Canadian Underwriter

Why this 1996 auto accident benefits claim has not been resolved

October 31, 2018   by Greg Meckbach

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An accident benefits claimant who a designated assessment centre concluded 22 years ago was not disabled still has a chance to claim income replacement benefits, Ontario’s Divisional Court has ruled.

Dharam Sidhu was involved in a traffic accident in 1996. He was initially receiving income replace benefits and agreed to go to a designated assessment centre, Judge Barbara Conway of the Ontario Superior Court of Justice wrote in Aviva Canada Inc. v. Sidhu, released Tuesday.

The DAC system was abolished in 2006. DACs were “not able replace the inefficient and costly practice of dueling assessments,” an Insurance Bureau of Canada spokesperson told Canadian Underwriter earlier.

In Sidhu’s case, Aviva told the claimant in May, 1996 that the insurer intended to stop paying Sidhu income replacement after the DAC that Sidhu attended concluded he was not disabled.

For the next 18 years, there was no contact between Sidhu and Aviva. In 2014, Sidhu brought his claim to the Financial Services Commission of Ontario for arbitration.

Aviva asked an arbitrator to toss Sidhu’s claim out due to the two-year statute of limitations. In 2017, a FSCO arbitrator ruled that the claim is not statute-barred because the letter Aviva sent to Sidhu in 1996 did not mention the time within which Sidhu had to exercise his rights should mediation fail. Aviva also failed to specifically tell Sidhu in the letter that the disputed claim must first go to mediation before the claimant could take further steps.

The arbitrator’s ruling was upheld by a FSCO director’s delegate and again by the Divisional Court.

Using case history, Aviva argued that when deciding whether an accident benefits claim is time-barred, judges have taken a “contextual approach … considering factors outside the notices to determine whether the insured was aware of the time and process for disputing an insurer’s refusal to pay benefits.”

In rejecting Aviva’s argument, Conway wrote that in such cases, “the analysis must focus on whether the insurer provided a proper notice of refusal and that outside circumstances should not be considered in determining whether the insurer had complied with its notice obligations.”

Concurring were Divisional Court judges Phillip Sutherland and Thomas Heeney.

Although the DAC system was abolished in 2008, David Marshall recommended in a 2017 report that the province “independent examination centres (IEC) which should be hospital-based.” At the time, Marshall was an advisor to then- Liberal finance minister Charles Sousa.

In late 2017, Sousa announced the province planned to roll out “independent examination centres to assess more serious auto collision injuries.”

It’s not clear whether this will still happen, because the Liberals were voted out of office this past June.