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Injured worker precluded from SABS benefits after opting out of workers’ comp


May 27, 2008   by Canadian Underwriter


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FSCO has dismissed the appeal of a ruling that a man opted out of workers compensation benefits to launch an action against an insurer for the sole purpose of seeking accident benefits under the SABS-1996.
In the arbitration Patrick Lawrence and ACE INA Insurance, Lawrence was involved in a 2003 car accident. He was driving a bus in Toronto as part of his employment duties when his bus was rear-ended.
Lawrence suffered neck pain, from which his doctor expected him to “fully recover” within a few weeks. He lost only a little time from his two part-time jobs, arbitrator David Evans noted in his decision.
Shortly after the accident, Lawrence retained a paralegal firm that specializes in claims for automobile accident benefits. He declined benefits from the Workplace Safety and Insurance Board, opting instead to take legal action against his employer’s insurer.
Subsection 59(1) of the SABS precludes Lawrence from claiming accident benefits from the school bus’s insurer, unless he elects to bring a court action. Such a court action could not be made “primarily for the purpose of claiming benefits” under the SABS.
ACE INA Insurance was the insurer of the school bus. It denied Lawrence’s claim for accident benefits, raising s. 59 in its response to arbitration and at a pre-hearing trial.
“The arbitrator concluded that Mr. Lawrence’s election out of the Workplace Safety and Insurance Act was not made bona fides, in that it was made primarily for the purpose of collecting accident benefits and not primarily for the purpose of pursuing a claim against a third party in tort,” Evans wrote.
On appeal, Lawrence argued the arbitrator erred by focusing on his testimony about the reason he made the election to pursue accident benefits. The arbitrator should have focussed on the objective factors supporting his intention to pursue the third party action, he argued.
Nevertheless, “other than some formalities such as making the election and putting the third party on notice, little else was done until after the statement of claim was issued,” Evans wrote. “On the other hand, the accident benefit claim was very active, there were six mediations that were combined into the application for arbitration.”
While the timing of a court action is not determinative, it is a legitimate factor in assessing the injured person’s motivation, Evans ruled.
“Therefore, the arbitrator found that ACE properly denied Lawrence’s accident benefits claim and that the arbitration proceeding should be dismissed.”