LICENCE APPEAL TRIBUNAL
Safety, Licensing Appeals and Standards Tribunals Ontario
In the matter of an Application pursuant to subsection 280(2) of the Insurance Act, RSO 1990, c I.8., in relation to statutory accident benefits
Between:
J. T. Applicant
and
Intact Insurance Company Respondent
DECISION
Panel: Nicole Treksler and Chris Sewrattan, Adjudicators
Appearances: For the Applicant: Joelle Sears-Briggs, counsel For the Respondent: Anna-Marie Musson, counsel; Roxanne Hector and Beata Morris, representatives
Held by Teleconference: September 16, 2016
I. Introduction:
The Applicant, J. T., was injured in an automobile accident on October 26, 2011 and sought benefits pursuant to the Statutory Accident Benefits Schedule - Effective September 1, 2010 (the ''Schedule'').
On April 12, 2016, the Applicant submitted an application for dispute resolution services to the Licence Appeal Tribunal – Automobile Accident Benefits Service (the “Tribunal”) because Intact Insurance Company (“Intact”) had denied his Treatment & Assessment Plan for psychological services dated November 14, 2015 for $2,320.00.
The Tribunal held a case conference on June 22, 2015.
The June 22, 2015 Case Conference
At the start of the case conference, the parties informed the adjudicator that Intact had approved the Treatment Plan. However, the Applicant wanted to recover his costs for preparing his application and alleged that Intact had acted unreasonably.
Prior to the case conference, the parties attempted to settle the issue of costs, but were not able to come to an agreement. At the case conference, the settlement discussions continued, but the parties were still not able to resolve the issue in dispute.
As the parties could not come to settlement on this issue, the Tribunal, with the consent of the parties, scheduled a preliminary issue hearing for July 11, 2016 on whether the Tribunal had the jurisdiction to consider the Applicant’s request for costs under Rule 19.1 of the Licence Appeal Tribunal Rules of Practice and Procedure (the “Rules”).
Preliminary Issue Hearing July 11, 2016
The July 11, 2016 preliminary issue hearing addressed only the question of whether the Tribunal had the jurisdiction to consider J. T.’s request for costs after he settled the original dispute with Intact prior to the initial case conference.
In the Tribunal’s decision on jurisdiction released August 16, 2016, the Tribunal determined that it has the jurisdiction to award costs, but only under Rule 19.1. This rule states that a party can request costs where a party in a proceeding has acted unreasonably, frivolously, vexatiously, or in bad faith.
The Tribunal ordered a second hearing by teleconference to address the Applicant’s and the Insurer’s requests for costs under Rule 19.1, and the Applicant’s request for an award under s. 10 of O. Reg. 664.
II. Issues:
- Is the Applicant entitled to recover costs pursuant to Rule 19.1 of the Rules?
- Is the Insurer entitled to recover costs pursuant to Rule 19.1 of the Rules?
- Is the Applicant entitled to an award under s. 10 of O. Reg. 664 because the Insurer unreasonably withheld or delayed payments to the Applicant?
III. Result:
a. The Applicant is not entitled to recover costs pursuant to Rule 19.1 of the Rules.
b. The Insurer is not entitled to recover costs pursuant to Rule 19.1 of the Rules.
c. The Applicant is not entitled to an award under s. 10 of O. Reg. 664 as the Insurer did not unreasonably withhold or delay payments to the Applicant.
IV. Analysis:
Is the Applicant entitled to recover costs pursuant to Rule 19.1?
The Tribunal finds that the Applicant is not entitled to recover costs as he did not establish that the Insurer acted unreasonably, frivolously, vexatiously or in bad faith during the proceeding.
Rule 19.1 provides that costs may be requested in a proceeding where a party believes that another party has acted unreasonably, frivolously, vexatiously or in bad faith.
When does a proceeding begin and end? Rule 2.17 defines “a proceeding” as the “entire process from the start of an appeal to the time a matter is finally resolved.” A proceeding starts once the Applicant submits an application to the Tribunal and ends once all issues in dispute between the parties are resolved.
For the Tribunal to order costs against a party, the party must act unreasonably, frivolously, vexatiously and/or in bad faith during the proceeding. The actions and/or behaviour of a party that occurred prior to the filing of an application with the Tribunal cannot be considered under Rule 19.1.
The Applicant’s position is that the Insurer acted in bad faith, and relies on correspondence between him and the Insurer from December 10, 2015 to January 26, 2016. This time period is before the proceeding started at the Tribunal.
The Applicant also submits that after the filing of his Application and prior to the case conference on June 22, 2016 the Insurer acted in bad faith because it did not negotiate a reasonable settlement on the issue of costs, knowing that it should have approved the treatment plan prior to April 19, 2016.
The Respondent attempted to settle the issue of costs with Applicant. However, the Applicant refused the Respondent’s offers. The Tribunal is of the view that the Insurer’s conduct in attempting to settle the costs issues prior to the case conference does not rise to threshold of unreasonable, frivolous, vexatious or bad faith behaviour as outlined in Rule 19.1.
The Tribunal is of the view that the Applicant did not establish that during the proceeding the Insurer acted in a manner that was unreasonable, frivolous, vexatious, or in bad faith. As such, the Tribunal will not award costs to the Applicant.
Is the Insurer entitled to recover costs pursuant to Rule 19.1?
- The Insurer submits that the Applicant’s conduct is frivolous and vexatious as follows:
- Although there are no benefits in dispute, the Applicant continued with his AABS application and sought payment of costs, outside Rule 19, for which there was no legislative authority or chance of success.
- The Applicant did not raise the issue of award in the AABS Application. There was no formal request to add this issue. Instead, counsel raised the argument in a written submission on the unrelated jurisdictional issue. This resulted in further delays as the preliminary issue hearing needed to be bifurcated.
- The Applicant is using the award provision as a means to recover costs which are not payable under the Rules.
- The Tribunal finds that the Insurer did not establish that the Applicant’s behaviour was frivolous or vexatious for the following reasons:
- Under Rule 19.2, a party can make a request for costs in writing or orally at a case conference or hearing, at any time before the decision or order is released. Even though the main issue had been resolved, the Applicant was within his right to ask for costs. In addition, the Applicant requested clarification of the Tribunal’s jurisdiction on costs. The Tribunal is of the view that this request was reasonable.
- At the preliminary issue hearing, the Applicant requested to add another issue regarding claiming an award. The Respondent indicated that it did not have notice to address this issue. The Respondent was given an opportunity to respond to the issue of the award at a subsequent hearing. Both parties consented to having a bifurcated hearing because they wanted to add affidavit evidence regarding the issue of costs and not solely to address the issue of an award. We find that the addition of this issue did not create unreasonable delays.
- The Applicant’s request for an award does not amount to frivolous and vexatious behaviour. An insured person can make a request for an award if they believe that the insurer has unreasonably withheld or delayed payment of a benefit. In this matter, the Applicant believed that the Insurer withheld or delayed payment unreasonably. As such, the request for an award was not unreasonable.
- For the reasons stated above, The Tribunal will not grant costs to the Insurer.
Did the Insurer unreasonably withhold or delay payments to the Applicant?
The Tribunal finds that the Applicant is not entitled to an award because the Insurer did not unreasonably withhold or delay payment of a benefit.
The Applicant’s position is that the Insurer unreasonably withheld and delayed payment of a benefit because it did not pay for a disbursement fee of $39.83. The Applicant submits that had the Insurer paid the disbursement fee, it would have had the documents necessary to adjust the file and approve the treatment plan in dispute.
The Applicant relies on correspondence between him and the Insurer during December 10, 2015 and January 26, 2016 to show that the Insurer unreasonably withheld and/or delayed payment of the benefit.
Below is the timeline regarding the communications between the Applicant and the Insurer:
- On December 10, 2015, the Insurer requested an insurer’s examination and that the Applicant submits records for the past two years.
- On January 6, 2016, the Applicant responded indicating that he would, not submit to an examination but that he would provide a complete copy of Dr. Langewisch’s notes.
- On January 13, 2016, the Applicant provided a list of productions to the Insurer. The Applicant indicated that once he received a cheque in the amount of $39.83, he would provide the listed records electronically to the Insurer.
- On January 26, 2016, the Insurer indicated that there was a gap in dates, and the records were complete only to July 2014. The insurer requested records from July 2014 to January 2016.
- In an email sent to the Insurer on January 26, 2016, the Applicant stated that he would obtain his most updated records and send them to the Insurer.
On April 12, 2016, the Applicant submitted an application for dispute resolution services to the Tribunal because the Insurer had denied his Treatment & Assessment Plan for psychological services dated November 14, 2015 for $2,320.00.
On April 18, 2016, the Insurer requested productions from January to July 2014 from the Applicant (and not the earlier requested materials from July 2014-July 2016). The Applicant provided the documents and on April 19, 2016, the Insurer approved the treatment plan in dispute.
Under section 33 of the Schedule, the Applicant is required to provide any information reasonably required to assist the insurer in determining the applicant’s entitlement to a benefit. The Applicant indicated that he would provide documentation to the insurer and never did so. Instead, the Applicant decided to file an application with this Tribunal.
The Tribunal is of the view that the Insurer did not withhold or delay payment of the benefit. It was waiting for updated medical records which were in the Applicant’s possession. Once these records were received, the treatment plan was approved. The Applicant had an obligation to send these documents without expecting for the Insurance Company to pay for the disbursement fee upfront.
The Tribunal finds that the Insurer acted reasonably and did not withhold or delay payment of the benefit. As such, the Applicant is not entitled to an award pursuant to s. 10 of O.Reg. 664.
V. Decision:
The Applicant is not entitled to recover costs pursuant to Rule 19.1.
The Insurer is not entitled to recover costs pursuant to Rule 19.1.
The Applicant is not entitled to an award under s. 10 of O. Reg. 664 as the Insurer did not unreasonably withhold or delay payments to the Applicant.
Released: November 2, 2016
Nicole Treksler _______________________
Chris Sewrattan