Surprising Special Award Against Insurer

Article by Alon Barda

A recent decision of the Licence Appeal Tribunal (“LAT”) indicates that an insurer cannot simply rely on the opinion of an assessor when determining a claimant’s needs.

The adjudicator said that the insurer should have considered all relevant medical evidence and should have followed up with the assessors for clarification of the claimant’s needs. The failure to do so resulted in a special award against the insurer.

Background

In Malitskiy v. Unica Insurance, 18-010164/AABS, the claimant sought entitlement to attendant care in the amount of $6,000 per month less the partially approved amount of $1,199.10. He also sought entitlement to a rehabilitation benefit of $344,864 for home modifications and entitlement to some cost of examinations. The claimant also sought a special award for unreasonably withheld or delayed payments.

The claim involves an ice fishing accident that occurred on March 16, 2014. The vehicle in which the claimant was travelling hit a pressure crack on the lake and slipped over, ejecting the passengers in the process.

The impact caused the claimant to suffer a brain injury and multiple fractures, including to his cervical spine and wrist. It was later discovered that the accident caused nerve damage in the claimant’s shoulder as well as cognitive and emotional impairments.

Unica deemed the claimant to be catastrophically impaired as a result of the accident.

The adjudicator was persuaded on a balance of probabilities that: the claimant has pain in his shoulder and cannot lift heavy items; he experiences difficulty while using the stairs in his home; he experiences balance issues; he needs assistance with dressing and supervision while showering; he has cognitive and memory issues; and he has emotional issues and needs cuing to eat and engage in hygiene activities.

Attendant Care

The adjudicator considered the Form 1 completed by the claimant’s OT assessor recommending $6,020.63 in attendant care per month and the insurer’s assessor recommending $1,199.10 per month in attendant care assistance.

The significant difference between the Form 1’s surrounded assistance to respond to an emergency, coordination of attendant care assistance, and supervision/assistance regarding certain daily tasks. In particular, the insurer was of the view that the claimant did not require overnight assistance to ensure safety and security in the bedroom.

When the insurer’s assessor conducted the assessment, she did not consider whether the claimant needed cuing, emotional support and supervision at night, and she was unable to explain conclusively on cross-examination why she did not do so.

The adjudicator ultimately found that, based on the claimant’s various functional limitations, the additional time recommended by the claimant’s assessor represented a reasonable assessment of the claimant’s attendant care needs and that the claimant is entitled to $6,000 per month from October 13, 2017 to date and ongoing less amounts paid by the insurer.

Home Modifications

Unica agreed that some of the home modification recommendations were reasonable and necessary but the significant items of contention included the installation of a home elevator (the insurer proposed an in-home stair lift) and a therapy room for space to engage in exercises and use the equipment while home.

Based on the claimant’s functional needs, the adjudicator found on a balance of probabilities that the claimant required the disputed renovation items and that the home modifications totaling $344,864 are reasonable and necessary.

Special Award

The most notable aspect of this case is the finding regarding the special award. Under section 10 of Ontario Regulation 664, if the LAT finds that an insurer has unreasonably withheld or delayed payments, the LAT, in addition to awarding the benefits and interest to which an insured person is entitled under the SABS, may award a lump sum of up to 50 per cent of the amount to which the person was entitled at the time of the award together with interest on all amounts at 2 per cent per month, compounded monthly.

While the adjudicator found that Unica paid for most of the disputed benefits in part and that it based its decisions on the assessments it completed, the adjudicator still found that there was a failure on the part of the insurer to “ask the relevant questions” about the claimant’s functional needs.

For example, the adjudicator states that, after receiving the Form 1 and the treatment plan proposing the home modifications, Unica “should have asked its assessors to investigate whether [the claimant] needed cuing, emotional support, and nighttime supervision”. The assessor testified at the hearing that she did not consider those issues.

Furthermore, the adjudicator found that it was unreasonable of Unica to focus on the reports of their assessors on the core issues in dispute when its assessors had designated the claimant to be catastrophically impaired on various grounds and the medical and treating evidence confirmed that the claimant “has needs for significant assistance that included not just helping him physically but also being attentive to his psycho-emotional needs.”

The adjudicator found that, when read together, the reports of the insurer’s assessors on the issue of attendant care and home modifications did not correspond with the information in the claimant’s medical and treatment file and that their opinions as to the claimant’s functional needs were not supported elsewhere in the evidence.

While Unica had the information available to make further relevant inquiries into the functional needs of the claimant, the adjudicator found that it did not do so despite the fact that this should have been readily apparent based on the evidence already in its possession.

As such, the adjudicator ultimately held that the position taken by Unica with respect to the attendant care benefit and home modifications amounts to an “unreasonable withholding or denial, when the medical evidence, including evidence from Unica’s own assessors, supported [the claimant’s] need for these claimed benefits.”

Accordingly, the adjudicator found the partial denials of these benefits to be “imprudent, inflexible, and immoderate” and ordered a special award.  Unica is required to pay 25% of the portions of attendant care and home modifications benefit that were denied. This represents half of the limit outlined in the Regulation. Unica is also required to pay interest at 2 per cent per month, compounded monthly.

Takeaway

While the adjudicator was entitled to reject the opinions of the insurer’s assessors, it is highly questionable as to whether Unica “unreasonably withheld or delayed payments” to warrant a special award.

Insurers are not medical experts. An insurer should be able to rely on the expertise of assessors who conduct benefit-specific assessments, including occupational therapists who complete a Form 1, which is a detailed document. There was no evidence that the insurer withheld relevant medical documentation from the assessors.

However, based on the decision of the adjudicator, it seems that insurers should confirm that assessors are asked all the appropriate questions that may arise from the medical evidence available and to ensure that the response to the benefit at issue includes consideration of the file in its entirety.

An attendant care assessor must consider all the attendant care assistance recommended for a claimant and, if providing a response that does not conform to the medical evidence to date (or earlier insurer examinations), then the assessor should provide detailed reasons explaining why that is the case, particularly on more serious cases involving catastrophically injured claimants.

Rogers Partners LLP is an experienced civil litigation firm in Toronto, Ontario. The firm represents insurers and self-insured companies in numerous areas, including motor vehicle negligence, occupiers’ liability, product liability, professional negligence, construction claims, statutory accident benefits, disability benefits, municipal liability, medical negligence, sexual abuse, and insurance coverage disputes.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

Source: Mondaq

Protect Your Insured From Being Added To Litigation

Article by Ian S. Epstein

When an opposing party brings a motion to add an insured to existing litigation, the courts usually allows the party to be added, unless there are clear reasons not to do so, such as an expired limitation period. Consent is usually provided, as the threshold to add a party is low. Yet, recent developments show that a court may look deeper and assess the strength of the claim and evidence in support, to determine whether the addition of a party is improper, from the outset.

In Tacoma Engineers Inc. ats TNS Landco Inc. 2019 ONSC 1296, we successfully opposed a motion for Tacoma, a structural engineer, to be added as a Third Party on the basis that there was no merit to the claim against it, and that the claim was statute-barred.

The matter arose out of a failed septic system on a commercial property, which failed partly due to improper coordination of consultants. Without their knowledge or consent, Tacoma was listed as the consultant responsible for coordination, on a contract between the Claimant owner and the Design-Builder. In fact, as the structural engineer on the project, Tacoma was never responsible for coordinating others.

Instead of simply adding Tacoma, and requiring it to subsequently bring a summary judgment motion to strike the action against it, the court considered the evidence to ascertain Tacoma’s involvement. Justice Fowler Byrne dismissed the motion on the basis of the missed limitation period, and the fact that there was no basis to the claim.

The court noted that Tacoma’s invoices all dealt with structural issues, and not coordination. She also found that at no time did the Claimant notify Tacoma about a septic issue, nor ask for their assistance to fix things. The court also drew an adverse inference from the fact that the Claimant did not even mention Tacoma when they retained an expert to opine on the cause of the septic issues.

The key take-away is that while the threshold may be low to add a party, there is a threshold. The court can assess the evidence to determine whether a party is improper or a limitation period is expired, and make a determination to not add them at a very early stage. 

The case has important implications for insurers. Before simply consenting to a motion to add an insured to litigation, take a look at the facts. Is there clear evidence that the insured is an improper party? Is there clear evidence that the limitation period has expired? If so, it may be worth opposing the motion. If successful, it will prevent the insured from being added to the litigation, saving significant costs. If it is not successful, it may help to set up the evidentiary record needed to bring a summary judgment motion at a later stage.

Insurers should give careful consideration as to whether to consent or oppose a motion for an insured to be added as a party to existing litigation. Doing so may help reduce legal costs, and assist in potentially getting an insured out of litigation at an early stage. 

Ian Epstein has a general insurance practice covering a wide array of insurance issues including E&O, general liability and product liability claims as well as coverage assessments. He has been recognized by Lexpert® Canadian Legal Directory as a leading practitioner consistently recommended in Professional Liability matters and ranked by Best Lawyers® in Canada for his expertise as a practitioner in insurance law.

Lauren Rakowski’s insurance practice focuses on professional liability, tort, and commercial litigation. She has experience representing lawyers, engineers, individuals, corporations and financial advisors.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be ought about your specific circumstances.

Lawyers file court challenge over ICBC’s new limits on auto insurance payouts

By Justine Hunter | The Globe and Mail

A group representing B.C.’s trial lawyers is asking the courts to overturn new limits on automobile insurance payouts that they say discriminate against people with disabilities.

Effective Monday, the provincial government imposed new rules to curb skyrocketing payments for minor-injury claims by capping settlements for pain and suffering at $5,500 and limiting when accident victims can sue.

The province is the last in Canada to abandon a system in which victims could sue for any type of injury − known as a full tort system.

But the Trial Lawyers Association of British Columbia filed a constitutional challenge on Monday. They say the challenge is to protect the Charter rights of British Columbians because the right to sue is a basic human right.

Rather than waiting for an individual complainant to challenge the law, the case is filed on behalf of “Jane Doe,” an individual whose identity is not yet known who suffers a “minor injury” as a result of an accident and has to follow the new rules.

Attorney-General David Eby said he is confident the amendments will stand up in court. “We believe the amendments we have made are not just constitutional, but good public policy,” he said in an interview.

Basic auto insurance in the province is only available through the Crown-owned Insurance Corp. of B.C., which is on track to post its second $1-billion deficit in a row. Without the caps, he said, insurance rates would have had to climb significantly this year.

Mr. Eby said the changes are expected to restore ICBC’s fiscal health, even after the province has boosted support for those needing medical services after an accident.

“We need to stop the bleeding at ICBC and this is a $1-billion reform that will actually increase benefits for British Columbians,” he said.

The diagnosis of injuries are made by a doctor and ICBC will then assess whether the injury falls under new definitions for a minor injury.

British Columbians with motor-vehicle-accident claims totalling $50,000 or less will have to resolve them through an online dispute resolution tribunal, without the opportunity to go to court.

Shelley Howard, executive director of the non-profit Campbell River Head Injury Support Society, said she is concerned that some accident victims may be caught under the new cap before they realize the extent of their injuries.

“The medical world doesn’t always recognize brain injuries right off the bat. It’s a complex injury,” she said. “I don’t know how the system will be able to go back and rectify the situation.”

The advocacy group wants assurances that people who suffer head injuries won’t fall through the cracks if their injuries are not promptly diagnosed.

Under ICBC’s rules, individuals have two years to settle their claims. Injuries can be switched from the minor classification to the non-minor category if new symptoms emerge in that time and if the file is still open. However, once an individual settles their claim, there is no opportunity to reopen their case.

“People who have a concussion will likely receive legal advice to not settle until that time period is over and it is clear the extent of the injury,” Mr. Eby said.

The trial lawyers association consulted with former NDP premier and attorney-general Ujjal Dosanjh on the case.

In an interview, Mr. Dosanjh said the government is violating the intent of the ICBC system when it was created in the 1970s.

“What you have now is the NDP government of British Columbia saying, ‘we will continue public auto insurance but we will increase rates and diminish your rights,’” he said.

“Taking away tort isn’t modernization, it’s going to medieval times without the right to go to court.”

Nine Insurance Scams from 2018

Source: The Coalition Against Insurance Fraud

While much of insurance fraud goes unreported, at least $80 billion in fraudulent claims are made annually in the U.S. The Coalition Against Insurance Fraud, a group of insurance, consumers and government organizations, reported the following incidents:

Burning desire. Two firefighters died when a brick wall fell on them as they fought an arson fire. Thu Hong Nguyen set the blaze to burn her nail salon for insurance money in Kansas City, Mo.

Driven to steal. A vast fraud ring run by Felix Filenger stole fully $23 million for bogus whiplash injury claims from real and setup car crashes in South Florida.

Bribes for blood. The largest doctor bribery scheme in U.S. history saw chiropractor David Nicoll stealing more than $100 million. He bribed at least 38 corrupt doctors for false testing of blood samples in Parsippany, N.J.

Toddler killer. Erica White poisoned her blind and deaf toddler Tyrael McFall to death for $50,000 of life insurance in the Atlanta area.

Maladjusted adjuster. Public adjuster Jorge Fausto Espinosa burned and flooded dozens of homes for $14 million of inflated claims in South Florida. Damage was rigged to look like electrical problems, kitchen accidents and faulty water lines.

Home arsonist floored. Firefighter Patrick Wolterman died when he fell through a seared floor while combating an insurance arson set by Billy Lester Parker and Billy Tucker in Hamilton, Ohio.

Pain for profit. Homeless people were inflicted with painful and unneeded spinal injections. Detroit-area streets also were flooded with more than 4 million painkillers in a $300-million Medicare plot by Dr. Mishiyat Rashid.

Unsober sober homes. Yury Baumblit ran unsafe flophouses that housed homeless people and addicts in the New York City area. He pushed many into unneeded drug rehab, forced some to take drugs, and evicted anyone who didn’t cooperate.

Money addiction. Kirsten Wallace co-owned a corrupt sober home that stole the identities of addicts to overbill insurers in a $175-million insurance crime. It was one of the largest health-insurance plots in California history.

Car thefts on rise in Canada as thieves target trucks, SUVs: insurance board

A new report says thieves are setting their sights on older-model Ford trucks and high-end SUVs as the number of automotive thefts rose again last year.

The Insurance Bureau of Canada said Tuesday, December 11, 2018 in its annual list of the most frequently stolen vehicles that the Ford F250 and F350 trucks dominated the list of most stolen vehicles in 2017.

In Ontario, Chevrolet dominated the list, including older model Tahoes and Silverados. In Quebec, the most stolen vehicle was the 2017 Acura MDX, while in Atlantic Canada the Nissan Maxima was the top pick.

Henry Tso, the board’s vice-president of investigative services, said thieves are going after older model trucks because they have less sophisticated security measures.

“Usually you need the card key information to get the diagnostic to start the car. A lot of the older vehicles, it doesn’t have that, so once you have a key cut you can start the vehicle.”

Thieves are, however, targeting newer vehicles that have key fobs through a technique known as a relay attack, where they use a device to remotely pick up the radio signal coming from the fob to unlock and start the car.

“Right now it’s just trending up right now, it’s fairly new,” said Tso.

To prevent the relay attack, vehicle owners should consider keeping their fob in what’s known as a Faraday sleeve or pouch, which blocks the radio signals, he said.

Many drivers, however, would do well to simply not leave their keys in their vehicles. In Alberta, about 25 per cent of thefts occurred when the keys were in the car, often to keep the vehicle warm, said Tso.

“It’s easily preventable, the 25 per cent, all they have to do is be a little colder in their vehicle.”

Alberta also saw the most thefts, making up about 25,000 of the 85,000 vehicles stolen in 2017 for a nationwide increase of about six per cent.

New Brunswick saw the sharpest rise in thefts with a 28 per cent jump, with Ontario seeing a 15 per cent increase.

The board says New Year’s Day is the most common time for vehicles to be stolen.

But, it says vehicles are often smuggled outside the country, sold to unsuspecting consumers, scrapped for parts or used to commit another crime with organized crime rings usually involved.

The Criminal Intelligence Service of Canada says crime groups involved in auto thefts operate primarily out of Montreal and Toronto.

Father who lost son in Broncos crash wants graduated licensing in truck training

A father who lost his son in the Humboldt Broncos bus crash says mandatory training in Saskatchewan for commercial semi-truck drivers is a good first step, but he wants to see more.

Russ Herold, whose son Adam died in a collision between the junior hockey team’s bus and a semi last April, told CJME in Regina that he would like to see the rules adopted nationwide.

Herold is also calling for graduated licensing with limits on mileage and on what semi-trailer combinations drivers are allowed based on how much time they’ve spent behind the wheel.

Last week, the Saskatchewan government announced that, starting in March, drivers will have to take mandatory training of just over 120 hours for a Class 1 commercial licence.

Farmers driving for agricultural purposes will be exempt from the new rules, but will need to stay within the provincial boundary.

Herold, a farmer himself, doesn’t think there should be exemptions for anyone.

“There is no such thing as a border when you’re a truck driver nowadays,” he said. “Everybody sees that there’s lots of trucks. Truck traffic is just the way goods move these days and we need to ensure the roads are safe.”

He suggested experience has to be key in training.

“Experience behind the wheel is what’s going to make people better drivers. You’re not going on a thousand-mile trip your first trip out,” Herold said.

“We all share the road and an accident could happen in 50 miles as easy as it can in 500 miles.”

Sixteen people were killed and 13 players were injured as a result of the crash at a rural intersection in April as the Broncos were heading to a junior hockey playoff game.

The truck driver, Jaskirat Singh Sidhu, is charged with numerous counts of dangerous driving causing death and dangerous driving causing bodily harm.

Joe Hargrave, minister responsible for Saskatchewan Government Insurance, has called mandatory training overdue and said the government had been considering the measure even before the Broncos crash.

Herold said he gets frustrated to hear that from a government that has been in power for years.

“If people talk like that, obviously they know there was a concern. There was possibly a problem,” he said. “Why weren’t things done sooner? Why did it take a tragedy like this to bring it to the forefront?”

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