Financial Services Commission des
Commission services financiers
of Ontario de l’Ontario
Neutral Citation: 2013 ONFSCDRS 121
FSCO A12-001040
BETWEEN:
JEMEAMLOUIS PHILLIPAIYA
Applicant
and
TD HOME AND AUTO INSURANCE COMPANY
Insurer
DECISION ON A MOTION
Before: Susan Sapin
Heard: June 26, 2013, at the offices of the Financial Services Commission of Ontario in Toronto.Written submissions were received on June 13, 2013.
Appearances: Jeffrey Raphael for Mr. Phillipaiya
Brian Murphy for TD Home and Auto Insurance Company
Issues:
The Applicant, Jemeamlouis Phillipaiya, was injured in a motor vehicle accident on October 14, 2008. He applied for and received statutory income replacement benefits (IRBs) from TD Home and Auto Insurance Company (“TD Home”), payable under the Schedule.1 TD Home terminated these benefits just over a year later on November 2, 2009. The parties were unable to resolve their disputes through mediation, and Mr. Phillipaiya applied for arbitration at the Financial Services Commission of Ontario under the Insurance Act, R.S.O. 1990, c.I.8, as amended.
The issue for determination is:
- Is it reasonably necessary for TD Home to require Mr. Phillipaiya to attend Insurer Examinations for the purpose of assisting it to determine if he continues to be entitled to an IRB more than 104 weeks after the accident, under s. 44(5) of the Schedule?
Result:
- The Insurer Examinations are reasonably required.
Positions of the Parties:
TD Home brought this motion asking me to find that the following insurer examinations (IEs) are reasonably required to determine if Mr. Phillipaiya is entitled to receive an income replacement benefit (IRB) on the basis that he meets the “post-104 test,” i.e. that he suffers from a complete inability to engage in any employment for which he is reasonably suited by education, training or experience, 104 weeks after the accident:
A Functional Abilities Evaluation
A neurological assessment
An orthopaedic assessment
A psychological assessment
A vocational assessment
A transferable skills analysis
A labour market survey2
TD Home sent Mr. Phillipaiya notices that it required these assessments on November 30, 2012 and December 4, 2012 – three years and more after it terminated Mr. Phillipaiya’s IRBs effective November 2, 2009 on the basis of IEs that determined he was not substantially unable to engage in the essential tasks of his pre-accident employment.
The arbitration hearing to determine the issues in dispute between the parties, including ongoing entitlement to IRBs, is scheduled to begin on November 4, 2013. TD Home’s argument, in essence, is that it would be unfair to require it to proceed to a hearing on entitlement to post-104 IRBs without its own evidence on that issue. It submits that it has no IEs addressing Mr. Phillipaiya’s post-104 week IRB entitlement; it requires the IEs to adjust his IRB claim; and it reasonably requires the IEs to be able to fairly defend against Mr. Phillipaiya’s IRB claim at the upcoming arbitration. TD Home emphasized that it is not asking for a stay of the arbitration hearing until Mr. Phillipaiya attends the IEs (the usual remedy requested by insurers in similar circumstances), because it believes that in this case, if the IEs are found to be reasonably required, there is still time to obtain them and for Mr. Phillipaiya to rebut them before the arbitration hearing. According to TD Home, the IEs are necessary for a full and fair hearing of the substantive issues in the arbitration.
Mr. Phillipaiya submits that the IEs are not reasonably required at this time; that TD Home has not presented any evidence to indicate the purpose for the IEs; that the dominant purpose for requiring them is not to adjust the claim, but to bolster its case for arbitration, which is not an acceptable reason; there is no reasonable explanation for the delay in requesting the IEs; and the delay is unreasonable.
He further submits that the notices to attend the IE’s were not in accordance with the Schedule as required by s. 44(5) and s. 55.2, because they did not include the qualifications of the persons conducting the assessments.
The Law:
Under s. 44(5) of the Schedule, insurers are entitled, upon proper notice in accordance with the Schedule, to require insured persons to be examined by a health practitioner of the insurer’s choice “not more often than reasonably required,” in order to determine initial or ongoing entitlement to a particular benefit.
The parties cited a number of cases in support of their positions. For the most part, arbitrators and judges agree on certain general principles, beginning with the understanding that although the primary purpose of IEs under the Schedule is for the insurer to determine initial or ongoing entitlement to benefits, i.e. to adjust claims, “as often as reasonably required,” the timing of the requests and other circumstances may limit that right the closer the parties are to arbitration. The statutory right to an IE is limited by an adjudicator’s discretion to control the dispute proceedings in the interests of procedural fairness to both parties.3 Since the Divisional Court decision in Gonsalves,4 the emphasis has shifted from one of strict adherence to the requirement of the Schedule to whether the IE request is consistent with procedural fairness.
In Ramalingam5, the Director’s Delegate outlined factors arbitrators should consider in determining whether an IE is reasonably necessary:
the timing of the request, especially where it will require the hearing to be adjourned;
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 IE request as soon as it reasonably determined the need for the examination;
what other information is available to the insurer, including information provided by the claimant and the number, nature and date of previous IE’s;
whether information provided by the claimant since the insurer’s last IE suggests a new diagnosis, a change in the claimant’s condition or a new direction in medical investigation of it;
whether the insurer accepts the claim and continues to pay benefits;
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.
Findings and Analysis:
The question of whether an IE is reasonably required turns very much on the facts. TD Home asserts that it is seeking to conduct assessments, not for the dominant purpose of arbitration, but to determine if the applicant is entitled to IRBs more than 2 years after the accident, and states its two-year delay in seeking post-104 IEs is because it did not have enough medical information from Mr. Phillipaiya to provide a full medical record to its IE assessors.
I note that TD Home terminated Mr. Philipaiya’s IRBs on November 2, 2009, just over a year after the accident, on the basis of a physiatry assessment, a Functional Abilities Evaluation (“FAE”) and a job site analysis that determined he was not substantially unable to complete the essential tasks of his employment. Mr. Phillipaiya filed an application for mediation of TD Home’s denial of his claims and indicated he was claiming IRBs beyond 104 weeks on October 13, 2010, right at the two year mark, when the test for IRB changes from one of substantial inability to complete inability. I find TD Home had notice at that time that Mr. Phillipaiya was claiming an ongoing income replacement benefit, and post-104 IEs would have been reasonably required at that time.
However, the evidence before me is that TD Home did not send notices to Mr. Phillipaiya to attend post-104 IEs until November 30 and December 4, 2012, more than two years after it had notice of the ongoing claims and two years after the entitlement test changed. This was also several months after Mr. Phillipaiya applied for arbitration claiming ongoing IRBs (March 2, 2012) and after TD Home filed its Response stating its position that he had never been completely unable to engage in any occupation (April 4, 2012).
TD Home submits its delay in requesting the IEs was due to Mr. Phillipaiya’s failure to provide it with timely relevant medical information. I find the first indication TD Home requested further information was in Schedule B to its April 4, 2012 Response. It next requested medical documentation by letter dated October 12, 2012.6 A copy of its AB Brief Index attached to that letter indicates TD Home had in its possession at that time a number of medical documents including two “medical legal” reports which I assume were conducted on behalf of Mr. Phillipaiya and sent by him to TD Home: a July 2, 2012 2-day Situational Assessment Report and an August 7, 2012 Psychovocational Assessment Part II.
These two reports were provided to TD Home after the application for arbitration and response were filed. I find the receipt of these two reports, which I assume are in support of Mr. Phillipaiya’s post-104 IRB claim, likely triggered TD Home’s request for more medical information as well as for the IEs listed above. TD Home next sent notices dated November 30 and December 4, 2012 to Mr. Phillipaiya to attend the IEs, scheduled for December 2012 and January 2013.
Mr. Phillipaiya’s counsel sent a letter to TD Home dated December 2012 advising that his client would not attend the IEs because they were not proper IEs and that the Insurer was trying to bolster its case for arbitration, which was improper.
Given that insured persons have an ongoing obligation under the Schedule to provide insurers with timely and relevant information for insurers to be able to determine initial or ongoing entitlement to benefits, and given the late (July and August 2012) medical reports presumably in support of Mr. Phillipaiya’s post-104 claim, I find procedural fairness leans in favour of TD Home in this case. This is particularly so as it appears that even after the pre-hearing which took place on January 23, 2013, Mr. Phillipaiya had still not produced many of the medical records TD Home had repeatedly requested.
Although TD Home might have acted earlier in this case, I find it was not unreasonable for it not to do so until Mr. Phillipaiya demonstrated he was serious about pursuing his post-104 IRB claim by submitting the two medical-legal reports in support of it. I find TD Home acted promptly after receiving the reports to get a fuller picture of Mr. Phillipaiya’s medical condition by requesting more information.
I find that the IE’s are reasonably required for TD Home to determine Mr. Phillipaiya’s ongoing entitlement beyond 104 weeks; to be able to respond to the case against it; and for a full and fair hearing in this case.
TD Home also raised the issue that Mr. Phillipaiya was precluded from disputing its refusal of his IRB claim by s. 55 2. of the Schedule, which states that an insured person who fails to attend an IE upon proper notice may not commence a mediation proceeding. As noted, in this case, Mr. Phillipaiya maintains TD Home’s notices were deficient, and so his non-attendance does not trigger the operation of s.55.
I find this to be the case. Neither the November 13 nor the December 12, 2012 notice letters includes the qualifications of any of the IE assessors, except for Ian Blackstone, orthopaedic surgeon. Even that bare information is insufficient, given that s. 44(5)(c) specifies that the IE notice must set out “the name of the person or persons who will conduct the examination, any regulated health profession to which they belong and their titles and designations indicating their specialization, if any, in their professions.” The lack of this information is not, as TD suggests, a “technical deficiency.” It is specifically required. As it is lacking, the application of s. 55.2 is not triggered and Mr. Phillipaiya is not precluded from mediating his disputes.
EXPENSES:
I exercise my discretion to remit the question of who should bear the expenses incurred in this motion to the hearing arbitrator.
September 6, 2013
Susan Sapin
Arbitrator
Date
Financial Services Commission des
Commission services financiers
of Ontario de l’Ontario
Neutral Citation: 2013 ONFSCDRS 121
FSCO A12-001040
BETWEEN:
JEMEAMLOUIS PHILLIPAIYA
Applicant
and
TD HOME AND AUTO 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:
- The Insurer Examinations required by TD Home under subsection 44(5) of the Schedule to assess Mr. Phillipaiya’s entitlement to income replacement benefits from 104 weeks after the accident are reasonably required.
September 6, 2013
Susan Sapin
Arbitrator
Date
Footnotes
- The Statutory Accident Benefits Schedule — Accidents on or after November 1, 1996, Ontario Regulation 403/96, as amended.
- I am assuming personal attendance would not be required for this survey and that it would be based on information obtained from the other assessments.
- This is somewhat different than Arbitrator Rogers’ finding in Albanese and State Farm Mutual Automobile Insurance Company (FSCO A10-000464, October 25, 2011), that the post-104 weeks is a change in circumstances that gives an insurer a prima facie right to post-104 IEs; a conclusion that was not directly confirmed on appeal. (P11-00023, December 20, 2011.)
- Certas Direct Insurance Company v. Gonsalves, 2011 ONSC 3986, June 23, 2011
- State Farm Mutual Automobile Insurance Company and Ramalingam (FSCO P05-00026, August 13, 2007), upheld on judicial review.
- Followed by letters dated December 3, 2012, January 7, 2013 and May 16, 2013.