Allstate Insurance Company of Canada v. Adel Harb, 2019 ONFSCDRS 6

Financial Services Commission of Ontario

Commission des services financiers de l’Ontario

Neutral Citation: 2019 ONFSCDRS 6

Appeal P18-00028

OFFICE OF THE DIRECTOR OF ARBITRATIONS

ALLSTATE INSURANCE COMPANY OF CANADA

Appellant

and

ADEL HARB

Respondent

BEFORE:

Edward Lee

REPRESENTATIVES:

David Murray for Allstate Insurance Company of Canada

Frank McNally for Mr. Harb

HEARING DATE:

October 19, 2018

APPEAL ORDER

Under section 283 of the Insurance Act, R.S.O. 1990 c. I.8 as it read immediately before being amended by Schedule 3 to the Fighting Fraud and Reducing Automobile Insurance Rates Act, 2014, and Regulation 664, R.R.O. 1990, as amended, it is ordered that:

1. the appeal is dismissed, and the Arbitrator’s order of April 4, 2018 is confirmed.

2. if the parties are unable to agree about expenses of this appeal, an expense hearing may be arranged in accordance with Rule 79 of the Dispute Resolution Practice Code.

Edward Lee Director’s Delegate

February 13, 2019

REASONS FOR DECISION

I. NATURE OF THE APPEAL

This matter involves the SABS–2010.¹

This is an appeal from a preliminary decision of Arbitrator Matheson (“The Arbitrator”), dated April 4, 2018, wherein the Arbitrator determined Mr. Harb (“the Respondent”) was catastrophically impaired.

Allstate Insurance Company of Canada (“the Appellant”) appeals the decision. For reasons that follow, I am rejecting the appeal.

II. BACKGROUND

Mr. Harb (“the Respondent”) was injured in a motor vehicle accident on July 6, 2012. He applied for accident benefits from Allstate Insurance Company of Canada, payable under the SABS.² Disputes arose in relation to those benefits and Mr. Harb applied for arbitration at the Financial Services Commission of Ontario under the Insurance Act, R.S.O. 1990, c. I.8, as amended.

At the hearing, the Appellant contested the Arbitrator’s jurisdiction to determine whether an insured was catastrophically impaired when no accident benefits were at issue in the arbitration.

According to the Appellant, a “stand-alone” determination regarding catastrophic impairment in the absence of any dispute regarding accident benefits constituted a binding declaration of right, which fell within the exclusive jurisdiction of the Court of Appeal or the Superior Court.³

Further, the FSCO arbitrator’s jurisdiction derived solely from sections 279, 280 and 281 of the Insurance Act, and any power they have must be “… limited to dealing with those questions that must be answered in order to make a ruling on an applicant’s entitlement to benefits.”⁴ As the Courts have held that a designation of catastrophic impairment is not, in and of itself, an accident benefit, an arbitrator cannot determine the stand-alone issue of catastrophic impairment when no accident benefits are sought in the arbitration proceeding.

In his decision, the Arbitrator addressed these arguments. He acknowledged the determination of catastrophic impairment was not an accident benefit: “Reaching the status of catastrophic impairment does not itself determine entitlement to any specific benefit. It is only a gateway to entitlement to the highest tier of enhanced benefits under the Schedule.”⁵

Nonetheless, the Arbitrator held he was not persuaded that an arbitrator did not possess the jurisdiction to decide all disputes in respect of a person’s entitlement to accident benefits, or the amount of benefits to which the person is entitled. He found section 282(3) of the Insurance Act specifically allowed an arbitrator to determine all issues in dispute, whether raised by the insured or the insurer.

The Arbitrator also noted that the Court of Appeal had recognized that within the realm of accident benefits, the courts do not have the sole jurisdiction to make a catastrophic determination. He was unconvinced a finding of catastrophic impairment was declaratory or equitable relief; it was a question that needed to be answered prior to determining whether a specified benefit was reasonable and necessary.

Once he made that determination, the Arbitrator went on to find the Respondent was indeed catastrophically impaired.

The Appellant has appealed both parts of the decision, and I will address each in turn.

III. ANALYSIS

A. Did the Arbitrator err in law when he decided he had the jurisdiction to determine the issue of catastrophic impairment when no accident benefits were claimed in the same arbitration?

First, I agree with the Arbitrator’s reading of the Court of Appeal decision in Liberty Mutual v. Fernandes⁶. In that case, the Court upheld a lower court ruling that struck an insurer’s motion before the Court for a declaration that an insured person was not catastrophically impaired.

The Insurer had sought this declaratory relief to overturn a catastrophic designation made under section 40(4) of the SABS, which read as follows:

s. 40(4) The determination by the designated assessment center is binding on the insured person and the insurer, subject to the determination of a dispute, in accordance with sections 279 to s. 283 of the Insurance Act, relating to whether an impairment is a catastrophic impairment.

The Court of Appeal considered whether “… the dispute resolution scheme of ss. 279-283 of the Act for the determination of entitlement to and the quantum of statutory accident benefits constitutes a complete code, and if so, how it operates, or whether beyond the express provisions of the Act, an insurer has the right to bring an action in the Superior Court to challenge a catastrophic impairment designation.”⁷

The Court of Appeal confirmed the lower court’s ruling which rejected the Insurer’s request for declaratory relief: “It is clear the provisions of ss. 279 to 283 of the Act were intended to and do form a complete code for dispute resolution, which can work effectively and fairly for all parties.”⁸ [emphasis mine]

Second, I also agree with the Arbitrator’s reading of the FSCO appeal decision in Haripersaud v. State Farm Mutual Automobile Insurance Company.⁹

In that case, Director’s Delegate Makepeace considered whether an arbitrator had jurisdiction to enforce a settlement agreement, once the arbitrator had concluded that a valid settlement had resolved the case before her.

Delegate Makepeace approved the words of Delegate Naylor in Branchaud v. Co-operators General Insurance Co.¹⁰:

She held that “the key task in determining the parameters of an arbitrator’s jurisdiction is to look at the task or tasks required of an arbitrator under the legislation.” The task, as set out in subsection 279(1), is to resolve all disputes in respect of an insured person’s entitlement to accident benefits, or the amount of benefits to which he is entitled. The breath of an arbitrator’s jurisdiction is confirmed in section 20 and subsection 282(3) of the Act:

20(1) This section applies to proceedings under this Act before the Commissioner, superintendent and the Director and before an arbitrator.

(2) A person referred to in subsection (1) has exclusive jurisdiction to exercise the power conferred upon him or her under this act and to determine all questions of law or fact that arise in any proceeding before him or her, and unless an appeal is provided under this Act, his or her decision thereon is final den conclusive for all purposes.

282(3) the arbitrator shall determine all the issues in dispute, whether the issues are raised by the insured person or the insurer. [Italics added]

Delegate Makepeace then cited the Divisional Court decision in Wood v. Ontario Insurance Commission¹¹, where the Court considered whether the validity of a settlement agreement was a matter of contract and had to be determined by a court of competent jurisdiction.

Clearly, the issue of whether Guardian has complied with the requirements of the Settlement Regulation has everything to do with Wood’s entitlement to SABS and as such falls within the plain common sense meaning of the words, “any dispute in respect of the insured’s person’s entitlement to statutory accident benefits in ss. 280(1)” [emphasis in original]¹²

Finally, Delegate Makepeace held as follows:

The key point is that Arbitrators’ “have the powers that are conferred on them either expressly by the legislation or by necessary implication.”… I agree with Director’s Delegate Naylor that the plain wording of subsection 283(3) “confers jurisdiction on an arbitrator to deal with those questions which must be answered to in order to make a ruling on an applicant’s entitlement to benefits.”¹³ [emphasis mine]

It is noteworthy that determining the validity of a settlement agreement is also a form of “gateway” decision, as the initial determination does not necessarily entitle an insured to accident benefits. Nonetheless, various Directors’ Delegates have held such a determination is within an arbitrator’s jurisdiction.

Similarly, I agree that a determination on catastrophic impairment is necessary before an insured may be considered for a higher level of accident benefits or the continued provision of accident benefits, and falls within an arbitrator’s jurisdiction. It goes without saying that a negative finding on the catastrophic designation means the insured will never be entitled to higher levels of accident benefits or continued accident benefits, regardless of whether those benefits are reasonable and necessary.

Third, none of the cases (apart from one I will discuss later) cited by the Appellant stand for the proposition that an arbitrator does not possess the requisite jurisdiction to determine a “stand-alone” catastrophic designation. Machaj v. RBC General Insurance Company only holds that an insurer’s denial of a claim for a catastrophic impairment designation does not amount to a denial of an accident benefit.¹⁴

Plumbhouse Plumbing & Heating v Mungo Bear Ltd.¹⁵ dealt with the Small Claims Court and was decided on other grounds because the Court held the relief sought was not an equitable remedy at all.

In Alper v. State Farm Mutual Insurance Company, the arbitrator assumed the jurisdiction to decide the sole issue of catastrophic impairment, but declined to consider the matter for other reasons.¹⁶

The only case supporting the Appellant’s argument is Mandamin v. Pafco Insurance Co.¹⁷, by Arbitrator Mongeon, but that decision makes no mention or analysis of any of the jurisprudence discussed above, including the Court of Appeal decision in Fernandes. Further, Mandamin has been expressly repudiated in other arbitral decisions.¹⁸ Finally, Mandamin did not bind the Arbitrator, and it certainly does not bind me. The Arbitrator was not obligated to follow it.

Therefore, I find no error on law in the Arbitrator’s decision that he had jurisdiction to make this determination of catastrophic impairment status in the absence of any claim for an accident benefit in the arbitration.

B. Did the Arbitrator err in law in determining the Respondent was catastrophically impaired?

The arguments of the Appellant are broken down as follows in their written submissions:

(i) Did the Arbitrator err in law in rejecting the opinion of Dr. Scott?

The Appellant argues the Arbitrator failed to give sufficient reasons, was inconsistent, and erred in law in rejecting the opinion of Dr. Scott.

I reject the Appellant’s argument. The Arbitrator’s consideration and discussion of the expert evidence and testimony in regard to mental and behavioral disorders is detailed and extensive.¹⁹ He also weighed each party’s criticisms of the other’s expert in his section on “Arguments²⁰,” and determined which expert was more credible and whose evidence was more probative in a section called “Decision” at pages 40-42.

In these sections, the Arbitrator clearly and succinctly related why he preferred the evidence of Dr. Ricci over that of Dr. Scott, and how he determined Dr. Scott’s approach to the analysis of catastrophic impairment was deficient, making precise and specific references to the AMA Guides²¹ and the jurisprudence.²² The Arbitrator’s reasons explicitly emphasized the weaknesses inherent in Dr. Scott’s own testimony and report, contrasted with that provided in the evidence of Dr. Ricci.

A party may appeal an arbitrator’s order only on a question of law.²³ The role of the Director’s Delegate is not to re-hear, review, or re-weigh evidence heard at first instance.

In the present case, there was evidence on which the Arbitrator could base his factual assessments and determinations. I find neither insufficiency of reasons nor errors of law in the Arbitrator’s findings concerning the evidence in question.

(ii) Did the Arbitrator err in law in his interpretation and application of the AMA Guides?

The Appellant argues the “proper consideration for catastrophic impairment ought to have been rated pursuant to Chapter 15,” and the Arbitrator erred in law because he should have rejected the evidence of Dr. Ricci, “… an assessor who has not attempted to remove physical causes of pain from consideration in assessing a mental or behavioral disorder.”²⁴

I reject these arguments.

First, the Appellant’s argument is based on paragraphs culled from the decision of the Court of Appeal in Aviva Canada Inc. v. Pastore 2012 ONCA 642, where the Court held as follows:

63This passage states that because it is rare for pain to be a symptom only of a mental disorder, such pain must be carefully assessed. In order to determine whether pain is a symptom of a mental disorder, the assessor needs to remove from consideration, to the extent possible, any physical causes. In difficult and borderline cases, the Guides direct that this should be done using a multi-disciplinary approach. [italics mine]

In the instant case, the Arbitrator considered the evidence of Dr. Ricci and ruled as follows:

In regards to Chapter 14 versus Chapter 15 and how the Applicant is assessed and rated, I am unconvinced that Dr. Ricci did not turn her mind to removing or teasing out the pain elements of the impairment symptoms. In fact she did suggest, in her testimony, this would have been all but impossible to do. I note the Insurer did not present an alternative process for the doctor to pursue in order to tease out the pain, nor did the expert witnesses for the Insurer proffer their solution(s) as to how they teased out the pain. I also note that Dr. Scott, the only other mental health practitioner to testify on behalf of the Insurer, did not allow for any discussion on this matter in his report, nor did he elaborate on the issue in his testimony, other than ignoring the pain issue. Accordingly, since there was not a closed head injury and the pain was perceived by the Applicant to be widespread throughout his upper body, it is my view that Dr. Ricci acted reasonably in the circumstances and the Applicant was properly assessed and rated under Chapter 14. Therefore I accept the Applicant’s application as presented.

Clearly, the Arbitrator considered the argument concerning Chapters 14 and 15 of the AMA Guides, but also determined Dr. Ricci had turned her mind to removing or teasing out the physical elements of the impairment symptoms. Thus, the analysis undertaken and accepted by the Arbitrator in no way contradicted the process outlined in Pastore, where the Court held the teasing out had to be done “… to the extent possible.”²⁵

Second, the Court in Pastore approved of a multidisciplinary approach to pain assessment, and accepted it was not always possible to factor out the impact of an applicant’s discrete physical impairments and associated pain limitations. In that case, the Court also noted how the arbitrator had dealt with this situation:

67In my view, the assessors and adjudicators applied the Guides in their approach to determining whether Pastore's [page543] functional impairments were due to her diagnosed mental disorder. The Guides acknowledge how difficult it is to separate out pain from physical causes and they suggest a multi-disciplinary approach. That approach was taken, but the assessors were not able to factor out physical causes of pain and therefore took a cumulative approach. [italics mine]

A very similar factual finding was made by the Arbitrator in the case at bar.

Third, the Pastore Court approved of the Delegate’s Decision upholding of the arbitral ruling:

68In his decision, the delegate approved that approach. In my view, his decision to do so was a reasonable one; it was within a range of reasonable, acceptable outcomes. The diagnosed mental disorder was "Pain Disorder Associated with Psychological Factors and a General Medical Condition". Because the mental disorder itself involves pain and includes pain associated with a general medical condition, in this case it is certainly reasonable to include pain from the general medical condition to the extent that such pain is connected with the diagnosed mental disorder. [emphasis mine]

Essentially, this same process was followed in the instant case. Here, a multidisciplinary approach was also taken by the Respondent’s assessors,²⁶ but as in Pastore, they were unable to “tease out” all the physical elements of the impairment.

Thus, I find no error of law in the Arbitrator’s interpretation and application of the AMA Guides.

(iii) Did the Arbitrator err in law by reversing the onus of proof and requiring the Appellant to disprove that the Respondent had suffered a catastrophic impairment?

The Appellant argues that the Arbitrator acknowledged there were “a few anomalies in the historical records”²⁷ and the Arbitrator’s treatment of those anomalies amounted to a reversal of the burden of proof which should have been borne by the Respondent at all times during the arbitration process.

The Arbitrator’s assessment of causation is found at pages 40-41 of his decision. There, he discussed and assessed various sources of evidence, including “irregular statements made in regards to the post-2009 accident (sic).”²⁸ In his analysis, the Arbitrator explicitly detailed how he determined the credibility of that evidence and its probative value. He noted deficiencies in the evidence presented by the Appellant. He noted the authors of the irregular statements did not testify, and Appellant did not call witnesses to verify reports or evidence the Appellant suggested conflicted with the Respondent’s statements.

Nothing in the Arbitrator’s assessment suggests he somehow reversed the onus of proof. He assessed and weighed various sources of evidence. It was within his jurisdiction to make these factual assessments, and I find no error of law in his determinations.

(iv) Did the Arbitrator err in rejecting the evidence of Dr. Sharma?

The Appellant argues the Arbitrator failed to provide an explanation as to why he rejected the evidence of Dr. Sharma, whom the Appellant argues “… was uncontroverted and maintained the worsening symptoms were due in part, to arthritis.²⁹

The Arbitrator’s discussion of Dr. Sharma’s evidence is at page 41 of his decision. There, the Arbitrator states that he was unconvinced by Dr. Sharma that all of the Somatic Symptom Disorder was associated solely with arthritis. There was ample evidence from other assessors to support this finding of the Arbitrator³⁰. In fact, the Arbitrator noted himself that Dr. Sharma did not assess for pain or mental issues because it was outside of his scope of expertise, and that Dr. Sharma did not ask “in-depth questions on housekeeping or self-care or other daily activities.”³¹

Again, the task of the Director’s Delegate is not to re-hear, re-weigh or re-assess evidence already considered by the arbitrator at first instance. I find no error of law in the Arbitrator’s rejection of Dr. Sharma’s opinion.

The appeal is dismissed in its entirety and the decision of the Arbitrator is confirmed.

IV. EXPENSES

If the parties are unable to agree about expenses of this appeal, an expense hearing may be arranged in accordance with Rule 79 of the Dispute Resolution Practice Code.

Edward Lee Director’s Delegate

February 13, 2019

Footnotes

1. 1The Statutory Accident Benefits Schedule — Effective September 1, 2010, Ontario Regulation 34/10, as amended.
2. 2Ibid
3. 3Factum of Appellant, ss. 96(3) and 97 of Courts of Justice Act
4. 4Ibid at paragraphs 29-42
5. 5Page 7 of decision.
6. 62006 CarswellOnt 5308 ONCA
7. 7Ibid at Page 4
8. 8Ibid at 10
9. 91999 CarswellOnt 4489 (FSCO A.D.)
10. 10May 2, 1997, Doc. P96-00048 (OIC Dir. Of Arbs.)
11. 11(November 9, 1999), Doc. Toronto 4744/98 (Ont. Div. Ct.)
12. 12Ibid at page 13
13. 13Ibid at page 13
14. 142016 ONCA 257, and similarly by the Divisional Court in Do v. Guarantee Insurance Co., 2015 ONSC 1891
15. 152003 CanLII 72356 (ON SCDC), [2003] O. J. No. 3795
16. 16[2009] OFSCO No 78
17. 17[2017] OFSCO No 207
18. 18Aviva Insurance Company v. 17-004258/AABS, 2018 CarswellOnt 7181 (LAT)
19. 19At pages 22-26 (Dr. Ricci, psychologist); and pages 31-35 (Dr. Scott, psychiatrist)
20. 20Pages 35-40 of decision
21. 21American Medical Association Guides to the Evaluation of Permanent Impairment, 4th Edition
22. 22Pages 42-42
23. 23Rule 50.1 DRPC
24. 24Written submission of Appellant at paragraphs 53 and following
25. 25Ibid
26. 26Pages 19-26 of decision: evidence of Mr. S. Ferland, occupational therapist; and Dr. Ricci, psychologist
27. 27Page 40 of decision
28. 28Page 40
29. 29Written submission paragraph 69, 70 and page 29 of decision.
30. 30See discussions of Dr. Ricci’s testimony and reports pages 22-26 of decision
31. 31Page 29 of decision.