Law Times

Page 8 January 6, 2014 Law Times • Focus On Insurance Law Appeal decision overturns first ruling on minor injury guideline BY JuDY VAN RHIJN For Law Times D irector's delegate David Evans has overturned the arbitrator's decision in Scarlett v. Belair Insurance Co. Inc. in almost every particular and has sent the case back to the Financial Services Commission of Ontario's arbitration wing for a full hearing. The decision is a blow to the plaintiff's bar that was enjoying the tools the original decision had given them. The appeal concerned the decision of arbitrator John Wilson on March 26, 2013, regarding the monetary limits set by s. 18 of the statutory accident benefits schedule and by the minor injury guideline. Wilson found in favour of the complainant and made some startling findings about the way insurance companies were to approach the application of the new category. Mark MacNeill, a partner at Brauti Thorning Zibarras LLP, recalls the buzz when the original decision came out. "It was the first real decision to try to address the MIG that we're all dealing with on a daily basis. I did hear that the lawyers and paralegals that do the heavy lifting with non-catastrophic injuries were excited. There was a lot of chatter about the MIG being non-binding, that they had the insurers on the ropes." MacNeill recalls reacting more cautiously. "It was a preliminary issue 'Right now, this is a decision that hurts injured individuals,' says John McLeish. from one arbitrator. On any given day, with any given client and a given set of facts, it's really hard to predict what will happen. I didn't think anything was going to change in the minds of insurers. It was immediately appealed." John McLeish of McLeish Orlando LLP says it's a significant case. "Mr. Scarlett was VIEW 2014 Brought to you by Canada's leading CLOs explore their challenges for the year ahead Read it in print or online at www.canadianlawyermag.com/inhouse Live on January 27th trying to prove that he did not fall within the MIG in several ways. The first way was to show he had injuries over and above those described as minor injuries, including chronic pain, depression, and TMJ syndrome. The director delegate found that the arbitrator left it open as to whether those conditions might be included as 'any clinically associated sequelae' of the minor injury, which would not take it outside the MIG. "The second way was to show compelling evidence that he had a pre-existing medical condition that would prevent him from achieving maximal recovery from the minor injury if he could only access $3,500." McLeish refers to Evans' finding that even though Wilson found the totality of Lenworth Scarlett's injuries put him outside of the minor injury guideline, he didn't direct his mind to the relevant test of whether his impairment was predominantly a minor injury. Evans appeared to be perplexed as to why Wilson had addressed the definition of "compelling evidence" as referred to in s. 18(2) as necessary to access the exception for a pre-existing condition. While Wilson found "compelling evidence" simply means credible evidence, Evans concluded the phrase meant more than that. Evans also disagreed with Wilson's determination that the burden of proof fell on the insurer. In his view, the burden of proof always rests on the claimants to prove they fit within the scope of the coverage. "Otherwise, it would put the burden on the insurer to show that the expenses were not reasonable and necessary," wrote Evans. He also found $50,000 isn't some sort of default coverage and the burden of proof remains on the claimants to show their entitlement to benefits at whatever level. MacNeill considers this finding to be one of the two key points to take away from the decision. "Evans is absolutely right. The www.lawtimesnews.com burden of proof is always on the insured. There are obligations on the part of the insurer, but if you are making an application, you have to show that you are entitled to coverage." The other key point is the overturning of Wilson's reference to the minor injury guideline as a "non-binding interpretative aid." Evans found the minor injury guideline is part of the statutory accident benefits schedule by reference and is just as binding. "It's not an optional thing. It's there," says MacNeill. McLeish always felt that was the case. "Whether it's statutory or regulatory, the MIG is incorporated by reference into SABS and anyone deciding whether a case should be considered in or out is going to look at the MIG. In my view, it does have the same weight as a regulation." Evans also addressed procedural matters with respect to research and reliance on cases and statutory provisions the arbitrator raised of his own accord without providing notice to the parties or an opportunity to respond. He found that to be a breach of procedural fairness and sent the matter back for a full and final hearing. MacNeill considers this course to be a fair thing to do. "It is not what you would call a preliminary matter now. All the fruit is ripe and the witnesses are there." However, he disagrees strongly with Evans' criticism of preliminary hearings in general. "Preliminary hearings can narrow the issues," says MacNeill. "They can knock things out at that point. Everyone's complaining about costs and access to justice. I wouldn't want to throw the baby out with the bath water." Overall, McLeish laments the change the appeal decision brought after briefly enjoying the benefits of the arbitration decision. "It allowed practitioners to say to adjusters that the conditions of chronic pain, depression, and TMJ syndrome fell outside the MIG but they can do so no longer. Another tool arose from the arbitrator's decision that a pre-existing condition made the $3,500 inadequate." McLeish also found the reverse onus to be helpful to the injured person in accessing the $50,000 of benefits for those outside the MIG. "Now the appeal decision has taken away those tools." McLeish considers the appeal decision to be very unfriendly to injured people. "It does certainly give the insurance industry more reasons to put somebody into the MIG. Right now, this is a decision that hurts injured individuals." MacNeill is waiting on the ultimate outcome. "Who knows what will happen on a full trial of the facts? Things are always helpful when they are certain. Maybe you don't agree with it, but a good, well-written decision always helps." Nicole Corriero, counsel for Scarlett, notes her client is appealing the recent decision to the Divisional Court. LT

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