Keshavarz v. Aviva General Insurance, 2022 CanLII 8683

Citation: Keshavarz v. Aviva General Insurance, 2022 ONLAT 20-001377/AABS

Licence Appeal Tribunal File Number: 20-001377/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:

Maryam Keshavarz

Applicant

and

Aviva General Insurance

Respondent

DECISION

ADJUDICATOR:

Rebecca Hines

APPEARANCES:

For the Applicant:

Manreet Pabla, Counsel

For the Respondent:

Alexander Dos Reis, Counsel

HEARD:

By way of written submissions

OVERVIEW

1M.K. (the “applicant”) was involved in an automobile accident on August 19, 2018, and sought benefits from Aviva Insurance Canada (the “respondent”), pursuant to the Statutory Accident Benefits Schedule - Effective September 1, 2010 (the ''Schedule'').¹ The respondent denied the applicant’s entitlement to accident benefits and she submitted an application to the Licence Appeal Tribunal – Automobile Accident Benefits Service (“Tribunal”).

2This matter arises from a decision issued on October 18, 2021, wherein I determined the respondent unreasonably withheld and delayed payment of a treatment plan (“OCF-18”) for a psychological assessment in the amount of $2,200.00 recommended by Dr. Fiati. In that decision, I asked the parties to file additional submissions regarding the quantum of the award which is the issue I will now address.

What is the appropriate quantum of the award for the respondent’s unreasonably withholding and delaying payment of the benefit?

3I find that an award in the amount of $550.00 (25%) is appropriate for the following reasons.

4Regulation 664, R.R.O. 1990 (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 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.

5I have already determined that the respondent unreasonably withheld and delayed payment of the OCF-18, so I am not going to repeat those findings. The applicant submits that I should award 50% because of the length of the delay, blameworthiness of the respondent’s conduct, vulnerability of the applicant and need for deterrence. The respondent submits that I should award 0% but if I deem necessary, I should award 5% which would be consistent with previous Tribunal decisions.

6Both parties agree that the Tribunal has considered the following criteria in determining the appropriate quantum of an award²:

i. the overall length of the delay; ii. the blameworthiness of the insurer’s conduct; iii. the vulnerability of the insured person; iv. the harm or potential harm directed at the insured person; v. the need for deterrence; and vi. the advantage wrongfully gained by the insurer from the misconduct.

Length of Delay

7I find the length of the respondent’s delay in approving the OCF-18 to be the most aggravating factor in this case. I find the respondent denied the OCF-18 based on no rationale and did not approve the benefit for almost two-years from the date that it was submitted. The Tribunal and the courts have considered an insurer’s failure to comply with its procedural obligations under the Schedule in determining whether an award is payable. In this case, the respondent did not comply with s.38(8) of the Schedule by responding to the OCF-18 within 10-days and it did not provide a reason for its denial. The respondent argues that the Tribunal has determined that an award is not payable where an insurer has failed to comply with s.38(8). I find the case law supports both parties’ positions. While I agree with the respondent that the Tribunal’s decisions should be consistent, I am not bound by them and the facts in this case are different. I agree with the applicant that the respondent’s non-compliance with s. 38(8) and its delay in approving the OCF-18 was unreasonable and unnecessary as the respondent had many opportunities to reverse its decision but chose not to for two years.

Blameworthiness of the Respondent’s Conduct

8I find that the respondent is fully responsible for its conduct as there was no evidence of a mistake or an administrative oversight. The applicant contends that the respondent is fully responsible for the unreasonable denial and delay in approving the OCF-18 as it had medical documentation which supported that the psychological assessment was reasonable and necessary. I agree with the applicant as it approved an OCF-18 for psychological treatment. Therefore, there was a clear link between the applicant’s impairment and the assessment being sought. In my view, the respondent is a sophisticated party and it knows better. I find it fully responsible for its conduct as the adjuster who testified at the hearing confirmed that there was no real reason for denying the benefit.

The Vulnerability of the Insured Person

9I find the applicant vulnerable as she was a minor when the OCF-18 was denied. The applicant asserts that at the time the OCF-18 was submitted she was a vulnerable 17-year-old high school student struggling with physical and emotional difficulties and in need of psychological treatment for her accident-related impairments. Further, the respondent denied an assessment needed to determine the type of intervention she required. In addition, the respondent’s failure to provide a valid explanation for its denial prevented the applicant from understanding the decision-making process behind the adjustment of her claim. Consequently, she was forced to incur the assessment and file an application with the Tribunal.

10The respondent submits that the fact that the applicant was 17 years old on its own does not prove that she was vulnerable. I disagree. In my view, a young person is more vulnerable then an adult because they cannot process, analyze, and make decisions the same way an adult can. Therefore, in my view the respondent should have used extra care in its handling of the OCF-18 and by explaining why it was being denied. Instead, it did the opposite.

Need for Deterrence

11The applicant submits that the respondent has an obligation to adjust her file in good faith, which it failed to do, and this conduct needs to be deterred. I agree that the respondent has a duty to adjust her claim in good faith and decisions denying important benefits should be based on clear rationale. I also agree that the respondent’s conduct needs to be deterred.

Mitigating Factors

12As already highlighted, the applicant submits that I should award 50%. In reducing the amount of the quantum to 25%, I have considered the following factors:

i) The applicant has not demonstrated that she has been prejudiced by the respondent’s conduct; and ii) The respondent approved the OCF-18 eight months prior to the hearing.

13Of significance, the applicant has not proven that she has been prejudiced or suffered any harm as a result of the respondent’s conduct. In my view, this supports a reduction of the quantum of the award. The applicant argues that in considering the overall length of the delay, I may infer that she has been prejudiced as this approach is consistent with the consumer protection intent of the legislation. The respondent highlighted the fact that the applicant has not been harmed by its delay in approving the OCF-18 as it approved psychological treatment. This was a unique aspect of this case and I reduce the quantum by 20%.

14Another mitigating factor I have considered in reducing the quantum of the award is that the respondent approved the OCF-18 eight months prior to the hearing. Consequently, the applicant was not forced to proceed to argue her position on this issue. I have reduced the quantum by 5% in consideration of this factor.

ORDER

15For all of the above reasons, the respondent is liable to pay the applicant an award in the amount of $550.00 plus interest in accordance with the regulation.

Footnotes

1. 1O.Reg. 34/10 as amended.
2. 2M. M. v Aviva Insurance Canada, 2020 CanLII 42663 (ON LAT), para 34.