Neutral Citation: 2017 ONFSCDRS 251 FSCO A15-004823

BETWEEN:

SATNAM SANDHU Applicant

and

STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY Insurer

REASONS FOR DECISION

Before: Arbitrator Anne Morris

Heard: In person at ADR Chambers on July 31, 2017, submissions completed on August 4, 2017

Appearances: Ms. Samia Alam (attending on consent by teleconference) for Mr. Satnam Sandhu Mr. Arthur Camporese for State Farm Mutual Automobile Insurance Company

Issues:

The Applicant, Mr. Satnam Sandhu, was injured in a motor vehicle accident on May 25, 2006 and sought accident benefits from State Farm Mutual Automobile Insurance Company (“State Farm”), payable under the Schedule.¹ The parties were unable to resolve their disputes through mediation, and Mr. Sandhu, through his representative, applied for arbitration at the Financial Services Commission of Ontario under the Insurance Act, R.S.O. 1990, c. I.8, as amended.

The parties advised at the outset of the Hearing that, on consent, the Applicant had withdrawn all issues in dispute except the cost of catastrophic (“CAT”) assessments and expenses. The issues in this Hearing therefore are:

Is Mr. Sandhu entitled to payment for costs of examination in the outstanding amount of $10,359.90 ($22,359.90 less $12,000.00 paid) for CAT assessments conducted by Rhuel Maano pursuant to an OCF-18 dated April 28, 2015?
Is either party entitled to its expenses of the Arbitration?

Result:

Mr. Sandhu is not entitled to payment for costs of examination in the outstanding amount of $10,359.90.
If the parties are unable to agree on the entitlement to, or quantum of, the expenses of this matter, the parties may within 30 days of the date of this decision, make submissions to me for determination of same in accordance with Rules 75 to 79 of the Dispute Resolution Practice Code.

EVIDENCE AND ANALYSIS:

The Insurer has paid $12,000.00 for six individual CAT assessments ($2,000.00 per assessment) in accordance with the $2,000.00 cap for assessments set out in section 25(5)(a) of the Statutory Accident Benefits Schedule – Effective September 1, 2010 (“the new SABS”).

It is the position of the Applicant that the $2,000.00 limit per assessment introduced in the September 2010 legislation does not apply to the subject CAT assessments which, in the submission of the Applicant, are properly classified as rebuttal reports. Entitlement to reimbursement for rebuttal reports was available under section 42.1 of the Statutory Accident Benefits Schedule – Accidents on or after November 1, 1996 (the “old SABS”) but the new SABS eliminated the right to rebuttal reports. The Applicant submits, however, that reimbursement for rebuttal reports is still available to him under the old SABS as a vested substantive right which crystallized at the time of the subject 2006 accident and which could not be eliminated retrospectively by the new SABS in the absence of a clear legislative intent to do so. It is the further position of the Applicant that, for similar reasons, the amount available for rebuttal assessments under the old SABS is limited only by reasonableness in accordance with the old SABS, and not by the $2,000.00 cap set out in the new SABS.

While the Insurer has argued that the right to reimbursement for a rebuttal report is not a substantive vested right, the fact is that the Insurer paid for the six reports. The parties did not call evidence at the hearing of this matter but rather made oral submissions with case law provided later. If the Insurer paid for the assessments as other than rebuttal reports, that is not clear to me. Whether or not the Applicant is entitled to reimbursement for rebuttal reports is therefore not the issue in this case. The Insurer has in fact provided reimbursement for the reports. The issue is the level of reimbursement payable by the Insurer.

The Insurer argued that even if entitlement for reimbursement for rebuttal reports, in an amount limited only by reasonableness, survived the amendments of the new SABS, the Applicant was nevertheless not entitled to reimbursement because he did not comply with one of the conditions set out in section 42.1 (3) of the old SABS. That section provides in part as follows:

(3) The insurer shall pay fees in accordance with this section for an assessment or examination of the insured person and for the preparation of a report of the assessment or examination if the following conditions are satisfied:

…3. If the insured person has sustained a catastrophic impairment or the examination under section 42 relates to whether the insured person has sustained a catastrophic impairment, the assessment or examination under this section is conducted and the report provided to the insurer not more than 80 business days after the day the insurer gave the insured person notice of its determination…

The Insurer argued that the Applicant had not provided a copy of the rebuttal report within 80 business days of the Insurer providing notice of its determination that the Applicant was not catastrophically impaired. The Insurer relied upon the findings in Almousavi and TD General Insurance² where the arbitrator indicated that section 42.1(3)3 would have to be complied with before considering granting funding for reimbursement.³

The Applicant did not dispute that this time limit had not been complied with and did not provide an explanation for the failure to meet the time requirement. Instead the Applicant argued that while the right to full funding survived the new SABS as a vested right, the procedure for obtaining such funding had changed. The Applicant submitted that the request for funding is now submitted by way of an OCF-18 (Treatment and Assessment Plan) in accordance with section 38 of the new SABS.

To argue that a substantive right to a benefit has survived as a vested right while a condition for receiving that benefit has been eliminated because the procedure for claiming the benefit has changed seems to me like a self-serving “splitting of hairs”. It is not apparent to me that the time requirement in section 42.1(3) 3 is a matter of procedure only which changed with the requirement that a request for funding for an assessment be submitted by way of a treatment plan. On the other hand, I note that the Insurer did not raise the Applicant’s failure to meet the time requirement when partially funding the six individual CAT assessment reports.

Rebuttal reports were covered under section 24 of the old SABS which deals with costs of examinations as provided in section 24 (1) 10 of that sections as follows:

Reasonable fees and expenses in accordance with section 42.1 that are charged for an assessment or examination of the insured person and the preparation of a report of the assessment or examination.

Costs of Examinations are now dealt with in section 25 of the new SABS. Section 25 (5) provides in part as follows:

(5) Despite any other provision of this Regulation, an insurer shall not pay,

(a) more than a total of $2,000 in respect of fees and expenses for conducting any one assessment or examination and for preparing reports in connection with it, whether it is conducted at the instance of the insured person or the insurer; …

I am inclined to agree that the right to reimbursement for a rebuttal report under the old SABS was a substantive vested right which survived the elimination of funding for rebuttal reports in the new SABS. The level of reimbursement was limited by reasonableness. The concept of “reasonableness”, however, is not a specific substantive benefit. It is a concept of general application to the costs of assessments. In enacting section 25 (a) of the new SABS, the legislature, in my view, expressed a clear intention to cap the costs of assessments at $2,000.00 regardless of whether or not the amount was otherwise reasonable and regardless of whether the entitlement to funding for an assessment arose out of the old SABS or the new SABS.

The Applicant’s claim for payment for costs of examination in the outstanding amount of $10,359.90 is dismissed.

EXPENSES:

If the parties are unable to agree on the entitlement to, or quantum of, the expenses of this matter, the parties may within 30 days of the date of this decision make submissions to me for determination of same in accordance with Rules 75 to 79 of the Dispute Resolution Practice Code.

September 25, 2017

Anne Morris Arbitrator

Financial Services Commission of Ontario