Belair court victory exposes how clinics can abuse auto claims system

Belair Direct has succeeded in quashing an auto insurance claim that illustrates how rehab and assessment clinics can potentially abuse Ontario’s accident benefits law.

In its ruling in Belair Direct Insurance Company v. Green, an accident benefits case, the Ontario Superior Court referenced a parallel court action between Belair Direct and a rehab centre, which ended in a settlement. That sideline court action exposed a legal loophole allowing rehab and assessment clinics to overwhelm insurers with treatment plans. The law requires insurers to respond to plans within 10 days or else they are deemed to accept — and therefore pay for — the plans.

Belair Direct Insurance Company v. Green addressed an arbitration ruling in an accident benefits matter involving Charmaine Green, who was injured in a car accident on Sept. 20, 2009. Green applied to Belair Direct for no-fault statutory accident benefits to cover the cost of extensive treatments by Osler Rehabilitation Centre Inc. and for the cost of numerous assessments by Assessment Direct Inc. All told, Green submitted claims for 85 treatment and assessment plans over a one-year span between October 2009 and September 2010.

Belair Direct paid approximately $70,000 for expenses and assessments in the first year following the accident.

By May 2010, Belair Direct became suspicious about the volume of claims submitted by Osler and Assessment Direct – not only in Green’s case, but in a number of cases involving other insured persons. Belair Direct began refusing to pay for goods and services these companies recommended.

To get Belair Direct to pay for her claims, Green launched arbitration proceedings in March 2011 at the Financial Services Commission of Ontario [FSCO] .

Approximately three months later, in June 2011, Belair Direct began a court action against Osler and Assessment Direct in the Superior Court of Justice.

“The insurer alleged that the clinics conspired to unjustly enrich themselves by making material misrepresentations to the insurer regarding the goods and services that they provided to insured persons, among other allegations,” the Ontario Superior Court noted in its decision in Belair Direct Insurance Company v. Green.

“The insurer also alleged that Osler and Assessment Direct were abusing the provisions of the SABS [Statutory Accident Benefits Schedule] by inundating insurers with a huge volume of claims that an insurer could not possibly respond to within the 10-day period set out in the SABS. Under the current iteration of the SABS, if an insurer fails to respond to a claim within the brief window provided, the insurer is deemed to accept the claim.”

Belair Direct alleged in its action against Osler that “Green suffered minor injuries at most and had acted with Osler and Assessment Direct to improperly file claims for services that were not only not needed but were not even provided in many cases,” the court wrote in Belair Direct Insurance Company v. Green.

Belair settled its claim with Osler. The terms of the settlement were not included in the Ontario Superior Court’s decision regarding Green’s accident benefits claim. However, counsel for Osler  provided a letter that released Green from any obligation to pay the claims at the centre of her arbitration dispute with Belair.

One of those claims involved a $1,074 follow-up, in-home assessment. A FSCO arbitrator found that Green had failed to prove that the claimed assessment had actually taken place. A Director’s Delegate overturned that decision, but the Superior court reinstated the arbitrator’s finding.