Licence Appeal Tribunal File Number: 23-002463/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:
Lanceford Barnes
Applicant
and
TD General Insurance Company
Respondent
PRELIMINARY ISSUE HEARING DECISION AND ORDER
ADJUDICATOR:
Tavlin Kaur
APPEARANCES:
For the Applicant:
Gjergji Laloshi, Paralegal
For the Respondent:
Jennifer Kiss, Counsel
Heard by way of written submissions
OVERVIEW
1Lanceford Barnes, the applicant, was involved in an automobile accident on October 14, 2017, and sought benefits pursuant to the Statutory Accident Benefits Schedule – Effective September 1, 2010 (including amendments effective June 1, 2016) (the “Schedule”). The applicant was denied benefits by the respondent, TD General Insurance Company (“TD”), and applied to the Licence Appeal Tribunal – Automobile Accident Benefits Service (the “Tribunal”) for resolution of the dispute.
PRELIMINARY ISSUE IN DISPUTE
2The preliminary issue to be decided is whether the applicant is barred from proceeding to a hearing for the benefit claimed in this application because the applicant failed to dispute their denial within the two-year limitation period.
RESULT
3The applicant may proceed with his application.
ANALYSIS
Background
4On August 11, 2020, the respondent denied the treatment plan in the amount of $2,029.53 for physiotherapy services. The applicant attended insurer examinations for the purpose of determining whether the treatment plan was reasonable and necessary. On July 2, 2021, the respondent upheld the denial of the treatment plan. The applicant filed his application with the Tribunal on March 2, 2023.
Parties’ positions
5The respondent submits that more than two years have passed since the denial of the treatment plan in dispute and as such, the applicant is barred pursuant to section 56 of the Schedule.
6The applicant submits that he should not be barred from proceeding with his application. The applicant asserts that the denial letter was insufficient. It is the applicant’s position that the denial letter must be conveyed in a manner that is “clear and unequivocal” to an unsophisticated person. The denial letter dated August 11, 2020 fell short of this standard. The applicant states that, “The suggestion that a decision on the treatment plan's finding of reasonable necessity or its alignment with the MIG is contingent upon the Insurer’s Examination results introduces a significant potential for confusion and misunderstanding.”
The Law
7Section 56 of the Schedule provides that an application to dispute a denial of a benefit shall be commenced within two years of the insurer’s refusal to pay.
8In order for the provision under section 56 to be triggered, I must determine whether the respondent’s notice of denial was proper in accordance with the principles set out in Smith v. Co-operators General Insurance Co, 2002 SCC 30 (“Smith”). According to Smith, the refusal to pay the benefit must contain straightforward and clear language, it must be directed towards an unsophisticated person, it must outline the dispute resolution process and the relevant time limits that govern the process, and it must provide valid or other reasons for the denial.
9The Supreme Court’s direction in Smith clearly recognizes that greater accessibility of an insured person to the informational content of the denial notice is of paramount importance and must necessarily account for the variety of persons and backgrounds who may make claims for accident benefits. Accordingly, Smith requires a denial notice to be as specific and accessible as possible to ensure that there is no ambiguity in what a notice means when read by an unsophisticated person.
10Further, the notice must provide a valid medical and any other reason for the denial. I note that the Divisional Court in Hedley v. Aviva Insurance Company of Canada (“Hedley”), 2019 ONSC 5318 considered the reconsideration decision of B.H. v. Aviva Insurance Company, which in turn applied T.F. v. Peel Mutual Insurance Company, 2018 CanLII 39373 (ON LAT) (“T.F.”). The Court found no basis to intervene as the decision was within the reasonable range of outcomes.
11The principles were set out by the Tribunal in T.F. in which Executive Chair Lamoureux stated, at para. 19:
[…] an insurer’s “medical and any other reasons” should, at the very least, include specific details about the insured’s condition forming the basis for the insurer’s decision or, alternatively, identify information about the insured’s condition that the insurer does not have but requires. Additionally, an insurer should also refer to the specific benefit or determination at issue, along with any section of the Schedule upon which it relies. Ultimately, an insurer’s “medical and any other reasons” should be clear and sufficient enough to allow an unsophisticated person to make an informed decision to either accept or dispute the decision at issue. Only then will the explanation serve the Schedule’s consumer protection goal.
12This means the notice at the very least should explain what the insured person’s medical conditions are and why those conditions do not justify entitlement to the benefit claimed. By providing this information, the insured person will have a better understanding of the insurer’s determination. It is then that the consumer protection mandate of the Schedule is achieved.
13Moreover, I note that the Court in Hedley found that boilerplate medical reasons for denials of treatment plans submitted under the Schedule constitute as no reasons at all. Reasons must be meaningful in order to permit the insured person to decide whether or not to challenge the insurer’s determination.
14If an insurer’s notice of denial to an insured person does not satisfy these requirements, the denial may be determined to be invalid and fail to trigger the two-year limitation period.
15However, if the notice of denial does satisfy these requirements, then the onus is on the applicant to establish reasonable grounds for an extension under Section 7 of the Licence Appeal Tribunal Act, 1999 (“LAT Act”). Section 7 allows the Tribunal to extend a limitation period for filing an appeal to it. In considering whether to exercise its discretion to extend the limitation period, the Tribunal must consider the following four factors to determine if the justice of the case requires the extension:
a) A bona fide intention to appeal within the limitation period;
b) The length of delay;
c) Prejudice to the other party; and
d) Merits of the appeal.
16No one factor is determinative in this analysis.
Denial letter is valid.
17In my view, the denial letter dated August 11, 2020 is valid. Reasons for the denial are provided. The respondent has identified the applicant’s medical conditions. References have been made to medical evidence which the respondent relied on to come to this determination. The benefits in dispute have been properly identified. In my view, the reasons were clear and sufficient to allow an unsophisticated person to make an informed decision to either accept or dispute the decision at issue. I do not see how this letter would create confusion in the applicant’s mind. As such, I find that this was a clear and unequivocal denial.
The application was not filed within the limitation period.
18On March 20, 2020, Ontario enacted O. Reg. 73/20. This regulation suspended limitation periods retroactively from March 16, 2020 and was repealed on September 14, 2020. This legislation was in force for 183 days. As such, a limitation period that began running before March 16, 2020 can be extended by 183 days. This was affirmed in McAuley v Canada Post Corporation, 2021 ONSC 4528, where the Ontario Superior Court of Justice found that O. Reg. 73/20 extended all running limitation periods by 183 days.
19The limitation period for this application started running before March 16, 2020 and can therefore be extended by 183 days. In the facts before me, the applicant had until February 10, 2023 to file the application. The application was filed with the Tribunal on March 2, 2023. Therefore, I find that the applicant did not file his application within the limitation period.
Section 7 of the LAT Act
Bona fide intention
20The respondent submits that the applicant has not provided a bona fide intention to appeal within the appeal period. The applicant and his counsel were provided a clear and timely denial for the issue in dispute. The applicant had legal representation as early as April 2019 for his accident benefits claim. The respondent submits that there has been no effort made on the part of the applicant and his counsel to support that there was a bona fide intention.
21The applicant submits that his intention to seek recourse through the appeals process is evident from his initial engagement with the claims process. He argues that he adhered to all of the procedural requirements set forth by the insurer. It is his position that his conduct must be interpreted against the backdrop of the insurer's communications, which, although deemed clear, led to a reasonable belief that the finality of the denial was pending the outcome of the insurer's examinations.
22I am not persuaded by the applicant’s position. The denial letter dated August 11, 2020 provided the applicant with information regarding the process to dispute the decision at the Tribunal. Moreover, submissions are not evidence. There is no affidavit from the applicant that supports that he believed that the finality of the denial was pending on the outcome of the insurer’s examination. He did not provide any evidence that substantiates his position that he had a bona fide intention to dispute this decision at the Tribunal.
Length of the delay
23The respondent submits that the applicant has not provided a reasonable explanation for the delay in bringing the subject application. This is not a case where the applicant's application is outside of the limitation by a few days or weeks. Rather, the respondent submits that this application was filed on March 1, 2023 which is seven (7) months passed the expiration of the two-year limitation period, including the COVID extension, for the issues in dispute.
24The applicant submits that the delay was not a product of disregard or willful neglect but a direct result of the intricate process. The applicant states that:
The insurer's communication strategy, if deemed clear for the purpose of initiating the limitation period, inadvertently introduced complexities that influenced Mr. Barnes' understanding of when the decision was final. This perceived finality was crucial for Mr. Barnes to recognize the commencement of the limitation period, and any actions taken prior to this understanding should not penalize him. Thus, the delay, while substantial, is mitigated by these circumstances and does not diminish the sincerity of Mr. Barnes' intent to appeal.
25In my view, the respondent’s calculation is incorrect. With the extension, the applicant had until February 10, 2023 to file the application. The application was filed on March 2, 2023, which is twenty days outside of the limitation period. Regardless, there is a delay in filing the application.
26I am not satisfied by the applicant’s explanation. It is unclear what these so-called complexities are. The applicant has not pointed to the evidence that substantiates his argument. Moreover, the applicant had legal representation at the time. It was his representative’s responsibility to ensure that the application was filed within the limitation period. His legal representative has not explained why he was unable to file the application on time on behalf of his client.
Prejudice to the other party
27The respondent submits that it would suffer immense prejudice if the Tribunal were to extend the limitation period. Insurers are entitled to finality and the delay in filing this application is so extreme that it deprives the insurer of this finality and would open the flood gates from a public policy perspective to continue to litigate claims that are more than six months outside of their limitation. The respondent states that, “In this case, not only did the representative for the applicant miss the limitation period, but the application to dispute this issue was submitted seven months after the five-year expiry of the AB policy, which was on October 14, 2022.” It is the respondent’s position that these actions show that the applicant and his representative(s) exhibited extreme disregard for the accident process and timelines, placing the respondent in a position where it could not possibly predict or properly prepare for future substantive disputes on the current issues.
28The applicant submits that respondent’s ongoing involvement in the claims process, including the commissioning and receipt of medical assessments, indicates their preparedness to address the dispute at any point. This readiness mitigates any argument of prejudice due to the delay as the insurer has remained engaged and active throughout the period in question. It is the respondent’s position that he would be prejudiced if he were to be prevented from accessing benefits.
29The respondent has not proffered an explanation or evidence that demonstrates how it is prejudiced by the delay. Based on my review of the file, the respondent was actively involved in adjusting the file. In fact, the respondent was able to conduct insurer examinations to assess the applicant. The respondent has not provided any evidence that suggests that records or witnesses would not be available if this matter were to proceed. On the other hand, it would be prejudicial to the applicant if he were denied the opportunity to move forward with his case.
Merits of the appeal
30The respondent submits that there is no merit to this case. The respondent asserts that the denial provided was clear and unequivocal which commenced the limitation period to run on the sole issue in dispute. The filing of this application far surpasses the limitation date for this issue. It is the respondent’s position that to allow an extension of the limitation period would violate the rules of natural justice and procedural fairness.
31The applicant submits that the merits of the appeal are substantiated by the medical evidence which notes an exacerbation of pre-existing conditions of the lumbar spine and bilateral shoulders, which provides a credible foundation for contesting the applicability of the MIG.
32I have reviewed the chronic pain assessment from Dr. Stephen Brown, anesthesiologist. It appears that there is some evidence of chronic pain and his pre-existing conditions being exacerbated by the accident. In my view, there is some merit to the appeal.
Weighing the factors
33In weighing the factors to determine if the justice of the case warrants an extension of time under section 7 in favour of the applicant, I find that there is some merit to the appeal and that the respondent did not suffer prejudice due to the delay because it conducted assessments during that period. As such, I find that the applicant has met his onus in demonstrating that the limitation period for commencing his application should be extended. As such, I am exercising my discretion under section 7 of the LAT Act to extend the limitation period and allow him to proceed with his application before the Tribunal.
ORDER
34For the reasons above, the applicant may proceed with his application before the Tribunal.
Released: December 6, 2023
Tavlin Kaur
Adjudicator