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The insurer’s attempt to limit access to benefits rejected by the Divisional Court

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Many people involved in traffic accidents need rehabilitation to recover. Auto insurance is designed to be a form of risk management and provides the insured with the assurance that certain expenses will be covered under defined circumstances. The recent case of Aviva Insurance Company of Canada v. Danay Suarez 2021 ONSC 6200, is an important decision for accident victims. He confirms that the Statutory Accident Benefits Schedule (SABS), which is part of every consumer auto insurance policy, was designed as consumer protection legislation to help accident victims access benefits that they need and to which they are entitled.

An accident, a request, a refusal and a decision of the LAT

Danay Suarez was involved in a motor vehicle accident on May 8, 2013. She submitted an accident benefits claim to her accident benefits insurer, Aviva, in accordance with SABS. Aviva had refused four chiropractic treatment plans because she found them unnecessary and unreasonable. Suarez has asked the License Appeal Tribunal (LAT) to challenge these denials. She had not actually incurred the expenses associated with these treatment plans prior to the hearing.

In DS v. Aviva Insurance Canada 2020 CanLII 30433 (ON LAT), Adjudicator Grant of LAT concluded that the treatment plans should have been approved and ordered that they be payable with interest in accordance with the SABS.

Aviva argued that the arbitrator erred in not considering whether the benefits had been incurred within the meaning of s. 3 (7) of the SABS and requested a review. Arbitrator Grant dismissed the request for reconsideration in DS v. Aviva Insurance Company of Canada 2020 CanLII 45478 (TAM). He noted that if an arbitrator determines that a treatment plan is reasonable and necessary and orders that the benefit be payable under the SABS, the salary (and interest) is payable when incurred (and past due. ).

Arguments of the named parties during the appeal

When the insurer appealed to the Divisional Court, it argued that the arbitrator had erred in law. Noting that there was no evidence to suggest that Suarez incurred any treatment-related expenses prior to the TAMP hearings, Aviva argued that the TAMP did not have jurisdiction to order payments incurred after the hearing.

Aviva offered an interpretation of s. 3 (8) of the SABS to suggest that the LAT only had jurisdiction to order the payment of expenses “deemed incurred” within the meaning of s. 3 (7) (e) of the SABS. If these expenses were not incurred until after a LAT hearing, the insurer argued that the arbitrator was function function. As such, he had no jurisdiction to order payment upon the occurrence of a future event.

In response, Suarez argued that the LAT’s statutory authority gives it great latitude to resolve insurance disputes. A TAMP decision accepting that an insured is entitled to coverage replaces the insurer’s refusal. An injunction to the insurer to pay for the proposed treatment plan in accordance with the SABS is the only effective remedy. Suarez also argued that since law and quantum are separate issues, the original LAT order did not violate the doctrine of functus officio. Suarez argued that Aviva’s argument for a system where insurers could remedy deficiency notices following a hearing flies in the face of the LAT’s dispute resolution system.

Had the appeal of a LAT decision granting benefits been successful, the precedent set would have had important ramifications for an insured’s ability to seek redress for accident benefits denials. The importance of the case prompted the Ontario Trial Lawyers Association (OTLA) and the Coalition of Citizens with Disabilities – Ontario and Health Justice Program (the coalition) to seek and obtain intervener status in the proceedings.

Fortunately, the Divisional Court dismissed the insurer’s appeal and reaffirmed the principle that an insured person does not need to fund denied SABS benefits before seeking a LAT decision granting them.

Stakeholder perspectives

While the LAT took no formal position on the appeal, OTLA and the coalition made arguments supporting Suarez’s position.

The OTLA asserted that Aviva’s proposed interpretation of SABS would violate its purpose as consumer protection legislation and render LAT inaccessible to most applicants.

The coalition noted that the principles of statutory interpretation require consideration and promotion of access to justice. Applicants from vulnerable populations, such as low-income people with disabilities, would be affected if they were required to fund treatment before applying for a LAT decision.

Essentially, Aviva’s position would further exacerbate the power imbalance between insurers and the insured. In other words, the injured party would be required to assume an additional financial burden and risk akin to registration fees before bringing these matters to the LAT. If an insured did not have the means to finance these treatments himself before seeking compensation for a denial, he would be unable to access the TAMP to appeal the insurer’s decisions to deny benefits.

Appeal dismissed

In dismissing the appeal, the court returned Arts, by her litigation guardian, Arts v. State Farm Insurance Co 91 OR (3d) 394 (Arts c. State Farm Insurance Company 2008 CanLII 25055 (ON SC)) and Stegenga v. Economical Mutual Insurance Company 2019 ONCA 615 to reaffirm the remedial role of the SABS as consumer protection legislation and the role of the LAT as an effective, fair and accessible mechanism to resolve accident benefits disputes, respectively.

Rejecting the appellant’s position that claimants must fund denied treatment plans before seeking relief through LAT would limit a claimant’s treatment options to what they can afford to fund themselves. , rather than what he is entitled to receive as treatment benefits. This would have the unwarranted effect of perpetuating an imbalance of power and frustrating access to justice.

In addition, allowing an insurer to issue a compliant denial following a LAT hearing would render s. 38 (11) of the SABS is meaningless, making the results of these LAT disputes irrelevant.

The court agreed with Suarez’s position that determinations of law and quantum are mutually exclusive. An order from the LAT, which approved treatment plans and allowed a claimant to incur and submit related expenses, was the only effective remedy for a contested denial by an insurer. Such a process does not prevent an insurer from disputing invoices submitted for expenses incurred, including payment for treatments that exceed the claimant’s accident benefits coverage limits.

Suarez was awarded costs in the previously agreed amount of $ 5,000 including HST.

Importance

This important decision provides accident benefit claimants with a useful precedent on the purpose, intent and function of SABS legislation. By reiterating that the SABS is designed to be consumer protection legislation, and by confirming that SABS applicants do not need to fund their own treatment before asking LAT to challenge insurer denials, this decision protects vulnerable populations, promotes equitable access to justice and prevents the imbalance of power between insurers and policyholders from growing further.

The Divisional Court’s dismissal of Aviva’s appeal against the Suárez The case reaffirms that vulnerable SABS applicants do not need to gamble with their finances in pursuit of health and well-being following an accident. While unjustified denials of insurance may still hamper the speed of processing for a claimant, this decision’s assertion of LAT’s jurisdiction and power to resolve SABS disputes provides the insured with an efficient, fair and effective means. accessible for applicants to receive disputed rights.

Steve Rastin is Senior Counsel and Attorney at Lawyers Rastin Gluckstein. His practice focuses on civil litigation, with an emphasis on personal injury, employment law and class / tort lawsuits. Jessica Golosky is a lawyer with Gluckstein Lawyers whose practice areas include personal injury, auto litigation, medical malpractice and occupant liability.

Photo credit / Mironov Konstantin ISTOCKPHOTO.COM

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