Neutral Citation: 2016 ONFSCDRS 334

FSCO A13-004326

BETWEEN:

SAMEER ISMAIL

Applicant

and

STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY

Insurer

REASONS FOR DECISION on a MOTION

Before: Jessica Kowalski

Heard: By written submissions received to November 30, 2016.

Appearances: A. Fabio Longo for Mr. Ismail Cary Schneider for State Farm Mutual Automobile Insurance Company

The applicant, Sameer Ismail, was injured in a motor vehicle accident on February 6, 2010. He applied for and received statutory accident benefits from the insurer, State Farm Mutual Automobile Insurance Company, payable under the Schedule.¹ After the parties were unable to resolve their disputes through mediation, Mr. Ismail applied for arbitration at the Financial Services Commission of Ontario under the Insurance Act, R.S.O. 1990, c.I.8, as amended, for, among other things, a determination that he sustained a catastrophic impairment as a result of the accident.

A preliminary issue hearing on the question of catastrophic determination is scheduled to start on January 9, 2017. This date is an adjourned date from August 29, 2016. The insurer seeks a stay until the applicant attends in-person insurer examinations (IEs).

The issue on this motion is:

Is the applicant precluded from proceeding to arbitration because he did not attend insurer examinations scheduled in September 2016?

Result:

The examinations the insurer seeks are reasonably necessary. This arbitration is stayed until the applicant attends. The insurer is directed to reschedule the examinations for the earliest date on which the applicant and the assessors are available.

At a pre-hearing on September 21, 2015, the parties agreed to schedule a preliminary issue hearing to deal first with the issue of catastrophic impairment on the basis that it would have a fundamental impact on the benefits in dispute. Approximately ten months after the pre-hearing, in May and June 2016, the applicant attended for his assessments in response to the insurer assessments that were completed in mid-2013.

Prior to the delivery of his assessments, the applicant took the position that he would not attend further in-person IEs.

The applicant has continued to refuse to attend in-person examinations. He submits that he was thoroughly assessed with respect to catastrophic impairment, should not be required to be subjected to intrusive examinations again, and that the insurer is seeking simply to bolster its case at arbitration. The applicant also submits that he will be prejudiced by a delay to the hearing.

The Insurer submits that the applicant’s refusal to attend the IEs severely prejudices its right to have a fair hearing given the passage of three years between the last catastrophic IEs and the applicant’s responding assessments.

Background

The applicant commenced an application for catastrophic determination (OCF-19) on the basis of a neurocognitive/behavioural and mental/behavioural examination of neuropsychologist, Dr. Zakzanis. Dr. Zakzanis’ report was forwarded to the insurer with the OCF-19 dated February 11, 2013.

In response, the insurer scheduled multidisciplinary IEs to address the issue of catastrophic impairment. The IEs took place between May and June 2013.

The applicant obtained responding reports to those of the insurer three years later. The last of the applicant’s reports was served approximately 30 days before the start of the preliminary issue hearing, which at that time was scheduled to start on August 29, 2016.

In the three years between reports, the applicant started the dispute resolution process, filing for mediation and arbitration. During this time, the insurer inquired about the applicant’s assessments. Consistently, insurer’s counsel was advised that they would be delivered by the 30-day deadline set out in Rule 39 of the Dispute Resolution Practice Code (the DRPC).

On July 19, 2016, the insurer requested an adjournment. I granted the adjournment² on the basis that, at the time of the request, some of the applicant’s reports were still outstanding. The applicant, although pre-emptively refusing to attend in-person examinations, acknowledged that the insurer might need time to consider the recent assessments and obtain opinions.

ANALYSIS

Section 44 gives the insurer the prima facie right to an examination.³ There is no explicit or implied limit to the number of examinations.⁴

Starting with F.S. and Belair Insurance Company Inc.,⁵ arbitrators have stayed hearings to allow IEs where fairness required it, and the s.42 (now s.44) requirements were met.

Prevailing arbitral authority has considered a number of factors in determining the reasonableness and necessity of IEs. These include:⁶

i. the timing of the request, especially whether it will require the hearing to be adjourned;

ii. 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;

iii. what other information is available to the insurer, including information provided by the claimant and the number, nature and date of previous insurer examinations;

iv. 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;

v. whether there is a reasonable nexus between the requested examination and the insured person’s injuries;

vi. whether the insurer accepts the claim and continues to pay benefits; and,

vii. 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.⁷

Examinations are inherently intrusive, but that fact alone is not reason for restricting an insurer’s rights under s. 44.⁸ It is also clear that the right to conduct IEs is not static in time: the date of previous IEs is a consideration, and s. 44 permits IEs “for the purpose of assisting an insurer to determine if the insured person is or continues to be entitled to a benefit for which an application is made.

Recent jurisprudence has also made it clear that insurer examinations are not deemed unreasonable simply because they might also prove to be useful in ongoing litigation and that procedural fairness is an overriding consideration.⁹

In Certas Direct Insurance Co. v. Gonsalves¹⁰, the Divisional Court wrote that:

Fundamental to any administrative process, is the requirement that it be fair. At its most basic, procedural fairness requires that a party have an opportunity to be heard and that it be able to respond to the position taken against it.

The applicant’s choice to delay his assessments by three years with the view that compliance with the minimum requirements set out in the DRPC is sufficient has effectively left the insurer without the ability to have its assessors review his reports in circumstances where a significant amount of time has passed.

With respect to the timing of the insurer’s requests, I am not persuaded that the insurer is acting in a manner to bolster its case at arbitration. The timing of the insurer’s requests is in direct response to the timing of the applicant’s reports. The insurer initially attempted paper reviews. It requested in-person IEs after the medical facility (Seiden Health) responded that they would need to see the applicant because of the amount of time that had passed since the last assessments. I find nothing improper in the insurer’s conduct or timing in this regard.

With respect to the reports themselves, the applicant submits that his assessments contain no new diagnoses. However, that was apparently not a consideration when the applicant pre-emptively refused to attend further IEs, even before his own assessments were completed.

Before any reports were delivered to the insurer, in an email dated May 27, 2016, the applicant’s counsel wrote to insurer’s counsel acknowledging that, “We appreciate that you and your client need sufficient time to review, formulate and give/receive opinions” but that, “[i]f your client needs to obtain further reports, we would understand same but we will not agree to produce our client for further examinations”¹¹. In other words, before it could be determined whether the completed reports contained new medical information or diagnosis, counsel for the applicant outright refused to produce his client for further examinations while acknowledging that the insurer would need time to consider the reports.

While the passage of time in this case may alone not be sufficient to warrant further in-person assessments, it must be weighed against all the facts before me. While the applicant is entitled to choose the timing of his assessments, the decision to do so at the last moment should not act to disentitle the insurer from a reasonable response. I note, however, Arbitrator Sone’s comments in Jodoin and Gore Mutual Insurance Company,¹² that the insurer had not conducted catastrophic assessments of Ms. Jodoin for three and one-half years and that “That alone might be a reason for Gore Mutual to update its assessments in a significant case.”

The fact that s.44 permits IEs to determine whether a person is or continues to be entitled to benefits, together with the overarching principle of procedural fairness, dictate that the insurer should have the opportunity to have its experts respond.

Finally, I note a date for the arbitration hearing (regarding benefits in dispute) has already been set aside for May 2017. Provided the parties act reasonably quickly, the preliminary issue hearing can be moved to that date with limited prejudice to both.

Conclusion

For these reasons, I find that the in-person IEs are reasonable and necessary and that fairness dictates that a stay be granted in this case.

December 16, 2016

Jessica Kowalski Arbitrator

Date

Financial Services Commission of Ontario