Ontario appeal court rules against insurer in disputed attendant care auto claim

 DAILY NEWS Jul 17, 2013

 A ruling released Tuesday by the Ontario Court of Appeal against Gore Mutual Insurance Company is significant because it does not define “economic loss” in the province's auto insurance regulations governing attendant care benefits, when the person caring for the vehicle accident victim is a family member and not a professional, according to insurance lawyers.

 In ruling in favour of Tyrone Henry, who was left a paraplegic after a motor vehicle accident in 2010, the Court of Appeal upheld a lower court finding that Gore Mutual's obligation to pay for Henry's attendant care benefits “was not restricted to care provided during the 40 hours per week of paid work foregone” by Henry's mother, who quit her job to care for him.

On June 27, 2012, Justice Timothy Ray of the Ontario Superior Court of Justice noted that Henry's attendant care needs were assessed about $9,500 per month on a Financial Services Commission of Ontario (FSCO) Assessment of Attendant Care Needs form, commonly known as “Form 1.”

Under Section 19 of the province's Statutory Accident Benefits Schedule (SABS, also known as Ontario Regulation 34/10), the maximum payable for attendant care is $6,000 per month, if the victim sustained a catastrophic impairment and if the policyholder did not purchase optional additional medical, rehabilitation and attendant care benefits.

However, Cambridge, Ont.-based Gore Mutual contended that because it's Henry's mother providing the care, the carrier's liability is limited “to the number of hours that the applicant's mother had been working  as a proportion of the total attendant care hours assessed as reasonable.”

Court records indicate Gore Mutual reviewed Henry’s Form 1 and, in essence, calculated attendant care at $2,117.40 a month by apportioning the amount of care required into an eight-hour day, rather than compensating Henry for the income of $2,100 that his mother lost by quitting her job.

Henry had argued he should get the $6,000 maximum payable under the standard auto policy, given that the amount calculated on Form 1 exceeded that amount. Judge Ray ruled in favour of Henry and Gore Mutual appealed.

In a unanimous decision July 16, the Ontario Court of Appeal upheld Judge Ray's decision, ruling in favour of Henry.

The issue on appeal was whether Gore Mutual was required to pay attendant care for a 24-hour period or only for the care that Henry's mother provided during the 40 hours a week of paid employment she had forgone in order to provide attendant care.

“Of note to the industry is that the Court of Appeal refused to provide its own definition of 'economic loss' despite Gore's request to do so,” wrote Daniel Strigberger, an insurance litigation lawyer for Miller Thomson LLP, on his company's blog.

“Gore argued that because 'economic loss' is not defined in SABS-2010, insurers risk facing claims for attendant carebenefits founded on wide and expansive interpretations of 'economic loss, or de minimis financial or monetary loss (such as subway token expenses).”

But in the case of Henry versus Gore Mutual, the “economic loss is clear,” wrote Justice Alexandra Hoy, associate chief justice of the Ontario Court of Appeal. “The respondent's mother gave up full-time paid employment to provide care for her son on a 24-hour per day basis.”

Justice Janet Simmons and  Justice George Strathy, the other appeal court judges hearing the case, concurred.

Other lawyers reacting to the decision agree the refusal to define “economic loss” is significant to the industry.

“By failing to define 'economic loss,' the Court has left the term open to a wide range of interpretation,” according to a bulletin published by Dutton Brock LLP, a Toronto-based law firm specializing in insurance litigation.

“What if Henry's mother had given up a part-time job to care for her son? What if she had given up one shift per week? Insurers and claimants will continue to argue and cases will continue to be decided on their facts until a Court takes on the definition once and for all.”

In his June 2012 ruling, Judge Ray wrote that economic loss has been defined “in very broad terms in claims for compensation in tort law cases, and has been the subject of a great deal of jurisprudence because of the difficulty in quantification.”

He added that economic loss “is a threshold finding for 'incurred expense', but is not intended as a means of calculating the quantum of the incurred expense.”

In upholding Judge Ray's ruling, the appeal court found that “if the amount of the monthly care benefit were to be calculated based upon the number of hours the family care-giver was unable to work because she was providing care, or the quantum of the economic loss sustained by the care-giver, SABS-2010 could have so indicated.”

Both Dutton Brock and Miller Thomson noted insurance carriers still have the right to request information from Ontario auto claimants.

“Insurers are able to challenge an insured's assessment of attendant care needs by securing a Form 1 of their own,” Dutton Brock wrote in its bulletin commenting on the ruling. “In the present case, Gore conceded that the attendant care was reasonable and necessary, and that it had been provided.”

For his part, Strigberger wrote that “in many cases insurers should be able to distinguish Henry from those cases where the economic loss is unclear.

In its ruling, the Court of Appeal noted that FSCO released in March, 2009 a five-year report on auto insurance in Ontario. That report quoted the Insurance Bureau of Canada as being concerned that “over-utilization of the attendant care benefit was becoming a problem” and that carriers were concerned that the benefit “can become a windfall for the claimant if not actual services are provided.”

“IBC's solution, as summarized by FSCO, did not include restricting the amount of the payment for attendant care to care provided during the period that the family care-giver would otherwise have been at work, as the appellant now proposes,”

Judge Hoy wrote, adding that in 2009, FCSO did not propose that the province revert to the system in place as of 1990, “which provided for reimbursement of income reasonably lost by a person other than the insured in caring for the insured, subject to maximums.”


 [30]       The appellant points to the concerns raised by the Insurance Bureau of Canada (“IBC”) with respect to attendant care. At pages 44-45, FSCO reported that IBC indicated that over-utilization of the attendant care benefit was becoming a problem…


[1]          The respondent, Tyrone Henry, was left a paraplegic after a motor vehicle accident on September 28, 2010. His mother took an unpaid leave of absence from work to provide the full-time care he required.

[2]          In 1990, limits were introduced on tort compensation for victims of automobile accidents and insurers were required to provide various benefits prescribed by regulation, including paying for the reasonable and necessary expenses incurred by or on behalf of an insured for attendant care, subject to various limitations, regardless of whether the insured was at fault.

[3]          The issue on this appeal is whether, under the regulation in effect at the time of the respondent’s accident – the Statutory Accident Benefits Schedule – Effective September 1, 2010, Ont. Reg. 34/10 (“SABS-2010”) – the appellant insurer, Gore Mutual Insurance Company, is required to pay attendant care benefits for the entire 24 hours per day that the respondent required, and the mother provided, care, or only for the care provided during the 40 hours per week of paid employment foregone by the mother. The insurer took the position that because the mother worked an eight hour day, the amount payable for attendant care benefits would be pro-rated, based on an eight hour day.

[4]          The application judge concluded that the insurer’s obligation to pay for attendant care benefits was not restricted to care provided during the 40 hours per week of paid work foregone by the mother.  I agree, and, for the reasons that follow, would dismiss this appeal.

[30]       The appellant points to the concerns raised by the Insurance Bureau of Canada (“IBC”) with respect to attendant care. At pages 44-45, FSCO reported that IBC indicated that over-utilization of the attendant care benefit was becoming a problem, with a 59.1 per cent increase in attendant care costs between 2004 and 2007. FSCO also reported anecdotal information from the insurance industry suggesting “that an increasing number of claimants with minor injuries are now claiming and receiving attendant care benefits”. At page 45, FSCO expressed concern that assessments were being conducted “by individuals without explicit training in functional assessments to address functional impairment…” At page 46, it recommended that only occupational therapists and nurses who have been trained on the use of Form 1 should be permitted to assess auto accident victims for the attendant care benefit.[2] It concluded that, if adopted, this recommendation should provide insurers with more confidence of the necessity of the attendant care claimed.


Accident victims’ advocate FAIR is a non-profit organization run by volunteers, including vehicle crash survivors

By Alan Shanoff ,Toronto Sun

First posted: Saturday, June 29, 2013 06:33 PM EDT

It’s time I introduced readers to the Fair Association of Victims for Accident Insurance Reform, otherwise known as FAIR.

FAIR is a non-profit organization run by volunteers. They are either motor vehicle accident victims or family members of victims.

They advocate for change in the bizarre world of no-fault insurance, trying to achieve the near-impossible: Fair treatment for accident victims.

According to Rhona DesRoches, board chair, FAIR’s purpose is to hold insurance companies accountable for the insurance contracts they issue.

As FAIR points out on its website, fairassociation.ca, it advocates for “reforms to auto insurance legislation that will improve the way all Motor Vehicle Accident victims are treated and cared for under provincial insurance legislation.” FAIR provides a voice for the thousands of accident victims who have been unfairly treated by a system stacked against them, one that often doesn’t provide needed or timely rehabilitation coverage and benefits.

The insurance system starts off by providing an arbitrary maximum of $3,500 to pay for medical and rehabilitation benefits for what are deemed minor injuries.

But that includes fees for medical assessments and insurance companies have been cutting off treatment far below $3,500 in many cases.

If the insurance company doesn’t categorize the injuries as minor, there’s a more generous $50,000 in benefits available, but that’s a 50% reduction from the $100,000 available prior to September 2010.

Victims suffering from catastrophic impairment are entitled to up to $1 million in benefits, but only about 1% of accident victims qualify and there is an industry push to change the definition so that even fewer victims will qualify.

Regardless of the maximum amount of benefits, FAIR is pushing for reforms in how insurance companies assess and pay for injuries suffered by accident victims.

They describe a “broken system of independent medical examinations.” FAIR objects to the use of “partisan assessors” — so-called medical experts — earning substantial sums of money to provide “flawed, biased assessments.” These are used to “trivialize and minimize” serious injuries and justify the denial of benefits to pay for needed and timely medical and rehabilitation services.

As FAIR put its, “(f)ar too often the assessor provides an unqualified, biased or shoddy assessment that becomes part of a claimant’s medical file. Rehabilitation and benefits are often discontinued based on a flawed report and it can take years to have treatment and benefits reinstated.” FAIR backs up its accusations by citing on its website actual court and arbitration decisions where these “experts” and their assessments have been exposed.

FAIR argues that falsely deflating the value of a claim is just as serious as falsely inflating it and that both types of abuse should be sanctioned.

It wants to purge the system of “substandard, unqualified or flawed assessments” whether provided to insurance companies or plaintiffs’ lawyers.

FAIR says it’s “flawed, biased assessments” by insurance- friendly experts that form the basis for many of the accusations of fraud levelled against accident victims by the industry. This is then used to manufacture inflated fraud figures, part of the industry’s campaign to push for reduced benefits and increased insurance company profits.

FAIR argues the wrongful denial of legitimate insurance claims drives up premiums by encouraging expensive, protracted litigation, with high fees paid to an army of experts and lawyers on each side.

FAIR must be doing a good job. It’s getting under the skin of the insurance industry’s lobby group and has twice been invited to make presentations to government hearings on automobile insurance in Ontario, so that their members could hear the consumer perspective.

Take a look at FAIR’s website. You’ll be amazed at the prodigious amount of work, along with a wealth of information for accident victims, that a small group of volunteers has been able to compile on a shoe-string budget in just over two years.

Tammy Kirkwood
Vice Chair