Canadian Underwriter

When is someone catastrophically impaired after multiple car accidents?

February 4, 2022   by David Gambrill

Concept of auto insurance legal case

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The courts continue to grapple with the thorny question of determining catastrophic impairment in cases when a claimant has been injured in multiple vehicle accidents.

Most recently, an Ontario court overturned the insurer’s appeal of an accident benefits case, in which the claimant had aggravated injuries from previous car collisions. The court restored the arbitrator’s initial ruling that a third accident had rendered the claimant catastrophically impaired.

The insurer, RBC General Insurance Company, had appealed the arbitrator’s initial finding of catastrophic impairment. It argued the driver had already been catastrophically impaired as a pre-existing condition of two previous car accidents.

A Director’s Delegate agreed with the insurer, and overruled the arbitrator’s initial finding, ruling the arbitrator had used the wrong causation test.

Stalin Thiruchelvam alleges that as a result of his Sept. 4, 2013 car accident, he sustained injuries rendering him “catastrophically impaired.” He’d been injured in two previous car accidents, one on Mar. 16, 2002, and another on Mar. 23, 2002.

Dr. Brian Levitt produced two medical reports describing Thiruchelvam’s condition, one on Mar. 20, 2007, and on Aug. 27, 2014.

The second report observed: “His depression worsened and he developed psychotic features that include the belief the accidents were part of an effort from the insurance company to kill him. His symptoms have remained quite serious, for years, as documented by his treatment psychiatrists and others. A further MVA [motor vehicle accident] in [September] 2013 initially aggravated all of his symptoms though he knows that depression and pain are likely similar to what they would have been before that accident.”

Doctors noted Thiruchelvam was feeling better prior to the third accident, such that he was able to attend a wedding in Germany. One doctor was asked if the third accident made Thiruchelvan’s psychological condition worse.

“I echo the statement of Brian E. Levitt, PsyD., C.Psych, Clinical & Rehabilitation Psychologist, in his report dated August 27, 2014,” the doctor responded. “And I quote: ‘as such, all three accidents materially contribute to his current symptom picture and impairment from a psychological perspective and their impact cannot be artificially teased apart from a clinical or scientific perspective – they function in concert with respect to causation of his current psychological disorders.”

The arbitrator initially found the third accident materially contributed to his psychological condition after the first two accidents becoming worse, pushing him into the realm of “catastrophic impairment.”

RBC appealed the arbitrator’s decision to the Director’s Delegate.

Using the stronger, “but-for” causation test, the Director’s Delegate found the claimant could not say that “but for” the third accident, he would not have been catastrophically impaired, since he was already catastrophically impaired after the first two accidents.

The Director’s Delegate found fault with the arbitrator applying a looser causation test, a “material contribution” test, which found the injuries from the third accident materially contributed to a catastrophic impairment designation.

But in overturning the Director Delegate’s decision, the Superior Court found he had incorrectly substituted his own finding of fact that the claimant was catastrophically impaired before the third car accident. In fact, the accident benefit arbitrator had made no such finding of fact. And since the Director’s Delegate only has authority under the Insurance Act to deal with errors of law, and not fact, the court restored the arbitrator’s decision.

“There has never been a finding identifying that Stalin Thiruchelvam was catastrophically impaired at any time prior to the accident of Sept. 4, 2013,” Ontario Superior Court Justice Thomas Lederer wrote for the divisional court. “Nor does the evidence suggest that he necessarily would have qualified to be so identified.

“The limitation of the appeal to issues of law means that it was not proper for the Director’s Delegate to conclude that he was. The Arbitrator did not make that finding. Her decision recognized that the process had not been engaged and no determination that Stalin Thiruchelvam was catastrophically impaired had been made.”

The court noted the “but for” test is usually the go-to causality test to determine fault in tort cases that decide fault for car accidents. And while it’s also the first causality test to be considered in accident benefits law, often there are exceptions where the “material contribution” test makes more sense.

As the court noted, the case is of interest to insurers because of situations that happen when drivers who have been injured in previous accidents move to new insurers.