Financial Services Commission of Ontario
Commission des services financiers de l’Ontario
Neutral Citation: 2005 ONFSCDRS 181
FSCO A04-000446
BETWEEN:
MS. G
Applicant
and
PILOT INSURANCE COMPANY
Insurer
DECISION ON A MOTION FOR AN INTERIM ORDER
Before:
Lawrence Blackman
Heard:
December 13, 2005, at the offices of the Financial Services Commission of Ontario in Toronto.
Written submissions were received by December 9, 2005.
Appearances:
Steven Rastin for Ms. G
William G. Scott for Pilot Insurance Company
Issues:
The Applicant, Ms. G, sustained serious injuries in a motor vehicle accident on August 20, 1998, including fractures of her right forearm and right lower extremity. My decision is presently pending as to whether, as a result of that accident, Ms. G was catastrophically impaired as defined in section 2 of the Schedule.1 The parties had failed to resolve that issue at mediation, which resulted in Ms. G commencing an arbitration at the Financial Services Commission of Ontario under the Insurance Act, R.S.O. 1990, c.I.8, as amended.
Pending my decision on the issue of catastrophic impairment and pending final resolution of the dispute regarding the Applicant's entitlement to payment of certain benefits claimed under the Schedule, Ms. G brought a motion pursuant to section 65 of the Dispute Resolution Practice Code (Fourth Edition, Updated - October 2003) (the "Code") for an interim order against her first party automobile insurer, Pilot Insurance Company ("Pilot").
Subsection 279(4.1) of the Insurance Act gives arbitrators the discretionary authority to make interim orders pending the final order in any matter. The specific relief sought in this motion, as amended at the oral hearing, is:
- an Interim Order that Pilot pay, commencing November 1, 2004, the monthly sum of $2,267 prescribed in a medical/rehabilitation Designated Assessment Centre ("DAC") report of Work Able Centres dated March 11, 2005 until any further order of an arbitrator or in accordance with the review process set out in the DAC report. This issue raises the following questions:
are nanny services an income replacement benefit or a caregiver benefit, or are they a medical/rehabilitation benefit?
if nanny services are a medical/rehabilitation benefit, was Pilot required to pay them from November 1, 2004?
interest pursuant to section 46 of the Schedule.
a special award pursuant to subsection 282(10) of the Insurance Act.
her legal expenses of this motion.
Neither party argued, either in their written submissions or in their oral arguments, that the criteria of (1) urgency or necessity (2) a prima facie, persuasive or convincing case (3) irreparable harm and/or (4) balance of convenience applied. The parties implicitly agree, and I concur, that this is simply a question of whether the services in question are payable as a rehabilitation benefit pursuant to paragraph 38(14)(a) of the Schedule and subsection 268(8) of the Insurance Act until the dispute is resolved.
Result:
- Nanny services may entitle an insured person to a caregiver benefit or to a rehabilitation benefit, based on the specific facts of a case. In this case, I find that they are properly claimed as a rehabilitation benefit. Pilot was required to pay this benefit in accordance with paragraph 38(14)(a) of the Schedule and subsection 268(8) of the Insurance Act.
Accordingly, Pilot shall pay Ms. G the sum of $31,738, representing fourteen months of benefits (November 1, 2004 to December 31, 2005 inclusive) at the monthly rate of $2,267, as opined as reasonable and necessary in the medical/rehabilitation Work Able DAC report dated March 11, 2005.
- Pilot shall further pay Ms. G, ongoing from January 2006, the monthly sum of $2,267 until:
(a) in accordance with the procedure set out in section 38 of the Schedule, a medical/rehabilitation DAC opines that a different amount, or no amount is reasonable or necessary; or,
(b) until such further or other order of an arbitrator.
interest is payable from March 11, 2005 on the November 2004 to March 2005 monthly amounts of $2,267. Interest is payable thereafter on each monthly amount of $2,267, from the first of each respective month. Interest is payable on all overdue amounts at the rate of two per cent per month, compounded monthly.
the issue of a special award will be determined upon receipt of further written submissions by Friday, January 20, 2006, at 5:00 p.m.
the issue of the legal expenses of this motion will be determined upon receipt of further written submissions by Friday, January 20, 2006, at 5:00 p.m.
The above result is presently subject to the non-catastrophic monetary limits of $100,000.
EVIDENCE AND ANALYSIS:
Mrs. G was injured in a motor vehicle accident on August 20, 1998. She sustained significant injuries which are dealt with in depth in a separate preliminary decision on catastrophic impairment which is presently pending.
At the time of this accident, Ms. G was 22 years old, single, and without children. After the accident she married Mr. G.
In a Future Cost of Care Analysis dated October 17, 2001, Ms. S. Paquette (a future care cost specialist) with Concentra Managed Care Inc. ("Concentra") noted that Ms. G had identified one of her pre-accident long-term goals as having children. Concentra had been referred by and reported to Pilot. In her report, Ms. Paquette opined that the Applicant was not, at that time, able to complete the physical activities required to care for young children. The specialist was of the view that it was not unreasonable for a young adult to wish to raise a family.
Ms. Paquette costed "child care (Live out nanny)" for a future five year period (for two children, each until the age of three, assuming some overlap) at 50 hours a week for 48 weeks a year, for a total annual cost of $25,800. These costs were recommended by Ms. Paquette to assist Ms. G "to maximize her ability to function" and "to compensate for physical child care needs that the client is unable to complete." As noted on page four of her report, these were needs "resulting from the motor vehicle accident on August 20, 1998."
On April 20, 2004, Ms. G gave birth to a baby daughter, A. By letter dated November 2, 2004, the Applicant submitted an October 17, 2004 treatment plan completed by Ms. P. Saunoris, R.N. (hereinafter referred to as the "Saunoris Proposal") for 50 hours a week of "nanny services" at a monthly cost of $2,267. Ms. Saunoris specifically noted the Applicant's fractured right radius and ulna, and submitted that Ms. G could not lift or carry the baby.
Pilot denied the Saunoris Proposal by letter dated November 9, 2004. The reasons given were that the "expenses are not reasonable and necessary with respect to the injuries sustained in the accident" and the Applicant was "not deemed catastrophic."
Counsel for the Applicant, by letter dated November 15, 2004, responded that:
he believed that there may still be "a small amount of limits left of the $100,000 [monetary cap for non-catastrophic claims for medical/rehabilitation/attendant care benefits] that should be accessible to pay for this service;"
a DAC assessment of the Saunoris Proposal was requested; and,
that Trafalgar Personnel Ltd. was providing the services, the cost of which was $2,267 per month and continuing.
The request for a medical/rehabilitation DAC was repeated by letters dated November 18 and 24, 2004. Ms. G stated that under the amended Schedule, Pilot was required to notify the DAC within five business days. A dispute arose as to whether the Applicant was required to provide an OCF-14 (Permission to Disclose Health Information to the DAC). By letter dated November 30, 2004, the Applicant forwarded the Insurer a signed OCF-14, notwithstanding her submission that same was not required.
In the interim, the Saunoris Proposal was added to a pending mediation at the Commission. The mediation was held December 8, 2004. The Report of Mediator notes this issue remaining in dispute as a section 15 claim for rehabilitation benefits, specifically "funding entitlement for nanny assistance" in the amount of $2,267 per month ongoing from November 1, 2004. I have no evidence that any party objected to the Mediator's description of this issue.
By letter dated December 15, 2004, more than a month after receiving the Saunoris Proposal, Pilot advised that they were now ready to set up what they referred to as "a med/rehab DAC Assessment." An orthopaedic assessment and a functional abilities evaluation ("FAE") were scheduled for January 17, 2005 with Work Able Centres Inc. A neuropsychological assessment was scheduled for February 17, 2005. The cost of these assessments was $7,590. The Applicant expressed concern that an in-home assessment was not conducted to determine the "safety conditions surrounding Ms. G's daily activities with her daughter, as well as her ability to pick up, carry, walk, bathe, feed, interact, ultimately care for and bond with her own daughter."
The DAC report was received by Applicant's counsel on March 16, 2005. The report states that the assessment was completed February 17, 2005. The Applicant submits that the DAC report was to be delivered within 14 days of the completion of the DAC.
In his report, Dr. M. Tile, the DAC orthopaedic surgeon, was of the view that the Saunoris Proposal was neither reasonable or necessary from an orthopaedic perspective. The authors of the DAC FAE reported that Ms. G presented with limited abilities and that she did not feel she was capable of taking care of her child on a daily basis. However, given their finding that Ms. G was presently receiving little assistance and appeared to be managing with the child's daily basic needs, with modifications, the FAE was unable to determine the Applicant's current functional capabilities.
Dr. P. Comper, the DAC psychologist, opined that Ms. G's emotional problems would likely be "exacerbated by any sort of oppositional behaviour posed by a child just now entering into the 'terrible two's.'" He was, therefore, of the view that the Saunoris Proposal was reasonable and necessary "to ensure the safe care of the child," time limited for a period between half a year and a year, "at which point it should be reviewed "[emphasis added]. Concurrently, Dr. Comper recommended counselling and/or other rehabilitation (including a pain management program) and a review of her current medication. I have no evidence that there has been any further DAC review of the Saunoris Proposal.
The overall opinion of the DAC report, completed March 11, 2005, was that:
The Treatment Plan in dispute is deemed reasonable and necessary from a neuropsychological perspective. It is recommended that [Ms. G] be provided with a childcare provider, as outlined in the treatment plan in dispute, for 6 to 12 months duration.
By letter dated April 13, 2005, Ms. Saunoris wrote Pilot's adjuster, confirming a conversation in which the latter now indicated that Pilot was taking the position that nanny services were a caregiver benefit and that Ms. G had elected income replacement benefits ("IRBs"). A decision regarding the Saunoris Proposal would be forthcoming after an April 25, 2005 meeting.
Pilot's response was to apply for mediation by letter dated May 2, 2005. The Commission responded that the issue noted in the Insurer's Application for Mediation (it is not disputed that the issue was the Saunoris Proposal) had been previously mediated and, accordingly, the Commission's mediation file was closed.
On or about May 17, 2005, Ms. G sent Pilot an Application for Expenses which included seven months of "nanny services" provided by Ms. C. (I note "C" is the Applicant's maiden name) for a total of $15,869.
On July 11, 2005, four months after the completion of the DAC report, and almost seven weeks after its April 25, 2005 internal meeting, Pilot responded to the DAC report, denying the benefits on the ground that Ms. G had elected IRBs. The issue of IRB entitlement had been settled in November 2002 by payment of a lump sum. By separate explanation of the same date, Pilot refused payment of a subsequent Application for Expenses dated July 6, 2005, which included two further months of services provided by Ms. C. The same reason for refusal was given.
By letter dated August 31, 2005, a further Application for Expenses was submitted to the Insurer, including another month of "nanny services." The Insurer's Explanation, dated September 26, 2005, now gave as the reason for refusal that the Applicant had "not been deemed Catastrophically Impaired."
By earlier letter dated November 15, 2004, Ms. G had requested an updated summary of benefits paid to date. There was evidently some response by Pilot, however, by letter dated November 24, 2004, the Applicant specifically requested confirmation of medical and rehabilitation benefits still available to her. Some eight months later, this information had not yet been provided, prompting an August 11, 2005 letter from the Applicant's counsel disputing that the medical/rehabilitation limits had been completely exhausted. The Applicant submits that Pilot was asked on nine separate occasions to provide this information.
By letter dated October 3, 2005, Pilot finally provided a printout of medical and rehabilitation monies that had been expended. The printout noted that the sum of $28,154.96 remained under the non-catastrophic monetary limits. Notwithstanding this information, the Insurer, by Explanation dated November 3, 2005, denied further "nanny services" solely on the basis that the Applicant had "not been deemed catastrophically impaired."
Nonetheless, by letter dated September 14, 2005, Pilot's counsel wrote the Applicant's counsel, proposing that the parties have the Saunoris Proposal issue determined as quickly as possible before myself. Accordingly, the pre-hearing discussion was resumed on October 14, 2005 before Arbitrator Alves, and this motion date was set.
Applicant's Position
The Applicant submits that the Saunoris Proposal is a rehabilitation benefit pursuant to paragraph 15(5)(l) of the Schedule, that is "other goods and services that the insured person requires, except services provided by a case manager." Under section 15, rehabilitation benefits are intended to cover reasonable and necessary measures undertaken by an insured to eliminate the effects of any disability resulting from an impairment, or to facilitate, amongst other things, the insured's reintegration into her family. Ms. G argues that this is the intent of the Saunoris Proposal.
Ms. G submits that as the Saunoris Proposal was refused, Pilot submitted the issue to a DAC rehabilitation expense assessment. The DAC assessors opined that the Saunoris Proposal was reasonable and necessary. Paragraph 38(14)(a) of the Schedule mandates that the insurer "shall" pay the expense when the DAC assessors are of the opinion that an expense is reasonable and necessary for the insured's treatment or rehabilitation.
As her Insurer has refused to pay, Ms. G seeks an interim order that Pilot pay the Saunoris Proposal on an ongoing basis in accordance with the DAC report, subject to any further opinion of a DAC, or any further or other order of an arbitrator.
Insurer's Position
The Insurer has given a number of reasons why it has not paid the Saunoris Proposal in accordance with the DAC opinion, which are as follows:
1. The Saunoris Proposal is neither reasonable nor necessary
One of the two reasons given by Pilot on November 9, 2004 for initially denying the Saunoris Proposal was that it was neither reasonable nor necessary.
Pilot has the right to dispute the reasonableness and necessity of the Saunoris Proposal at a full hearing. Pending resolution of that issue, given the positive DAC opinion, as long as the Saunoris Proposal is a medical or rehabilitation plan, paragraph 38(14(a) of the Schedule and subsection 268(8) of the Insurance Act oblige Pilot to pay the expense, notwithstanding its reasonableness and necessity arguments. Hence, by itself, this reason is no answer to the interim order sought.
2. That Ms. G was not deemed catastrophic
The second reason initially given by Pilot on November 9, 2004 for refusing the Saunoris Proposal was that Ms. G was "not deemed catastrophic." This reason continued to be given to deny payment of any part of the Saunoris Proposal, most recently on November 3, 2005.
The apparent significance of this explanation is paragraph 19(1)(a) of the Schedule, which sets a $100,000 limit on medical, rehabilitation and attendant care benefits. If one has sustained a catastrophic impairment as a result of the accident, the monetary limit rises to $1,000,000.
It has now been confirmed that there is $28,154.96 remaining in medical and rehabilitation benefits under the non-catastrophic limits. Hence, the "catastrophic" explanation is no defence to this motion, at least regarding $28,154.96 of rehabilitation benefits.
There is an argument that this should be the end of the discussion. The Supreme Court in Smith v. Co-operators General Insurance Co. [2002] S.C.R. 129, stated that "[t]here is no dispute that one of the main objectives of insurance law is consumer protection, particularly in the field of automobile and home insurance."
One of the provisions of the Schedule to protect consumers is section 38. Paragraph 38(14)(a) is a "pay now, dispute later" provision where there is a positive DAC. Its purpose, as stated by Director Draper in Liberty Mutual Insurance Co. and Sivaloganathan (FSCO P03-00035, September 23, 2004), is "to ensure that the injured person's current needs are met on a without-fault basis, including access to reasonable and necessary treatment." This "pay now, dispute later" provision honours, in my view, the Schedule's basic philosophy of providing expedited reasonable and necessary assistance. If one errs, one errs not on the side of delaying benefits until a full hearing on the merits at some indefinite time in the future, but on the side that ultimately repayment of benefits, plus interest, may be sought.
Paragraph 38(14)(a) is not a "continue to deny now, think of a reason later" provision. Paragraph 38(14)(a) is taken very seriously by insurers. I note my decision of Soobrian and Belair Insurance Company Inc. (FSCO A04-000422, September 20, 2005) in which Belair conceded its requirement to continue to pay weekly IRBs in the face of a positive DAC report, notwithstanding significant evidence of fraud. In that case, I ultimately determined that the applicant had committed fraud and ordered repayment of more than two and a half years of IRBs.
In this particular case, there is no submission that the Applicant has been fraudulent. There is no submission that new facts have come to light which were unknown when Pilot initially denied the Saunoris Proposal (a proposal foreseen and, indeed, recommended by Pilot's own chosen specialist as a necessary future professional service). All that has changed is that Pilot's analysis of the claim has evolved.
I agree with Pilot's submission that just because it once treated the Saunoris Proposal as a rehabilitation expense does not make it ultimately so. As the Ontario Court of Appeal stated in Harrison v. The Ocean Accident & Guarantee Corporation Limited 1948 CanLII 103 (ON CA), [1948] O.R. 499-521, estoppel is not a substitute for evidence, that "the rule of estoppel cannot be given the effect of creating a substantive right in law which does not otherwise exist in favour of a person." However, actions may have procedural consequences, especially when consumer protection is a primary goal of the legislation. As stated by Director Draper in Sivaloganathan, the DAC report "determines whether the insurer can complete the stoppage process." However, without presently deciding this issue, I will proceed to consider the Insurer's further defences.
3. That the Applicant had elected Income Replacement Benefits
In its July 11, 2005 explanation, the Insurer provided as a further reason for its refusal, the Applicant's election to receive IRBs. Unfortunately, Pilot failed to explain or give a rationale as to the basis for this supplemental reason.
Pilot's December 5, 2005 Factum, some five months later, provides insight into its reasoning.
The Insurer submits, correctly in my view, that there are three alternative weekly benefits potentially available to an insured person under the Schedule, namely IRBs, non-earner benefits and caregiver benefits. Pilot further submits, again correctly in my view, that under subsection 36(1) of the Schedule, only one weekly benefit is payable to an insured person.
Pilot argues that as the Applicant elected to receive weekly IRBs under Part II of the Schedule in lieu of weekly caregiver benefits, and in fact, has now settled her IRB claim on a full and final basis, she has relinquished any right to weekly caregiver benefits under Part IV of the Schedule.
However, the Applicant does not and has never sought weekly caregiver benefits. The Applicant concedes that she was never eligible for weekly caregiver benefits, as she never met the prerequisites of entitlement under that section, most critically, that A. was not born until 2004. Hence, there was no "person in need of care" residing with Ms. G at the time of the accident, as required by section 13. Accordingly, I find that the election of IRBs as opposed to caregiver benefits is a non-issue.
4. That the Saunoris Proposal represents double recovery.
A further reason for refusal was raised in the Insurer's December 5, 2005 factum.
Pilot submits that Ms. G has been compensated for her loss of income by payment of and settlement of her IRB claim. It submits that had she been able to continue working, she would have "necessarily incurred child care expenses" once A. was born. That future expense, Pilot argues, is included in and compensated for by payment of IRBs. To allow Ms. G to claim for such expenses under paragraph 15(5)(1) of the Schedule represents double recovery, that is, Ms. G would be paid twice for the same loss.
Pilot cites, amongst other cases, Park and Citadel General Assurance Co. (OIC A-003410, August 23, 1993), decided under the Statutory Accident Benefits Schedule - Accidents Before January 1, 1994 (the "1990 Schedule"), as support for the proposition that an insured is not eligible for benefits for child care during work hours. However, I note that the Park decision, decided on the particular facts of that case, was prepared to contemplate that "people working full-time also may have child care and housekeeping responsibilities" which may meet the requisite entitlement criteria.
The Insurer further cites Laskin J., in Bapoo v. Co-operators General Insurance Company, 1997 CanLII 6320 (ON CA), 36 O.R. (3d) 616, to the effect that a purpose of the Schedule is to prevent overcompensation or double recovery, which reflects common law jurisprudence. However, I note that in that decision, Laskin J. notes as the first purpose of the Schedule, the necessity of ensuring that "injured insureds receive a fair or adequate level" of compensation, in that particular case, IRBs.
In the case of rehabilitation expenses, the principle of "fair and adequate" compensation is set out, in my view, in the general aim of subsection 15(2) of the Schedule, that rehabilitation benefits shall cover:
reasonable and necessary measures undertaken to reduce or eliminate the effects of any disability resulting from the impairment or to facilitate the insured person's reintegration into his or her family, the rest of society and the labour market.
The specific provision which prevents "double recovery" of rehabilitation expenses in this context argued by Pilot, is the introduction to subsection 15(5) which limits the benefit to:
reasonable and necessary expenses incurred as a result of the accident; and,
reasonable and necessary expenses incurred for a purpose set out in subsection 15(2), noted above.
Once the prerequisites of entitlement to a benefit are established by an insured, including the relevant causation test, the onus shifts to an insurer to establish that all or part of the proposed benefit represents "double recovery." Under subsection 15(5), an insurer may well argue that it is not ultimately liable for all or part of an expense because, amongst other things, all or part of the claimed expense which arises as a result of an accident would have also arisen in any event of the accident and is covered by the weekly IRB.
In this case, the evidence does not support Pilot’s proposition that the entire Saunoris Proposal represents "double recovery." Specifically, amongst other things:
there is a question whether Ms. G would have continued her paid employment once her child was born. Entitlement for IRBs is dependent on one's status at the time of the accident; it is not dependent on one's ongoing commitment to remain in the workforce had the accident not happened;
IRBs do not represent full compensation for loss of income; specifically, one is only entitled to 80% of net income, up to a maximum weekly payment of $400;
maternity or other benefits, which would have been available to Ms. G had she remained in the work force and which would have allowed her a continued stream of income payments while she stayed home to take care of her child, have not been taken into consideration by the Insurer;
I have no evidence as to the precise or even estimated child care expenses Ms. G would have indeed incurred had she remained in the paid work force; and,
I have no evidence as to the extent the precise hours and times for assistance provided by the Saunoris Proposal compare with the precise hours Ms. G may have required child care services, but for the accident.
The Insurer has not provided any fall back position to its argument that the entire Saunoris Proposal represents "double recovery." To deny the entire benefit on the basis of speculative "double recovery," in my view, subverts the first principle enunciated by Laskin J. cited above, that "injured insureds receive a fair or adequate level" of compensation.
More fundamentally, both parties agreed that this motion was not a full hearing on the Saunoris Proposal. Both sides will argue at another time whether, in fact, the Saunoris Proposal is indeed reasonable and necessary. They may also wish to argue the question of "double recovery" at that time. However, at this juncture, I find the argument regarding double recovery premature as well as unpersuasive in defeating the mandatory effect of paragraph 38(14)(a) of the Schedule.
5. That the Saunoris Proposal is not the direct result of the accident
A further argument, raised in the Insurer's December 5, 2005 factum, was that the Saunoris Proposal was not directly caused by the motor vehicle accident.
Pilot notes that under the present Schedule, the definition of the term "accident" was amended from an incident which directly or indirectly causes an impairment to solely an incident which directly causes an impairment. The Insurer submits that this change should apply equally to subsection 15(1) of the Schedule, which states that:
The insurer shall pay an insured person who sustains an impairment as a result of an accident a rehabilitation payment.
There is no dispute that Ms. G sustained impairments as a result of an accident. In reality, what Pilot is arguing is that subsection 15(1) should be interpreted to read as follows:
The insurer shall pay an insured person a rehabilitation payment for only those who sustains an impairments directly resulting from as a result of an accident a rehabilitation payment the direct use or operation of an automobile.
No case law was given to support this rather significant rewording of the section.
In Correia and TTC Insurance Company Limited (FSCO A00-000045, October 27, 2000), upheld on appeal (P00-00061, July 16, 2001), (then) Arbitrator Makepeace concluded, after a lengthy analysis, that:
the extent of coverage for the consequences of an accident is governed by the "as a result of test, which requires proof that the accident materially or significantly contributed to the disability or impairment that gives rise to the claim for benefits. I find that treatment and assessment-related impairments come within this rule where it is reasonably foreseeable that the insured person would seek treatment as a result of the accident and that treatment might result in further injuries or aggravation of the original injury.
Pilot did not disagree with Arbitrator Makepeace's statement, at least as it applied to tort law.
I agree with Arbitrator Makepeace that the test is material or significant contribution. I find, based on the evidence (set out above) of Pilot's own chosen expert, Ms. Paquette, and (set out below) by Dr. Comper, the DAC expert, that this accident materially or significantly contributed to the physical and psychological impairments that give rise to the claim for the Saunoris Proposal. I find that the Insurer's argument does not defeat the effect of paragraph 38(14)(a).
6. That the Medical Rehabilitation DAC exceeded its jurisdiction
In its December 5, 2005 factum, Pilot further submits that the medical rehabilitation DAC exceeded its jurisdiction in considering the Saunoris Proposal a rehabilitation expense, as the claim did not arise as a "direct result" of the accident nor did the Saunoris Proposal fall within "other goods and services" under paragraph 15(5)(l) of the Schedule.
In fairness to the DAC, it saw Ms. G only upon Pilot's decision to have the Applicant assessed, albeit at Ms. G's urging. Pilot's referral is dated December 16, 2004. The referral does not appear to have been prepared without thought. Included in the referral, arranged at a cost of $7,590 to Pilot, are 95 separate documents which the Insurer provided. On December 20, 2004, Pilot signed back the DAC Assessment Plan that the summary appropriately reflected the issues in dispute and that the DAC could proceed with the proposed assessment.
Pilot now argues that:
an arbitrator is not bound by the Medical Rehabilitation DAC Assessment Report and must consider the report in the context of the circumstances of the case, including all expert reports and other evidence presented.
I agree that an arbitrator is not bound by a medical rehabilitation DAC report. However, as a result of paragraph 38(14)(a) of the Schedule, an insurer is bound by a positive DAC opinion. I am not persuaded that the DAC improperly seized or exceeded its jurisdiction. Rather, the DAC appears, as mandated by the Schedule, to have addressed the precise question put to it by Pilot, a question which I find, as set out below, was properly put as a rehabilitation question.
7. That the Saunoris Proposal does not come within paragraph 15(5)(l)
The above leads to this final submission, which counsel for the Insurer very frankly and fairly stated had fully developed over the course of the week before this motion, and is more completely set out in the Insurer's Supplementary Written Submissions, dated December 9, 2005.
Succinctly, Pilot submits that child care benefits are payable only under section 13 of the Schedule. It argues that the Schedule:
provides a complete code for determining accident benefits entitlement;
is a restrictive code of benefits; and,
is contractual not tort compensation and is not intended to provide full compensation for all losses.
The Insurer notes that subsection 13(2) provides that:
The caregiver benefit shall pay for reasonable and necessary expenses incurred as a result of the accident in caring for a person in need of care.
Pilot submits that section 13 compensates insured persons who are normally capable of performing childcare, for the inability to do these tasks as a result of injuries from a motor vehicle accident. Pilot argues that the nanny support services set out in the Saunoris Proposal fall squarely within the purpose of section 13 caregiver benefits.
Pilot noted that subsection 13(3) limits the amount payable for childcare to $250 for the first person in need of care. It argues that this monetary limit excludes the recovery of such benefits under any other provision, and specifically under paragraph 15(5)(l). Otherwise, if one's care expenses for one child were greater than $250, one could claim the section 13 maximum and then claim the balance under section 15. Such an approach, states Pilot, has been rejected in other circumstances, such as in Le and Wellington Insurance Company (OIC A-000920, November 25, 1992) which dealt (under the 1990 Schedule) with the interplay between medical/rehabilitation expenses and expenses to care for the insured herself. Pilot was not aware of any case specifically on point under the present Schedule.
Pilot, therefore, submits that the Saunoris Proposal, as a caregiver claim, does not come within the section 15 rehabilitation benefit. Therefore, there is no entitlement. The Applicant’s characterization of the Saunoris Proposal as a rehabilitation expense does not make it so; nor do any prior actions of Pilot in possibly implicitly initially accepting the Saunoris Proposal as a rehabilitation expense; nor does the DAC's implicit acceptance of the Saunoris Proposal as same.
The question then, is whether the Saunoris Proposal pertains to caregiver benefits under Part IV of the Schedule, or rehabilitation benefits under Part V.
I find that the Saunoris Proposal pertains to rehabilitation expenses under Part V of the Schedule.
Firstly, I find that the Saunoris plan meets the prerequisites of paragraph 15(5)(l), namely:
it is, on the basis of the DAC opinion, prima facie (and subject to further argument), a reasonable and necessary measure entailing "other goods and services" that she requires as a result of this accident;
it is a measure undertaken by the Insured with the purpose of reducing or eliminating the physical, psychological, and/or emotional effects of her disability resulting from her accident-related physical, psychological and emotional impairments, in providing safe care for her young child; and,
in addition or in the alternative, it is a measure intended to facilitate her reintegration into her family.
Secondly, regarding the submission that "caregiver" benefits are exclusively covered by section 13 of the Schedule, as pointed out by the Applicant, unlike case manager services, there is no specific exclusion in section 15 regarding the services contemplated by the Saunoris Proposal.
I also note that in the case of Ms. G, Pilot's argument of possible "double dipping" into more than one section of the Schedule does not apply, as the Applicant agrees that she never had any entitlement whatsoever to any section 13 benefit.
I further note that subsection 13(2) provides that the caregiver benefit shall pay for reasonable and necessary expenses incurred as a result of the accident in caring for "a person in need of care." Those same words, "a person in need of care," are used in subparagraph 13(1)(1)(ii), which set the prerequisite to entitlement to a caregiver benefit that the insured must be residing with "a person in need of care at the time of the accident." If section 13 is the exclusive provision for childcare benefits, which I do not accept (for reasons further set out below), it is the exclusive provision only where the there is "a person in need of care" at the time of the accident.
Thirdly, also addressing the section 13 argument, I use as an analogy, the prior case law concerning business expenses.
In Zehr and The Guarantee Company of North America (OIC A-001963, July 30, 1993), the applicant claimed as a rehabilitation expense, the ongoing cost of hiring other persons to help him run his farm after his accident. The insurer argued that these expenses were not rehabilitation expenses under section 6 of the 1990 Schedule, but were rather business expenses "dealt with exhaustively" under paragraph 12(7)(3). Section 12 dealt with weekly income benefits.
In her decision, Arbitrator Makepeace stated that while accepting that wage expenses of a self-employed person were business expenses for the purposes of section 12 of the 1990 Schedule, this was only one factor to be considered in determining whether any particular wage expense was a rehabilitation expense. The Arbitrator was of the view that it could not have been the Legislature's intent to preclude self-employed persons from claiming under section 6 for the cost of services which made it possible for them to return to work.
In the specific case of Mr. Zehr, Arbitrator Makepeace found there was no evidence that hiring farm workers would facilitate his rehabilitation, except by allowing him to avoid the restricted activities (which could be achieved by other means). She found that the hired farm workers were not helping Mr. Zehr perform the heavy farm work, supplement his work, retrain him or help him in his physical or vocational rehabilitation. They were merely replacing his labour. Accordingly, the claim was denied.
Zettler and Pilot Insurance Company (OIC A97-000674, March 31, 1998) was decided under the subsequent Statutory Accident Benefits Schedule —Accidents after December 31, 1993, and before November 1, 1996 (the "1993 Schedule"). In that decision, Arbitrator Sampliner stated that he was not excluding replacement labour as a reasonable rehabilitation expense under section 40 of the 1993 Schedule. Rather, he "would be prepared to consider some labour expenses necessary to continue business operations where the applicant is reasonably assured he or she will be able to resume the task in the near future. However, that is not the evidence here."
In DesRoches and Economical Mutual Insurance Company (FSCO A97-000312 and A97-000814, November 10, 1999), I agreed with the approach in Zettler, "that some measure of replacement labour might qualify as a reasonable expense . . . if, as part of his rehabilitation, it would assist the Applicant in resuming his completion [in that case] of his house." However, as the applicant in that case took the position that he was presently, and into the foreseeable future, unable to partake in any such work, I could find no rehabilitative purpose in allowing payment of the claimed replacement labour.
Adapting the words of Arbitrator Makepeace, I do not think that it was the Legislature's intent to preclude mothers from claiming under section 15 for the cost of services which made it possible for them to take over the care of their newborn babies. Nor do I find that it was the Legislature's intent that the existence of section 13 caregiver benefits absolutely foreclosed specific services being considered under any circumstances as a rehabilitation expense, even when the requirements of the latter were met.
Nor do I think that it was the intent of the Legislature that young women such as Ms. G should despair as to whether they should dare have children in the future, having no recourse to medical or rehabilitative assistance outside the four corners of section 13, a benefit for which they never qualified simply because they had no children at the time of the accident. If rehabilitation expenses are potentially available to men such as Mr. Zehr, Mr. Zettler and Mr. DesRoches for replacement labour notwithstanding the IRB provisions, then rehabilitation expenses should also be potentially available for women such as Ms. G, notwithstanding the caregiver provisions of section 13 of the Schedule.
In this case, in the summary of his neuropsychological assessment, Dr. Comper expressly stated that "[t]he provision of childcare assistance would allow [Ms. G] time to focus on rehabilitation." Dr. Comper supported such assistance as part of a larger rehabilitation program, including counselling, cognitive behavioural therapy, a pain management program and review of the Applicant’s current medication regimen, which did not then include psychotropic (modifying mental activity) medication.
In addition to the specific rehabilitative aspect of the assistance provided by the Saunoris Proposal, Dr. Comper specifically, if perhaps unknowingly, met a further consideration set by Arbitrator Sampliner above, namely, that it was time limited to six to twelve months, at which point it would be reviewed. In his oral evidence, Dr. Comper reiterated that:
this wasn't an endless loop of attendant care, this was to help her deal with a difficult time.
Dr. Comper specifically found the Saunoris Proposal reasonable and necessary "to ensure the safe care of the child." Dr. Comper stated that Ms. G's mood problems, "i.e., her longstanding accident-related [emphasis added] complaints of irritability, anger and pervasive sadness, will likely be exacerbated by any sort of oppositional behaviour posed by a child just now entering into the 'terrible twos.'" In his oral evidence, Dr. Comper testified that in the absence of her significant orthopaedic injuries and the resultant pain, she would not have a chronic mood disturbance.
Earlier in his report, Dr. Comper stated that Ms. G’s responses on testing produced "Asocial, Avoidant, Dependent, Negativistic and Masochistic character traits." Dr. Comper was of the view that the Applicant's "level of emotional upset is normally associated with a psychological disability that would significantly interfere with her ability to care for herself and for her children." He further stated that Ms. G was "at an elevated risk of becoming entrenched in an abnormal illness role."
In his oral evidence, Dr. Comper testified that the Applicant was:
...not well equipped to deal with the energy and volatility of a two year old to the point where there was some concern on her part expressed for acting out towards the child. So I felt it would be reasonable to offer attendant care on the basis of how the mood was affecting her ability to interact appropriately with a two year old.
What I am hearing is that Dr. Comper was of the view that as a result of this accident, in the absence of the recommended time-limited assistance, the well-being of both mother and child are at risk. What I am hearing is that without the recommended time-limited assistance, Ms. G has an enhanced risk of long-term serious emotional illness. Dr. Comper's unprompted repeated use of the words "attendant care" in the above quotes from his oral evidence strongly suggests that a major purpose of the Saunoris Proposal, in his view, is protecting the Applicant's mental health.
I am unable to discern what impairment barriers caused by a motor vehicle accident, be they physical or emotional, could be potentially more compelling to reduce or eliminate than those between a mother and her newborn child. This case is not about replacing pre-accident duties. It is not about "double dipping." This case is now, in significant measure, about whether certain recommended services are reasonable and necessary to rehabilitate a family at risk. I have no hesitation in finding that the Saunoris Proposal is properly advanced as a rehabilitation expense under paragraph 15(5)(l) of the Schedule.
Conclusion
I have found that the Saunoris Proposal is a rehabilitation expense. A medical/rehabilitation DAC report has found the Saunoris Proposal reasonable and necessary, subject to further review, to ensure the safe care of the child and to allow the Applicant time to focus on her rehabilitation. Paragraph 38(14)(a) of the Schedule states that where a medical/rehabilitation DAC opines that the expense is reasonable and necessary for the insured person's treatment or rehabilitation, the insurer shall pay the expense. Subsection 268(8) of the Insurance Act provides that:
Where the No-Fault Benefits Schedule Provides that the insurer will pay a particular benefit pending resolution of any dispute between the insurer and the insured, the insurer shall pay the benefit until the dispute is resolved.
Again, I agree with Director Draper's comments in Sivaloganathan that subsection 268(8):
reflects a fundamental goal of accident benefits. Unlike tort, where compensation can be delayed for years while the dispute is resolved, accident benefits are meant to ensure that the injured person's current needs are met on a without-fault basis, including access to reasonable and necessary treatment and some level of income protection.
I further agree with his comments that the DAC report "determines whether the insurer can complete the stoppage process" and that "[t]here is no question that following receipt of a positive DAC report, the insurer must continue paying benefits."
I thus conclude that pursuant to the medical/rehabilitation DAC report of March 11, 2005 and the provisions of subsection 38(14)(a) of the Schedule and subsection 268(8) of the Insurance Act, Pilot is required to pay Ms. G the monthly sum of $2,267 from November 2004 until:
a medical/rehabilitation DAC opines that a different amount, or no amount is reasonable or necessary (no further DAC opinion having been forthcoming); or,
until such further or other order of an arbitrator.
This is presently subject to the non-catastrophic monetary limits of $100,000.
INTEREST
The Applicant seeks interest on the Saunoris Proposal pursuant to section 46 of the Schedule. Subsection 46(1) states that a benefit is overdue if the insurer fails to pay the benefit within the time required under Part X of the Schedule (Procedures for Claiming Benefits). Subsection 46(2) mandates that if a benefit is overdue, the insurer shall pay interest on the overdue amount for each day the amount is overdue from the date the amount became overdue, at the rate of two per cent per month, compounded monthly.
The Applicant, citing in support the decision of Arbitrator Miller in Hejnowicz and Coachman Insurance Co. (FSCO A03-000780, August 4, 2005), argued that the benefit was payable fourteen days after the denial of the treatment plan. In Hejnowicz, however, the Arbitrator had earlier determined (FSCO A03-000780, March 19, 2004), upon a full hearing, on a balance of probabilities, that the medical benefit sought was reasonable and necessary.
In this case, no such determination has been made. Therefore, at present, entitlement to payment of the benefit flows not from an adjudicative decision that Ms. G has met the requirements of section 15. Rather, the entitlement to payment of the benefit flows from paragraph 38(14)(a) of the Schedule, that is, the DAC opinion that the expense is reasonable and necessary for the insured person's treatment or rehabilitation.
Paragraph 38(14)(a) merely states that the insurer "shall pay for the expense" if a DAC report provides a positive opinion. Implicitly, the benefit is payable immediately. The DAC report is noted completed March 11, 2005. Accordingly, interest is payable from March 11, 2005 on the monthly amounts from November 2004 to March 2005. Interest is payable thereafter on each monthly amount, from the first of each respective month. Interest is payable on all overdue amounts at the rate of two per cent per month, compounded monthly.
This finding of interest is subject to the Applicant proving her claim before myself at the main hearing. Both parties are at liberty to argue that interest, if payable, runs from a different date.
SPECIAL AWARD
I received written and oral submissions regarding both entitlement to and the quantum of a special award. The Applicant provided a written calculation of the quantum against which she submits a special award may be determined. Pilot asked for, and has been allowed, an opportunity to review this mathematical calculation.
In the interim, I again refer the parties to the decision of Soobrian and Belair Insurance Company Inc. (FSCO A04-000422, September 20, 2005). If the parties wish, they may serve and file written submissions as to the significance, if any, of the actions of the insurer in that case regarding a "positive" disability DAC report, and what are the general implications, if any, of the actions of the Insurer in this case. Written submissions shall be served on the other party and filed with the Commission by Friday, January 20, 2006, at 5:00 p.m.
EXPENSES
The parties advised, pursuant to Rule 77 of the Code, that it was not necessary to separate the issue of the legal expenses of this motion from the substantive motion. However, given that the question of a special award is still pending, I will defer my decision regarding expenses.
December 22, 2005
Lawrence Blackman
Arbitrator
Date
Financial Services Commission of Ontario
Commission des services financiers de l’Ontario
Neutral Citation: 2005 ONFSCDRS 181
FSCO A04-000446
BETWEEN:
MS. G
Applicant
and
PILOT 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, presently subject to the non-catastrophic monetary limits of $100,000:
Pilot shall pay Ms. G the sum of $31,738, representing fourteen months of benefits (November 1, 2004 to December 31, 2005 inclusive) at the monthly rate of $2,267, as opined as reasonable and necessary in the medical/rehabilitation Work Able DAC report dated March 11, 2005.
Pilot shall further pay Ms. G, ongoing from January 2006, the monthly sum of $2,267 until:
(a) in accordance with the procedure set out in section 38 of the Schedule, a medical/rehabilitation DAC opines that a different amount, or no amount is reasonable or necessary; or,
(b) until such further or other order of an arbitrator.
interest is payable from March 11, 2005 on the November 2004 to March 2005 monthly amounts of $2,267. Interest is payable thereafter on each monthly amount of $2,267, from the first of each respective month. Interest is payable on all overdue amounts at the rate of two per cent per month, compounded monthly.
the issue of a special award will be determined upon receipt of further written submissions by Friday, January 20, 2006, at 5:00 p.m.
the issue of the legal expenses of this motion will be determined upon receipt of further written submissions by Friday, January 20, 2006, at 5:00 p.m.
December 22, 2005
Lawrence Blackman
Arbitrator
Date
Footnotes
- The Statutory Accident Benefits Schedule —Accidents on or after November 1, 1996, Ontario Regulation 403/96, as amended.