Licence Appeal Tribunal File Number: 22-010075/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:
Paula Longboat
Applicant
and
Gore Mutual Insurance Company
Respondent
PRELIMINARY ISSUE HEARING DECISION AND ORDER
ADJUDICATOR:
Tavlin Kaur
APPEARANCES:
For the Applicant:
Mikolaj Grodzki, Counsel
For the Respondent:
Danielle Lecours, Counsel
HEARD:
By way of written submissions
OVERVIEW
1Paula Longboat, the applicant, was involved in an automobile accident on September 4, 2018 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, Gore Mutual Insurance Company (“Gore”) and applied to the Licence Appeal Tribunal - Automobile Accident Benefits Service (the “Tribunal”) for resolution of the dispute.
2The respondent raised a preliminary issue at the case conference and as a result, this written preliminary issue hearing was scheduled.
PRELIMINARY ISSUE
3The preliminary issue to be decided is whether the applicant barred from proceeding to a hearing for the following benefit because the applicant failed to dispute the denial of the income replacement benefit (“IRB”) within the 2-year limitation period.
RESULT
4I find that the applicant is not barred from proceeding with her application.
ANALYSIS
Background
5The applicant was involved in an accident on September 4, 2018. She submitted an Application for Accident Benefits (“OCF-1”). On March 1, 2019, the applicant elected to receive the IRB. The applicant was provided an Explanation of Benefits (“OCF-9”) on March 11, 2019, which advised her that she needed to attend insurer examinations (“IEs”) to determine if she suffered a substantial inability to perform the essential tasks of her pre-accident employment as a result of the accident.
6On May 31, 2019, the respondent advised the applicant that the IEs confirmed that she did not suffer a substantial inability to complete the essential tasks of her pre-accident employment. The applicant was advised that there is no initial entitlement to the IRB and that no benefit is payable. On August 7, 2020, the respondent was informed that the applicant had retained legal counsel. On September 14, 2022, the applicant filed an application with the Tribunal claiming the IRB in the amount of $400.00 per week from January 31, 2019 to date and ongoing, interest and an award.
Parties’ position
7The respondent submits that the applicant is statute-barred from proceeding with her claim for IRB, interest and an award. The limitation period was suspended for six months from March 16, 2020 to September 14, 2020 under section 7.1 (6) of the Emergency Management and Civil Protection Act, R.S.O. 1990, c. E.9. Therefore, it is the respondent’s position that the applicant had until November 29, 2021 to dispute the refusal to pay the IRB. The applicant filed her application 9.5 months after the limitation period expired.
8The applicant submits that the preliminary issue should be dismissed and that she should be permitted to proceed to an oral hearing. She requests that the Tribunal exercise its discretion under section 7 of the Licence Appeal Tribunal Act, 1999 S.O. 1999, c.12, Sched. G (the “Act”) to extend the time to file an appeal. The applicant also alleges that the notice was defective and requests that the Tribunal review the respondent’s conduct under the Unfair and Deceptive Acts and Practices Regulation (O.Reg. 7/00)
Was the notice defective?
9Section 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.
10In 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”) at paragraph 14. 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. [emphasis added].
11Defining with precision an unsophisticated person is a challenging task; however, the 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 mean when read by an unsophisticated person.
12Further, 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.
13The 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.
14This 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.
15Moreover, 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.
16If 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.
17In the recent decision of the Court of Appeal for Ontario, Varriano v. Allstate Ins. Company of Canada, 2023 ONCA 78, a medical reason for a denial does not have to be provided if there was no medical basis for the denial at issue. However, where there is a medical basis for a denial, then in my view, medical reasons should be provided.
The EOB is not compliant
18I have reviewed the EOB dated May 31, 2019 and find that it does not comply with the requirements under section 38(8). There are no references made to her medical conditions such as whiplash-associated disorder type 1 with residual soft tissue/muscular disfunction, concussion and headaches. The EOB discusses carpal tunnel syndrome, which was found to not be attributable to the accident. The EOB does not set out why she does not suffer a substantial inability to complete the essential tasks of her employment. The respondent could have provided a brief explanation by referring to the findings in the IEs. In my view, the reasons provided are vague. In this particular case, the applicant was unrepresented and as such, it was even more imperative to provide her with information regarding why they were denying her claim to the IRB.
19According 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. If the respondent’s notice to the applicant does not meet these basic requirements, the denial is invalid and the two-year limitation period in the Schedule is not triggered. I find that the notice of denial did not meet the basic requirements outlined in Smith and therefore, the two-year limitation period was not triggered.
20As I have determined that the limitation period was not triggered by the invalid denial, the applicant may proceed with her application. I find it unnecessary to conduct an analysis in relation to section 7 of the Licence Appeal Tribunal Act1999, SO 1999, c 12, Sch G.
ORDER
21It is ordered that the applicant may proceed with her application before the Tribunal.
22The Tribunal will reach out to the parties to schedule a new date for the case conference.
Released: July 27, 2023
___________________________
Tavlin Kaur
Adjudicator