Financial Services Commission of Ontario

Commission des services financiers de l’Ontario

Neutral Citation: 2007 ONFSCDRS 167

FSCO A06-001588

BETWEEN:

LISA FAIZ Applicant

and

WAWANESA MUTUAL INSURANCE COMPANY Insurer

Before: Maggy Murray

Heard: July 4, 2007, at the offices of the Financial Services Commission of Ontario in Toronto.

Appearances: Jack Parsekhian for Ms. Faiz Neil Colville-Reeves for Wawanesa Mutual Insurance Company

Issues:

The Applicant, Lisa Faiz, was injured in a motor vehicle accident on July 10, 2003. She applied for statutory accident benefits from Wawanesa Mutual Insurance Company (“Wawanesa”), payable under the Schedule.¹ Wawanesa refused to pay for weekly income replacement benefits. The parties were unable to resolve their disputes through mediation, and Ms. Faiz applied for arbitration at the Financial Services Commission of Ontario under the Insurance Act, R.S.O. 1990, c.I.8, as amended.

The preliminary issues are:

Is the medical examination requested by Wawanesa under s.42 (1) of the Schedule reasonably necessary?
Is Wawanesa entitled to an Order that the Applicant attend a medical examination to assess and evaluate her medical condition relating to her progressed multiple sclerosis ("MS") prior to the commencement of the arbitration proceedings?
Should this arbitration proceeding be stayed until Ms. Faiz has attended the proposed medical examination?

Result:

The medical examination requested by Wawanesa under s.42 (1) of the Schedule is not reasonably necessary.
I have no jurisdiction to Order that Ms. Faiz attend a medical examination.
This arbitration hearing is not stayed.

EVIDENCE AND ANALYSIS:

Legislation:

An insurer’s right to examine its insured is set out in s.42 of the Schedule which states:

42(1) For the purposes of assisting an insurer determine if an insured person is or continues to be entitled to a benefit under this Regulation for which an application is made, an insurer may, as often as is reasonably necessary, require an insured person to be examined under this section by one or more persons chosen by the insurer who are members of a health profession or are social workers or who have expertise in vocational rehabilitation.

(4) Whenever the insurer requires an insured person to be examined under this section, the insurer shall arrange for the examination at its expense and shall give the insured person a notice setting out,

(a) the reasons for the examination;

(b) the type of examination that will be conducted and whether the attendance of the insured person is required during the examination;

(c) the name of the person or persons who will conduct the examination, the regulated health professions to which they belong and their titles and designations indicating their specialization, if any, in their professions; and

(d) if the attendance of the insured person is required at the examination, the day, time and location of the examination and, if the examination will require more than one day, the same information for the subsequent days.

The s.42 notice of examination (“Notice”) must be in a form approved by the Superintendent of Insurance² and the insured must receive the Notice at least five business days before the examination.³

ANALYSIS:

Issue One:

a) Is the medical examination requested by Wawanesa under s.42 (1) of the Schedule reasonably necessary?

On April 3, 2007, Wawanesa couriered to Ms. Faiz a purported Notice of the proposed examination that Wawanesa scheduled for April 17, 2007.

Wawanesa did not send a copy of this Notice to her counsel.⁴ The hearing in this matter is scheduled for November 19, 2007.

Insurer's Submissions:

Following the accident, Ms. Faiz continued working until March 8, 2004. During the pre-hearing conducted on January 22, 2007, counsel for Ms. Faiz advised that Ms. Faiz was unable to attend the pre-hearing because her multiple sclerosis had progressed and she had difficulty commuting. According to Wawanesa, the pre-hearing was the first time it was made aware of the Applicant's "progressed" MS.⁵ Wawanesa is requesting that Ms. Faiz undergo a s.42 examination with a neurologist because it has not yet had the opportunity to medically assess her MS complaint.

Applicant's Submissions:

According to Ms. Faiz, Wawanesa has known since July 17, 2004⁶ that she was diagnosed with MS. Her position is that Wawanesa has known for years about her MS condition and Wawanesa is now trying to bolster its case for arbitration rather than adjust her claim.

Law and Analysis:

It is unreasonable to request an examination where circumstances indicate that its only apparent purpose is to acquire medical evidence to bolster the insurer’s case at a hearing.⁷ Consequently, a proposed insurer medical assessment must be for the purpose of adjusting the claim.⁸

Determining the appropriateness of a request for a medical examination requires a balancing of the interests of the parties, in the context of the particular facts.⁹ The following factors must be considered in determining whether a s.42 examination is “reasonably necessary”:

1. The timing of the insurer’s request. The closer a request is made to a hearing, the more stringent the scrutiny of its reasonableness should be to ensure that there is no avoidable delay or that the insured’s preparation for the hearing is not prejudiced.[^10] Absent a clear explanation, examinations scheduled on the eve of a hearing suggest the kind of tactical brinkmanship that arbitrators have rejected as part of this system.[^11]

A medical/rehabilitation DAC assessment conducted on July 10, 2004 reported that Ms. Faiz was diagnosed with MS, complained of MS related symptoms for the past six months and that her symptoms are "getting worse."¹² In a report dated March 2, 2006, Dr. Marchetti (neurologist) opined that it is probable that the accident was the cause of Ms. Faiz's MS.¹³ Wawanesa waited over one year between receiving Dr. Marchetti's report and requesting that Ms. Faiz undergo a s.42 examination.

2. The possible prejudice to both sides. If there will be a delay of the start of the arbitration hearing in order for an insured to attend an insurer’s examination,[^14] that may be considered prejudicial to the Applicant.

The arbitration hearing is scheduled to commence November 19, 2007, less than three months from now. Other than Wawanesa's blanket statement that its request is made in a "timely manner,"¹⁵ I have no evidence that the arbitration hearing will proceed as scheduled if Wawanesa's request for a medical examination is granted. By the time the insurer schedules an appointment, the report is completed and the report is serviced on the Applicant, this would afford Ms. Faiz little, if any, opportunity to provide a responding report and comply with Rule 39.1 of the Dispute Resolution Practice Code – Fourth Edition (the "Code"), which provides that all documents, including reports, must be served on the other party at least 30 days before the first day of the hearing.

3. The number and nature of previous insurer’s examinations.[^16]

Ms. Faiz has not undergone any s.42 examinations.

4. The nature of the examinations being requested.

There is a reasonable nexus between the neurological examination requested and the Applicant’s complaint of MS.

5. Whether there are any new issues raised in the applicant’s claim that require evaluation. Where there are changes in the nature of an insured person’s medical or psychological condition which are relevant to a disability claim, further examinations are reasonable.[^17]

There are no new issues raised by Ms. Faiz. In a treatment plan dated March 16, 2004,¹⁸ Dr. Kevin Hue-Fah reported that Ms. Faiz was having difficulty walking (limping), balance difficulties and fell twice since the accident. Although her counsel advised during the pre-hearing that her condition has "progressed," Wawanesa has known since July 10, 2004 that Ms. Faiz's MS symptoms were "getting worse."¹⁹

As stated above, in Dr. Marchetti's report dated March 2, 2006,²⁰ he opined that it is probable that the accident was the cause of Ms. Faiz's MS.²¹

Conclusion:

Wawanesa was aware of Ms. Faiz's limitations caused by MS as early as July 2004.²² Moreover, the report of Dr. Marchetti dated March 2, 2006 was served over one year before Wawanesa requested that Ms. Faiz undergo a s.42 examination. Wawanesa also waited over two months following the pre-hearing to request a s.42 examination. Therefore, I find that Wawanesa has not met its onus of establishing that the s.42 examination is reasonably necessary because of the delay in requesting one. Wawanesa, in its submissions for this motion, stated that it required "evidence" for the upcoming hearing. Consequently, I also find that Wawanesa is trying to bolster its case for arbitration rather than adjust Ms. Faiz's claim.

Even if I found that Wawanesa's request to have Ms. Faiz undergo a s.42 examination was reasonably necessary, I would have denied Wawanesa's request because it did not comply with the Notice requirements in s.42(4) of the Schedule, as outlined below.

b) Deficiency of Notice:

Section 42 of the Schedule requires an insurer to provide the insured with Notice of an examination. The Notice must include the particulars contained in s.42(4) of the Schedule set out above. Wawanesa conceded during this motion that its Notice incorrectly referred to the doctor’s specialty²³ as “opthalmology” rather than neurology.

The Applicant’s counsel wrote to Wawanesa on April 11, 2007 and advised that the Applicant is not disabled because of her vision. On April 16, 2007, Wawanesa wrote directly to the Applicant’s counsel and advised that the doctor "is a neurologist." Wawanesa did not advise that its Notice dated April 3, 2007 incorrectly referred to the doctor’s specialty as ophthalmology.

In Part 2 of the Notice, “Income Replacement Benefits” is checked off under the heading "Type(s) of Examination." This is not in compliance with s.42 (4) (b) of the Schedule, which refers to "the type of examination that will be conducted." An “income replacement benefit” is not an examination that is conducted. It is a benefit. An "examination that will be conducted" is, for example, a functional abilities evaluation, an in-home assessment, an orthopedic examination, a neurological examination, to name only a few types of examinations. Indeed, all the items under “Type(s) of Examination” refer to various benefits under the Schedule. As it was stated in Smith v. Co-operators:

The use by the insurer of a prescribed form does not detract from its obligations under (the Schedule).

The industry practice of using a form prescribed by the (Superintendent) cannot somehow be a substitute for conformity with … the SABS. There is no indication that insurers are legally prevented from adding to the prescribed form so that it is in conformity with the legal requirements.²⁴

Wawanesa’s position regarding the Notice was that: (a) the reference in the Notice to the doctor’s specialty as ophthalmology was merely a "technical deficiency" that was rectified by its letter of April 16, 2007 to the Applicant’s counsel; and (b) the “type of examination” that indicated “Income Replacement Benefits” is a reference in the Notice, which information was clarified in its letter of April 16, 2007 by Wawanesa’s reference to the doctor who "is a neurologist." I disagree with both these submissions. As it was stated in Ives and Wawanesa Mutual Insurance Co.:²⁵

The legislature has set out information the insurer must give the insured if it seeks an examination, so that the insured can determine whether he or she wants to submit to the procedure. The parties cannot waive compliance with this section.

Wawanesa did not indicate in its Notice or letter of April 16, 2007 that the s.42 examination was a neurological examination which is also non-compliant with s.42 (4) (b) of the Schedule. Although in many instances "the type of examination that will be conducted"²⁶ can be inferred from an individual's "specialization,"²⁷ this is not always the case. Additionally, the legislature has set out the two as distinct pieces of information that an insurer is required to provide in its Notice.

There was no clarification in Wawanesa's letter dated April 16, 2007 that its Notice incorrectly referred to the doctor’s specialty as ophthalmology rather than neurology. Wawanesa's Notice, combined with its letter, “would tend more to confuse.”²⁸ Even if it is accepted that Wawanesa’s letter of April 16, 2007 corrected the Notice, it was given to the Applicant’s lawyer the same day²⁹ as the proposed examination, rather than at least five business days before the examination, in contravention of s.42(5)(b) of the Schedule.

I raised the issue with the parties of whether the Notice was deficient, and they were given an adequate opportunity to argue the issue. Wawanesa’s position was that the deficiency of the Notice is not an issue in this motion because it was not raised by the Applicant. I disagree. It is always open to an adjudicator to raise a legal issue on the facts before him or her and give the parties an opportunity to respond.³⁰

Wawanesa failed to provide the particulars required by s.42 (4) of the Schedule within the time required³¹ under the Schedule. Because Ms. Faiz was not provided with the proper Notice from Wawanesa that complies with s.42 of the Schedule, Wawanesa is not entitled to an Order that a proposed examination of the Applicant is reasonably necessary.³²

Issue Two:

I have found that the examination is not reasonably necessary. However, I note that it has previously been held that an arbitrator does not have jurisdiction to order an insured to attend a medical examination.³³

Issue Three:

Because Wawanesa's request that Ms. Faiz undergo a s.42 examination is not reasonably necessary, and because it did not serve her with a Notice that complied with s.42 of the Schedule, Wawanesa is not entitled to an Order staying this arbitration proceeding.

EXPENSES:

I exercise my discretion to award Ms. Faiz her expenses incurred in this preliminary issue hearing. If the parties are unable to agree on the issue of quantum, they may make submissions in accordance with Rule 79 of the Dispute Resolution Practice Code - Fourth Edition.

August 31, 2007

Maggy Murray Arbitrator

Date