Financial Services Commission of Ontario

Neutral Citation: 2009 ONFSCDRS 136 FSCO A08-001248

BETWEEN:

DENISE GONSALVES Applicant

and

CERTAS DIRECT INSURANCE COMPANY Insurer

DECISION ON A PRELIMINARY ISSUE

Before: Rosemary Muzzi Heard: September 21, 2009, at the offices of the Financial Services Commission of Ontario in Toronto.

Appearances: Amin Sachedina for Mrs. Gonsalves Todd J. McCarthy for Certas Direct Insurance Company

Issues:

The Applicant, Denise Gonsalves, was injured in a motor vehicle accident on August 25, 2005. She applied for and received statutory accident benefits from Certas Direct Insurance Company ("Certas"), payable under the Schedule.¹ Certas denied weekly non-earner benefits. The parties were unable to resolve their disputes through mediation, and Mrs. Gonsalves 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 in this hearing are:

1. Is it reasonably necessary for Mrs. Gonsalves to attend an orthopaedic examination pursuant to section 42 of the Schedule?

2. In the event the examination is determined to be reasonable, is Certas entitled to a stay of these arbitration proceedings until Mrs. Gonsalves has attended?

Result:

1. It is reasonably necessary for Mrs. Gonsalves to attend an orthopaedic assessment.

2. The arbitration proceedings are stayed pending Mrs. Gonsalves' attendance at the orthopaedic assessment.

EVIDENCE:

Background

Mrs. Gonsalves suffered two fractures as a result of an accident that occurred on August 25, 2005: a fracture of the left hemi-pelvis and a fracture of the left femural shaft. She underwent surgery and her orthopaedic surgeon, Dr. Michael Ford, completed a Disability Certificate (OCF-3) on October 3, 2005 in which he indicated his opinion with respect to her disabilities, including:

• A substantial inability to:
  • perform the essential tasks of her employment for more than 12 weeks
  • to return to work on modified hours and/or duties for more than 12 weeks
  • to engage in the care giving activities in which she engaged at the time of the accident for more than 12 weeks
  • to perform the housekeeping and home maintenance services she normally performed before the accident for more than 12 weeks;
• An inability to continue in an education program that she was enrolled in at the time of the accident;
• Not completely unable to carry on a normal life.

While Certas did not request that she be examined by another orthopaedic surgeon, Mrs. Gonsalves consulted with Dr. Fred Langer in October 2006. Dr. Langer noted pain in the left hip and problems she had with certain postures such as sitting for longer periods of time with the knee bent, standing, squatting, kneeling and climbing stairs and inclines. He opined that she had a significant disability for doing any of the strenuous housekeeping/home maintenance activities she did in the period prior to the accident and a disability for weight bearing activities.

After filing an application for mediation claiming non-earner benefits, Mrs. Gonsalves consulted with Dr. D.J. Ogilvie-Harris, another orthopaedic surgeon, in December 2007. He opined that she had suffered significant injuries as a result of the August accident. He also found that she had ongoing limitations due to her spine and left lower extremity and pain with restrictions in these areas such that it limited her ability to do prolonged standing and sitting, bending, lifting, twisting, turning or impact loading activities meaning she would require help with heavier household tasks. He concluded that this represented a permanent and serious impairment of important bodily functions and that the ongoing pain imposed functional limitations.

In February 2008, Mrs. Gonsalves' family physician completed an OCF-3 indicating that she suffered a complete inability to carry on a normal life. By way of explanation he indicated that that she suffered diminished mobility and pain secondary to multiple fractures with an anticipated duration of more than 12 weeks. By way of further explanation for the anticipated duration of the disability, he indicated that "patient sustained multiple site fractures and lost her mobility until recent past. Chronic pain, symptoms of depress (sic), post traumatic stress interfered with pre-accident functioning levels".

Certas did not seek to carry out its own orthopaedic assessment until October 2008 when this matter came on for its first pre-hearing conference. At that time, a hearing on the merits of Mrs. Gonsalves' application was set down for the week of September 21, 2009. A preliminary matter was also raised: whether two assessments that Certas wanted to conduct, an orthopaedic and a psychiatric assessment, were reasonably necessary and whether the arbitration hearing would be stayed pending Mrs. Gonsalves' attendance at these assessments. This preliminary matter was heard and decided by an arbitrator in December 2008. The arbitrator found that Certas' orthopaedic assessment was not reasonably necessary concluding in part that there was no evidence before her that Mrs. Gonsalves' orthopaedic symptoms presented a new diagnosis, a change in her condition or a new direction in medical investigation and, having considered a host of other factors, that granting the insurer's request was not required in order to preserve an adequate hearing. The arbitrator did allow Certas' request for a psychiatric assessment and stayed the proceedings pending her attendance thereto.

Mrs. Gonsalves attended at the psychiatric assessment in March 2009. On August 17, 2009, Mrs. Gonsalves' counsel, who had assumed carriage of her case from another lawyer at the firm around August 10, 2009, informed Certas that he wrote to the Commission asking that the stay of proceedings be lifted and that the arbitration hearing originally scheduled for the week of September 21 be allowed to proceed as scheduled. Counsel for Certas agreed that the matter should proceed as originally scheduled and, on August 19, 2009, the arbitrator ordered that the stay of proceedings be lifted.

By letters dated August 20 and 21, 2009, counsel for Mrs. Gonsalves provided Certas with new experts' reports from Drs. Langer and Ogilvie-Harris dated August 18, 2009 and August 17, 2009, respectively. Mrs. Gonsalves' Arbitration Brief, filed sometime thereafter, contains both of these reports.

The matter came before me for arbitration on September 21, 2009. Certas again brought a motion for the conduct of a section 42 orthopaedic assessment and a stay of the arbitration hearing pending Mrs. Gonsalves' attendance, this time based on the information contained in the two new expert reports.

Arguments

Insurer's Argument

Certas argues that it is entitled to an orthopaedic assessment of Mrs. Gonsalves as a means of responding to the newest orthopaedic reports prepared by Drs. Langer and Ogilvie-Harris. That new evidence includes new evaluations and assessments by the two doctors, information about a change of condition, a new diagnosis and therefore a new expert opinion about whether Mrs. Gonsalves meets the test for non-earner benefits. Certas argues that without an ability to respond to two new reports filed right at the 30 day deadline for the filing of materials before an arbitration hearing, there is an appearance of trial by ambush.

Certas also asserts that it would not have agreed to lifting the preceding stay of proceedings had it known that the hearing would proceed with new medical evidence to which it would have had an inability to respond. Had the insurer known of the new reports, it could have made an earlier request for an orthopaedic assessment.

Certas argues that whether the applicant meets the test for non-earner benefits is a mixed question of fact and law for which the arbitrator utilizes the advice and assistance of expert witnesses. Certas asserts that the hearing process is rendered unfair if Certas is denied an ability to respond to the new evidence and new opinions of a change in Mrs. Gonsalves' condition.

Mrs. Gonsalves' Argument

Mrs. Gonsalves submits that the matter of Certas' request for an orthopaedic assessment is res judicata. This issue has already once been litigated. The decision of the arbitrator was final and this current dispute involves the same issue and the same parties and therefore cannot be revisited.

Mrs. Gonsalves also submits that the new expert reports are merely updated reports because the doctors had not seen her in two years. Drs. Langer and Ogilvie-Harris had already seen her for examination and seen her records. What they have now provided is simply a new opinion based on the same evidence. Mrs. Gonsalves asserts that a new medical opinion is not a basis for a further insurer assessment. If an opinion is the basis for an assessment, then the insurer should have conducted its orthopaedic assessment when it had Dr. Ford's opinion early on that Mrs. Gonsalves did not meet the test. Further, an opinion with respect to whether Mrs. Gonsalves meets the test for non-earner benefits is a legal issue for the hearing arbitrator to decide so the doctors' opinions in this regard are essentially irrelevant.

Mrs. Gonsalves also submits that the assessment is not reasonably necessary in the current circumstances. Certas is asking for an assessment simply to bolster its claim. The fact that Mrs. Gonsalves' injuries have evolved over time cannot be a surprise to Certas. Whether Mrs. Gonsalves meets the test of non-earner benefits has been the same, live issue since the beginning of the proceeding. Certas could have got an orthopaedic assessment at any other point and did not. Initially Certas denied benefits on the basis of an opinion that Mrs. Gonsalves did not meet the test. Certas now has more recent new information and its earlier opinion is no longer of assistance to it so its request is merely to bolster its case at arbitration.

Law

Subsections 42(1) and (3) of the Schedule, in force on August 25, 2005, provide as follows:

(1) For the purpose of determining, whether an insured person is entitled to a benefit for which an application is made, an insurer may give the insured person notice requiring the insured person to be examined by one or more persons specified by the insurer, each of whom is a member of a health profession or a person with expertise in vocational rehabilitation.

(2) The insurer may require examinations as often as is reasonably necessary.

Analysis and findings

Is the issue of attendance at an orthopaedic assessment pursuant to section 42 res judicata?

Section 42(2) of the Schedule anticipates that an insurer may request that an insured undergo an assessment more than once and specifically allows that such assessments can be required as often as is reasonably necessary. The result is that a dispute of the nature we have here can arise more than once in a proceeding. Furthermore, the arbitral jurisprudence in these matters indicates that one of the factors that an arbitrator can consider in deciding whether an assessment is reasonably necessary is the existence of a new diagnosis. Such a consideration also anticipates that the question can arise more than once in a proceeding. Had this motion been brought on exactly the same evidence and in the same circumstances as the motion that went before the arbitrator in December 2008, I would find the issue res judicata. Instead, there are new circumstances to consider.

On this basis I find that the matter is not res judicata.

Is an orthopaedic assessment pursuant to section 42 reasonably necessary in the circumstances?

Arbitrators have a broad discretion to preserve the integrity of the adjudicative process. As such, ensuring a fair process or an adequate hearing may require that an insurer's examination proceed even after the filing of an application for arbitration and despite the insurer's mixed motivations in requesting it.

When determining the reasonable necessity of an insurer's request for examinations after the application for arbitration has been filed, rather than focusing on an insurer's motivations or to other subjective factors, the prevailing arbitral authority is that the enquiry should focus mainly on the objective factors identified in numerous decisions, including:

1. the timing of the request, especially whether it will require the hearing to be adjourned;
2. whether the claimant disclosed relevant materials as soon as reasonably possible in accordance with the Dispute Resolution Practice Code and whether the insurer made its insurer examination request as soon as it reasonably determined the need for the examination;
3. what other information is available to the insurer, including information provided by the claimant and the number, nature and date of previous insurer examinations;
4. whether information provided by the claimant since the insurer's last insurer examination suggest a new diagnosis, a change in the claimant's condition or a new direction in medical investigation of it;
5. whether there is a reasonable nexus between the requested examination and the insured person's injuries;
6. whether the insurer accepts the claim and continues to pay benefits, and
7. generally whether the request is reasonable considering the balance between the insured person's right to privacy and the insurer's ongoing right and obligation to assess the claim.

Taking into account all of these considerations, I find that Certas' orthopaedic assessment is reasonably necessary in these circumstances.

Beginning first with a consideration of the objective criteria identified above, the evidence before me indicates that the two new reports from Drs. Langer and Ogilvie-Harris, filed thirty days before the commencement of the arbitration proceeding, do suggest a new diagnosis or a change in Mrs. Gonsalves' condition from what they found when they examined her two years before. This point is significant as the information before the arbitrator when Certas first requested an insurer's orthopaedic examination had not changed for some time.

Further, with respect to Certas' timing for the request, I find that it brought its motion within a reasonable time after it became aware of the two new reports.

In my consideration on this point, I have also taken into account what appears to have been some tight, and perhaps unfortunate, timing around the final preparation of this case for arbitration.

By letter dated August 10, 2009, Mrs. Gonsalves' current counsel informed counsel for Certas that he had assumed carriage of her case from another lawyer at the firm. That letter addressed other issues and specifically indicated that at arbitration he intended to rely on the documents and reports previously provided. One week later, counsel wrote to the Commission asking that the stay of proceedings be lifted and that the arbitration hearing originally scheduled for September 21 be allowed to proceed. Counsel's letter indicated that he had sought the consent of Certas' counsel. On August 19, counsel for Certas agreed that the matter should proceed as originally scheduled and the stay of proceedings was lifted by arbitral order. By letters dated August 20 and 21, counsel for Mrs. Gonsalves provided Certas' counsel with the updated reports of Drs. Langer and Ogilvie-Harris respectively. While the new reports were filed in strict accordance with the thirty day disclosure provisions of the Code, only ten days passed between counsel's letter indicating that he intended to rely upon reports already produced and the delivery of brand new reports which were a complete surprise to Certas' counsel. The delivery of these reports did not need to be a complete surprise to counsel for Certas. Presumably, the two examinations had been scheduled in advance of the release of the reports.

The lifting of the stay of proceedings imposed earlier, the completion of the new assessments and reports, and the delivery of those materials for the arbitration proceeding seemed all to occur within a week's time. In addition, all of these events occurred in August when both counsel for Certas and his assistant had been off on vacation for periods of time.

Given all the circumstances, I find that Certas brought this motion in as timely as manner as possible.

The new reports of Drs. Langer and Ogilvie-Harris are very relevant to Mrs. Gonsalves' injuries and the claim to be adjudicated. Given the evidence in the new reports, especially the evidence suggesting a change in the applicant's condition, and considering that Mrs. Gonsalves has not yet undergone an insurer's orthopaedic examination, Certas' ongoing right and obligation to assess the claim outweighs the applicant's right to privacy and to be spared a further intrusive examination.

Taking into account the objective factors and these particular circumstances, I find that it would be unfair to proceed with the arbitration as scheduled. Certas should have an opportunity to respond to the new information provided by Mrs. Gonsalves. An orthopaedic assessment pursuant to section 42 of the Schedule is reasonably necessary in the circumstances.

I also find that the arbitration proceeding should be stayed until Mrs. Gonsalves attends the orthopaedic examination in furtherance of the objective of preserving an adequate and fair hearing process.

EXPENSES:

Neither party made submissions on the issue of expenses. The parties may raise this issue within 30 days of the date of this decision or may defer this issue to be dealt with at the hearing.

October 9, 2009

Rosemary Muzzi Arbitrator

ARBITRATION ORDER

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

1. It is reasonably necessary for Mrs. Gonsalves to attend an orthopaedic assessment.

2. The arbitration proceeding is stayed pending Mrs. Gonsalves' attendance at the orthopaedic assessment.

October 9, 2009

Rosemary Muzzi Arbitrator

Footnotes

1. 1The Statutory Accident Benefits Schedule — Accidents on or after November 1, 1996, Ontario Regulation 403/96, as amended.