Neutral Citation: 2001 ONFSCDRS 75

FSCO A00-000433

BETWEEN:

CHOUMCHOUIL AVDALIMOV

Applicant

and

CGU INSURANCE COMPANY OF CANADA

Insurer

DECISION ON A PRELIMINARY ISSUE

Before: K. Julaine Palmer

Heard: April 6, 2001, at the Offices of the Financial Services Commission of Ontario in Toronto. Written submissions were received on April 20 and May 1, 2001 from Mr. Spiegel and April 27, 2001 from Mr. Densem.

Appearances: Roland Spiegel for Mr. Avdalimov Scott W. Densem for CGU Insurance Company of Canada

Issues:

Choumchouil Avdalimov was injured in a motor vehicle accident on October 30, 1998. He was involved in another accident on June 4, 1999. After the first accident, he received some statutory accident benefits from CGU Insurance Company of Canada ("CGU"), payable under the Schedule.¹ In November 1999, CGU refused to pay for psychotherapy and other treatment requested in a treatment plan dated July 23, 1999, submitted by Dr. Marek J. Celinski, a psychologist, on Mr. Avdalimov's behalf. On November 15, 1999 CGU sent Mr. Avdalimov a letter explaining his options in response to their denial of his treatment claim and enclosing an OCF-14/59 form, entitled Permission to Disclose to a Designated Assessment Centre. Mr. Avdalimov did not return this form to the Insurer. The assessment at a Designated Assessment Center ("DAC") was not arranged.

In February 2000, CGU attempted to reschedule an Insurer's Examination, previously arranged with a neuropsychologist for November 20, 1999. CGU also wished to have Mr. Avdalimov examined by two other physicians and undertake a second functional abilities evaluation. For a second time, Mr. Avdalimov's representatives asked that the examinations be postponed.

The parties were unable to resolve their disputes through mediation, and Mr. Avdalimov 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"). In his application for arbitration, Mr. Avdalimov claimed income replacement benefits ("IRBs") of $250 per week from one week after the accident, $10,000 in medical and rehabilitation benefits, $21,000 in attendant care benefits and $3,400 in housekeeping expenses.

The preliminary issue is:

Is Mr. Avdalimov prevented from proceeding to arbitration by the application of sections 42, 43 and 50 of the Schedule?

Result:

Mr. Avdalimov is barred from arbitration with respect to two treatment plans dated July 23, 1999 signed by Dr. M. Celinski and a treatment plan dated November 18, 1999 signed by Dr. B. Karlin, under the terms of subsection 50(c) of the Schedule.
Mr. Avdalimov may proceed to arbitration on the other issues in dispute between him and CGU in this proceeding, namely his claims for income replacement benefits, attendant care, housekeeping, payment of the balance of a treatment account of $260, and section 24 examination expenses.

EVIDENCE AND ANALYSIS:

Mr. Avdalimov wishes to arbitrate his entitlement to IRBs, certain medical and rehabilitation expenses, attendant care benefits, housekeeping benefits, and some examination costs under section 24 of the Schedule. The Insurer says that because Mr. Avdalimov has not attended either a DAC or four insurer's examinations scheduled in February and March 2000, he is prohibited by the terms of subsections 50(b) and (c) from proceeding to mediation and hence arbitration.

CGU also alleges that no statutory accident benefits are payable to Mr. Avdalimov after CGU gave notice of the section 42 Insurer's Examinations in February 2000, according to the provisions of subparagraph 42(8)(b) of the Schedule.

I find that CGU's arguments with respect to Mr. Avdalimov's failure to attend certain insurer's examinations are not well-founded, since the Insurer's notice to Mr. Avdalimov was defective in a material respect. The notice sent to Mr. Avdalimov on February 15, 2000 by a health management company, at CGU's request, did not set out the purpose for the examination or the benefit to which it related as required by subsection 42(2) of the Schedule. I find CGU cannot reasonably rely on Mr. Avdalimov's failure to attend these examinations to bar Mr. Avdalimov from arbitration, stop payment of any benefit, or to absolve CGU from payment of any benefit until he complies, because it is unknown as to what benefit or benefits the examination was intended to relate.

The requirement that an insurer specify "the benefit to which the examination relates" is an important feature of the insurer examination process, because it allows an insured person who is reluctant to attend an examination to evaluate whether he wishes to continue to pursue an insurer for a specific benefit, or instead decline to attend an examination and thereby effectively choose to forego the insurer's payment of that benefit, either permanently or for a period of time.

An insurer has no inherent right to an examination of an insured person by a health professional. Section 42 of the Schedule gives the insurer the right to such examinations "for the purpose of determining whether an insured person is entitled to a benefit." The letter dated February 15, 2000 does not meet the requirements of a section 42 notice because it fails to state the benefit or benefits to which the examinations relate. I find this omission is significant and material. Mr. Avdalimov has numerous claims against CGU for a variety of statutory accident benefits arising out of his accident of October 30, 1998. In fact, the Insurer was requesting Mr. Avdalimov attend two medical examinations (including a psychiatric evaluation), a second functional abilities evaluation, and a neuropsychological assessment. The purpose of none of these examinations was set out in that letter or in any other letter entered as an exhibit.² Neither is it clear from the letter whether the examinations relate to any claims Mr. Avdalimov may have arising from the October 1998 accident or the second accident in June 1999, or both.

The DAC Issue

CGU refused to pay for a neuropsychological assessment requested on behalf of the Applicant, for psychological treatment recommended for him and for dental treatment stated to be required because of his injuries in the accident of October 30, 1998.

In responding to each of these treatment plans months after they were submitted, CGU clearly breached the provisions of the Schedule that require an insurer to respond promptly³ to proposed treatment, and in any event, within 14 days⁴ after receiving the application. It is difficult to understand the rationale for CGU's denial of the neuropsychological assessment and 20 sessions of psychological treatment, since the need for Mr. Avdalimov to receive a neuropsychological assessment and psychological treatment as a result of the accident was identified by the psychiatrist to whom CGU had sent Mr. Avdalimov in April 1999 for an insurer's examination. CGU's adjuster also tried to arrange a neuropsychological examination of Mr. Avdalimov, to be conducted through an interpreter, rather than in his native Russian, at the same time as she turned down the request for such an assessment submitted on behalf of the Applicant.

Mr. Avdalimov did not return a document sent to him by CGU, an OCF-14/59, entitled Permission to Disclose to a Designated Assessment Centre, in each case when it denied a treatment plan. CGU says because Mr. Avdalimov did not return this document to the Insurer, the Insurer could not arrange a DAC. CGU says that the consequence of this failure is that Mr. Avdalimov cannot access the mediation and arbitration process.

Mr. Avdalimov did not testify at the preliminary issue hearing. I have no evidence of his reasons for failing to return the OCF-14/59 forms. His representative made submissions about the lack of control by the insured person over the material provided to the DAC and the automatic dispersal of the DAC report. Mr. Avdalimov's representative also submitted that because CGU did not respond to the treatment plans within the 14 day period prescribed by subsections 38(7) and (8) of the Schedule, that CGU should be held to be liable for the expense of the proposed treatment. Similarly, he submitted that the reasons given by the Insurer here for not agreeing to pay for the services contemplated by the treatment plans were not an adequate "statement of the insurer's reasons for not agreeing to pay" as required by subsection 38(12) of the Schedule.

With respect to the adequacy of the Insurer's reasons for denying the treatment plans, in my view this is an area that should be explored on a full hearing on the merits of a case, not in this preliminary issue hearing. It may well be this issue can be dealt with adequately by an arbitrator's special award, if the arbitrator finds CGU unreasonably withheld or delayed a benefit. With respect to the failure of CGU to respond in a timely fashion as required by the Schedule, especially with regard to treatment issues, the Schedule sets out no consequence nor suggests any penalty. However, it may be that such conduct violates the unfair practices provisions of Part 18 of the Act, and Ontario Regulation 7/00 as "conduct resulting in unreasonable delay in ... the fair adjustment and settlement of claims" that may trigger an investigation and sanctions by the Superintendent.

The Authority of the OCF-14/59 form—Permission to Disclose to a Designated Assessment Centre

Mr. Avdalimov's representative, Mr. Spiegel, argued that the Schedule does not provide for the insured person to sign an OCF-14/59 prior to attending a DAC. Mr. Spiegel submitted that his client, Mr. Avdalimov, never said he would not attend a DAC, he only said he would not give an OCF-14/59. However, no evidence before me established that Mr. Avdalimov had conveyed to CGU the message that he was willing to attend a DAC. Mr. Spiegel also submitted, likewise without any supporting evidence, that Mr. Avdalimov would have gone to the DACs providing CGU had followed the proper provisions of the Schedule.

I agree that the OCF-14/59 form is not mentioned in the Schedule. It is not a document that must be in a form approved by the Commissioner, as provided for some notices and forms set out in section 69 of the Schedule. However, the OCF-14/59 does have authority. The OCF-14/59 form is published under the auspices of the Minister's Committee on the Designated Assessment Centre System. This committee was established pursuant to the authority conferred on the Minister by section 7 of the Act to perform the functions assigned to it by the Minister and any other functions prescribed by the regulations.

Paragraph 121 of the Act provides for the Lieutenant Governor in Council to make regulations, establishing benefits for the purposes of Part VI of the Act (Automobile Insurance) and establishing the terms, conditions, provisions, exclusions and limits related to such benefits. The Lieutenant Governor in Council may also (at subparagraph 10.2) prescribe rules for interpreting the regulations made under Part VI and prescribe the functions of a committee appointed under section 7 of the Act.

Paragraph 121(4)(c) of the Act provides that the regulations made under paragraphs 9 and 10 of subsection 121(1), referred to in the paragraph above, may require a person be examined or assessed,

(i) by an assessment centre designated by a committee appointed under section 7, in accordance with procedures, standards and guidelines established by that committee or by the Minister, or

(ii) by any other person specified by the regulations.

[emphasis added]

Under this authority, the committee has published procedures, standards and guidelines outlining the process to be followed with respect to designated assessment centres. The committee determined that insurers should bear the primary responsibility for collating the medical documentation that must be forwarded to the DAC. In its Guidelines for Designated Assessment Centres to Conduct Assessments for Accidents on or after November 1, 1996, as amended in June, 1998, the committee wrote:

The insurer must confirm that the claimant agrees to participate in the DAC referral, and signs all approved release forms for medical documentation that will be included in the DAC referral package.

The insurer must notify the DAC, in writing, to initiate an assessment request. As the first step in the assessment, this notification, in the form of a referral, sets the stage for the entire process. To ensure a successful outcome, the DAC must receive a complete referral, including a signed Permission to Disclose Health Information to the Designated Assessment Centre (OCF-14) form and up-to-date medical documentation and reports. A list of the referral package elements is included in this guideline (see page 15).

Disclosure

The SABS requires complete disclosure of all relevant information necessary to complete the assessment. While the insurance company and the claimant share responsibility for supplying this information, the insurance company is responsible for ensuring that all elements in the referral package are received by the DAC prior to the assessment appointment.

Consent

A Permission to Disclose Health Information to the Designated Assessment Centre (OCF-14) form, with an original signature by the claimant, must be submitted with the referral package. A DAC cannot commence an assessment without receiving a completed and signed OCF-14 form.

[emphasis added]

The top section of form OCF-14/59 identifies the applicant and provides his birth date and contact information. Part 2 of the form provides the insurer's information. Part 3 asks that the type or types of assessment be checked. In signing Part 4, the applicant authorizes the insurer to give the DAC "any information relating to my health condition, treatment and rehabilitation received as a result of the automobile accident." This permission is necessary to allow the insurer to forward the applicant's information to the DAC.

The second part of the signature section authorizes the DAC "to consult with my treating health professional(s) if necessary." Since the DAC will often be determining the eligibility of the applicant to begin or continue treatment with a particular health professional, as recommended by that health professional or another health practitioner, this provision appears reasonable on its face. The DAC assessors are thereby able to confirm any questions or discrepancies directly with the health care provider and receive further information from those professionals, if necessary. This provision would appear to benefit an insured person as a DAC seeks to provide an informed, neutral assessment of the insured's disability or proposed treatment.

In signing Part 4, the applicant confirms he understands that "this information will be used to determine my eligibility for benefits," which is the purpose of the assessment process as set out in subsection 42(4) of the Schedule. Finally, the applicant in signing authorizes the DAC to send the insurer and a treating health professional a copy of its report. Accordingly, not only do the insurer and applicant receive an opinion of the reasonableness and necessity of the treatment (for example) being provided or proposed, a treating health professional, who presumably is directing the applicant's rehabilitation, also is able to easily review the DAC experts' opinions as well.

I find in failing to sign and return the OCF-14/59 forms, Mr. Avdalimov has not followed a reasonable procedure established by the Minister's Committee on the Designated Assessment Center System, the body charged with the authority to designate assessment centres for the purposes of the Schedule and set out the procedures, standards and guidelines under which those centres operate.⁵ Accordingly, Mr. Avdalimov was ineligible to commence a mediation under section 280 of the Act to assess the treatment to be offered by Dr. Celinski, Dr. Cherepanova, and Dr. Karlin in the treatment plans, since this remedy is proscribed by the provisions of section 50 of the Schedule. I find that Mr. Avdalimov cannot proceed to arbitration to request an order that the Insurer pay for these treatments.⁶

Impact on other Issues

Mr. Avdalimov failed to return OCF-14/59 forms for medical rehabilitation DACs regarding a neuropsychological assessment, psychological treatment, and dental treatment. In my view, his failure to attend a DAC with respect to these areas is discreet. It is not my sense of the scheme of the Schedule and the express language of section 50 that an insured person who has not made himself reasonably available for an assessment under section 43 should be barred from mediation for other disputes between him and the insurer unrelated to the section 43 issue. For example, the failure to attend a DAC with respect to a proposed course of physiotherapy treatment should not preclude an insured person from mediating his entitlement to income replacement benefits, if he is in compliance with the Schedule and its procedures in relation to that claim.

A purposive interpretation of the exclusion in section 50 requires that the exclusion be read narrowly and treated as an inducement to encourage insured persons to attend an examination by a neutral expert that the DACs are mandated to provide. Accordingly, I find Mr. Avdalimov remains eligible to access the dispute resolution process for other disputes between him and CGU. His claims for income replacement benefits, attendant care, housekeeping, payment of the balance of a treatment account of $260, and section 24 examination expenses may proceed.

Constitutional Argument

Mr. Spiegel provided written submissions with respect to his contention that section 50 of the Schedule violates the provisions of sections 7 and 15(1) of the Canadian Charter of Rights and Freedoms which, respectively, protect the right to life, liberty and security of the person and provide for equality before the law. He had provided similar written submissions in another arbitration case—Kudla and Coachman Insurance Company, (FSCO A99-001115, order dated January 2, 2001 further reasons pending). The Insurer responded to this argument and also provided a copy of the Attorney General's submissions in Kudla to me, as requested by the Attorney General.

I find that section 50 of the Schedule does not contravene the provisions of the Charter. Section 7 of the Charter does not guarantee economic or property rights and hence protects no right to bring a civil action for physical or psychological damages or an arbitration for statutory accident benefits.⁷ I also find that section 15 has no application to this arbitration. Mr. Avdalimov has been treated no differently than any other applicant for statutory accident benefits, in terms of the application of the rules of the statutory accident benefits scheme. Case law under section 15 of the Charter has held that legislation restricting an individual's ability to recover damages for physical or psychological harm does not violate the Charter. Nor does legislation that provides an alternative method of restitution, like the present system.⁸

Conclusion

CGU's notice to Mr. Avdalimov dated February 15, 2000, sent by Seiden Health Management Inc., was not an effective notice under section 42 of the Schedule. The Insurer cannot rely upon it in order to invoke the provisions of subsections 42(8) or 50(b) of the Schedule.

Mr. Avdalimov failed to return OCF-14/59 forms for medical rehabilitation DACs regarding a neuropsychological assessment, psychological treatment, and dental treatment. His inaction has been found to amount to a failure to make himself reasonably available for an assessment. Accordingly, under the terms of subsection 50(c) of the Schedule he is not eligible to commence a mediation under section 280 of the Act, and hence arbitration on those treatment issues.

Mr. Avdalimov remains eligible to access the dispute resolution process with respect to other issues in dispute between him and CGU. Accordingly, then, his claims for income replacement benefits, attendant care, housekeeping, payment of the balance of a treatment account of $260, and section 24 examination expenses may proceed.

As suggested by Arbitrator Evans in his pre-hearing conference report dated October 19, 2000, the parties should now contact the case administrator to schedule a resumption of the pre-hearing to deal with the hearing proper.

EXPENSES:

The expenses of this preliminary issue hearing are reserved to the arbitrator hearing the main issues in this arbitration.

May 25, 2001

K. Julaine Palmer Arbitrator

Date