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Best practices help to avoid special arbitration awards when no benefits are in dispute


February 9, 2011   by Canadian Underwriter


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A recent Financial Services Commission of Ontario (FSCO) decision – which granted a special award when there were no benefits in dispute – should prompt adjusters to follow a set of best practices to avoid a similar decision in the future, Kadey B.J. Schultz, a partner at Hughes Amys LLP, told delegates of the Ontario Insurance Adjusters’ Association (OIAA) annual conference.
Schultz referred to the October 2010 FSCO arbitration, Cowan & Motor Insurance, during her joint presentation with Laurie Walker, McLaren’s director of Ontario accident benefits. The presentation was entitled ‘AB Update: Looking Forward Into the Future.’
“The most important part of Cowan & Motor is that it’s a case about a special award when there were no benefits in dispute at the time of arbitration,” Schultz said.
“For all of those years in which we felt fairly confident that if we resolved the issues in dispute, the claimant wouldn’t proceed to arbitration on just the claim for special award – or an arbitrator would be loath to award a special award when there were no benefits outstanding because they had been resolved consensually and voluntarily – I submit those days have been over for about three years now.
“If people weren’t listening, then Cowans is the decision to really, really get your attention.”
Schultz urged adjusters to follow best practices to avoid these kinds of special awards in the future. Her suggestions included:

  • No one is holding the insurer or adjuster to a standard of perfection. You have to do your best and do what’s reasonable.
  • An examiner or supervisor is expected to have sound and moderate judgment. But if a mistake in judgment is made, a second pair of eyes in an organization should review the file to make sure the first error in judgment is rectified.
  • Take reasonable steps that a reasonably prudent and careful examiner would take in the adjudication process.

Schultz gave an example of what reasonable and moderate steps might entail. For example, if a claimant says he or she should be bounced out of the Minor Injury Guideline due to pre-existing medical conditions, reasonable steps would include obtaining documentation. If the documents obtained are difficult to read or are illegible, as is the case with many doctors’ records, then pay to have them transcribed.
“A reasonable and moderate decision cannot be made on illegible information,” she said.


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