Neutral Citation: 2003 ONFSCDRS 36

FSCO A01-001520

BETWEEN:

CHARLES SCHNEIDER

Applicant

and

ECONOMICAL MUTUAL INSURANCE COMPANY

Insurer

Before:

John Wilson

Heard:

October 28, and 29, 2002, in London, Ontario.

Appearances:

James J. Mays for Mr. Schneider

Gordon L. Robson for Economical Mutual Insurance Company

The Applicant, Charles Schneider, was injured in a motor vehicle accident on June 14, 1996. He applied for and received statutory accident benefits from Economical Mutual Insurance Company ("Economical"), payable under the Schedule¹ Economical loss of earning capacity benefit (LECB) offer of zero was disputed by Mr. Schneider. The parties were unable to resolve their dispute through mediation, and Mr. Schneider applied for arbitration at the Financial Services Commission of Ontario under the Insurance Act, R.S.O. 1990, c.I.8, as amended.

The issues in this hearing are:

Is Mr. Schneider entitled to a weekly loss of earning capacity benefit pursuant to section 20 of the Schedule?

Mr. Schneider is entitled to a weekly loss of earning capacity benefit from June 14, 1998 and ongoing, at the rate of $375.36 per week, less any income replacement benefits (IRBs) paid in excess of 104 weeks.
Mr. Schneider is entitled to interest on the overdue amount, in accordance with section 68 of the Schedule.

Background

Mr. Schneider was a front-seat passenger in a small car late at night when the driver lost control of the vehicle. The car rolled and flipped end to end, and finally came to rest upside down on its roof.

Mr. Schneider was able to free himself from the wreck, and escape through a window. The driver was not so lucky. Mr. Schneider then went for help. Subsequently he was taken to hospital, first in St. Mary's and then in London, where he was treated for a fracture of both bones of the left forearm at the wrist, broken ribs, and pain. After undergoing a bone graft and other surgery, he was ultimately released to physiotherapy.

At the time of the accident, Mr. Schneider was about 23 years old. He had completed Grade 12, with the exception of two courses, and had embarked on a variety of careers, principally in the retail sector.

Immediately prior to the accident he had been working for Steffen's Food Mart as a produce and carry-out clerk. Prior to that he had been a manager/supervisor at a Beckers store in Goderich for about nine months.

Following the accident, Mr. Schneider was advised by his medical advisors that he could not work at any job requiring heavy lifting or use of his left hand in gripping or pinching. He also continued to experience discomfort and pain. This was such as to prevent him from returning to his pre-accident work as a produce and carry-out clerk. Consequently, his insurer paid him weekly income replacement benefits.

Ultimately, income replacement benefits were paid to the 104 week time-period, with the result that Mr. Schneider became entitled to an LECB offer, pursuant to section 20 of the Schedule.

The Insurer's offer, delivered May 13, 1998, was for an LECB of zero. This was based on a figure of $234.21 for pre-accident earning capacity (PEC) and a residual earning capacity (REC) of $274.76, based on work as a retail trade manager.

Economical agreed to extend benefits, however, until August 16, 1998, on condition that Mr. Schneider engage in an active job search.

Mr. Schneider disputed the Insurer's LECB offer. Procedures were put in place to have him referred to a Designated Assessment Centre (DAC) for assessment. Before the assessment took place, however, he advised the Insurer of a return to work, and the Insurer cancelled the DAC assessment.

The employment in question was at a dollar store called "A Buck Or Two" where he began work on August 4, 1998 as a clerk.

Mr. Schneider's return to work was not trouble-free. Finally, even though he had been promoted to assistant manager, on June 26, 2000 Mr. Schneider resigned his position, citing medical reasons (Tab 11, Payroll Change notice) - according to Mr. Schneider, these were his panic attacks, chronic pain, anxiety and depression. He was also employed for a brief period of time at a variety store (July 2000) and a car dealership (June 2002).

As noted previously, the issue in this arbitration is the amount of LECBs. Mr. Schneider feels that the Insurer has not fairly credited him with a high enough PEC, and has, at the same time, ascribed to him an overly optimistic REC, leading to a benefit of zero.

Mr. Schneider believes that his fragile psychological condition subsequent to the accident, combined with his physical weaknesses, served to disable him from performing any suitable work in a consistent and effective manner.

Entitlement to an LECB:

Initially, the Insurer made an LECB offer of zero, since Mr. Schneider returned to the workforce and, in the mind of the Insurer, did not qualify for any benefit due to his residual earning capacity. Consequently, it cancelled the REC DAC originally scheduled for September 2, 1998.

As noted, Mr. Schneider's return to work, however, was not an unmitigated success.

On March 15, 2000, the Insurer wrote to Mr. Schneider's solicitors, in response to his renewed claim for an LECB, and offered to re-arrange the REC DAC.

A REC DAC took place June 22, 2000 at Southwestern Rehabilitation Assessments.

Mr. Schneider was assessed by a physiatrist, a physiotherapist, an occupational therapist and a psychologist.

The REC DAC concluded that he could do a number of jobs, within his physical restrictions, and expressed employment preferences. These were, primarily, sales and clerical occupations. The one that was focussed on by the DAC was that of Retail Trade Supervisor. It identified a potential remuneration of $23,764.00 as Mr. Schneider's REC.

On July 21, 2000, Economical advised him that it, once again, considered his LECB to be zero, based on the residual earning capacity of $354.69 for a Retail Trade Supervisor, and the pre-accident earning capacity of $234.21.

As noted earlier, Mr. Schneider has complained of depression, chronic pain, panic attacks and anxiety. He claims that these matters, combined with his physical restrictions, arise from the accident and render his residual earning capacity much lower than estimated by the Insurer.

Pre-Accident Earning Capacity

The Insurer calculated Mr. Schneider's pre-accident earning capacity at $234.21. It appears that it extrapolated this amount from the income replacement benefit which, of course, was based on pre-accident earnings.

The Schedule provides that a PEC is to be calculated as follows:

29.- (1) For the purpose of determining the amount of a weekly loss of earning capacity benefit under this Part, the pre-accident earning capacity of a person who is entitled to receive weekly income replacement benefits under paragraph 1, 3, 4 or 6 of subsection 7 (1) shall be deemed to be the person's net weekly income from employment used in section 10 in determining the amount of weekly income replacement benefits immediately before payment of the weekly loss of earning capacity benefits begins, converted to a full-time net weekly income in accordance with section 86, if section 86 applies.

(4) The amount of a person's pre-accident earning capacity determined under subsections (1), (2) and (3) shall not be less than,

(a) the net weekly income determined in accordance with section 81 or 82 using a gross annual income from employment equal to the person's gross income from employment, including any temporary disability benefits and any benefits received under the Unemployment Insurance Act (Canada), for a period specified by the person of fifty-two consecutive weeks in the 156-week period before the accident, in the case of a person entitled to receive weekly income replacement benefits under paragraphs 1, 2, 3, 4 or 6 of subsection 7 (1), or a person who was self-employed at the time of the accident; or

According to counsel for Mr. Schneider, these provisions should be interpreted as permitting him to calculate his PEC based on his best consecutive 52 weeks out of the 156 weeks immediately prior to the accident. In Mr. Schneider's view, this calculation would result in a PEC that is substantially higher than the income replacement benefit actually paid to him following the accident. I accept this argument.

Although, prior to the accident, Mr. Schneider was working stocking shelves and carrying out groceries, he had earlier been employed as a manager at Beckers. The most advantageous 52 weeks for Mr. Schneider would be from June 1, 1994 to June 1, 1995, since it covered the period of his highest remuneration. The fact that the chosen period does not correlate precisely with T4's and employment records is irrelevant, as paragraph 29(4)(a) specifically allows Mr. Schneider to choose his best 52 weeks in the 156 weeks prior to the accident.

I accept Mr. Schneider's designation of the period from June 1, 1994 to June 1, 1995 as an appropriate period under the Schedule for the purpose of calculation of his pre-accident earning capacity. I also find that the level of income from the period suggested provides a reasonable approximation of Mr. Schneider's pre-accident earning capacity in accordance with subsection 29(4)(a) of the Schedule. Based on the evidence before me, I calculate Mr. Schneider's PEC to be $375.36.

Residual Earning Capacity

Calculating a correct PEC is, however, only one step in deciding whether Mr. Schneider is entitled to an LECB.

There must be a determination of his residual earning capacity, and a finding that the factors related to the disability that diminished his earning capacity arose out of the motor vehicle accident in question.

As noted earlier, the Insurer believed that Mr. Schneider retained the capacity to work as a manager in a retail business and attributed an earning capacity to him of $23,764.00.

This is consistent with the findings of the REC DAC which examined Mr. Schneider's residual earning capacity.

Mr. Schneider disputes that finding. He believes that the REC DAC erred in failing to take into consideration his demonstrated inability to remain at a job for any length of time, and the increased difficulty of performing any job functions in a reasonable manner due to his ongoing post-traumatic stress symptoms and panic attacks. He alleges that, despite several attempts to return to the workforce he has no reasonable possibility of returning and remaining in the work force in any remunerative capacity.

The REC DAC included an examination by a psychologist, Dr. W. Thompson. His report notes complaints of panic attacks and emotional difficulties, as well as physical difficulties including lower back pain and left wrist symptoms. He notes, as well, that Mr. Schneider is awaiting treatment with a psychologist for the panic attacks.

The psychological portion of the REC DAC assessment reported (under the heading "psychological functioning") that Mr. Schneider experienced frequent headaches and gastrointestinal problems "which may be a function of his high anxiety level." It also mentioned:

Cognitively, he reported difficulty learning new material and attending [sic]. Communication issues are speaking, reading and writing, which appear to be difficulties that existed prior to the MVA.
Psychologically, he reported feeling depressed, angry and fearful and suffering from poor self-esteem.
The three things he finds most troublesome are dealing with customers, as he feels that he has lost confidence, and not being able to work on cars or perform household chores as he once did.

Following testing, Dr. Thompson reported:

A number of the AXIS I scales were clinically elevated, indicating he is highly anxious, depressed and experiences Posttraumatic Stress Disorder symptoms.

He concluded:

The psychological picture described by Mr. Schneider indicates he is having a very difficult time coping with his current situation and dealing with his physical limitations.

Following these striking observations of Mr. Schneider's psychological condition, Dr. Thompson proceeded to put forward a number of hypotheses of possible vocational alternatives. These included the areas of Manager in Retail Trade, Clerical Occupations, Skilled Trades and Service Occupations, and Elemental Sales and Service Occupations.

While the analysis appears to account for Mr. Schneider's limited strength and mobility restrictions, as well as his training and work experience, there is no consideration of the substantial psychological challenges faced by him, which Dr. Thompson had just enumerated.

It is hard to imagine that severe depression, panic attacks, sensitivity to criticism, anger, mistrust, loss of confidence, and a difficulty dealing with customers might not be relevant to his ability to perform the work of a Retail Trade Manager, or a Retail Trade Supervisor, which are among Dr. Thompson's recommended occupational choices. Nor do the reports of the other professionals deal with Mr. Schneider's psychological limitations in the context of recommended occupations and residual earning capacity.

A report issued by Dr. Jeffrey M. McKillop, psychologist, almost a year after the DAC, evaluated the progress of the psychological issues identified by Dr. Thompson. Dr. McKillop summarized:

Mr. Schneider is a 26 year-old man who sustained injuries when involved in a motor vehicle [accident] on June 15, 1996. The result of this accident is that Mr. Schneider now suffers chronic pain, is experiencing depressions and anxiety and suffers post-traumatic stress.

Although Mr. Schneider is able to drive, he rarely drives with comfort, his driving is reduced to a fairly limited range, and novel driving situation results in increased probability of panic attack. Similarly, Mr. Schneider's ability to interact with others has also been compromised since his accident.

Dr. McKillop went on to describe Mr. Schneider's prognosis:

As mentioned earlier, Mr. Schneider describes a host of symptoms that would be consistent with a diagnosis of post-traumatic stress disorder. The typical pattern for recovery from post-traumatic stress disorder is a six to twelve week acute symptomatic stage followed by a slow and gradual lessening of symptoms. Usually, post-traumatic stress disorder is short-lived and should resolve within six months. At present, however, Mr. Schneider is approximately four years post-accident and is still troubled by post-traumatic symptoms. This is outside the typical recovery time-frame and points to a longer and more difficult recovery.

Post-traumatic stress disorder becomes problematic when it is coupled with chronic pain and/or extreme avoidance patterns. For example, in an effort to reduce overall level of arousal or serve to reduce reminders of the accident, people may become house-bound and severely limit their contact with others.

Dr. McKillop concluded:

Because of the time that has elapsed since Mr. Schneider's accident, I am pessimistic about Mr. Schneider's chances for full recovery. However, some partial improvements in his symptoms with treatment might be reasonable within the next six to 12 months.

In an updated report dated June 28, 2002, Dr. McKillop stated:

In terms of diagnosis, Mr. Schneider suffers from anxiety and depression complicated by post-traumatic stress. As a consequence, novel situations are a source of anxiety for Mr. Schneider and his employability has been compromised since his motor vehicle accident. I suspect that, without retraining, Mr. Schneider's future employment prospects are marginal.

Based on Dr. McKillop's and Dr. Thompson's observations about Mr. Schneider's psychological state, I have serious misgivings about the DAC's conclusion that "Mr. Charles Schneider's Residual Earning Capacity appears to be closely represented by the employment type NOC#6211, RETAIL TRADE SUPERVISOR with an annual salary of $23,764.00 as per the Financial Services Commission of Ontario, 2000."

There is jurisprudence clearly stating that a REC DAC should consider an insured's psychological makeup and condition as part of its analysis.

In Attavar v. Allstate Insurance Co. of Canada 2003 CanLII 7430 (ON CA), [2003] O.J. No. 213, a decision of the Ontario Court of Appeal, Laskin J. stated:

In assessing whether it is reasonable to expect a person to engage in a job, a trier of fact must consider both the insured's personal and vocational characteristics and the possibility of deterioration in the insured's impairment. For the trial judge in this case, Ms. Attavar's most important personal characteristic was her psychological makeup.

In my opinion, the trial judge could reasonably conclude that Ms. Attavar's psychological makeup is a personal characteristic under s. 30(2)3 of the Schedule. "Personal and vocational characteristics" are defined in s. 1 of the Schedule to "include":

(a) employment history

(b) education and training

(d) vocational skills,

(e) physical skills,

(e) physical abilities,

(f) cognitive abilities, and

(g) language abilities

Although "psychological makeup" is not expressly listed, the definition is not exhaustive. A person's psychological make-up, however, is a personal characteristic that may well be relevant to a person's ability to engage in a particular job, especially where - as in Ms. Attavar's case - it is linked directly to a listed factor - here "vocational interests and aptitudes."

A retail trade supervisor, according the REC DAC report, involves supervision and assignment of employees, the selling of merchandise to customers, the resolution of problems such as customer complaints, the maintenance of inventory, the preparation of reports, and the hiring and training of new sales staff.

These duties all require a significant interaction with people, the ability to take responsibility, and to carry through with complex projects.

I find it highly improbable that a person described as introverted, shy, and socially insecure, who tends to withdraw from others and is indecisive and tired, (see report of Dr. McKillop, April 26, 2001) would be able to undertake such tasks with any degree of success. I find it even less likely that an employer would hire a worker such as Mr. Schneider, if he was informed of limitations such as those listed above.

I find that, had the assessors taken into consideration Mr. Schneider's depression, difficulty with dealing with others, panic attacks, and generalized anxiety, they could not have in good conscience concluded that Mr. Schneider could fulfill the requirements of a retail trade supervisor, or any other similar position involving dealing with the public, or the interaction with employees.

Having heard the evidence of Mr. Schneider and his sister, Kim Albert, recounting the difficulties that he had in his various attempts to work following the accident, and the evidence of Dr. McKillop concerning his experience in evaluating and treating Mr. Schneider, I find that, at this time, there is very little that Mr. Schneider is capable of doing, on a sustained basis, that would provide remunerative employment.

I should note that I found Mr. Schneider to be straightforward and credible with regard to his testimony. While unsophisticated, he neither appeared to exaggerate nor misstate his impression of the symptoms which disabled him. In addition, his testimony seemed to accord with the testimony of his sister, Dr. McKillop and contemporary documentation, where it exists.

Although, as Dr. McKillop suggests, with further treatment and re-training it is possible Mr. Schneider may find some sort of remunerative employment, I find that his residual earning capacity, at present, is zero.

While Mr. Schneider may well be unemployable now for a significant period of time, the Insurer has alleged that any psychological disability he may have at the present time is due to factors other than the accident.

According to the Insurer, Mr. Schneider's ability to hold down various jobs after the accident, and his failure to obtain treatment for his psychological complaints in the period following the accident confirms its belief that any disability he is suffering now is due to other causes than the motor vehicle accident.

While the Insurer's position has certain logical attractions, it does not stand up if one considers Mr. Schneider's case in some detail.

Prior to the accident, Mr. Schneider was able to retain and perform the Beckers management job with some considerable success. Although he, ultimately, decided that work as an independent manager in a franchise situation was not for him, there is no suggestion that he failed in his duties, or that Beckers itself was in any way dissatisfied with his work.

While there were stresses involved in that position, stresses that likely contributed to his decision to seek other employment, he was able to make a transition to his work at the grocery store prior to the accident. He appeared to be successful there as well.

I do not accept that, prior to the accident Mr. Schneider had established a pattern of attempting work, and then failing miserably due to psychological stressors.

The same cannot be said for the period after his accident.

While Mr. Schneider's post-accident work at the dollar store was ultimately graced with a management title, both the level of remuneration and responsibility do not seem to be in the same category as his work as an independent manager at Beckers. Despite this, he was unable to keep working at his post-accident jobs.

Also, I do not accept that the stress that may have been a factor in his departure from Beckers was in any way equivalent to the severe panic attacks and depression that lead him to withdraw from the work at the dollar store.

There is evidence that Mr. Schneider's decision to leave Beckers arose due to the stress of dealing with employees, and accounting for the disappearance of a significant sum of money, for which he could, ultimately, be responsible. I find Mr. Schneider's departure from Beckers was a reasoned career choice, rather than the unreasoning flight from an untenable situation, that seemed to be characteristic of his departures from post-accident employment.

While most of the discussion of Mr. Schneider's limitations after the accident focussed on the physical injuries and their prognoses, I find there is evidence that he developed psychological impairment in the same period. The functional ability evaluation (FAE) performed by a kinesiologist at Focus Assessments on July 23, 1996 (Tab 7, Exhibit 1) indicated that Mr. Schneider put forth consistent effort but that he appeared to have "pain focused behaviour and a perception that his disability is more restricting than objectively demonstrated." It also reported a "self perception of a severe disability."

Mr. Schneider was either exaggerating his pain symptoms, or there was another factor that accounted for his perception of pain and disability. I find that the former is ruled out by the psychological component of the June 2000 REC DAC report (Tab 15, Exhibit 1), which commented:

While Mr. Schneider was obviously experiencing pain in his left arm and hand, he did not dwell on his physical situation, verbally stress his discomfort, complain about the assessment tasks or ask for special concessions to be made.

Dr. McKillop, his treating psychologist, noted that a depressed mood and low energy were part of Mr. Schneider's diagnosis. The FAE did not consider these as a possible explanation for Mr. Schneider's perception of disability.

While the FAE findings were intended to show there were no physical barriers to a return to work, I find that, taken in conjunction with Dr. McKillop's evidence and the psychological component of the REC DAC, they demonstrate a consistency of behaviour and perception on the part of Mr. Schneider.

Dr. McKillop testified that Mr. Schneider is essentially a concrete person, not psychologically sophisticated, and deals with his physical symptoms in preference to any psychological problems. He also mentioned that, given the current scarcity of health professionals in rural areas, it is difficult to access psychological care, even when a patient is aware that such treatment is appropriate and necessary.

Despite evidence of some potential stressors and anxiety in Mr. Schneider's life pre-accident, Dr. McKillop stated unequivocally that the motor vehicle accident, in light of its serious nature, and risk of death, is the only event that can account for the shift in Mr. Schneider's ability to perform work and hold down a job.

There was no subsequent event that could have triggered his post- traumatic stress disorder. Again Dr. McKillop was adamant that Mr. Schneider met and continues to meet the diagnosis for post-traumatic stress disorder.

I accept Dr. McKillop's diagnosis of Mr. Schneider's psychological disability, and his characterization of the depression and anxiety attacks as springing directly from the traumatic events that took place on the night of June 14, 1996.

Dr. McKillop's account corresponds with the testimony of Ms. Kim Albert, Mr. Schneider's sister, concerning his activities in the period following the accident. She described a change from a normally socially active individual to one who was withdrawn and who no longer wished to talk to friends, and who felt increasingly uncomfortable driving.

She recalled that this change took place in the period following the accident, as his physical injuries began to heal. While living alone in the country near Bayfield after the accident, he would call her in tears, without any understanding of why he was in that state. He was afraid to be alone, but resented company.

Ms. Albert's testimony painted a picture of a person who became almost reclusive, and whose functioning continued to decline after the accident.

It is not at all surprising that someone like Mr. Schneider, with little insight to his depression and crying, who, in the words of Dr. McKillop's words, "dislikes going to doctors and has difficulty discussing personal problems with others" and "doubts that any health care professional would understand his situation or care about him" (Tab 16, Exhibit 1), would not request treatment, or even attend at his family doctor without some pushing, prodding and compulsion.

Given the foregoing, the seriousness of the physical symptoms that overshadowed the psychological issues at first, and Dr. McKillop's evidence of the shortage of practitioners skilled in psychological treatment in the area where Mr. Schneider lives, I do not read much into his failure to obtain medical treatment during the time he retired in virtual seclusion to the cottage in Bayfield.

While detailed medical documentation covering the entire period of Mr. Schneider's illness would be the best evidence of impairment, he is only required to prove the existence of the psychological disability and its origins on a balance of probabilities.

I found his own evidence and that of his sister to be persuasive. Although the Insurer raised many suppositions and theories, it did not provide any credible evidence to contradict Mr. Schneider, nor did it call psychological evidence to counter Dr. McKillop's interpretation of Mr. Schneider’s disability and its origins.

I find that, on the whole, Mr. Schneider has presented compelling evidence that his psychological symptoms arose from the accident, began to manifest themselves during the period following the accident, and have continued to worsen to this day.

Commencement of Loss of Earning Capacity Benefit

While section 34(1) of the Schedule makes provision for a review of entitlement upon a worsening of an impairment where such a deterioration in an insured's condition is supported by a health practitioner's certificate, this is not an appropriate point of departure for an analysis of when the LECB benefit became payable.

Although Mr. Schneider worked post-accident, it is apparent in retrospect, that the Insurer's LECB offer of zero was incorrect at the time it was made.

My finding of a residual earning capacity of zero at the 104 week mark was due to credible evidence that Mr. Schneider was unable to remain at any remunerative work and, indeed, left very undemanding employment due to his psychological impairments.

Notwithstanding that his long-term earning capacity was limited to nil due to his physical and psychological limitations, he tried to work, at great psychological cost to himself, and he failed. Had he been properly assessed at the time of the LECB offer, he would have been found unable to work in any occupation for which he was suited.

This assessment did not take place. The Insurer cancelled the assessment since Mr. Schneider informed them that he was working.

It should not have been a surprise to them that he was employed. After cutting income replacement benefits to Mr. Schneider, it reinstated them for a short while on condition that he take part in a job search programme.

Faced with no other source of income, Mr. Schneider participated in the work programme and, ultimately, found work. He was unsuccessful at that work, and others he tried due to his ongoing psychological difficulties. These difficulties were not addressed and appear to have been, if anything, exacerbated by his attempt to stay in the work force.

I have little doubt that he would have attempted his ill-advised return to work, had he not been caught in an economic vise by the Insurer's refusal to pay benefits.

I find, therefore, that the Insurer should have paid an LECB from the beginning of the post 104 week period, based on a REC of zero. I find the amount of the LECB to be $375.36, payable from the 104 week mark.

Section 15 of the Schedule provides:

The insurer may deduct from any benefit payable under this Part 80 per cent of any income received or available from any occupation subsequent to the accident.

"This Part" refers to Part II, entitled "weekly benefits."

Part VI of the Schedule dealing with LECBs has no counterpart to section 15. The only deductible that applies to Part VI is section 75(1), which deals with collateral benefits.

Mr. Schneider's income from his abortive post-accident employment is not a collateral benefit, and is therefore not deductible from his LECB.

While this may be an oversight in the legislation, and may result in an anomaly, it is not inconsistent with the overall goals of Bill 164.

Bill 164 took away the right of an insured to sue for personal damages arising from a motor vehicle accident. In return, the insured was granted a right to compensation, on a weekly basis, for a loss of his or her capacity to earn income.

In Hodgson v. Walsh [1998] O.J. No. 3268, Thomson J. held that diminished earning capacity was a pecuniary loss.

Loss of earning capacity is an award of damages based on the recognition that a plaintiffs capacity to earn money is an asset which has been taken away. Damages for loss of earning capacity are properly awarded to compensate the injured party for the loss of a capital asset consisting of income earning capacity, rather than loss of income.

It is appropriate, therefore, that Mr. Schneider's income post-accident not be deducted from the LECB payable to him, since the LECB is a periodic payment for a loss of a capital asset, not income replacement.

The loss of that capital asset occurred as of the 104 weeks after the accident and became owing on that date, notwithstanding any future employment income.

I find, therefore, that the benefits became due and payable on the date of the original LECB offer. Economical is entitled to deduct from the LECBs payable, the amount of IRBs it paid in excess of 104 weeks after the accident. Mr. Schneider is entitled to interest on the outstanding LECBs from June 14, 1998, in accordance with the interest rate set in the Schedule.

Should the parties not be able to agree on the calculation of the exact amounts owed by the Insurer to Mr. Schneider, I remain seised of this matter, and will accept written submissions on the calculation of the amounts outstanding, providing that notice is given to the Commission within 30 days of the delivery of this decision.

EXPENSES:

I have received no submissions as to expenses, and may be spoken to should the parties be unable to agree on this matter.

March 11, 2003

John Wilson Arbitrator

Date