MIG: Gone with the wind?

Arbitrator John Wilson, of the Financial Services Commission of Ontario (FSCO), released the first decision in consideration of the Minor Injury Guideline (MIG) on Mar. 26, 2013.

Before we consider this decision, however, it is warranted to take a quick look back on what led us to Scarlett. On Sept. 1, 2010, the Statutory Accident Benefits Schedule (SABS) was amended replacing reference to the previous Pre-Approved Framework (PAF) with the MIG. Concerns were immediately raised within the industry questioning the breadth, scope and application of the MIG. Importantly, we must accept that the MIG is a guideline, noting that the legislature did not amend the SABS or Insurance Act itself to incorporate the provisions of that guideline, but have made the MIG an aid to the SABs.

By the fall of 2012, it had become clear that even in spite of a lack of clarity as to when the MIG should apply, the financial results for auto insurance in Ontario had turned from a significant loss ratio to a satisfactory profit. From the beginning, the MIG (and removal/reduction of various benefits from the standard package of coverage) was intended to create “cost certainty” by positioning insurers to have a financially viable product based on the approved premiums.

Absent case law to guide the way, each insurer has had little choice but to handle this Guideline in its own way, all the while asking: Are we doing this right? What does “predominantly minor” mean? How long can this last?

Has Scarlett rendered the MIG gone with the wind?

 Facts

Lenworth Scarlett suffered soft tissue injuries in a rear-end collision on Sept. 18, 2010. He was a passenger in a Belair vehicle that was struck from behind. He was also a recent arrival to Canada, with no OHIP coverage or permit to work. Any funding available to him to treat injuries sustained in this loss would have to flow from Belair under the accident benefits coverage. The Belair policy had yet to renew, so the “old” benefits were in place (housekeeping, $100,000 for medical and rehabilitation, $72,000 for attendant care and cost of examinations, which, if funded, would not come out of his med/rehab limits).

Scarlett produced three main reports, all from different specialists, in support of his claim that he suffered injuries that did not fall within the MIG. One was a medical report from dental surgeon Dr. Lewandowski who diagnosed temporo-mandibular joint syndrome (TMJ). The next was a report from Dr. F. Tavazzani, orthopaedic specialist, which indicated that Scarlett demonstrated “depressed affect” and that Scarlett had restricted lumbar range of motion and difficulty transferring positions from standing to sitting and from sitting to standing. Additionally, he produced a report from Dr. Pilowsky, psychologist, who found that Scarlett was suffering from pain disorder, severe depressive symptoms, and chronic symptoms of posttraumatic stress disorder and driver anxiety. Apparently, there was a follow up report from Dr. Pilowsky which responded to the insurer’s own psychological report.

In what appears to be an effort to comply with the requirements of the MIG, to ensure that the evidence provided in support of Scarlett’s claims were “compelling”, Belair arranged for several insurer’s examinations. The conclusion of the assessors was that Scarlett’s injuries fell within the scope of the minor injury definition and the MIG.

Belair relied first upon a paper review report from Dr. Crescenzi, a chiropractor, responding to a treatment plan. This assessor concluded that Scarlett’s injuries fell within the MIG on the basis that he sustained soft tissue injuries and there was no evidence of any neurological sequelae.

Next, Scarlett was examined by Dr. Mor, a psychologist. In the resulting report it was noted that Scarlett reported that he was independent with respect to personal care and denied depression or cognitive difficulties. Scarlett did not express the need for psychological treatment. Although the details of the reports are not apparent from the decision, it seems that Dr. Pilowsky, Scarlett’s treating psychologist, responded to that report challenging the comments and conclusions. As discussed below, it also raised an issue of concern for Wilson that a statement made by Scarlett was subsequently used against him.

Belair also arranged for a paper review report from a dentist, Dr. Ouanounou, who concluded that the file documentation did not provide “compelling substantive objective evidence or subjective claimant complaints to suggest” that the claimant had ongoing concerns regarding TMJ. Wilson’s lack of confidence in paper reviews and the opinions flowing from there is palpable.

Discussion

Wilson concluded that the MIG is a “non-binding interpretive aid” and that “compelling medical evidence” must be convincing, on a balance of probabilities.

In essence, the decision found that Belair had not proven on a balance of probabilities that the claimant’s soft tissue whiplash injuries, and other complaints were minor in nature, and stated:

While there is no doubt that Mr. Scarlett suffered soft tissue injuries, it is not at all clear that he also did not suffer from any other conditions that were neither soft tissue injuries nor the sequelae thereof, or that the sum of his injuries from the accident were minor in nature.

The reports of chronic pain from Dr. Tavazzani are evidence of symptoms separate from Mr. Scarlett’s soft tissue injuries, presenting as psychological, neurolocognitive and emotional impairment.

Dr. Pilowsky’s reports, taken with the comments of Dr. Tavazzani, provide credible evidence that Mr. Scarlett suffered serious depressive symptoms and PTSD consequent to the accident.

While the Insurer’s reports may disagree with that conclusion, that is the very sort of conflict that is meant to be resolved in court or by arbitration, on the issue of reasonableness of the particular treatment proposed, not by a unilateral veto of benefits by the Insurer.

An intriguing issue that has arisen relates to Wilson’s reference to section 233 of the Insurance Act. This section deals with insurance contracts – the information provided to insurers by applicants to form the basis of the policy and premium determination. It appears, from Wilson’s comments, that in his opinion, based on section 233 of the Act, an insurer could not rely on statements made by an insured claimant to assessors. His reference to section 233 was in the context of whether Scarlett advised Dr. Mor that he was independent with respect to personal care, denied depression or cognitive difficulties, and did not express the need for psychological treatment. Without saying it clearly, one can infer from the decision that Wilson gave little weight to that report and the reported comments of the claimant, preferring to rely on the treating psychologist’s earlier and subsequent reports supporting ongoing psychological sequelae and treatment needs.

The concern that naturally arises from this line of commentary is whether other FSCO arbitrators and decision makers will read this to restrict an insurer’s ability to rely on statements made by the claimant to s. 25 and 44 assessors, evidence obtained through examinations under oath, clinical notes and records and even surveillance. If read narrowly, Wilson’s commentary would mean that the only information the insurer can rely upon is the signed OCF-1, OCF-3 and/or the original copies of the OCF-18s or OCF-23s.

In review of s. 233(3) we note that it only applies to the “application for a contract” and the other portions of s. 233 only apply when the applicant or insured makes a false claim, misrepresents a material fact or contravenes a term of the contract. None of these requirements are present in this case.

Conclusion

Our recommendation is for insurers to continue to consider all relevant information in the file when providing the “medical and any other reasons” for approval, partial approval,
or denial of a benefit, keeping in mind the consumer protection intent of this legislation and Wilson’s approach in Scarlett.

Ultimately, he concluded that jaw pain, chronic pain and psychological impairments are “separate and distinct from the soft tissue injuries” and the MIG exclusion did not apply. While many insurers have taken the approach that one must consider whether the impairments as a whole were predominantly minor in nature or whether the sequelae complained of (in Scarlett: jaw pain, chronic pain and depression) flowed from the predominantly minor injuries, this was not Wilson’s approach. The MIG is only a guideline, and before it can be considered all insurers must first look at the language of the medical and rehabilitation benefits sections of the SABS – pay benefits for injuries sustained as a result of the accident.

There is no word yet on whether the decision will be appealed. One might suggest that an appeal of this decision is not in the interest of insurers. As it stands right now, Scarlett is not binding. It is an arbitration decision based on a specific set of facts and evidence. No viva voce evidence was presented. It was a preliminary issue hearing to determine whether Scarlett was precluded from receiving housekeeping, attendant care and other benefits as a result of falling within the MIG. It might be best to let this decision sit, and to continue to develop the case law based on different facts, different experts and a complete hearing.

Some aspects of the decision are both surprising and troubling, while others are as we would, and should, have anticipated. While we now have “the first word” on the MIG, there will be many more words before we are in a position to know whether the MIG is gone with the wind. 

Kadey B.J. Schultz, LL.B., L.L.M., is a partner, Jason Frost, LL.B., is an associate and Joy Stothers, LL.B., LL.M., is an associate with Hughes Amys LLP.