C.D. v. Aviva General Insurance, 2019 CanLII 51311

RECONSIDERATION DECISION

Before: Christopher A. Ferguson, Adjudicator

Date: May 17, 2019

File: 17-005825/AABS

Case Name: C.D. v. Aviva General Insurance

Written Submissions By:

For the Applicant: Norma Barron, counsel

For the Respondent: Aimee M. Draper, counsel

OVERVIEW

1The applicant C.D. was involved in an automobile accident on April 2, 2015 and applied to the Tribunal when the respondent Aviva refused to pay claimed benefits for physiotherapy, massage therapy, psychological assessment and psychotherapy. C.D. also claimed an award under Regulation 664¹, asserting that Aviva had unreasonably withheld or delayed payments to him.

2The disputed issues were heard in writing on February 27, 2018.

3In his decision, released on August 21, 2018, the Adjudicator found that:

i. C.D. is entitled to payment of all of the benefits claimed in her application, with interest at the prescribed rate. The treatment plans claimed by C.D. are all reasonable and necessary.

ii. C.D. is entitled to an award under the Regulation, which he assessed at 25% of the total amount of benefits, with interest at the prescribed rate, owing.²

ISSUES

4Aviva does not dispute the Adjudicator’s finding that the treatment plans submitted by C.D. were reasonable and necessary.

5Aviva asserts that the Adjudicator erred in two respects:

1. Double Recovery: The Adjudicator erred in awarding the full cost of the disputed treatment plans plus interest without applying a credit for money already paid by Aviva to C.D.’s treating facility prior to the hearing.

2. Special Award: The Adjudicator granted an award on insufficient evidence – Aviva contends that prescribed criteria for an award were not met in this case.

LEGAL TEST

6The rules governing this proceeding are the Licence Appeal Tribunal Rules of Practice and Procedure, Version I (April 1, 2016) (the “Rules”). According to Rule 18.1, Aviva is required to identify the applicable criteria for this request for reconsideration. The respondent relies on 18.2(b):

The Tribunal made a significant error of law or fact such that the Tribunal would likely have reached a different decision.

7The matter turns solely on a question of whether errors of law were made in imposing an award and in determining the amount of the award to be imposed.

8The relevant sequence of events is undisputed:

i. C.D. submitted six treatment plans which were denied by Aviva on various dates in January and March of 2017. The initial amounts claimed totaled $15,047.17.

ii. C.D. provided Aviva with various requested clinical notes and records (CNRs) on three occasions: July 26, 2016, May 14, 2017 and November 8, 2017. It is uncontested that as of November 8, 2017, Aviva had all of the information it required to support payment of the claimed benefits.

iii. Per Adjudicator Létourneau, payment by Aviva of the claimed benefits became due on November 18, 2017. Benefit payments after that date were overdue.

iv. Aviva paid $9,190.58 of incurred treatment amounts on February 14, 2018. On that date, $12,612.13 were incurred in treatment expenses under the disputed plans.

v. On February 14, 2018, Aviva filed its written Response Submissions in this matter.

9Under Rule 18.2(b)³ the onus is on Aviva to point to a significant error of law that would have affected the Tribunal’s decision in this matter. Accordingly, only if Adjudicator Létourneau’s interpretation or application of the law is significantly in error should I interfere. If his interpretation of the law shows no significant error, then his decision must be allowed to stand.

10Pursuant to s. 17(2) of the Adjudicative Tribunals Accountability, Governance and Appointments Act, 2009, S.O. 2009, c. 33, Sched. 5, I have been delegated responsibility to decide this matter in accordance with the applicable rules of the Tribunal.

RESULT

11Having considered Aviva’s submissions, I find that it has failed to identify any significant error of law in Adjudicator Létourneau’s decision. The Adjudicator carefully considered all of the arguments and evidence advanced by Aviva. He clearly articulated valid reasons for his conclusions and set out a public policy rationale in support of his decision on the claimed award.

12The request for reconsideration is dismissed.

ANALYSIS

1. Double Recovery

13Aviva asserts at paragraph 11 of its reconsideration request that, at paragraph 17 of his decision, the Adjudicator acknowledged that “the respondent had paid the full outstanding account of the treatment facility in the amount of $12,612.13 prior to the hearing and that this payment was directly related to the treatment plans in dispute.

14Aviva states that double recovery is contrary to the “mandate and principles” of the Schedule: “The applicant is entitled to medical benefits that are found to be reasonable and necessary but is not entitled to payment of these plans twice.”

15Aviva asks the Tribunal to vary the order flowing from Adjudicator Létourneau’s decision to:

1. reflect a credit for payments made to C.D.’s treatment facility, and

2. reflect that interest is only due and owing on amounts that were outstanding on the date of the hearing.

16I deny Aviva’s request because:

i. My reading of the Decision does not suggest a double recovery on the benefits paid. Aviva’s submissions do not explain how or why they thought it did. The Decision stands.

ii. The Decision is clear that some treatment plans were partially paid on the eve of the hearing,⁴ and simply concludes that Aviva is responsible for paying all treatment plans in full along with interest at the prescribed rate.

iii. Subsection 51(3) of the Schedule provides that interest is payable from the date the amount becomes overdue until the date on which the overdue amount is paid. I interpret “paid” to mean “paid in full”. Aviva does not point me to any authority for its suggested “credit for partial payment” request, nor does it indicate that such a suggestion was made to Adjudicator Létourneau for his consideration. In my view, there is no basis for a finding that an error was made on this point: Aviva is obliged to pay interest on the entire amount of overdue benefits.

iv. Absent payment of overdue amounts, subsection 51(4) clearly prescribes the interest period as starting on the date an application is submitted to the Tribunal and ending on the date that a settlement is reached or a decision is issued that finally disposes of the matter. There was no settlement in this matter and no reference is made to “hearing date” in the Schedule. There is no ambiguity in this requirement and no error was made in applying it.

2. Award

17The Regulation permits the Tribunal to award a lump sum of up to 50% of the amount to which the applicant was entitled if the insurer has unreasonably withheld or delayed payment of a benefit.

18The onus is on the applicant to prove on a balance of probabilities that the respondent unreasonably withheld or delayed payments.

19Aviva submits that its actions in adjusting C.D.’s claims should be considered against the following criteria:

1. Insurer conduct has to be essentially so egregious that it should have been patently obvious to the insurer that the treatment plans were reasonable and necessary.⁵

2. “Unreasonable” means "behaviour by an insurer that is excessive, imprudent, stubborn, unyielding or immoderate".⁶

3. An award is not punishment for payment which is simply delayed because of differing views of the file.⁷

4. Settlement of issues shortly before a hearing is not sufficient to prove entitlement to an award. The applicant must adduce persuasive evidence that the respondent unreasonably withheld or delayed payment of benefits.⁸

20Aviva submits that the Adjudicator erred in law because:

1. He took Aviva’s decision to pay C.D.’s claims after the appeal but before the hearing as evidence of unreasonable withholding or delay of benefit payments.

2. He failed to account for the fact that Aviva’s decision to pay benefits was made after it received new medical documentation in November 2017 and again in January 2018. He failed to explain his rationale for this decision in light of the new medical information and it impact on Aviva’s adjustment of C.D.’s file.

3. The award was not supported by his own findings that Aviva relied on two medical assessments in denying C.D.’s claims. He does not state that reliance on these assessments was unreasonable, specifically finds that there was no evidence to that the respondent mishandled C.D.’s file or acted unreasonably in denying C.D.’s claims. He fails to account for Aviva’s actions in scheduling s.44 insurer’s assessments to address the plans – evidence that Aviva took C.D.'s claims seriously and was adjusting the file appropriately and reasonably. In summary, the award is not based on evidence of mishandling C.D.’s claims, and therefore is an error in law.

4. He made an award notwithstanding his finding that up until November 8, 2017, Aviva has acted reasonably. Because Aviva paid C.D.’s incurred benefits in February, 2018, he “punished it” for a “relatively short 3 month delay in payment”, which does not meet the criteria for “unreasonable”.

21Aviva submits that making an award where an insurer has chosen to reconsider its position and approve and pay treatment plans in dispute just prior to a hearing is “a dangerous practice that is contrary to public policy and will result in dissuading insurers from engaging in this practice thereby increasing the number of hearings.”

22Aviva also argues, in the alternative, that even if an award were appropriate in this case, the 25% penalty in this case is far too high. It states “A special award is punitive and the amount ordered should be proportional to the nature of the transgression.”

23Aviva argues that a three-month delay is a minor transgression at best, and that the Adjudicator erred in failing to consider such mitigating factors as the short delay, the relatively small amounts outstanding, the fact that he made no finding of mishandling of the file and Aviva’s effort to settle the case before hearing.

24Aviva urges the Tribunal to consider the decision in 17-001627 v. Certas⁹ where a 5% award was imposed on an insurer after a year-long delay in payment. Aviva suggests that this would indicate that a 1% award would be more proportionate to the facts of this case.

25C.D. argues that Aviva’s decision to pay his claimed benefits (or the incurred amounts) before the hearing does not absolve it of accountability for unreasonable delay in paying those benefits. C.D. argues that the Adjudicator made the correct decision because:

a. He clearly considered that Aviva received all the necessary documents to fund the treatment plans as early as July 26, 2016, May 14, 2017 or at least by November 8, 2017 when further clinical notes and records and outstanding amounts were submitted. [para 44-47]

b. Based on the above-noted consideration, he fairly concluded that Aviva “had ample opportunity to proceed with its decision to pay the remaining incurred amounts prior” to receiving the information of November 8, 2017. He noted that as of November 8, 2017, Aviva had all of the necessary documentation it could have required to approve the benefits claimed or maintain its denial. The insurer maintained its denial, only to approve the amounts on or about February 14, 2018.

26I find that the Adjudicator’s decision to make an award was correct. I can find no significant error in law that if corrected would lead the Tribunal to a different decision in this matter. My reasons are as follows:

i. My reading of the Decision does not support Aviva’s contention that the Adjudicator considered or characterized Aviva’s pre-hearing payment of C.D.’s incurred benefits as in itself unreasonable. No error was made here.

ii. Aviva provides me with no evidence, argument or precedent to support its implicit assertion that pre-hearing payment somehow absolves an insurer of accountability for unreasonably delaying payment. The timing of payment in relation to a hearing is, in the context of an award, irrelevant.

iii. My reading of paragraphs 40-50 of the Decision persuades me that the Adjudicator carefully considered the evidence before him and explained why he found that the delay in paying C.D.’s benefits after November 8, 2017 was unreasonable. He did not accept Aviva’s position that it paid incurred benefits as soon as it had all the information it needed – he found the contrary to be true and said so. I can find no error of law in this finding.

iv. In response to Aviva’s stated public policy concern about discouraging pre-hearing settlements, I found that the Adjudicator thoughtfully and properly considered a number of competing policy priorities in paragraphs 52-55, which in my view are in keeping with his observation of the consumer protection mandate of the Schedule. These include:

a. the chilling impact on applicants who may delay treatment if worried about delays by insurers in paying claims;

b. the prejudice to applicants of delayed payments for incurred costs, which may lead them “negotiate against themselves” in settlement talks;

c. the potential for insurers to pay incurred amounts to delay appeals and attempt to reduce interest payable on overdue accounts.

27As a result of my findings in the preceding paragraph, I conclude that the implication that the Adjudicator’s decision ignores the objectives of the Schedule or that it discourages pre-hearing settlement is unfounded.

28I find no errors in the Adjudicator’s decision to impose a 25% award in this case. My reasons are as follows:

i. He considered a number of factors, including partial payment of the benefits, into account in halving the maximum award available as a penalty. No error was made here.

ii. His award was lower, percentage-wise, than awards made in other cases, where pre-hearing settlements had occurred, such as 17-006757 v. Aviva¹⁰ and Cowans¹¹ -- negating Aviva’s contention that it is wholly inconsistent with precedent in similar-fact cases.

iii. In assessing the severity of the award in this case, I went beyond Aviva’s emphasis on the percentage. As the Adjudicator noted at paragraph 59 of his decision, the award totalled $5,751.79, which I do not find unduly onerous for Aviva to pay.

DECISION

29Having considered the submissions of the parties, I find that Aviva has failed to establish that Adjudicator made a significant error of law such that the Tribunal would likely have reached a different decision.

30The request for reconsideration is dismissed.

Christopher A. Ferguson Adjudicator Tribunals Ontario – Safety, Licensing Appeals and Standards Division

Footnotes

1. 1That is, s.10, Regulation 664, R.R.O. 1990, Insurance Act
2. 2A request for costs by CD was denied – but is not at issue in this reconsideration request
3. 3All references to a “Rule” are made to the Licence Appeal Tribunal, Animal Care Review Board, and Fire Safety Commission Common Rules of Practice and Procedure, Version I (October 2, 2017)
4. 4Adjudicator Létourneau did not find, nor do I, that Aviva paid the claimed benefits in full before the hearing, contrary to its reconsideration submissions.
5. 517-000897 v Unifund Assurance Company, 2017 Can LII 69237 (ON LAT)
6. 617-001630 v Travelers Canada, 201 8 Can LII 76431 (ON LAT)
7. 717-001630 v Travelers Canada, 201 8 CanLll 76431 (ON LAT)
8. 816-001698 v Northbridge General Insurance, 2018 CanLII 81937 (ON LAT)
9. 917-001627 v Certas Direct Insurance Company, 201 7 CanLII 99139 (ON LAT)
10. 1017-006757 v. Aviva Insurance Canada [2018] CanLII 81949 (ON LAT), submitted by CD.
11. 11Cowans v. Motors, 2010, FSCO A09-003237, submitted by CD