favoured further treatment and it did not respond by requesting its own assessment or a DAC assessment. I therefore have no evidence that the Applicant is not entitled to psychological treatment. I find that this gives rise to a rebuttable presumption of entitlement. State Farm has presented no persuasive evidence to rebut this presumption. Under these circumstances, I find it was unreasonable for State Farm to have refused to cover this expense.

Regarding the vocational assessment claim, I find I do not have sufficient evidence before me to arrive at a finding on entitlement on this issue. I accept State Farm's submission that it lacked the employment and vocational background information to assess this claim and, accordingly, I do not find that State Farm unreasonably denied benefits for a vocational assessment.

I therefore calculate the quantum of the special award based on the cost of the psychological treatment and progress report. In assessing the amount of the award at the higher end, I took into account that State Farm's denial of psychological treatment put the Applicant in the untenable position of having no recourse to much-needed treatment for over a year and a half, until the matter was settled before the hearing. The Applicant clearly did not have the resources to pay for his own treatment.

I find therefore that State Farm is liable to pay a special award of $1,170 (50 percent of $2,340) together with interest calculated pursuant to subsection 282(10) of the Insurance Act.

EXPENSES:

Rule 75 of the Dispute Resolution Practice Code (4^th^ edition, May 31, 2001) permits arbitrators to consider, among other things, the conduct of the parties in awarding expenses. I encourage the parties to settle the expense issue. However, if I am required to decide this, I will take State Farm's conduct into account in assessing expenses. The DAC process is a very crucial part of FSCO's dispute resolution process because frequently the findings of a DAC are instrumental in the parties settling a matter before an arbitration hearing. I find State Farm's failure to refer the Applicant's psychological and vocational assessment claims to a DAC, might reasonably have prevented an earlier opportunity for the parties to settle these issues. Were this the case, a special award claim might not have arisen, and the hearing would have been considerably shorter, resulting in some cost savings.

December 20, 2001

Beth Allen Arbitrator

Date