Law Times

Law times • OctOber 17, 2011 FOCUS PAGE 9 Has government nixed insurance report? Lack of response to catastrophic injury panel gives lawyers hope BY JUDY VAN RHIJN For Law Times Insurance Co. pending and a lack of response from the gov- ernment to the fi nal report of the catastrophic impairment panel, the debate on the defi - nition of catastrophic impair- ment seems to be temporarily on hold. With an almost uni- versally negative response to the report's recommendations, many interested observers are hoping that situation may be- come permanent. When the panel presented its W recommendations for changes to the defi nition of catastroph- ic impairment on April 8, the initial response from the su- perintendent of insurance was that it was full steam ahead with implementation of them and that something would be before the legislature by Au- gust. Th e fact that nothing has surfaced has observers wonder- ing whether the consistently critical response from stake- holders has aff ected that initial enthusiasm or whether the gov- ernment has shelved the matter temporarily to avoid making it an election issue. Th e controversial report redefi ned the classifi cation for the most severely injured accident victims in terms of the various injuries that will qualify a patient for the high- est level of compensation. Th e proposed threshold sets out a new range of clinical tests to assess the claimant's condition and requires there to have been in-patient rehabilitation. Th e panel touted the tests as hav- ing a high level of consistency, certainty, and predictive value. It also recommended against combining physical and psy- chological impairments for the purpose of making a whole- body assessment. Th e legal and medical com- munities have criticized the re- port as premature and fl awed. ith an appeal in Kusnierz v. the Eco- nomical Mutual "Th e overall scheme of the critique is fairly consistent," says Adam Wagman of Howie Sacks & Henry LLP. "Th e vast majority of stakeholders all came independently to these same conclusions. I note that the panel was given not a lot of guidance or time or resources. I understand how they came to these conclusions in those circumstances, but it was done in such a vacuum without any thought to policy issues or practical considerations." In its response, the Insur- ance Bureau of Canada has been positive about the attempt to make bright-line distinc- tions in the defi nition; the sug- gestion not to combine physi- cal and psychological injuries; the abandonment of current mental and behavioural im- pairment ratings; dations recommen- on non-psychiatric impairment assessments; and the elimination of the Glasgow coma scale for assessing head injuries. Insurance organizations en- dorsed the proposals but ex- pressed concerns about the use of hospital admission as a necessary condition for a positive assess- ment and the introduction of an interim status. At the same time, the Co-operators Group Ltd. ar- gued that many of the proposed changes are so unclear that dis- putes and costs could arise. Richard Halpern, a partner at Th omson Rogers, believes the study has very little value because the panel approached the matter incorrectly. "It was supposed to be a medicine- based approach. In fact, it's a policy statement on what cata- strophic impairment ought to be, which was beyond the pan- el's jurisdiction to make. Th ey then crafted the defi nition to fi t their concept. Th e entire re- port has been manipulated to conform with the policy state- ment." Halpern also believes the panel started with a completely wrong premise about the en- titlements that fl ow from a catastrophic impairment rat- ing. "Just because someone is designated catastrophically impaired doesn't mean they can access catastrophic limits. You still have to prove medical and rehabilitation needs that are reasonable and necessary and the insurance company can still dispute it. Just being designated doesn't get you a dime." Wagman is alarmed by the failure to consider the practi- cal impact of what the panel has recommended. "Forget about the legal issues," he says. "Adding a term that the claimant must spend time in a rehab hospital in a sys- tem lacking in beds with a signifi cant waiting list that makes every attempt possible to discharge accident victims because they know there's ac- cident insurance would place a huge strain on the health system." Similarly, the removal of the Glasgow coma scale, a rou- tine test to record the level of consciousness at any traumatic event by ambulance attendants and emergency room physi- cians and nurses, takes away the most cost-eff ective method of assessment, critics say. It also appears clear that the legal system is in no shape to cope with changes that will engender a great deal of uncer- tainty and dispute. "We have been working with the current defi nition for 15 years," says Wagman. "Th at's 15 years of case law and legal experience and assessor experience. Why would you throw that out the window when there is a hor- rendous and growing backlog at mediation? If the govern- ment made these changes to the defi nition tomorrow, it would add complexity and uncertainty and set us back enormously." Many lawyers are question- ing whether there's in fact any need to make changes. "Firstly, we should get a handle on the scope of the costs and whether, reforms have been very help- ful to insurance companies' bottom line." For the same reason, many 'Why make changes to the sys- tem when they said that they didn't have the time or resources to study it properly?' says Adam Wagman. from the consumer's perspec- tive, there's a need for change," says Halpern. "Th e report doesn't help with that at all. Th ere is no evidence that the costs of catastrophic impair- ment assessments are out of control and it's not a problem to premium payers or consumers." Th e insurance bureau stated in its response to the report that the current defi nition has caused a great deal of expen- sive litigation, has suff ered from abuse, and has been ineff ective in achieving its goals. Statistics to support these allegations weren't available from the insur- ance bureau despite a request. It does appear that the re- forms in September 2010 have had a positive eff ect on the profi tability of the insurance sector. In the fi rst quarter of 2011, for example, Economi- cal Mutual credited the chang- es for its increased profi ts. It's Halpern's belief that the 2010 changes deprived a lot of legitimate claimants of appro- priate compensation. "Once that was done, there were con- siderable savings to the insur- ance industry, so there is no compelling reason to touch cat- astrophic impairment," he says. Wagman agrees. "Th ose lawyers believe there's no need to alter the current position on combining physical and psy- chological impairments. "In- surers are still lobbying against it but they have not proven that the cost strain from com- bining is out of control," says Halpern. "If the catastrophic impairment panel did any- thing correctly, it was that they acknowledged that you have to include all impairments in a whole-body assessment be- cause psychological impair- ments can be debilitating, too." But Wagman calls it "a puzzling logical jump" that the panel then said that until further study on the matter is complete, there should be no combining. "Why make changes to the system when they said that they didn't have the time or resources to study it properly?" Th e issue of combining im- pairments will be before the Court of Appeal on Nov. 26 in Kusnierz. "If the court agrees that you should combine the injuries, the government should leave it alone," says Halpern. "If the court says the legislation doesn't allow it, then there should be a change in the legislation. It is fundamentally unfair to ignore psychological impairments when combined with physical." Th e Ontario Trial Lawyers Association, Th e Advocates' So- ciety, and the Ontario Bar As- sociation have all been active in bringing their concerns to the at- tention of the Financial Services Commission of Ontario and the government. "Th e fact that they haven't moved on it is feedback," says Wagman cautiously. Halpern echoes the con- cern. "All I hope is that if the superintendent of insurance and the minister of fi nance wish to revisit the matter, they will realize the huge shortco m- ings of the report." Baxter_LT_May2_11 2.indd 1 www.lawtimesnews.com 4/27/11 2:57:54 PM

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