Intact Insurance Company v Beaudry, 2016 ONSC 6127

Court File and Parties

COURT FILE NO.: 16-67230 DATE: 20160930 ONTARIO SUPERIOR COURT OF JUSTICE

BETWEEN:

INTACT INSURANCE COMPANY Applicant – and – ANNE BEAUDRY Respondent

Counsel: Philippa Samworth/Michelle Mainprize, for the Applicant Joseph Obagi/Elizabeth Quigley, for the Respondent

HEARD: September 1, 2016

Beaudoin J.

REASONS FOR DECISION

The Nature of the Application

1Intact Insurance Company (“Intact”) brings this application under the Rules of Civil Procedure R.R.O. 1990, Reg. 194 for determination of rights based on the Court’s interpretation of the Statutory Accident Benefits Schedule – effective September 1, 2010, O. Reg. 34/10 as amended (the “SABS”), and in particular, s. 44(1).

2The Respondent, Anne Beaudry, (“Beaudry”) was involved in a motor vehicle accident on July 8, 2011 and applied to Intact, her motor vehicle insurance insurer, for accident benefits. Her accident benefits claims include income replacement benefits, medical and rehabilitation benefits, attendant care, and costs of examination as provided for under the SABS.

3The Respondent is a self-employed vocational rehabilitation worker/case manager. She was off work for a period of time post-accident, returned to modified hours, but stopped working completely as of March 29, 2013.

4Intact accepted pre-104 week entitlement to income replacement benefits and paid income replacement benefits for the 104 week period of disability. The disability test for entitlement changes after 104 weeks of disability. Given the upcoming change in the disability test, Intact wished to make a determination of continuing entitlement income replacement benefits in the spring of 2013.

5Section 37 of the SABS outlines the procedure for an insured to follow when determining ongoing and entitlement to specified benefits including income replacement benefits, which procedure includes the insurer’s right to obtain examinations by healthcare for practitioners under s. 44 of the SABS.

6Intact wrote to the Respondent informing her that the insurer required an examination under s. 44. Thereafter, there was an exchange of correspondence between Intact and counsel for the Respondent with respect to the conduct of that assessment and an agreement was reached with respect to five assessors to conduct the examination.

7Shortly thereafter, the Respondent submitted an OCF-19 application for a declaration of catastrophic impairment. Section 45 of the SABS outlines the procedure for an insurer to follow when determining catastrophic impairment which procedure includes the insurer’s right to obtain examinations by physicians and or neurologists under s. 44 of the SABS.

8The Respondent then submitted claims for payment of psychological and related therapy and assessment fees. Section 38 of the SABS outlines the procedure for an insurer to follow which procedure includes the insurer’s right to obtain examinations by healthcare practitioners under s. 44 of the SABS.

9Thereafter, counsel for the Respondent was in communication with Intact with regard to the terms of the consent forms requested by the assessors and/or the insurer. The insurer involved its legal counsel to engage in discussion with Respondent’s counsel, the assessors and the insurer to see if an agreement could be reached. An agreement could not be reached after numerous discussions and efforts. As a result, the various s. 44 assessments did not proceed other than a vocational assessment.

10The insurer has continued to pay all benefits pending the s. 44 assessments. The Respondent maintains that the delay in her application for catastrophic impairment has required her to pay out-of-pocket for certain expenses which could have been paid once a catastrophic designation is made. Beaudry would also be entitled to case management services, housekeeping and home maintenance expenses and increase transportation after a designation of catastrophic impairment. In addition, Beaudry’s tort action [as well as a companion action involving a separate plaintiff] have been put on hiatus pending the determination of whether Beaudry is considered to have suffered a “catastrophic impairment” and therefore, eligible for greater accident benefits. Beaudry maintains that her emotional well-being has also been affected by the delays.

11Given that the application sought a declaration purporting to be binding on a hypothetical insured who “refuses to attend” an assessment unless various specific provisions are included in consent, I questioned the Applicant further. Intact conceded that it was seeking a determination of rights as between itself and its insured and a declaration that Beaudry was in breach of s. 44 of the SABS because of her failure to sign the consent forms required by Intact. Both parties acknowledged that this Court had no jurisdiction to make a finding that Beaudry was in breach of s. 44 and that this issue had to be determined pursuant to the dispute resolution provisions set out in the SABS.

12Counsel nevertheless agreed that the Application requested the Court’s interpretation of s. 44 of the SABS, and that in doing so, I could read in a requirement that an insured execute any consent that could be required for a s. 44 examinations.

13Intact submits that the proper interpretation is that s. 44(1) of the SABS requires an insured to sign any consent form required by the assessor and/or the insurer and its agents. The Applicant concedes that this would give it final decision-making on the form of any consent. It argues that this is necessary in order to avoid the protracted negotiations that took place in this case.

14The Respondent submits that any consent form to be signed by an insured which provides consent to a "regulated health professional or person with expertise in vocational rehabilitation" for a s. 44 assessment under the SABS must be “reasonable and justifiable in the circumstances.”

15The key difference in the two positions is the Respondent’s addition of the words “reasonable and justifiable.” It is not clear if the addition of the requirement that the consent be “justifiable” adds much to a requirement of “reasonableness.” The Respondent submits that whatever terms are used, there must be a requirement to negotiate the form of any consent required by an insurer and that an insurer cannot unilaterally dictate its terms.

The Regulatory Framework

16Section 44 is contained in Part VIII of the SABS which sets out the procedure for claiming benefits. Section 44 of the SABS states:

Examination required by insurer

44. (1) For the purposes of assisting an insurer to determine if an insured person is or continues to be entitled to a benefit under this Regulation for which an application is made, but not more often than is reasonably necessary, an insurer may require an insured person to be examined under this section by one or more persons chosen by the insurer who are regulated health professionals or who have expertise in vocational rehabilitation. O. Reg. 34/10, s. 44 (1).

17The section is silent on the issue of the form of any consent that may be required by a particular examiner. In Luther v. Economical Mutual Insurance Co., [2012] O.F.S.C.D No. 82, Arbitrator Wilson had to consider whether or not the applicant was in breach of then relevant SABS provisions because of his refusal to sign the consent forms put forward by the facility and the assessors before proceeding with an assessment. He noted the provisions of the Health Care Consent Act, 1996, S.O. 1996, c. 2, Sch. A, the Personal Health Information Protection Act, 2004, S.O. 2004, c. 3, Sch. A, and the various professional guidelines in place, and concluded that health professionals could reasonably fear negative consequences if they perform medical-legal examinations without having obtained a consent in advance of that examination.

18He considered case law under s. 105 of the Courts of Justice Act, R.S.O. 1990, c. C43 (“CJA”) in particular, Chappell v. Marshall Estate [2001] O.J. No. 3009, where Valin J. concluded that there is no requirement under s. 105 of the CJA or Rule 33 of the Rules of Civil Procedure requiring an injured plaintiff to sign an authorization, consent or agreement when attending a defence medical examination. While both the relevant section of SABS and s. 105 speak to an obligation to undergo an examination, Arbitrator Wilson noted that there was a qualitative difference between an order of a court to do something and a mandatory request under a contract of insurance issued by a commercial entity such an insurance company. He concluded that it was reasonable for an examiner to ask for generalized consent undertaking a regulated examination and to document that process; and that “any written consents requested should be simple and consistent in accordance with the purposes of the Schedule.”

19I agree that the distinction between a s. 105 examination and a SABS examination is an important one, and that a written consent may be required before undergoing a section examination. That being said, that does not end the debate since there can be disputes and negotiations over the terms of order directing a plaintiff to undergo a defence medical examination pursuant to section 105 of the CJA: Lavecchia v. McGinn, 2016 ONSC 2193.

20In considering this issue, section 44 (9) is helpful as it governs the conduct of examinations.

(9) The following rules apply in respect of the examination:

1. If the attendance of the insured person is not required, the insured person and the insurer shall, within five business days after the day the notice under subsection (5) is received by the insured person, provide to the person or persons conducting the examination such information and documents as are relevant or necessary for the review of the insured person’s medical condition.
2. If the attendance of the insured person is required, i. the insurer shall make reasonable efforts to schedule the examination for a day, time and location that are convenient for the insured person, ii. the insured person and the insurer shall, not later than five business days before the day scheduled for the examination, provide to the person or persons conducting the examination such information and documents as are relevant or necessary for the review of the insured person’s medical condition, and iii. the insured person shall attend the examination and submit to all reasonable physical, psychological, mental and functional examinations requested by the person or persons conducting the examination.

21The repeated use of the terms “relevant or necessary”, “reasonably necessary”, “reasonable efforts” and “reasonable examination” in ss. 44(1) and 44(9) lead me to conclude that any consent form that is required must be “reasonable” as well.

22In this case, Intact’s own application appears to acknowledge this requirement of “reasonableness” at para.1(c) where it seeks:

A determination of whether it is reasonable under s. 44 for an assessor to require that the terms and conditions of the insured’s consent to attend and submit to a s. 44 examination be in writing and be signed by the insured.

23A requirement of reasonableness is founded on an insurer’s duty of utmost good faith and fair dealing with an insured which is well established in the case law.

The duty of good faith requires an insurer to act both promptly and fairly when investigating, assessing and attempting to resolve claims made by its insureds: 702535 Ontario Inc. v. Non-Marine Underwriters Members of Lloyd's London, 184 D.L.R. (4th) 687.

24The following provisions of the Unfair and Deceptive Practices Regulation, O. Reg 7/100 under the Insurance Act R.S.O. 1990, c. I. 8 further support this interpretation.

Section 1(9)

1. For the purposes of the definition of “Unfair or Deceptive Act or Practice” in section 438 of the Act, each of the following actions is prescribed as an unfair or deceptive act or practice: (9) Any conduct resulting in unreasonable delay in, or resistance to, the fair adjustment and settlement of claims.

Section 5

For the purposes of the definition of “unfair or deceptive acts or practices” in s. 438 of the Act, each of the following actions, if done on or after March 1, 2006, is prescribed as an unfair or deceptive act or practice in relation to a claim for statutory accident benefits under the Statutory Accident Benefits Schedule — Accidents on or after November 1, 1996 (in this section referred to as the Schedule):

(4) A requirement by an insurer that an insured person attend for an examination under section 42 of the Schedule conducted by a person whom the insurer knows or ought to know is not reasonably qualified by training or experience to conduct the examination.

(5) A requirement by an insurer that an insured person attend for an examination under section 42 of the Schedule that the insurer knows or ought to know is not reasonably required for the purposes authorized under the Schedule.

25The requirement of reasonableness inevitably turns on the circumstances of any particular case and this will necessitate negotiations between the parties. It is unfortunate in this case that the Respondent’s applications for enhanced benefits have ground to a halt while the parties have attempted to negotiate terms of a consent form. In the absence of a prescribed form, a standard form of consent developed through the collaborative efforts of the various stakeholders would be beneficial for both insurers and insured.

26If the parties are unable to come to an agreement on the matter of costs, they are to provide me with their brief written submissions which are not to exceed 3 pages in length. The Applicant’s submissions are due within 10 days of the release of this decision, the Respondent’s submissions are due ten days thereafter, and any reply submissions are due five days after that.