S. V. v. Aviva Insurance Company, 2020 CanLII 57406

S. V. v. Aviva Insurance Company

Citation: S. V. vs. Aviva Insurance, 2020 ONLAT 19-005032/AABS Released Date: 07/29/2020

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:

S. V. Applicant

and

Aviva Insurance Company Respondent

DECISION

ADJUDICATOR: Rebecca Hines

APPEARANCES:

For the Applicant: Jono Schneider, Counsel

For the Respondent: Leanne Zabudsky, Counsel

HEARD: By way of written submissions

OVERVIEW

1The applicant was involved in an automobile accident on January 11, 2019 and sought benefits pursuant to the Statutory Accident Benefits Schedule - Effective September 1, 2010 (the ''Schedule''). The applicant was denied certain benefits by the respondent and submitted an application to the Licence Appeal Tribunal - Automobile Accident Benefits Service (“Tribunal”).

2The parties participated in a case conference, however, were not able to resolve the issues in dispute. The matter proceeded to this written hearing.

ISSUES

3I have been asked to decide the following issues¹:

(i) Is the applicant entitled to interest on any overdue payment of benefits?

(ii) Is the respondent liable to pay an award under Regulation 664 because it unreasonably withheld or delayed payments to the applicant?

RESULT

4After reviewing the parties’ submissions and evidence, I find the applicant is entitled to:

(i) Interest on the overdue payment of the treatment plan for physiotherapy in the amount of $3,270.60 recommended by Spine Solutions payable pursuant to s.51 of the Schedule, and

(ii) An award in the amount of 25% as I find the respondent unreasonably withheld and delayed payment of the benefit.

ANALYSIS

Is the applicant entitled to interest on overdue payment of benefits?

5I find the applicant is entitled to payment of interest for the treatment plan for physiotherapy in the amount of $3,270.60 recommended by Spine Solutions.

6On January 30, 2019, the applicant submitted a treatment plan (OCF-18) for physiotherapy in the amount of $3,270.60 recommended by Spine Solutions. The author of the treatment plan indicated that the applicant’s impairments were not minor and do not fit within the definition of the Minor Injury Guideline (“MIG”). On the same date, the applicant submitted an OCF-23 (MIG Treatment Confirmation Form).

7The respondent did not reply to the treatment plan until February 19, 2019. It denied the treatment plan on the basis that the applicant’s impairments were minor and fit within the MIG. The respondent acknowledges the fact that it did not respond to the treatment plan within 10 days, as required by s.38(8) of the Schedule.

8On December 16, 2019, the respondent sent the applicant an Explanation of Benefits advising that it agreed to approve and pay for the treatment plan in full because it was non-compliant with s. 38(8) of the Schedule. No explanation was provided by the respondent for its lengthy delay in approving and paying for the treatment plan.

9The applicant argues that interest is payable from the date the benefit became overdue which in this case is on the 11th day from the date the treatment plan was submitted.

10The respondent argues that the applicant did not incur the treatment plan between February 13, 2019 and February 19, 2019, the date it responded to the treatment plan. Therefore, interest is not payable. The respondent acknowledges that it was non-compliant with s.38(8) of the Schedule and consequently paid for the treatment plan. However, it argues that interest is not payable as no benefits are owing. I disagree.

11I find the applicable section of the Schedule pertaining to when interest is payable is s. 51(1) which states that “an amount payable in respect of a benefit is overdue if the insurer fails to pay a benefit within the time required under this regulation”. In this case, the respondent did not comply with its obligation under s. 38(8) in responding to the treatment plan within 10 days. Further, no explanation was provided for why it only approved and paid for the benefit on December 16, 2019 (almost a year after the treatment plan was submitted). The applicant submitted session notes during the period of denial which demonstrate that he did incur the treatment plan by the date the respondent approved and paid for same. I accept this evidence. Therefore, I find interest is payable in accordance with s. 51 of the Schedule.

Is the respondent liable to pay an award under Regulation 664 because it unreasonably withheld or delayed payments to the applicant?

12I find the respondent is liable to pay an award.

13Ontario Regulation 664, R.R.O. 1990 (O. Reg. 664) states that, if the Tribunal finds that an insurer had unreasonably withheld or delayed payments, the Tribunal, in addition to awarding the benefits and interest to which an insured person is entitled, may award a lump sum of up to 50 percent of the amount to which the person was entitled at the time of the award with interest.

14The applicant filed his application with the Tribunal on April 12, 2019, disputing his entitlement to the treatment plan. On the application, he highlighted that the respondent did not respond to the treatment plan within 10 days as per the Schedule.

15A case conference was held on September 16, 2019; however, the respondent maintained its position regarding the denial of the treatment plan and a written hearing was scheduled for March 2, 2020.

16The applicant takes the position that the period of delay is grounds for an award. The applicant submitted the Financial Services Commission of Ontario (“FSCO”) decision in Sinnapu and Economical² in support of his position that the threshold for an award is not a high one. In that decision, the arbitrator stated that the test is reasonableness and an award is triggered by a withholding of benefits that is unreasonable. The applicant also relied on the Tribunal’s decision in J.M. v. Certas³ in support of his position that if an insurer waits to pay for benefits after an application is filed with the Tribunal, it can still be liable to pay an award if it is determined that it unreasonably withheld and delayed payment of benefits.

17The respondent argues that the applicant is not entitled to an award because the benefit was not incurred and, therefore, the automatic pay provision set out in s. 38(11) of the Schedule does not apply to this case. Further, the applicant failed to address that the treatment plan was reasonable and necessary in his submissions which is a requirement for an award to be payable. I disagree.

18I find that the respondent unreasonably withheld and delayed payment of the benefit as no explanation was provided for why it did not approve and pay for the treatment plan until December 16, 2019. As highlighted by the applicant, the respondent did not address its mistake for 304 days from the date the treatment plan was submitted. In my view, the applicant has a right to the prompt determination and payment of accident benefits. I find that the respondent had many opportunities to correct its mistake and re-evaluate its position. Instead it only reversed its decision a little over one-month prior to the deadline in which the applicant’s written submissions were due for this hearing. I find the respondent took a stubborn approach in remedying its mistake and the delay was unreasonable. In my view, this type of behaviour should be deterred.

19Further, I agree with the applicant that there is nothing in the Schedule that provides that benefits must be incurred, for an award to be payable. In my opinion, this defeats the purpose of an award as most accident victims do not have deep pockets and cannot fund their own treatment. In addition, the respondent acknowledges that its notice was deficient as it did not respond to the treatment plan within the 10 days. Therefore, it was precluded from taking the position that the applicant’s impairments fit within the MIG in relation to this treatment plan. Therefore, it was required to pay for same and its failure to do so for 304 days was in my view an unreasonable delay.

Quantum of the Award

20Since I have determined that the respondent is liable to pay an award for unreasonably withholding and delaying payment of the benefit, I need to address the appropriate quantum.

21The applicant argues that an award in a fixed amount of $1,500.00 is appropriate and is calculated by (a) 50% of value of the treatment plan; (b) interest owing compounded at 1%; and (c) interest on the award calculated on the special award calculated at 2%.

22The respondent submits that if the Tribunal finds that an award is appropriate it should be minimal as the respondent merely missed the 10-day time period to respond to the treatment plan and the applicant was not prejudiced by its conduct. Further, s. 38(11)(2) already imposes a penalty for its non-compliance. Therefore, an award would be over-compensating the applicant. I disagree. In my view, the respondent’s conduct included more than just not responding to the treatment plan in 10-days as it maintained its position for almost one year when it was aware of the error and had multiple opportunities to correct same. I find this to be an extra aggravating factor in this case. If the respondent corrected its mistake quickly, I would find an award is not payable at all.

23However, I do not find an award in the amount of 50% is appropriate in this matter for the following reasons:

(i) The respondent approved and paid for the treatment plan in advance of the hearing which partially mitigates its conduct and is worthy of a reduction; and

(ii) The applicant did not specify how he was prejudiced by the respondent’s delay in approving and paying for the treatment plan. I am not prepared to make assumptions in that regard, therefore, I am not satisfied that the full 50% is warranted.

24I find an award is payable in the amount of 25% for the following reasons:

(i) The length of the delay and the respondent’s lack of an explanation in not correcting its mistake earlier. The respondent was aware of its mistake as of the date the application was filed with the Tribunal;

(ii) The respondent did not provide any explanation for why it refused to pay interest; and

(iii) To award any less would not be much of a penalty.

ORDER

25For all the above reasons, I find the applicant is entitled to:

(i) Interest on the overdue payment of the treatment plan for physiotherapy in the amount of $3,270.60 recommended by Spine Solutions payable pursuant to s.51 of the Schedule; and

(ii) An award in the amount of 25% as I find the respondent unreasonably withheld and delayed payment of the benefit.

Footnotes

1. 1The Tribunal’s order initially included whether the applicant’s impairments fit within the Minor Injury Guideline (“MIG”) as well as his entitlement to the above noted treatment plan for physiotherapy as issues in dispute. The respondent approved the medical benefit in advance of the hearing and the applicant withdrew the MIG issue in his reply submissions, so these issues are no longer in dispute.
2. 2Sinnapu and Economical (FSCO A09-000900).
3. 3J.M. v. Certas Direct Insurance Company, 2019 CanLII 94016 (ON LAT) (“18-000052”).