A.A. v. Aviva General Insurance Company, 2020 CanLII 19571

A.A. vs. Aviva General Insurance Company, 2020 ONLAT 18-009541/AABS

Citation: A.A. vs. Aviva General Insurance Company, 2020 ONLAT 18-009541/AABS

Tribunal File Number: 18-009541/AABS

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:

[A.A.]

Applicant

and

Aviva General Insurance Company

Respondent

REASONS FOR DECISION AND ORDER

PANEL: Sandeep Johal, Adjudicator

APPEARANCES: For the Applicant: Aminder Hayher For the Respondent: Michael Silver

HEARD: In Writing on: September 9, 2019

OVERVIEW

1The applicant was injured in an automobile accident on October 30, 2016 and sought benefits pursuant to the Statutory Accident Benefits Schedule – Effective September 1, 2010¹ (the ''Schedule'').

2The applicant applied for medical benefits that the respondent denied on the basis that the applicant’s injuries fell within the Minor Injury Guideline (the “MIG”) and that the benefits were not reasonable and necessary. The applicant disagreed with that decision and submitted an application to the Licence Appeal Tribunal – Automobile Accident Benefits Service (the “Tribunal”).

3The parties participated in two case conferences² and the parties disagree on what the issues in dispute are. The applicant submits that she added an award and a new denied treatment plan in the amount of $2,672.36 as issues in dispute; however, that treatment plan was not listed as an issue in dispute in the case conference Orders dated February 14, 2019 and April 12, 2019.

4According to the respondent, on February 14, 2019 prior to the first case conference, all issues in dispute were agreed to be paid including interest and that the Minor Injury Guideline (“MIG”) does not apply. he respondent further submits that it did not consent to adding the denied treatment plan of $2,672.36 as an issue to be decided in this hearing and the case conference Adjudicator did not allow the issue to be added during the second case conference. The respondent also disputes the addition of an award as an issue in dispute, which will be addressed below. Instead, the respondent’s position is that there are no issues in dispute for this hearing before me.

ISSUE TO BE DECIDED

5After a review of the all the evidence, the case conference order and the parties’ submissions, I have determined that the issues in dispute are:

1. whether the applicant is entitled to an award under Regulation 664 for unreasonably withheld or delayed payment of benefits, and

2. whether either party is entitled to costs.

6The following denied treatment plans which were approved by the respondent at the case conference are the subject of whether an award is justified for the purposes of this hearing:

a. A medical benefit in the amount of $2,993.94 dated December 16, 2016;

b. A medical benefit in the amount of $1,102.48 dated April 18, 2017;

c. A medical benefit in the amount of $1,375.05 dated August 14, 2017;

d. A medical benefit in the amount of $1,334.05 dated September 13, 2017; and

e. A medical benefit in the amount of $2,460.00 dated June 13, 2018.

RESULT

7Based on the totality of the evidence before me, I find the applicant is entitled to an award in the amount of $2,316.38 (being 25% of $2,993.94, $1,102.48, $1,375.05, $1,334.05 and $2,460.00) for unreasonably delayed payments and neither party is entitled to costs.

ANALYSIS

Is the applicant entitled to add an additional treatment plan as an issue in dispute?

8I find that the applicant is not entitled to add the denied treatment plan in the amount of $2,672.36 as an issue in dispute for this written hearing for the following reasons.

9The case conference order dated April 12, 2019 lists the issues in dispute as an orthopaedic assessment in the amount of $2,480.00 and a psychological assessment in the amount of $2,460.00 as well as interest, an award and whether the respondent is entitled to costs.³ Based on the parties’ submissions, it would appear that both these two treatment plans are not in dispute for the purposes of this hearing.

10The applicant submits the only issues in dispute are whether the applicant is entitled to a treatment plan in the amount of $2,672.36 which was denied on January 2, 2018, interest on the overdue payment of benefits, an award and costs. The applicant further submits she added the denied treatment plan as an issue in dispute at the case conference of April 12, 2019 and it was due to the inadvertence of the Tribunal that it was not reflected in the case conference order.

11The respondent submits that both parties resolved the orthopaedic and psychological assessments along with the applicant not being in the MIG. The respondent further submits the applicant attempted to add two additional issues (the $2,672.36 denied treatment plan and an award) at the April 12, 2019 case conference. The respondent did not consent to their addition and the case conference Adjudicator advised the applicant to bring a motion to add the new issues.

12After reviewing the case conference order and the parties’ submissions, I am satisfied that the orthopaedic and psychological assessments that are listed in the case conference order dated April 12, 2019 are no longer the issues in dispute for this hearing and it would appear the parties agree to this fact.

13The applicant seeks to add the denied $2,672.36 treatment plan as an issue in dispute for the purpose of this hearing. The applicant attempted to do so by sending an email to the Tribunal two weeks after the April 12, 2019 case conference had already taken place.⁴ It does not appear that a motion was brought by the applicant to have this issue added.

14Rule 14.2⁵ sets out the scope of a case conference. In particular, Rule 14.2(c) states that a case conference is for the identification, clarification, simplification and narrowing of the issues and whether further particulars are required.

15The issue the applicant seeks to add now was not listed in the April 12, 2019 case conference order and the applicant submits it was through the Tribunal’s inadvertence; essentially, that the Tribunal made an error.

16Errors are sometimes made; however, once the applicant realised the denied $2,672.36 treatment plan was not listed as an issue in the case conference order, the appropriate way to have that dealt with would have been to bring a motion under Rule 15. This was not done. An email to the Tribunal seeking to add an issue after a case conference had already taken place is not the appropriate way to add an additional issue in dispute, especially if it is not on consent. If the applicant was unclear, she could have referred to the Rules or called the Tribunal to seek clarification on the appropriate steps.

Is the applicant entitled to add an award under section 10 of Regulation 664 as an issue in dispute?

17I find that the applicant is entitled to add an award as an issue in dispute for the following reasons.

18According to the case conference order dated April 12, 2019 an award is clearly listed as an issue in dispute and the respondent does not dispute the fact that the applicant sought to add this issue at the case conference.

19The respondent further acknowledges that a party may add an award at any time during the life of an application,⁶ however, it submits the Tribunal does not have authority to add an award after a file has resolved because there is no remaining application to which a claim for an award could be added.

20I do not agree with the respondent. This fact scenario was addressed by the Tribunal and it was found that the Tribunal has jurisdiction to deal with the issue of an award where all the issues in dispute have been resolved prior to the hearing, unless the parties had mutually entered into a settlement which terminated all of the proceeding.⁷ That does not appear to be the case here, and as a result, I find that the applicant is entitled to add the issue of an award as a standalone issue.

Requirements to be entitled to an award

21Section 10 of Regulation 664 states:

If the Licence Appeal Tribunal finds that an insurer has unreasonably withheld or delayed payments, the Licence Appeal Tribunal, in addition to awarding the benefits and interest to which an insured person is entitled under the Statutory Accident Benefits Schedule, may award a lump sum of up to 50 per cent of the amount to which the person was entitled at the time of the award together with interest on all amounts then owing to the insured (including unpaid interest) at the rate of 2 per cent per month, compounded monthly, from the time the benefits first became payable under the Schedule.

22The applicant provided the Financial Services Commission of Ontario (“FSCO”) case of Plowright and Wellington which held that the definition of unreasonable was behaviour by an insurer in withholding or delaying payments which can be seen as excessive, imprudent, stubborn, inflexible, unyielding or immoderate.⁸

23I agree with the approach from Plowright and Wellington and adopt it for the purposes of this hearing.

24A finding that the insurer’s actions were unreasonable is a finding of fact based on a review of the evidence.⁹

25I will now turn to discuss each treatment plan approved by the respondent at the case conference and whether the applicant is entitled to an award while keeping in mind that the onus is on the applicant to prove entitlement to an award, on a balance of probabilities.

Is the applicant entitled to an award because of an unreasonably withheld or delayed payment for a medical benefit in the amount of $2,993.94 dated December 16, 2016?

26I find that this treatment plan was unreasonably withheld or delayed and is therefore subject to an award for the following reasons.

27The applicant submits the respondent failed to comply with the notice requirement under s. 38(8) of the Schedule as it did not provide medical or other reasons for its denial and the respondent failed to consider new medical evidence from its IE assessors, namely Dr. Cowman’s diagnosis that took the applicant out of the MIG.

28The respondent submits that any allegation of insufficient medical reasons in the denial and allegations of technical non-compliance with the Schedule may be evidence in support of entitlement to the treatment plans but they would not be evidence in support of an award.

29The respondent further submits it made adjusting decisions based on when the treatment plans were initially submitted; the standard is not perfection and insurers are entitled to make incorrect decisions and not attract an award.

30I agree with the respondent in part. Insurers are not held to a standard of perfection and the respondent is entitled to make an adjusting decision based on the medical evidence available at the time and on an ongoing basis. However, once the respondent has evidence, especially from its chosen IE assessors, that the applicant’s injuries are not within the definition of the MIG, it cannot ignore that evidence and choose to rely on the evidence it prefers in order to deny the treatment plan. The respondent has a duty to treat the applicant fairly and not in an adversarial nature. I find that the respondent did not treat the applicant fairly by choosing the evidence it prefers to deny treatment.

31The ultimate purpose of s. 38(8) is to require an insurer to respond a treatment plan not only quickly but also reasonably, in a manner that respects an insured’s ability, when entitled, to access timely treatment. An applicant should not have to incur the temporal, emotional, and financial costs associated with engaging the Tribunal in order to obtain the treatment they should have received long before.¹⁰

32I find that the respondent’s denial constitutes an unreasonably withheld or delayed payment for this treatment plan and an award is justified.

Is the applicant entitled to an award because of an unreasonably withheld or delayed payment for a medical benefit in the amount of $1,102.48 dated April 18, 2017?

33I find that this treatment plan was unreasonably withheld or delayed and is subject to an award for the following reasons.

34The applicant submits the respondent did not comply with s.38(8) of the Schedule as it responded on the 13th business day rather than 10 business days after receiving the treatment plan and that the respondent’s IE assessor failed to provide any medical evidence to support her conclusion that the treatment focused on passive treatment rather than active treatment and that she referred to the IE report of Dr. Fung.

35Technical breaches of the Schedule such as s. 38(8) have a remedy within the section, namely s. 38(11) that the respondent is precluded from taking the position that the MIG applies and that the goods and services, assessments and examinations listed in the treatment plan shall become payable on the 11th business day.

36The Schedule provides a remedy for a breach of s. 38(8) and in my opinion, that does not automatically entitle the applicant to an award and is not evidence, on its own, of unreasonably withholding or delaying the payment of the benefit.

37However, the facts of the case must be looked at in its entirety to determine whether the insurer’s actions were unreasonable.¹¹

38I do not find that an IE assessor who relies upon the medical opinion of another assessor in arriving at their conclusion to be evidence to suggest medical reasons were not provided or that it is evidence of unreasonable withholding or delaying on the part of the respondent.

39However, the denial was on May 2, 2017 outside of the ten business day requirement from s. 38(8) and the respondent continued to maintain the denial based on the MIG for almost two years until it was approved at the case conference. In my opinion this would be evidence of unreasonable behaviour by an insurer in withholding or delaying payments which can be seen as excessive, imprudent, stubborn, inflexible, unyielding or immoderate for two reasons. First, the respondent had in its possession an IE report that found the applicant’s injuries were not within the MIG. Second, the respondent denied the benefit outside the ten business day window as s. 38(8) requires and then continued to deny the benefit based on the MIG in clear contravention of s.38(11).

40As a result, I find that this benefit was unreasonably withheld or delayed and subject to an award.

Is the applicant entitled to an award because of an unreasonably withheld or delayed payment for medical benefits in the amount of $1,375.05 dated August 14, 2017, $1,334.05 dated September 13, 2017 and $2,460.00 dated June 13, 2018?

41I find that the respondent unreasonably withheld or the delayed the payment of these benefits and it is liable to pay an award to the applicant for the following reasons.

Medical benefit in the amount of $1,375.05

42This treatment plan is dated August 14, 2017 and the respondent’s letter denying the treatment plan on August 25, 2017 states the treatment plan is denied based on its assessment that the applicant’s injuries are predominately minor and under the MIG. The respondent relies on the opinion of Dr. Fung dated February 14, 2017.

43I find this to be an unreasonable position taken by the respondent because according to the IE report of Dr. Cowman from the same day as Dr. Fung’s on February 14, 2017 she diagnosed the applicant with Adjustment Disorder with Mixed Anxiety and Depressed Mood and that the applicant could not be treated within the MIG.¹² Once it is determined that the applicant has an injury that is not within the MIG, it is irrelevant whether it is based on physical injuries or a psychological injury.

44As a result of this diagnosis from Dr. Cowman, the applicant should have been removed from the MIG and each subsequent treatment plan should have been determined on the basis of whether it is reasonable and necessary. That was not done for this treatment plan and the respondent continued to deny the treatment plan based on the applicant’s injuries being in the MIG when clearly according to its own IE assessor, the applicant has injuries not within the definition of the MIG.

Medical benefit in the amount of $1,334.05

45Similar to the reasons above, the letter from the respondent dated October 30, 2017 denies this treatment plan based on the applicant’s injuries falling within the MIG definition and the respondent also relies on its IE assessment from Dr. Fung that the applicant’s injuries are within the MIG.¹³

46I find this position to be unreasonable. Contrary to the denial letter, the respondent has medical evidence from its own IE assessor, Dr. Cowman, that the applicant’s injuries are not within the MIG. For the respondent to ignore this evidence, it runs counter to the respondent’s ongoing duty to continuously adjust an insured’s file based on relevant medical information. I find that was not done with respect to this treatment plan.

Medical benefit in the amount of $2,460.00

47This was a treatment plan seeking psychological treatment. In the Explanation of Benefits dated June 25, 2018, the respondent denied the benefit because the respondent has insufficient compelling medical documentation on file to support the listed impairments that warrant the need for a psychological assessment.¹⁴

48This is clearly not the case, the respondent’s own IE assessor made a diagnosis of a psychological impairment as far back as February 14, 2017.¹⁵ The respondent had medical information in its possession that would have made this treatment plan reasonable and necessary but chose to ignore it and maintain its denial. I find this to be evidence of unreasonably withholding or delaying the payment of this benefit and an award is justified.

49As a result of finding the treatment plans to have been unreasonably withheld or delayed, I now turn to discuss the factors to determine the quantum of the award that should be payable by the respondent.

Quantum of the award

50In determining the quantum of any award, the applicant relies on the Tribunal case of 17-006757 v Aviva for the following factors in determining quantum¹⁶:

i. the blameworthiness of the insurer's conduct;

ii. the vulnerability of the insured person;

iii. the harm or potential harm directed at the insured person;

iv. the need for deterrence;

v. the advantage wrongfully gained by the insurer from the misconduct;

vi. take into account any other penalties or sanctions that have been or likely will be imposed on the insurer due to its misconduct; and

vii. overall length of the delay.

51I agree with and adopt the above factors to determine quantum from the decision of Adjudicator Paluch in 17-006757 v Aviva.

52The applicant seeks an award at 50% of the unreasonably withheld or delayed benefits.

53The respondent submits it did not unreasonably withhold or delay any payments and that it had a reasonable basis to deny the treatment plans.

54Having already found that the applicant unreasonably withheld or delayed the payment of benefits, I will now turn to discuss any aggravating and mitigating factors to determine the amount of the award.

Aggravating and mitigating circumstances

55An aggravating factor is that the applicant is particularly vulnerable, she is a 70 year old person with a pre-existing medical history including osteoarthritis, myalgia, pain in her hips, legs and a traumatic left foot injury. The applicant deserved care in the handling of her file and I find this this was not done.

56From my review of the documentation, there would appear to be a pattern of lateness in responding to the treatment plans, contrary to the time limits set out in s. 38(8). However, in my opinion as stated mentioned above, not responding within the prescribed 10 business days does not automatically entitle the applicant to an award. More is required in order to determine whether this is an aggravating factor that would warrant an award.

57What I find to be an aggravating factor is that in the respondent’s Response to the Tribunal dated November 19, 2018 the respondent continued to maintain that the MIG applied to the applicant’s injuries, despite an IE report to the contrary and the respondent also continued to maintain that the denials were in accordance with the Schedule despite the denials being outside the requirements of s. 38(8). This was clearly in violation of s. 38(11) and the procedural requirements of the Schedule.

58What I find to be a mitigating factor in favour of the respondent is that it chose to settle the issues in dispute at the case conference stage and it did not maintain its denial through to a hearing, thereby saving the applicant from the expense and time of having to conduct a formal hearing.

59Furthermore, I have not been directed to any evidence similar to that in 17-006757 v. Aviva of aggravating factors such as a delay in paying the benefits after they were approved, or if there was a complete and total disregard to any written or verbal communications from the applicant’s treating medical practitioners or legal representatives.

60After considering these factors, I find that the appropriate quantum of the award is 25 per cent of the maximum award which would be $2,316.38 (being 25% of $2,993.94, $1,102.48, $1,375.05, $1,334.05 and $2,460.00 the amounts of the unreasonably withheld or denied treatment plans) plus interest, if any, in accordance with Regulation 664.

COSTS

61I decline to order costs against either party for the following reasons.

62Both parties are seeking costs of the proceeding under Rule 19.1 which states:

Where a party believes that another party in a proceeding has acted unreasonably, frivolously, vexatiously, or in bad faith, that party may make a request to the Tribunal for costs.

63The applicant seeks $2,000.00 and the respondent did not provide a quantum for its request.

64The applicant submits costs must be awarded against the respondent for deterrence and because the respondent is in a position of advantage compared to the applicant. The applicant further submits that, as a result of hiring incompetent assessors such as Dr. Fung who did not provide a comprehensive picture of the applicant’s condition, she should be entitled to costs against the respondent.

65The respondent submits that it should be entitled to costs as the applicant’s conduct was misleading to the Tribunal by stating that the issue in dispute she was attempting to add was not done because of inadvertence of the Tribunal, when that was not the case. Furthermore, the applicant acted unreasonably, frivolously and vexatiously in adding the claim for an award once all the substantive issues in the application had resolved.

66I disagree with both parties. The applicant is seeking costs for reasons which are not covered under Rule 19.1 and she has not directed me to any evidence of unreasonable, frivolous, vexatious or bad faith behaviour in the proceeding before the Tribunal. Alleged conduct prior to the commencement of a proceeding is not covered by the Rule.

67A party is entitled to add issues to dispute in its application and just because they may not have been agreed to by the respondent, or by the Tribunal is not evidence of unreasonable, frivolous, vexatious or bad faith behaviour. Furthermore, I was not directed to any evidence other than the respondent’s submissions that the applicant attempted to mislead the Tribunal. Therefore, there shall be no order as to costs.

ORDER

68For the reasons outlined above, I order that:

a. The applicant is entitled to an award in the amount of $2,316.38 plus interest in accordance with s. 10 of Regulation 664; and

b. Neither party is entitled to costs.

Footnotes

1. 1O. Reg. 34/10.
2. 2Tribunal Case Conference Orders dated February 14, 2019 and April 12, 2019.
3. 3The applicant makes a request for costs against the respondent in her written submissions.
4. 4Applicant’s Written Submissions dated August 9, 2019 at Tab 14.
5. 5Common Rules of Practice & Procedure, October 2, 2017. (the “Rules”)
6. 616-004312 v. Aviva Insurance Canada, 2018 CanLII 39463 at paras 14-15
7. 717-006757 v Aviva Insurance Canada, 2018 CanLII 81949 (ON LAT)
8. 8Plowright and Wellington Insurance Company (FSCO A-003985, October 29, 1993) page 17.
9. 917-006757 v Aviva Insurance Canada, 2018 CanLII 81949 (ON LAT) at para. 31.
10. 10Applicant’s Book of Authorities at Tab A, Reconsideration Decision, T.F. v. Peel Mutual Insurance Company 2018 CanLII 39373 (ON LAT) at para. 21.
11. 11See Note 9.
12. 12Applicant’s Submissions dated August 9, 2019, Psychological IE Report dated February 14, 2017 , Tab 5 page 18.
13. 13Applicant’s Submissions dated August 9, 2019, Letter from the Respondent dated October 30, 2017 at Tab 11.
14. 14Ibid at Tab 12.
15. 15See Note 12.
16. 1617-006757 v Aviva Insurance Canada, 2018 CanLII 81949 (ON LAT) at paras 44-45