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Insurance - Auto - 'Catastrophic Impairment'. Kellerman-Bernard v. Unica Insurance Company
In Kellerman-Bernard v. Unica Insurance Company (Div Court, 2023) the Divisional Court considered an interesting SABS appeal where the insured, whose son was injured in a bicycle accident, herself applied for 'catastrophic impairment' SABS coverage on the basis of emotional and psychological injuries. She was denied coverage both at the LAT appeal and a further LAT reconsideration on grounds that she was not categorically-eligible, but reversed at the Divisional Court on a statutory interpretation argument.
In these quotes the court considers the statutory definition of 'catastrophic impairment' and it's application:Section 45(1)
[10] Section 45(1) confers upon an insured person the right to seek a catastrophic impairment designation. It reads:An insured person who sustains an impairment as a result of an accident may apply to the insurer for a determination of whether the impairment is a catastrophic impairment. [11] Pursuant to this section the Appellant, an insured person, applied to the Respondent for a determination as to whether her impairment was a catastrophic impairment. The Respondent denied her application on the basis that she did not fall within the class of insured persons that was entitled to apply for a CAT designation. The LAT agreed with the Respondent. It did so on the basis of its interpretation of s. 3(2) of the SABS.
Section 3(2)
[12] Section 3(2) of the SABS provides:(2) For the purposes of this Regulation, a catastrophic impairment caused by an accident is:
(a) paraplegia or quadriplegia;
(b) the amputation of an arm or leg or another impairment causing the total and permanent loss of use of an arm or a leg;
(c) the total loss of vision in both eyes;
(d) Subject to subsection (4), brain impairment that results in,
(i) a score of 9 or less on the Glasgow Coma Scale ...
(ii) a score of 2 (vegetative) or 3 (severe disability) on the Glasgow Outcome Scale….
(e) Subject to subsections (4),(5) and (6) an impairment or combination of impairments that, in accordance with the American Medical Association’s Guide to the Evaluation of Permanent Impairment…results in 55 per cent or more impairment of the whole person, or
(f) Subject to subsections (4), (5) and (6), an impairment that , in accordance with the American Medical Association’s Guides to the Evaluation of Permanent Impairment…results in a [marked impairment, extreme impairment] due to mental or behavioural disorder. [13] The LAT in its decisions focused on the phrase “caused by an accident” in s. 3(2) and found that the Appellant was not entitled to apply for a CAT designation because she was not directly involved in the accident and thus her impairment was not caused by an accident. Thus, the LAT found that the class of insured persons to which the Appellant belongs, namely people who are not themselves involved in the accident but who suffer psychological or mental injuries as a result of an accident that resulted in injury to their family member, are not entitled to seek a CAT designation.
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[15] The LAT found that not all classes of insured persons could apply for a CAT designation. This is contrary to the express language of s. 45(1), which states that “an insured person” may apply for a CAT designation. It puts no restriction on who can apply for such a designation.
[16] This is to be contrasted with another provision of SABS – the section dealing with entitlement to optional benefits. Section 28(2) of the SABS states:(2) The optional benefits referred to in subsection (1) are applicable only to,
(a) the named insured;
(b) the spouse of the named insured;
(c) the dependants of the named insured and of the named insured’s spouse, and
(c) the persons specified in the policy as drivers of the insured automobile. [17] Thus, in section 28(2), the legislature has specified through a list who is which class of entitled to apply for optional benefits. This demonstrates that when the legislature wishes to restrict benefits to only certain people it does so through explicit language. Section 45(1) contains no such list. Anyone who is an “insured person” is entitled to apply for a catastrophic impairment designation.
[18] The decision of the LAT also ignores the plain meaning of s. 3(2). Section 3(2) contains no language that speaks to the insured person’s entitlement to apply for a catastrophic impairment designation. Rather, it sets out the functional and medical criteria to be used in assessing whether the impairment at issue can be considered “catastrophic.”
[19] In effect, the LAT interpreted s. 3(2) so as to restrict the application of s. 45(1). There is nothing in the express language of s. 3(2) that supports such an interpretation.
The LAT failed to consider the words “caused by an accident” in their entire relevant context
[20] In Canada (Minister of Citizenship and Immigration) v. Vavilov, 2019 SCC 65, the Supreme Court reiterated that the proper approach to statutory interpretation requires reading the language chosen by the legislature in its entire relevant context (para. 117).
[21] The LAT failed to do this. Instead, it took the phrase “caused by an accident” in s. 3(2) out of context and then asked itself whether the Appellant’s impairment was caused by an accident within the meaning of caselaw that has no application to the case at bar. The case law that the LAT examined deals with entitlement to benefits by people who were not clearly “insured persons” within the meaning of the legislation. The Appellant is an insured person and, as such, according to the express language of s. 45(1), her entitlement to apply for a catastrophic impairment designation is clear.
[22] If the phrase had been considered in context, it would have been clear that its purpose is not restrict entitlement to apply for benefits under s. 45(1), but to clarify that the only impairments to be considered in assessing whether the impairments at issue are “catastrophic” are the impairments that were caused by the accident (as opposed to other causes.) There is no issue that the Appellant suffered a psychological or emotional injury as a result of the accident. The only issue is whether that injury qualifies as a “catastrophic impairment.”
The interpretation adopted by the LAT ignores the purpose of the SABS
[23] In Vavilov, supra at para. 117, the Supreme Court reiterates that the words of a statute are to be read “ in their entire context and in their grammatical and ordinary sense harmoniously with the scheme of the Act, the object of the Act, and the intention of Parliament.”
[24] The courts have repeatedly recognized that the SABS are remedial and constitute consumer protection legislation and ought to be read, interpreted and applied in such a way. This was confirmed by the Supreme Court of Canada in Smith v. Co-Operator’s General Insurance Co. 2002 SCC 30 (CanLII), [2002] 2 S.C.R. 129 at para. 11.
[25] In Tomec v. Economical, 2019 ONCA 882 the Ontario Court of Appeal confirmed that “[the] legislature’s definition of ‘catastrophic impairment’ is intended to foster fairness for victims of motor vehicle collisions by ensuring that accident victims with the most health needs have access to expanded medical and rehabilitation benefits. That definition is meant to be remedial and inclusive, not restrictive” and that the goal of the SABS “is to reduce the economic dislocation and hardship of motor vehicle accident victims and as such, assumes an importance which is both pressing and substantial” (see para. 42).
[26] Instead of being remedial and inclusive, the interpretation adopted by the LAT is restrictive. Instead of fostering fairness for people with the most health needs, it increases their suffering and economic hardship. . Abdi v. TD General Insurance Company
In Abdi v. TD General Insurance Company (Div Court, 2023) the Divisional Court considered an auto insurance SABS LAT appeal on the issue of 'catastrophic impairment', particularly on the date of assessment of the impairment:[2] The Adjudicator held that the Appellant had not suffered a catastrophic impairment as defined under the Statutory Accident Benefits Schedule – Effective September 1, 2010: O. Reg. 34/10 (“Schedule”). That finding is the subject of this appeal.
[3] At issue is s. 3.1(1)4 of the Schedule (“Criterion 4”) which imposes a two-part test. The parties agree that the Appellant met the first part of the test. There was diagnostic evidence of brain trauma, given the positive intracranial findings on an MRI. What is contentious is the second part of the test. The Adjudicator found that the Appellant did not meet the criteria in the Extended Glasgow Outcome Scale (“GOS-E”) referenced in Criterion 4. The Adjudicator upheld this decision on February 16, 2022 (“the Reconsideration Decision”).
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[6] The parties agree that this court has jurisdiction to hear this appeal, on a question of law only, pursuant to ss. 11(1) and (6) of the Licence Appeal Tribunal Act, 1999, S.O. 1999, c. 12. It is also agreed that the applicable standard of review is correctness: Canada (Minister of Citizenship and Immigration) v. Vavilov, 2019 SCC 65, [2019] 4 S.C.R. 653, at para. 37. A breach of procedural fairness constitutes an error of law: Newfoundland and Labrador Nurses’ Union v. Newfoundland and Labrador (Treasury Board), 2011 SCC 62, [2011] 3 S.C.R. 708, at para. 22.
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THE TEMPORAL REQUIREMENT
[17] As noted above, Criterion 4 provides that catastrophic impairment is made out if certain conditions are met at certain times, as set out below:A. Vegetative State (VS or VS*), one month or more after the accident,
B. Upper Severe Disability (Upper SD or Upper SD*) or Lower Severe Disability (Lower SD or Lower SD*), six months or more after the accident, or
C. Lower Moderate Disability (Lower MD or Lower MD*), one year or more after the accident. [18] I agree with the Appellant that, if any one of the above conditions is satisfied, the Applicant is entitled to a finding of catastrophic impairment, even if there has been subsequent recovery.
[19] The Appellant argues that the Adjudicator erred in failing to consider the Appellant’s level of functioning “6 months or more” following the accident. However, there was no evidence of functioning 6 months or more following the accident. The assessments were carried out much later. The Appellant’s assessments were carried out 16 months post-accident, and the Respondent’s assessment was carried out close to 24 months post-accident. The relevant time frame was not 6 months or more after the accident, but one year or more after the accident.
[20] Assessments are to measure level of functioning at the time of the assessment. According to the Wilson Article at p. 575: “only pre-injury status and current status should be considered” by the assessor. Current status “includes problems and capabilities evident over the past week or so”. The article confirms that “the person’s initial state after injury and hopes for the future are not relevant in determining outcome”.
[21] Consistent with this directive, the assessments filed in this case were focused on the Appellant’s “current” level of functioning. The Appellant’s assessments made some reference to hospital records and functioning a few months after the accident. Yet, there was no concrete measurement of the appellant’s status 6 months after the accident, or even one year after the accident. The testing measured the Appellant’s functioning at the time of the assessments.
[22] It follows that the relevant time period was not “6 months or more” after the accident. Both assessments measured functioning “1 year or more” after the accident.
[23] The Adjudicator adverted to the temporal requirements in the Schedule. She was aware of the risk that insurers might delay assessments in order to capitalize on recovery over time. However, she found that that was not the case here. She adopted a flexible approach, correctly concluding that, in the particular circumstances of this case, the Respondent’s assessments were available for consideration. She was correct in finding that she was not obliged to accept the Appellant’s assessments just because they were first in time.
[24] As she put it in her decision:[25] The section on timing in the GOS-E Guidelines states that the GOS-E is intended for use after discharge from hospital, and that reports should always include the timing of assessment. The section is silent on how soon after discharge the GOS- E should be administered. The context in which the GOS-E Guidelines state that only the person's current status should be considered refers to the person's status at the time of the assessment and not to the hopes or anticipation that the persons status will improve at some future point. Nor should the severity of the person's earlier status compared to their current status be considered. There is no prohibition on conducting an assessment two years after release from hospital.
[26] The Schedule is not silent on timing. The purpose of the GOS-E is to determine outcome after a head injury. The GOS-E has been incorporated in the Schedule as a legal test. The Schedule states that the GOS-E assessment is to be conducted in accordance with the GOS-E Guidelines to determine the rating. However, the timing of that assessment is set out in ss. 3.1(1) 4 (ii) A to C of the Schedule. On a plain meaning, an insured person will have sustained a catastrophic impairment if an insured person meets the test associated with the specific period, regardless of how much longer the assessments were conducted after the 6month period in s.3.1(1)4(ii)B or the one year period in s.3.1(1)4(ii)C of the Schedule. I find there is any no conflict between the GOS-E Guidelines and the Schedule. Even if I there were a conflict, I find that the Schedule takes precedence as it is the governing legislation.
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[29] Although Security National Insurance Company v. Allen dealt with a different test for catastrophic impairment, the reasoning is applicable to the GOS-E. Accordingly, I find that a flexible approach together with the Schedule requires that I do not look at the applicant strictly at the one-year mark, but also his condition more than one year after the accident. A flexible approach also means that an IE assessment that is done a few years down the road may be of limited value or receive little weight. However, since the timing of IEs are not legislated under the present Schedule, that is the risk an insurer takes if it does not conduct timely assessments. That does not mean that the Tribunal cannot or should not consider an IE assessment that is not conducted within a month to six months of the catastrophic impairment application. [25] She reiterated these conclusions in her Reconsideration Decision:I also rejected the applicant's submission that the timing of my determination of whether the applicant meets the GOS-E was constrained to the time of his initial GOS-E assessment. I adopted a more flexible approach and determined that an adjudicator is not restricted to looking at only the time of the first assessment. An adjudicator may look at an insured's condition beyond the date of the first assessment. However, the timing of the evidence of an insured's condition could affect the weight to be given to that evidence.
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