June 9, 2015 by Canadian Underwriter
Nothing in Ontario’s Statutory Accident Benefits Schedule “expressly incorporates by reference the entirety” of the province’s Minor Injury Guideline (MIG) for auto insurance claims, but the “burden of proof” is on claimants “to establish entitlement to the appropriate level” of auto accident benefits, the province’s Divisional Court suggested in a recent ruling.
The Divisional Court ruled Friday largely against Lenworth Scarlett, who was injured in September, 2010 when the vehicle in which he was a passenger was rear-ended. The vehicle’s insurer, Belair Insurance Company Inc., is essentially disputing Scarlett’s contention that his injuries fall outside the MIG, which puts a $3,500 limit on auto insurance claims for a minor injury, which could include a “sprain, strain, whiplash associated disorder, contusion, abrasion, laceration or subluxation and any clinically associated sequelae.”
In March, 2013, an arbitrator with the Financial Services Commission of Ontario (FSCO), John Wilson, ruled that Scarlett was “not precluded” from claiming housekeeping, attendant care and medical and rehabilitation expenses beyond the $3,500 limit of the MIG.
But the following November, FSCO appeals officer David Evans, a director’s delegate, determined that Wilson’s analysis had several legal errors that “required the matter be returned for a new arbitration hearing,” wrote Mr. Justice Robbie D. Gordon, of the Divisional Court, in its June 5 decision. That was on a judicial review requested by Scarlett, who asked the court to set aside Evans’ decision and to reinstate the order that Scarlett is not precluded from claiming benefits above $3,500.
Rather than reinstate Wilson’s decision, the Divisional Court remitted Scarlett’s case for a new preliminary issue hearing.
Evans, in 2013, “decided that rather than having only the preliminary issue addressed at the new arbitration, it would be most just and expedient to have all of Mr. Scarlett’s issues addressed in one arbitration hearing before a new arbitrator,” Justice Gordon wrote on behalf of himself, Madam Justice Ann Molloy and Mr. Justice David L. Corbett.
The Divisional Court found that most of Evans’ findings were reasonable. The court agreed with Evans’ finding that Belair was denied procedural fairness when Wilson “raised arguments of his own for the first time, conducted research of his own, and inappropriately applied section 233 of the Insurance Act, all without first raising the matters with counsel and allowing an opportunity for submissions to be made.”
But the court disagreed with Evans’ finding that the MIG is “as binding” as SABS.
The MIG “remains a non-binding interpretative aid in deciding whether Mr. Scarlett comes within the MIG,” Wilson wrote in 2013. “In the absence of clear legislative direction that would override the existing jurisprudence as to burden of proof, it remains the insurer’s burden to prove any exception to or limitation of coverage on the civil balance of probabilities. In this case, that burden has not been met.”
At the time, Wilson found it was “not at all clear that (Scarlett) also did not suffer from any other conditions that were neither soft tissue injuries nor the sequelae therefore, or that the sum of his injuries from the accident was minor in nature.”
Justice Gordon noted that there is “no provision in the SABS which expressly incorporates by reference the entirety of the MIG.”
Therefore, “it is necessary to examine each reference to the MIG to determine if it is an express reference thereto, and if so, what part of the MIG is required for the proper interpretation of the SABS provision in question,” the Divisional Court found.
“Although it is fundamental to insurance law that the burden of proof rests on the insured to establish a right to recover under the terms of the policy, so too is it fundamental that when an insurer relies upon an exclusion in the policy to avoid payment, the onus of proving that the loss falls within the exclusion generally lies upon the insurer,” Justice Gordon added. But the court ruled that neither Section 14 or Section 18 of SABS creates such as exclusion.
Related: MIG Schmig
Court records indicate that in his request for judicial review, Scarlett argued that Evans had “erred in finding that the $3,500 limit on medical and rehabilitation expenses,” in section 18 (1) of SABS “was not an exclusion of benefits.”
That section stipulates that “the sum of the medical and rehabilitation benefits payable in respect of an insured person who sustains an impairment that is predominantly a minor injury shall not exceed $3,500 for any one accident, less the sum of all amounts paid in respect of the insured person in accordance with the Minor Injury Guideline.”
Section 18 (1) creates limits but not exclusions on an auto insurer’s liability under SABS, the Divisional Court ruled.
Therefore, it “reasonable” for Evans “to find that the effect of sections 14 and 18 is to create three tiers of benefits relating to medical and rehabilitation benefits,” Justice Gordon wrote.
Those tiers are:
-A maximum of $3,500 for an impairment that is predominantly a minor injury;
-A maximum of $50,000 if the impairment is not a minor injury and is not catastrophic; and
-A maximum of $1,000,000 for an impairment that is catastrophic.
“There being no exception, the Director Delegate reasonably and correctly held that the burden remains on the insured throughout to establish entitlement to the appropriate level of benefits,” the Divisional Court found.
The June 5 Divisional Court decision “is helpful in some ways, but not in others,” law firm Dutton Brock LLP commented in a bulletin. “There is no judicial review of whether chronic pain or (temporal madibular joint) impairments can be considered ‘clinically associated sequelae.’ The finding that the Guideline is only binding on the limited basis of ‘specific reference’ in the Regulation makes interpretation more challenging.”