Neutral Citation: 2001 ONFSCDRS 78

FSCO A99-000984

FINANCIAL SERVICES COMMISSION OF ONTARIO

BETWEEN:

ELVIRA B. MOSTAJO

Applicant

and

WAWANESA MUTUAL INSURANCE COMPANY

Insurer

DECISION ON THE COST OF TREATMENT AND ON EXPENSES

Before:

David Leitch

Heard:

May 4, 2001 by telephone through the Offices of the Financial Services Commission of Ontario.

Appearances:

Altor Shields for Ms. Mostajo

Darrell P. March for Wawanesa Mutual Insurance Company

Issues:

The Applicant, Elvira B. Mostajo, was injured in a motor vehicle accident on June 5, 1998. In a decision dated January 16, 2001, I dealt with certain claims made by Ms. Mostajo for statutory accident benefits under the Schedule.¹ I determined, among other things, that Ms. Mostajo was "entitled to medical benefits in relation to the treatment she received in accordance with the treatment plans submitted to the Insurer by SMRC, plus interest." At page 17 of my decision, I indicated that the parties were to advise me in the event they could not agree on the amount payable by the Insurer in respect of this treatment. I was so advised. In addition, I did not hear submissions or make orders on the issue of expenses. The issues in this further hearing are, therefore:

1. What is the amount payable by the Insurer in respect of the treatment Ms. Mostajo received in accordance with the treatment plans submitted to the Insurer by SMRC?

2. Is either party liable to pay the expenses of the other in respect of the arbitration hearing?

Result:

1. The Insurer will pay Ms. Mostajo $3,070 plus interest in respect of the treatment she received in accordance with the treatment plans submitted by SMRC.

2. The Insurer will pay Ms. Mostajo's expenses in respect of the arbitration hearing.

Issue 1: the cost of treatment

Part 6 of the authorized treatment plan form (OCF-18/59) required SMRC to estimate three aspects of the treatment it proposed to provide to Ms. Mostajo: its duration, its frequency and its cost.² I note that the definition of "treatment plan" in section 2(1) of the Schedule only refers to estimates in connection with the duration and the cost of treatment; it does not mention frequency. However, since the OCF-18/59 form asks the treatment provider to estimate "how long and how often good/service will be provided" (my emphasis) and since this form was approved under section 69 of the Schedule, I find that SMRC was required to provide estimates with respect to duration, frequency and cost of treatment.

As stated at page 6 of my decision, Dr. Marciniak provided the following duration, frequency and cost estimates in respect of the treatment he proposed: "6 weeks, 3x per week," "$1,800." Karen Spivak provided the following estimates in respect of the treatment she proposed for Ms. Mostajo : "6-8 weekly one hour sessions," "$1,080 -1,440."

In respect of the treatment recommended by Dr. Marciniak, the Insurer argues that Ms. Mostajo is entitled to recover the cost of treatment spread over the first six weeks, at a frequency of three times a week. The Insurer calculates this amount to be $1,440.³ The Insurer excludes the cost of additional treatment provided after the first six weeks or at a frequency of more than three times a week, despite the fact that the cost of this additional treatment could be included without exceeding the estimated cost of treatment of $1,800. Likewise, in respect of the treatment recommended by Karen Spivak, the Insurer argues that Ms. Mostajo is entitled to recover the cost of weekly one hour sessions spread over the first eight weeks. This amount is also, coincidentally, $1,440.⁴ The Insurer again excludes the cost of additional treatment provided after the first eight weeks or at a frequency of more than one hour per week but, in this case, the cost of additional treatment could not be included without exceeding the estimated cost of treatment of $1,080 -1,440.

Ms. Mostajo argues that in respect of the treatment recommended by Dr. Marciniak, she is entitled to recover the cost of treatment which may have exceeded the duration and frequency of treatment estimated in the treatment plan but which did not exceed the estimated cost of treatment of $1,800. Ms. Mostajo calculates this amount to be $1,775.⁵ In respect of the treatment recommended by Karen Spivak, Ms. Mostajo argues that she is entitled to recover the cost of treatment which may have exceeded the frequency and the cost estimates contained in the treatment plan but which corresponded roughly⁶ to the duration estimate. She calculates this amount to be $2,160.

In support of the Insurer's position, Mr. March emphasizes the procedural requirements of section 38 of the Schedule. He submits that the Insurer is entitled to receive a treatment plan so that it can determine whether it will pay for all, some or none of the treatment being proposed. He further submits that if the treatment provider is not limited by its own estimates, the Insurer is effectively deprived of a meaningful description of the proposed treatment and of the opportunity to consider whether that treatment is reasonable and necessary.

In support of Ms. Mostajo's position, Mr. Shields emphasizes the words "estimation" and "estimated" in the treatment plan form (OCF-18/59). He submits that these words recognize that treatment providers cannot always be expected to predict, in advance, the precise duration, frequency or cost of reasonable and necessary treatment. He further submits that since this Insurer simply rejected the treatment plan without questioning the duration, frequency or cost estimates, it cannot now claim to have been prejudiced by their lack of precision.

In my view, the submissions of both parties have substantial merit. Relying on them, I take the view that while treatment providers are entitled, indeed required, to provide insurers with duration, frequency and cost estimates, they should also be required to provide insurers with revised or new estimates whenever the duration, frequency or cost of the treatment as originally proposed is significantly revised or extended. What constitutes a significant revision or extension should, in my view, be determined in light of the particular facts of each case.

In this case, Dr. Marciniak's treatment plan estimated that treatment would last for a period of six weeks. SMRC's invoices indicate that treatment started on April 9, 1999 and ended on July 26, 1999, a period of approximately 15 weeks. Karen Spivak's treatment plan estimated that treatment would last for a period of six to eight weeks. SMRC's invoices indicate that treatment started on April 19, 1999 and ended on July 21, 1999, a period of approximately 13 weeks. In my view, the duration of treatment, as estimated in both treatment plans, was significantly extended. I, therefore, find that this extended treatment should have been the subject of new treatment plans. In the absence of a new treatment plan, I reiterate my earlier finding, found at page 16 of the decision, "that Ms. Mostajo is not entitled to recover the cost of treatment for which treatment plans were not submitted to the Insurer."⁷

However, when restricted to the estimated durations of treatment, the evidence does not establish that the frequency or cost of treatment varied significantly from that estimated in the treatment plans. SMRC's invoices indicate that by May 28, 1999, Ms. Mostajo had received 20 sessions of the treatment recommended by Dr. Marciniak, spread over about seven weeks, at a cost of $1,630. In my view, this was not a significant departure from the treatment plan estimates of 18 sessions of treatment spread over six weeks at a cost of $1,800. SMRC's invoices also indicate that by June 4, 1999, Ms. Mostajo had received around eight hours of the treatment recommended by Karen Spivak, spread over about eight weeks, at a cost of $1,440. These were, of course, the upper-range estimates contained in the treatment plan.

I, therefore, conclude that Ms. Mostajo is entitled to $3,070 (being the total of $1,630 + $1,440), plus interest, for the treatment she received in accordance with the treatment plans submitted to the Insurer by SMRC.

Issue 2: expenses

Each party claims its arbitration expenses from the other in accordance with the Expense Regulation. I am only asked to determine the basic issue of each party's entitlement to expenses, not to assess the expenses incurred by either party.

Referring to the first criterion stipulated by the Expense Regulation, degree of success, Mr. March pointed out that Ms. Mostajo's claim for treatment expenses was only allowed in part and that her claims for housekeeping expenses and special awards were rejected. Referring to the second and third criteria, conduct and positions taken by a party, Mr. March questioned the Applicant's insistence on claiming special awards; he deplored the preparation and hearing time these claims generated. With respect to the offer to settle criterion, Mr. March filed a copy of his letter dated October 18, 2000 to Mr. Shields offering to settle Ms. Mostajo's claims on the following basis: "$7,500 all inclusive in exchange for an executed Full and Final Release and Disclosure Statement relating to the accidents of June 5, 1993, June 5, 1998 and any accidents thereafter to today's date."⁸ Mr. March maintained that while Ms. Mostajo did not respond to this offer, she did not achieve a more favourable outcome at the hearing, having been awarded only her recoverable treatment expenses, now determined to be $3,070 plus interest, and $1,250 plus interest in respect of Dr. Lau's report.

Mr. Shields underlined Ms. Mostajo's successes, particularly my decision that her right knee injury was a result of the accident of June 5, 1998. He denied that Ms. Mostajo's special award claims generated significant preparation time for the Insurer; he pointed out that the Insurer only produced one short document in response to his production demands in relation to this issue.⁹ He also denied that the Insurer had "beat its own offer" since that offer was for a full and final release whereas Ms. Mostajo retains the right to claim any ongoing medical expenses in relation to her injuries.

Mr. March cited Athanasiadis and Zurich Insurance Company,¹⁰ apparently the first decision to award an insurer its expenses under what was then the new Expense Regulation. The arbitrator wrote:

I choose to interpret the new expense regulation as being consistent with the purpose of the legislation, namely, to facilitate access to inexpensive, speedy and informal adjudication of disputes regarding statutory accident benefits, while deterring undeserving claims or undesirable behaviour.

In my view, the new regulation does not depart from the fundamental objectives of the dispute resolution system as outlined in the McCormick case, and affirmed on appeal in the Calogero and Allison cases. The principles outlined in these cases have been uniformly accepted by the arbitrators as the guiding principles in exercising their discretion when awarding expenses.

Accordingly, I do not view the regulation in a light that restricts an arbitrator's discretion to award applicants their expense in unsuccessful cases. Instead, I interpret the regulation as broadening an arbitrator's discretion not only to disallow applicants their expense in certain circumstances, but also to award expenses to insurers. When and why an arbitrator will exercise his or her discretion in this manner will depend on the facts of each particular case in light of the new regulation.¹¹ (My emphasis)

Applying this approach to the present case, I perceive no reason to either deny Ms. Mostajo's claim for expenses or to allow the Insurer's claim for expenses.

In rejecting Ms. Mostajo's claim for housekeeping expenses, I specifically emphasized, at page 21 of the decision, "that this conclusion does not constitute a finding that Ms. Mostajo deliberately misrepresented her ability to do housework or home maintenance...[it] only constitutes a finding that the evidence submitted to support [her housekeeping claim] does not meet the required standard of proof, that is, the balance of probabilities." Likewise, while I rejected Ms. Mostajo's special awards claims, I cannot describe them as having been "manifestly unfounded, frivolous, vexatious, fraudulent or an abuse of process." On the contrary, they identified mistakes in the Insurer's handling of Ms. Mostajo's claims even though I characterized those mistakes as understandable in the circumstances and undeserving of special awards.

Finally, I accept Mr. Shields' submission that the Insurer did not establish that it had "beat its own offer." That remains to be seen as Ms. Mostajo's right to make claims from the June 5, 1998 accident has not been extinguished as it would have been under the Insurer's settlement offer.

Moreover, unlike the Insurer's settlement offer, my decision makes no reference to, or findings in connection with, an accident on June 5, 1993 or any other accidents between June 5, 1998 and October 18, 2000.

I, therefore, conclude that the Insurer must pay Ms. Mostajo's arbitration expenses.

May 28, 2001

David Leitch

Arbitrator

Date

Neutral Citation: 2001 ONFSCDRS 78

FSCO A99-000984

FINANCIAL SERVICES COMMISSION OF ONTARIO

BETWEEN:

ELVIRA B. MOSTAJO

Applicant

and

WAWANESA MUTUAL INSURANCE COMPANY

Insurer

ARBITRATION ORDER

Under section 282 of the Insurance Act, R.S.O. 1990, c.I.8, as amended, it is ordered that:

1. The Insurer will pay Ms. Mostajo $3,070 plus interest in respect of the treatment she received in accordance with the treatment plans submitted by SMRC.

2. The Insurer will pay Ms. Mostajo's expenses in respect of the arbitration hearing.

May 28, 2001

David Leitch

Arbitrator

Date

Footnotes

1. 1The Statutory Accident Benefits Schedule —Accidents on or after November 1, 1996, Ontario Regulation 403/96, as amended by Ontario Regulations 462/96, 505/96, 551/96 and 303/98.
2. 2Exhibit 1, Tab 35.
3. 3Exhibit, Insurer's counsel's letter dated February 1, 2001.
4. 4Ibid.
5. 5This amount appears to include section 24 charges in the amount of $145 which were the subject of a separate agreement between the parties.
6. 6My decision stated, on page 17, that this treatment started in early May 1999 but the first invoice found at Exhibit 2, Tab 4 indicates that this treatment started on April 19, 1999. Ms. Mostajo sought to recover the cost of this treatment to June 28, 1999.
7. 7I note that this finding was based on the facts of this case; different facts may produce different results: see Beaman and Guarantee Company of North America fFSCO A00-001016, May 1, 2001).
8. 8Exhibit 9, Insurer's counsel's letter dated October 18, 2000
9. 9Exhibit 3, Insurer's counsel's letter dated October 22, 2000
10. 10(FSCO A97-001239, December 23, 1999)
11. 11Ibid., pp.19-20.