Standard of proof high for denying auto accident benefits based on cospiracy to defraud

Insurers seeking to deny auto accident benefits payments on the basis of an alleged conspiracy to defraud will have to meet a very high standard of proof, based on the Financial Service Commission of Ontario (FSCO)’s decision in a recent arbitration case.
In Patience Sarpong v. TD Home and Auto Insurance Company, TD Home refused to pay benefits to Sarpong, who was injured in an auto accident in June 2004.
“TD Home’s theory of these cases [Sarpong is linked with two other arbitration cases, each adjudicated separately] is that there exists a ring of individuals who provide ‘front’ employers and false employment documentation to persons who wish to make statutory accident benefits claims,” noted FSCO adjudicator David Muir.
“At the centre of the conspiracy is the putative employer of Ms. Sarpong Worthys Unisex Hair Salon (“Worthys”). Over a period of 15 months, there were, including the claims of Ms. Sarpong and Mr. Asamane [another case before FSCO], five accident benefit claims made by individuals who claimed to work at Worthys.
“In TD Home’s view, the unlikelihood that all of these claimants would find themselves connected through this one small employer strongly suggests an organized attempt to defraud.”
Nevertheless, TD Home’s evidentiary support for its theory was based almost wholly on circumstantial evidence, Muir found. He ultimately rejected TD Home’s allegations.
“I am persuaded that it is possible that Ms. Sarpong’s claim is entirely fraudulent, however mindful of the approach to the nature and quality of evidence required when considering these kinds of allegations I am not persuaded that TD Home has established the elements of its allegation of her participation in a ring, on a balance of probabilities,” Muir wrote.
The adjudicator said the case really turned on whether there was “credible evidence” that Sarpong was substantially unable to perform the essential tasks of her pre-accident employment for any period of time.
Here, Muir noted Sarpong was “clearly capable of dissembling. Her evidence is rife with contradictions, gaps, inaccuracies and latterly admitted untruths.”
On this basis alone, Muir rejected Sarpong’s claim for benefits.