New arbitration hearing ordered in Ontario minor injury guideline dispute

A delegate in the Office of the Director of Arbitrations with Ontario’s auto insurance regulator has rescinded a decision made earlier this year related to the minor injury guideline in the accident benefits legislation, also ordering a new arbitration hearing.

In Scarlett v. Belair Insurance Company, an arbitrator with the Financial Services Commission of Ontario found in a preliminary hearing that Lenworth Scarlett’s medical and rehabilitation claim, resulting from a motor vehicle accident in 2010, weren’t subject to the $3,500 limit for minor injuries.

Background: Canadian Underwriter May 2013 – Frankly, Scarlett

In an appeal decision released Nov. 28, Director’s Delegate David Evans pointed out a number of flaws in the arbitrator’s decision, ordering a new full arbitration hearing with a new arbitrator, for all the issues between Scarlett and Belair, not just what was addressed in the original preliminary hearing.  

In the appeal order, the Director’s Delegate noted that the arbitrator “did not direct his mind to the relevant test of whether Mr. Scarlett’s impairment was predominantly a minor injury” when he arrived at his decision.

“Regarding the initial rest of whether any particular injury is a minor injury, I find that the Arbitrator failed to address why Mr. Scarlett’s chronic pain, depressive symptoms and temporomandibular joint disorder where separate and distinct from his soft tissue injuries and were not the sequelae thereof,” the appeal decision also says.

In his decision, the arbitrator had also said that the MIG in the Statutory Accident Benefits Schedule (SABS) was a “non-binding interpretive aid.”

However, in the appeal decision, the Director’s Delegate disagreed, noting that “…the MIG is binding precisely because it is specifically issued pursuant to s. 268.3(1.1)” of the Insurance Act, and therefore incorporated into the SABS “by reference.”

The arbitrator had also found that the burden of proof was on the insurer, Belair, to show that Scarlett was subject to the MIG, while the Director’s Delegate noted in his appeal decision that the burden is always on the insured when seeking entitlement for a predominantly minor injury.

The appeal decision also noted that the arbitrator had used his own “research and reliance on statutory provisions” without allowing the parties involved an opportunity to respond, which resulted in a breach of procedural fairness.