Canadian Underwriter

Recommendation for lifetime care management for MVA victims ‘may be buried’ by Ontario government: insurance defence lawyer

April 28, 2017   by Greg Meckbach, Associate Editor

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The Ontario government announced Thursday it is “reviewing” 35 recommendations on auto insurance form made by the former head of the province’s government-run workers’ compensation insurance system, the same day an insurance defence lawyer warned that some of those recommendations are “extraordinary” and will have most lawyers “not sleeping at night.”

The province released April 11 Fair Benefits Fairly Delivered: A Review of the Auto Insurance System in Ontario final report, written by David Marshall, a former chief executive officer of the Workplace Safety Insurance Board.

“The government is reviewing the recommendations and will be hosting consultations in the coming months,” the ruling Liberals said Thursday in their budget 2017-18 budget document.

Charged with reviewing and making recommendations on auto insurance, Marshall was appointed in 2015 as a special advisor to Finance Minister Charles Sousa.

His report has “some extraordinary recommendations which have most of the lawyers not sleeping at night,” said Philippa Samworth, a lawyer whose work includes representing insurers in auto accident benefits claims disputes.

Samworth, a Toronto-based partner with Dutton Brock LLP, made her remarks during a presentation at BDO Canada LLP’s 21st Annual Accident Benefits Conference, held at the Canadian National Exhibition grounds in Toronto.

One of Marshall’s recommendations is to establish a new “arms-length regulator” with a “skills based” board. Before Marshall’s report was published, the province had passed a law – The Financial Services Regulatory Authority of Ontario Act – that establishes a new regulator. That law, which has yet to come into force, was based on a recommendation made from an advisory panel appointed in 2015.

The new regulator should “undertake serious discussions with the Ministry of Health and Long Term Care to develop a service for lifetime management of care for seriously injured accident victims,” Marshall said in his report.

But at the BDO AB conference, Samworth questioned whether the province could afford to provide lifetime care for seriously injured accident victims.

“When you have no more of your (catastrophic impairment coverage) money left and when you are seriously injured, there’s going to be a care program that allows you to be covered under (Ontario Health Insurance Plan)” is how Samworth characterized Marshall’s recommendation to BDO AB conference attendees. “I think that alone may allow us to suspect that some aspects of (the Marshall report) may be buried because I don’t think the OHIP system can afford these care programs.”

Marshall also recommended that the province establish “a roster of hospital-based independent examination centres,” which would “provide diagnoses and future treatment plans,” which would be binding on insurers.

“The advice given by the independent examination centres should be taken as mandatory in accident benefits and tort disputes and courts should afford those opinions a zone of deference in tort cases,” Marshall said.

Marshall contended that his proposed IECs would be different from the designated assessment centres that were used until 2006.

But Samworth said Thursday the IEC system “is a new kind of DAC.”

When the DAC system was brought in, “we really wanted to have hospitals as part of our DACs,” Samworth noted. “We had maybe three hospitals. Hospitals did not want to do auto insurance stuff. Family doctors don’t want to do auto insurance stuff. Why would a hospital?”

In his proposal to establish IECs, Marshall said they would be different from the DACs because an evaluation would “take place much earlier in the treatment cycle,” and that his proposed IEC system “is not concerned in any way with approving or denying a claim.

DACs, Marshall wrote, were assessing auto claims “as precursor to a ediation or arbitration hearing or litigation,” their assessments were “often long, drawn out and expensive” and DACs “frequently acted on behalf of insurers or claimants in providing medical assessments to them separately.”

The task of an IEC “is to go and say, ‘We are going to work out a future plan of care and we are going to direct what future treatment plans there should be. And p.s., if you don’t like what our decision is, and what we recommend, that’s too bad because it’s binding,” Samworth said Thursday. “It’s binding on you and it’s binding on the insured. You can’t go to your family doctor and say ‘I don’t want to do that.'”

Marshall also suggested the province “consider” requiring personal injury lawyers to file their contingency fee arrangements with the new regulator, and that the province set restrictions on personal injury lawyers’ contingency fees.

He did not recommend a specific ceiling, though a private member’s bill currently before the legislature – if passed into law – would cap contingency fees at 20%.

If Marshall’s recommendation is made policy, “that means before a lawyer can take on the case, or after they have taken on the case, I guess at some point they are going to have to file, with the independent regulator that’s going to be created, the contingency fee and get it approved before it can go forward,” Samworth said.

In his report, Marshall contended that claims costs “continue to rise” in Ontario “while automobile accidents continue to fall.” The “main cause,” Marshall added, “is not inefficiency, or excess profits by insurance companies or the behaviour of claimants, providers or lawyers” but rather “the way the system is structured.”

The Marshall report is “probably the best description we have had to date of what’s wrong” with the Ontario auto insurance system, Insurance Bureau of Canada CEO Don Forgeron said April 25.

“Paraphrased, the system is not about making people well,” Forgeron said during IBC’s annual financial affairs symposium at the Design Exchange event venue, the former Toronto Stock Exchange trading floor.

“It’s about making stakeholders wealthy and that’s what’s wrong with the system,” Forgeron added, without specifically supporting or opposing any of Marshall’s recommendations. “There are perverse incentives built into the system that creates a focus not where it ought to be.”