Ross v. Aviva General Insurance, 2023 CanLII 119823

Citation: Ross v. Aviva General Insurance, 2023 ONLAT 22-002558/AABS

Licence Appeal Tribunal File Number: 22-002558/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:

Steven Ross

Applicant

and

Aviva General Insurance

Respondent

DECISION

ADJUDICATOR: Kate Grieves

APPEARANCES:

For the Applicant: Roger R Foisy, Counsel Rusald Laloshi, Paralegal Rutumi Tank, Student-at-Law

For the Respondent: Kevin Griffiths, Counsel

HEARD: By Way of Written Submissions

OVERVIEW

1Steven Ross (“the applicant”) was involved in an automobile accident on August 22, 2015, and sought benefits pursuant to the Statutory Accident Benefits Schedule - Effective September 1, 2010 (the “Schedule”). The applicant was denied benefits by Aviva General Insurance Company (“the respondent”) and applied to the Licence Appeal Tribunal - Automobile Accident Benefits Service (the “Tribunal”) for resolution of the dispute.

2The initial dispute involved various benefits, including non-earner benefits. Although the parties were able to eventually resolve the disputes, the applicant submits that the unreasonable withholding and denial of non-earner benefits should result in award pursuant to section 10 of Regulation 664.

ISSUES

3The issue to be decided in this hearing is:

1. Is the respondent liable to pay an award under s. 10 of Regulation 664 because it unreasonably withheld or delayed payments to the applicant with regards to the non-earner benefit?

RESULT

4The respondent is liable to pay an award under s. 10 of Regulation 664. The applicant is entitled to an award of $5,550.00, plus interest under the Schedule, plus compound interest calculated as per s. 10 of Regulation 664.

PROCEDURAL ISSUES

5The respondent submits that a stand-alone s. 10 award cannot be granted, because s. 10 of O. Reg. 664 contains clear language that precludes an award unless the Tribunal is awarding an amount for outstanding benefits and interest.

6Section 10 states that, if the Tribunal finds that an insurer has unreasonably withheld or delayed payments, the Tribunal, in addition to awarding the benefits and interest to which an insured person is entitled under the Schedule, may award a lump sum of up to 50% of the amount to which the person was entitled at the time of the award, plus interest on all amounts owing (including unpaid interest) at the rate of 2% per month, compounded monthly, from the time the benefits first became payable.

7The respondent submits that, the amount that the Tribunal may award cannot exceed 50% of the amount of benefits that the Tribunal awards. Therefore, it precludes a s. 10 award if the person is not awarded benefits or interest by the Tribunal. The respondent provided no case law in support of its position.

8Consistent with prior case law, I find that the Tribunal can grant a stand-alone s. 10 award in situations where the parties resolved all the substantive issues in dispute before a hearing: see 17-006757 v Aviva, 2018 CanLII 81949 (ON LAT). As in the subject case, the sole issue in dispute was a s. 10 award, and Aviva took a similar position. Adjudicator Paluch determined that interpretation of Regulation 664 involves reading it in the context of the Insurance Act and the Schedule, and interpreting them as being remedial, thereby giving it a large and liberal interpretation towards its listed objectives. Adjudicator Paluch noted that a proceeding had not ended until a withdrawal is submitted, resolution of all disputes, or after a Tribunal’s decision, none of which have been achieved here. Second, the Insurance Act is consumer protection legislation, and it would contradict the spirit of the Act to let insurers sidestep the enforcement of the s. 10 provisions by delaying settlement of claims until the eve of a hearing. It would undermine the legislature’s intent of a timely provision of accident benefits and consumer protection. Similar reasoning is provided in JM v Certas Direct Insurance Company, 2019 CanLII 94016 (ON LAT).

9Aviva’s interpretation would be unreasonable and ultimately defeat the purpose of the statute. The Tribunal has jurisdiction to make a s. 10 award even when the substantive issues in dispute are no longer in dispute. A dispute may also encompass a disagreement regarding unreasonably withheld or delayed payments, such as in the subject dispute. The respondent did not relieve itself of liability to an award for unreasonably withholding or delaying payments of NEBs as a result of reinstating them prior to a hearing.

Background

10The applicant applied for accident benefits on September 18, 2015, and shortly thereafter submitted an OCF-3 supporting his entitlement to NEB. The respondent started to pay NEBs.

11In January 2016, the respondent arranged a multi-disciplinary insurer’s examination (“IE”) to assess his ongoing eligibility for the benefits. The IE reports dated March 2, 2016 determined that he did not suffer a complete inability to carry on a normal life. The respondent terminated the benefits effective March 25, 2016 based on these reports.

12As part of the multi-disciplinary report, the neurologist, Dr. V. John found that the applicant sustained a left C6 nerve root impingement. The applicant reported that he had not returned to his self-employment as a consultant due to neck pain and left arm symptoms. He had been able to return to most household chores with pacing. He could not shovel snow. It took him several days to mow the lawn, whereas it used to take him a few hours. He had not been able to return to social activities, hike, or golf. Dr. John recommended that the applicant undergo an MRI to determine diagnosis.

13The applicant underwent the MRI. A paper review report from Dr. John indicates that the results of the MRI were very concerning for causing a cervical myelopathy which could cause great impairment. Given the findings, Dr. John opined that a further in-person assessment was most appropriate.

14The applicant refused to attend the assessment, which contributed to some delay. Eventually, the dispute was resolved and the applicant agreed to attend the IE.

15Following the stoppage, the applicant provided updates on his health via assessments, treatment plans, reports, and clinical notes and records. The applicant also notified the respondent that the stoppage was disputed through three applications to the Tribunal on March 9, 2818, June 27, 2019, and March 2, 2022.

16For example, the applicant points to the July 21, 2017 neurologist report of Dr. Mehdiratta, that should have triggered a re-evaluation of his NEB eligibility. Dr. Mehdiratta noted that the objective examination demonstrated restrictive functioning, which affected him physically. Cognitively he continued to complain of post-concussive symptomology such as chronic migraines. Since the accident, he had been unable to participate in activities such as employment and leisure activities, and even for activities for which he continues to participate, such as self-care, he continued to experience pain resulting in him limiting his self-care to only those days when it becomes necessary for him to leave his home. The report explicitly states that the applicant suffered from a complete inability to carry on a normal life.

17A psychological assessment dated February 12, 2018 also documented his deteriorating condition.

18A section 25 catastrophic impairment report documents the applicant failed attempt to return to work, as well as significant cognitive and self-regulation challenges, such as light and noise sensitivity, slow reaction/response time, disorganization, and inadequate emotional regulation. It also noted that he cannot engage in activities independently, suffers from multiple days of pain and fatigue, and faces difficulties with daily tasks that demand planning, organization, and self-monitoring.

19The applicant eventually underwent the neurological re-assessment with Dr. John, explicitly assessing NEB, report dated April 1, 2019. He confirmed that the applicant’s condition had deteriorated since the prior assessment. He emphasized persistent memory issues, attributed to factors such as sleep deprivation, pain, and low mood. Despite the foregoing, Dr. John maintains that, exclusively from a neurological perspective, the applicant did not suffer a complete inability to carry on a normal life. The applicant submits that his observations should have triggered a full reassessment of the NEB eligibility.

20Four years after the NEB stoppage, on October 22, 2020 the respondent accepted that the applicant was catastrophically impaired.

21The applicant’s entitlement to NEB was not reconsidered during that time.

22A year after the catastrophic determination, the respondent agreed to reinstate the NEB via email on October 5, 2021. Inexplicably, it took a further six months for the respondent to actually pay the benefit. The respondent concedes that it unreasonably delayed paying the benefit for that period, less a reasonable period for it to calculate interest and issue payment. On April 5, 2022 the respondent confirmed the reinstatement and enclosed payment for past NEB with interest, accruing since March 26, 2016, six years since the benefits were terminated.

ANALYSIS

Entitlement to an Award

23The applicant submits that in adjusting the applicant’s file, the respondent ignored pertinent medical information that led to the unreasonable withholding and six-year delay of the applicant’s NEB.

24The applicant submits that there were three periods of delay. The first from March 25, 2016 to October 22, 2020. The applicant submits that there were many documents provided to the respondent during that period that should have prompted the respondent to reconsider its denial.

25The applicant submits that the second periods of delay was from October 22, 2020 to October 5, 2021 when the respondent was obligated to readjust the applicant’s benefits after it accepted that he was catastrophically impaired

26The third delay period occurred from October 5, 2021 to April 5, 2022 when the respondent agreed to reinstate the benefits, but didn’t actually reinstate them for a further six months.

27The respondent submits that it should not be held to a standard of perfection, and that it was reasonable to rely on its IE assessors’ conclusions in denying the applicant’s entitlement to the disputed benefits. The respondent concedes that it unreasonably delayed paying the NEB for the third period of delay, less a reasonable period for it to calculate the interest and issue payment. The respondent submits that there was a five-month period of delay.

28Based on the evidence, I find that the applicant has shown on a balance of probabilities that the respondent unreasonably withheld or delayed payment of the NEB by ignoring pertinent medical information and not reassessing the decision. I find that the respondent unreasonably withheld the benefits from October 22, 2020 to April 5, 2022. I agree, an insurer should not be held to a standard of perfection, but to a standard of reasonableness. However, papering a termination with compliant reports is not necessarily protection against an award if an insurer closes its mind to other information available to it that may affect its decision. It must consider the medical and all other information provided. It should reassess its position as the information is provided. By not doing so, the respondent acted in a manner that was stubborn, unyielding and inflexible.

29After receiving the initial IE reports and terminating the NEB, the respondent requested that the applicant undergo the MRI as suggested by Dr. John, and then arranged the reassessment. The applicant contributed to some delay in refusing to attend the IE. The dispute was eventually resolved and the reassessment report dated April 1, 2019 determined that the applicant did not meet the test for NEBs.

30However, the respondent received multiple reports that discuss the applicant challenges with his day-to-day functioning, for example: a neurology report of Dr. Mehdiratta dated July 21, 2017, a psychological evaluation report by Dr. Ramsey, dated February 12, 2018, multidisciplinary catastrophic assessment reports dated February 11, 2019, OT progress reports of Entwistle Power dated July 18, 2019 and June 3, 2020.

31While Dr. John concluded that the applicant did not suffer a complete inability to carry on a normal life, the report uncovers significant impairments including significant pain, frustration, and increasing forgetfulness, and that he had ceased most of his housekeeping. Tasks that he was able to complete in an hour now took several days. He became apprehensive about leaving the house at all.

32The test for NEB is that the applicant must establish that he suffers a complete inability to carry on a normal life as a result of the accident. Section 3(7)(a) of the Schedule defines this test as follows: a person suffers a complete inability to carry on a normal life as a result of the accident if, as a result of the accident, the person sustains an impairment that continually prevents the person from engaging in substantially all of the activities in which the person ordinarily engaged before the accident.

33The seminal decision regarding entitlement to NEB is that of the Court of Appeal in Heath v Economical, 2009 ONCA 391 establishes that the phrase “engaging in” requires a qualitative analysis. If the degree to which a claimant can perform an activity is sufficiently restricted, it cannot be said that they are truly engaging in the activity. I find that the respondent overlooked that aspect of their evaluation.

34I find that the respondent acted unreasonably in the circumstances, and ought to have reassessed the applicant based on new information regarding his deteriorating condition. At the latest, when the respondent received its own catastrophic assessment report from Mr. Ross in October 2020, it should have triggered a reassessment of the applicant’s NEB. The respondent argues that his class 4 impairment in the sphere of adaptation does not impact his eligibility for NEB. I agree the test for catastrophic impairment and the test for NEB are not the same. However, the conclusions of this report, taken together with the other medical evidence regarding the applicant’s deteriorating condition should have triggered a review of his eligibility for NEB, which did not happen until 2022.

35The AMA Guides define impairment in that domain as a repeated failure to adapt to stressful circumstances. Such stress may cause an individual to withdraw from the situation or experience exacerbation of signs and symptoms of a mental disorder, or lead to difficulty maintaining their activities of daily living, continuing social relationships, and completing tasks. This domain also reflects an individual’s ability to function across all other activity domains. Taking that class 4 rating in conjunction with the other three class 3 ratings, should have prompted the respondent to reconsider the applicant’s NEB entitlement. In failing to reassess the applicant upon receipt of the occupational therapy catastrophic assessment outlining the applicant’s impairments resulted in significant impairment in his useful functioning, the respondent acted in a manner that was imprudent, stubborn, inflexible, and unyielding in addressing the applicant’s NEB claim.

Quantum of the Award

36As outlined in Persofsky v Liberty Mutual Insurance, 2000 ONFSCDRS 113, determining the quantum of the award is grounded in the principles of rationality and proportionality. Rationality requires that the determination of the amount of the award sufficiently promotes the objectives of punishment and deterrence without exceeding what is necessary to fulfill those goals. Proportionality ensures that the consequences imposed bear a rational connection to the misconduct.

37In determining the appropriate quantum, the Tribunal has outlined six non-exhaustive factors to consider, which include: (1) the overall length of the delay; (2) the blameworthiness of the insurer’s conduct; (3) the vulnerability of the insured person; (4) the harm or potential harm directed at the insured person; (5) the need for deterrence; and (6) the advantage gained by the insurer from the misconduct.

38I find that the respondent’s conduct should attract an award for the unreasonable denial of benefits from October 22, 2020 until they were reinstated in April 5, 2022.

39The blameworthiness of the insurer’s conduct is outlined above. It was unreasonable after receipt of further information to not reassess the benefit. There is no direct evidence of a conscious decision to withhold or delay benefits, however the respondent has conceded that its conduct should attract an award for the third period of delay, as there is no explanation for the delayed payment after it agreed that he was entitled to the benefits. In terms of vulnerability and harm to the insured person, there is evidence that the applicant’s condition was deteriorating as a result of his impairments. While I agree that there was some harm in the delay, I do not accept that they delay resulted in the level of financial hardship alleged by the applicant – he was in receipt of ODSP benefits, and receiving an NEB payment would result in a reduction of his ODSP. The respondent acted unreasonably and this conduct should be deterred. I have not been directed to evidence of any advantage gained by the respondent.

40The applicant requested a special award amounting to 50% of the outstanding benefits from March 2016 until they were paid. He directed me to various cases which considered what percentage of award was granted based on the various factors.

41The respondent submits that rather than consider percentages (i.e.: 50% for the most egregious facts, 5% of benefits for a case that barely crosses the threshold for unreasonable conduct), the Tribunal should set the dollar amount it feels is warranted and then determine the maximum based on 50% of the amount awarded in interest and benefits, only to ensure that the lump sum does not exceed the maximum.

42The Divisional Court in Personal v Hoang, 2017 ONSC 81 adopted the formula in Persofsky for fixing the amount of a “special award” (as it was termed then) under section 282(10) of the Insurance Act. Section 282(10) has been replaced by section 10 of Regulation 664 and is identical in its language. This formula has been followed by the Tribunal (see for example: G.J v Coachman Insurance Company, 2019 CanLII 126208 (ON LAT); Foucade v Coachman Insurance Company, 2021 CanLII 120889 (ON LAT)).

43The formula to compute the maximum amount that could be awarded as a lump sum is:

Up to 50% x (amount unreasonably withheld or delayed benefits + interest on these benefits calculated under the Schedule + compound interest calculated as per s.10 of Regulation 664).

44I find that the maximum payable is 50% of the benefits owing from October 22, 2020 to April 5, 2022 when they were reinstated.

October 22, 2020 to April 5, 2022 = 75 weeks

75 weeks x $185.00/week = $13,875.00 (NEB entitlement for the period)

Maximum amount of award 50% = $6,937.50, plus interest

45Having considered the factors above, I find that the applicant is entitled to a 40% award on the benefits that were unreasonably withheld during the above noted period – from the receipt of the occupational therapy catastrophic assessment report, not since 2016.

40% of $13,875.00 = $5,550.00

46The applicant is entitled to an award of $5,550.00, plus interest under the Schedule, plus compound interest calculated as per s. 10 of Regulation 664. I leave it to the parties to calculate the interest payable.

ORDER

47The applicant is entitled to an award of $5,550.00, plus interest under the Schedule, plus compound interest calculated as per s. 10 of Regulation 664.