Financial Services Commission of Ontario

Neutral Citation: 2010 ONFSCDRS 11 FSCO A07-002350

BETWEEN:

Tara Davenport, Applicant

and

Lombard General Insurance Company of Canada, Insurer

Decision on a Motion

Before: Jeffrey Rogers Heard: December 10, 2009, at the offices of the Financial Services Commission of Ontario in Toronto.

Appearances: Mr. David S. Wilson, solicitor for Ms. Davenport Ms. Leilah Edroos, solicitor for Lombard General Insurance Company of Canada

Issues:

The issue in this motion is:

1. Should Ms. Davenport be ordered to attend a psychiatry assessment, a physiatry assessment and a neurology assessment, to be arranged by Lombard General Insurance Company of Canada (“Lombard”) and should the hearing, scheduled to be continued on January 11, 2010, be adjourned pending her attendance?

Result:

1. The motion is dismissed.

Evidence and Analysis:

Background

Ms. Davenport was injured in an automobile accident on April 12, 1996. She applied for and received statutory accident benefits from Lombard. Income Replacement Benefits (“IRBs”) were paid to October 1996, when Ms. Davenport returned to work. On December 4, 1997, the parties purported to settle Ms. Davenport’s claims for benefits arising from the accident. Ms. Davenport stopped working in March 2003. She has not returned to work. Her position is that her inability to work is caused by accident related impairments.

After she stopped working in 2003, Ms. Davenport claimed further IRBs. Lombard refused to pay. Ms. Davenport applied for mediation and, after mediation failed to resolve the dispute, she applied for arbitration in October 2007. She claimed entitlement to further IRBs, a Loss of Earning Capacity Offer, interest, expenses and a special award. A pre-hearing was held on February 11, 2008. At the pre-hearing, a Preliminary Issue Hearing was scheduled to resolve the question of the validity of the purported settlement and a later date was set for the hearing on substantive issues.

On November 14, 2008 the Preliminary Issue Arbitrator issued a decision. He ruled that Ms. Davenport could rescind the purported settlement. On February 2, 2009, the hearing started before me as scheduled. It continued on February 3, 4 and 20, 2009. Cross-examination of Ms. Davenport was completed on February 20. She is the only witness heard so far. The hearing is scheduled to be continued in the weeks of January 11 and July 19, 2010.

On September 4, 2009 Lombard paid Ms. Davenport the amount it calculates to be owed for IRBs to that date, plus interest. Although it does not concede entitlement, it has agreed to continue paying IRBs until this arbitration is resolved. Lombard has never conducted medical assessments of Ms. Davenport. On September 21, 2009, it served Notice for her to attend to be examined by Dr. Waisman, a psychiatrist, on October 7, 2009 and by Dr. Yufe, a neurologist, on October 26, 2009. Ms. Davenport refused to attend and Lombard brought this motion.

Relief Sought

Lombard served its motion record on November 23, 2009. The relief sought is an order requiring Ms. Davenport to attend a psychiatry assessment, a physiatry assessment and a neurology assessment, to be arranged and a stay of the arbitration, pending her attendance. In its reply material, served December 7, 2009, Lombard indicated that it was not relying on any Notices it had served. Counsel clarified Lombard’s position at the hearing of the motion. She indicated that Lombard was seeking an order requiring Ms. Davenport to attend the proposed assessments and an adjournment of the hearing from the first scheduled week of continuation in January 2010, pending her attendance. Counsel indicated that the hearing could then be continued in July 2010, in the second scheduled week. Counsel also indicated that, in the event that Lombard’s motion was successful and Ms. Davenport still refused to attend, it would have to consider whether to suspend payment of further IRBs.

Disposition

Section 65(1) of the Schedule¹ provides as follows:

An Insurer may, for the purpose of any of Parts II to VIII, X and XIII and as often as reasonably necessary, give an insured person notice requiring the 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.

Lombard relies on its rights conferred by section 65(1) in bringing this motion. It argues that the purpose of the proposed assessments is its ongoing adjusting of Ms. Davenport’s claim.

The circumstances under which Lombard brings this motion are unique. The hearing has already started and Ms. Davenport has completed her testimony. Lombard has not given Ms. Davenport Notice to attend for examination but seeks a determination that she is required to attend and, in its request for an adjournment, it seeks a sanction in advance of any refusal to attend. Lombard has agreed to pay the only benefit in dispute and to continue to do so pending the outcome of the arbitration. Lombard has advised that it does not intend to rely on any reports from the proposed assessments in this arbitration. There is no precedent for a finding that an insured person is required to attend an examination, in these circumstances. I find that Lombard has not surmounted four major hurdles that stand in the way of its success on this motion.

(1) Notice

Lombard has not given Ms. Davenport Notice to attend. That deprives her of the right to consider whether she will attend, once Lombard complies with its obligations under the Schedule. Lombard conceded in argument that an Arbitrator does not have the jurisdiction to order an insured person to attend an examination, but it still sought an adjournment of the hearing pending attendance at the proposed examinations. However, the absence of a proper Notice removes any jurisdiction to impose a sanction for non-attendance because any such sanction flows from a finding of failure to attend, despite having been given Notice in compliance with all the terms of section 65 of the Schedule.

Although I could not find precedent for it, I do not rule out the possibility that there might be circumstances where it can be anticipated that an insured person will refuse to attend and it would be reasonable to determine an insurer’s right to an examination by a specified health professional, pending service of a proper Notice. However, there is an inherent lack of efficiency in that approach. It would require two hearings on an issue that could be resolved in one hearing, if the insurer gave Notice before bringing the motion. The minimum requirement for adopting such a process would be a reasonable explanation for the insurer’s failure to give Notice and proof that the insured person will not attend, if given proper Notice. Lombard provided neither.

(2) Remedy

Adjourning the hearing does not serve the purpose of advancing Lombard’s ability to compel Ms. Davenport to attend the proposed examinations. Counsel conceded that Lombard is not seeking a stay of the arbitration. That would be a curious remedy, in light of its agreement to continue paying IRBs, pending completion of the arbitration. Therefore, if the hearing is adjourned from January to July and Ms. Davenport still has not attended the proposed assessments, no further adjournment would be sought. Counsel advised that Lombard would then consider whether to suspend payment of benefits, pursuant to the rights conferred by section 65(5.1) of the Schedule. But that approach is problematic. Lombard does not need to bring a motion to be entitled to the remedy conferred by section 65(5.1). Where an insured person breaches obligations imposed by section 65, section 65(5.1) allows the insurer to stop paying the relevant weekly benefit, until the insured person attends for examination. The onus then shifts to the insured person to either comply or seek a remedy. However, in this case, Lombard has agreed to pay the benefit pending the resolution of the arbitration, and it has done so while explicitly not conceding that Ms. Davenport is entitled to payment. In other words, it has agreed to pay despite its position that Ms. Davenport is not entitled.

(3) Jurisdiction

Any reports produced as a result of the proposed assessments will serve no purpose in this arbitration unless they convince Lombard to change its position. Lombard will not be seeking to introduce them into evidence. Counsel submitted that the reports would assist Lombard in determining whether Ms. Davenport is entitled to benefits beyond the completion of this arbitration. However, should the opinions expressed lead Lombard to conclude that Ms. Davenport is not entitled to further IRBs, I doubt that they would be of much value in an application to vary an order made after they were produced. It seems unlikely that Lombard would be permitted to adduce evidence that it is not seeking to admit before the decision maker, in order to attack the decision at a later date. In Ramalingam and State Farm Automobile Insurance Company² I ruled that the fact that reports produced from an assessment are not admissible at the arbitration in which a motion is heard does not preclude jurisdiction of the arbitrator to hear the motion. I stated as follows:

If the examinations are for the purpose of adjusting the claim, it is irrelevant that the reports they generate may not be admitted at the hearing. The adjusting purpose is served upon the insurer receiving the reports. Admissibility of the reports therefore should not affect jurisdiction to hear the motion.

However, in Ramalingam the insurer’s position was that any reports produced should be admitted at the arbitration.

The facts are different here. Because Lombard does not intend to rely on the reports from the assessments in this arbitration, Lombard cannot show that it requires the proposed assessments in order to assist in determining entitlement to any benefits in dispute in this arbitration. Implicit in Lombard’s position is the fact that any right it now seeks to enforce is in anticipation of a future dispute.

I find no jurisdiction to make the order Lombard seeks in these circumstances. Section 281(1) of the Insurance Act gives insured persons the right to choose to pursue a claim for benefits, either at the Commission or in a court of competent jurisdiction, after a dispute arises. Making the order that Lombard seeks would abrogate that right.

(4) Delay

One of the critical factors in assessing whether an insured person is required to attend assessments is the timing of the insurer’s request. Insured persons are generally not required to attend where an insurer delays giving Notice, particularly where the late delivery will impact the ability to proceed with the hearing. The reason is that, the closer to the hearing, the greater the inference that the purpose of the assessment is not to adjust the claim but to bolster the insurer’s position. If the basis of the request is to ensure fairness of the process, assessments closer to the hearing have the increased potential to either tilt the scale in favour of the insurer or create unfair delay.

I find that, even in the absence of all other factors upon which Lombard’s motion may be denied, unreasonable delay on its part precludes its claim that it continues to adjust Ms. Davenport’s entitlement.

Counsel for Lombard submitted that the first time that it could have given Ms. Davenport Notice to attend for assessments was in November 2008, when it received the Arbitrator’s decision on the validity of the settlement. Accepting that, Lombard offered no reasonable explanation for waiting almost a year before pressing the issue of attendance. It could have given Notice immediately upon receipt of the Arbitrator’s decision and would then have been in a position similar to the present, except the hearing would not have started. It could have given Notice immediately upon adjournment of the hearing on February 20, 2009, and then the issue of further adjourning the hearing would have been avoided.

In any event, I do not accept the submission that Lombard’s first opportunity to schedule assessments was in November 2008. I find that Lombard could have done so immediately upon receipt of the claim for further benefits and that it was in a position to seek a remedy in the arbitration as soon as it received the Application for Arbitration in October 2007. From Lombard’s perspective, nothing has changed. Its position has always been that Ms. Davenport is not entitled to further IRBs. The decision on the validity of the settlement simply resolved one basis for denial. Therefore, without reasonable explanation, Lombard has waited almost two years after receiving the Application for Arbitration to press the issue of attending for assessments. In those circumstances, I do not accept Lombard’s suggestion that the reason for the proposed assessments is to assist in its determination of Ms. Davenport’s ongoing entitlement to benefits.

Expenses:

The issue of entitlement to and quantum of expenses of the motion is reserved to be determined upon the completion of the arbitration.

January 25, 2010

Jeffrey Rogers Arbitrator

Financial Services Commission of Ontario

Neutral Citation: 2010 ONFSCDRS 11 FSCO A07-002350

BETWEEN:

Tara Davenport, Applicant

and

Lombard General Insurance Company of Canada, Insurer

Arbitration Order

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

1. Lombard’s motion for an order that Ms. Davenport attend a psychiatry assessment, a physiatry assessment and a neurology assessment, to be arranged and an order adjourning the hearing, scheduled to be continued on January 11, 2010, is dismissed.

January 25, 2010

Jeffrey Rogers Arbitrator

Footnotes

1. 1Statutory Accident Benefits Schedule — Accidents After December 31, 1993 and before November 1, 1996, Ontario Regulation 776/93, as amended
2. 2(FSCO A02–001646, December 17, 2004)