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PAGE 12 FOCUS OcTOber 19, 2009 • Law Times When is a request for an insurance exam 'reasonably necessary?' G BY JULIUS MELNITZER For Law Times etting insurance claim- ants to submit to a medical exam has be- come harder due to a recent de- cision by the Financial Services Commission of Ontario. When Ontario abolished des- ignated assessment centres, it gave insurers the right to request medi- cal examinations for each benefi t for which a claimant applied. Th e only limit on the number of ex- aminations was that a request be "reasonably necessary." Typically, insurers have main- tained that all their requests for examination are reasonably nec- essary and tend to exercise their right to deny benefi ts if the claim- ant fails to attend. "Before the decision in H.T. v. Security National, there was no proper legal interpretation of what was 'reasonably necessary,'" says David Payne of Toronto's Th omson Rogers. Th e case came about after Clients and Counsel who know Insurance, know us... So should you! H.T.'s injury in a vehicle accident in September 2003. Five years lat- er, she applied for statutory ben- efi ts and provided an application for determination of catastrophic impairment signed by a psychol- ogist and based solely on a mental or behavioural disorder. Security National Insurance Co. respond- ed with a request that H.T. attend four in-person examinations with a psychiatrist, a neurologist, an occupational therapist, and an orthopaedic surgeon. Th en, in September and Oc- tober, H.T. attended previously scheduled insurer examinations with a psychiatrist, a dentist, and a physiatrist to determine her non-catastrophic entitlement. Th e psychiatrist, Dr. L. Je- Call us or visit our website for more information. rome, opined that the severity of H.T.'s functional impairment warranted consideration of an in- patient assessment and treatment program for post-traumatic stress disorder. He concluded that she suff ered from a complete inability to carry on her normal life. He also reported that H.T. suff ered signifi cant setbacks due to the stress of the assessments, which led her to becoming active- ly suicidal. He could not "stress strongly enough the risk that four assessments in the span of a little over two weeks" posed to H.T. Payne's colleague, Deanna Gilbertson_LT_Oct19_09.indd 1 10/13/09 3:15:03 PM Insurance and Risk Management in Commercial Leasing Finally, a resource that simplifies these complicated concepts Insurance and risk management issues in the commercial leasing context are highly technical, interrelated and often misunderstood. Insurance and Risk Management in Commercial Leasing is the first resource to simplify these complicated concepts. Find detailed discussion on: • the types of insurance that apply to landlords and tenants • risk that is excluded from coverage and factors that limit insurance proceeds or recovery • clarification on common misconceptions such as key differences between "additional insureds" and "additional named insureds" • the right to subrogate and waivers of subrogation • express and implied common law releases and indemnities • managing liability for pure economic loss and implications in the leasing community • the damage and destruction provisions of a lease and how they interrelate with the repair, insurance, indemnity and release provisions … and much more. This unique resource includes over 100 case commentaries, detailed analysis and references to applicable statutes from across Canada. It also includes numerous precedent provisions and drafting tips and a glossary of insurance industry terms to guide you through the process. This resource is a must for anyone who prepares, negotiates, reviews or administers commercial offers to lease and/or leases. ORDER your copy today Hardbound • 210 pp. • May 2009 • $98 P/C 0299010000 • ISBN 978-0-88804-483-9 Gilbert, advised the insurer that her client wouldn't attend the cat- astrophic impairment examina- tions. Th e insurer responded that H.T.'s refusal to attend meant she didn't meet the requirements for catastrophic impairment. Payne and Gilbert applied for arbitration, seeking a determina- tion that H.T. suff ered from cata- strophic impairment and urgent directions on attendance at the examinations. Security National replied that it was entitled to con- duct the examination and had the "sole and unqualifi ed right to chose the assessors(s) for the said examination." In February 2009, arbitrator John Wilson ruled that the in- surer had to proceed with a deter- mination of catastrophic impair- ment on the basis of the available assessments and a review of the documentary evidence. "At this time, given [H.T.'s] current condition it is not rea- sonable to schedule further in- person examinations, although the [insurer] may refer supple- mentary questions to the previ- ous examiners with regard to the claim for catastrophic impair- ment," Wilson wrote. "It would therefore be reason- able to refer the issue back to Dr. Jerome who has expertise in cata- strophic impairment and who has recently examined [H.T.] for a further paper review of the issue of catastrophic impairment from a psychiatric perspective." As Wilson saw it, the insurer's For a 30-day, no-risk evaluation call: 1.800.263.2037 Canada Law Book is a Division of The Cartwright Group Ltd. Prices subject to change without notice, to applicable taxes and shipping & handling. MICHAELOFF_Insurance and Risk Managemnt (LT 1-4x3).indd 1 LT0715 www.lawtimesnews.com 6/10/09 10:03:57 AM right to conduct assessments gave rise to a fi duciary duty to the insured. Th e insurer, therefore, Deanna Gilbert represents H.T. in a dispute with Security National Insurance Co. didn't have an unfettered right to change assessors. "It is clear also that in the choice of [an] independent ex- pert, one party's strategic in- terest does not trump issues of fairness," he wrote. "Given the fi rst-party relationships in accident-benefi t matters, the responsibility of experts chosen to assist in the determination of benefi t entitlement should be no less than for unrelated parties in an adversarial situation. "In this matter, it is not enough for Security [National] to have an unexplained preference for a new and diff erent psychiatrist when such an abrupt change of asses- sors can lead to an inference of expert shopping for a more fa- vourable report." Security National, represented by Christopher Caston, sought to appeal Wilson's preliminary de- termination to FSCO's offi ce of the director of arbitrations. But delegate Lawrence Black- man ruled the insurer didn't have a "sole and unqualifi ed right to determine the assessment of the assessors." Th e fact that the ex- aminations pertained to the issue of catastrophic impairment or that the potential increase in ben- efi ts might be signifi cant didn't eliminate the need to determine whether the insurers' requests were reasonable. Consequently, Blackman re- fused to accept the appeal of what was a preliminary issue. According to Payne and Gil- bert, the case articulates several fundamental principles relating to s. 42 of the statutory accident benefi ts schedule: • Upon receipt of a benefi t re- quest, insurers can't imme- diately initiate a full-blown assessment and multiple ex- aminations without fi rst con- sidering a less invasive or de- manding process; • Insurers can't conduct un- limited examinations with- out fi rst considering available medical records and expert reports. Caston, meanwhile, wouldn't comment on the substantive aspects of the case as the matter is still pending. He notes, how- ever, that a private mediation is set to take place at the end of the month. But if the case doesn't settle there, the parties will then proceed to arbitration in Novem- ber, he adds. LT Dawn Michaeloff

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