Steven Rastin, Rastin & Associates1

Given the ever-increasing complexity and widening range of cases currently proceeding to the Financial Services Commission of Ontario, it is simply impossible to identify 10 key cases that will assist in every arbitration. Obviously, the sort of cases that you need to consider at an expense hearing are completely different than the case law you would reference during a catastrophic impairment arbitration or a post-104 week income replacement benefit entitlement case. What we have tried to do is to point out some of the significant cases that we think should be in every lawyer and law clerk's arsenal. In my view, while the cases themselves are important enough to warrant consideration, it is at least as beneficial to look at the creativity and fearless advocacy demonstrated by the advocates in taking these matters forward.

This analysis highlights interesting cases in the areas of special awards, challenging assessment processes, expenses and costs, procedural considerations, collateral deductibility, production issues, and catastrophic determination cases.


Cowans and Motors Insurance Corporation (FSCO A09-003237, Arbitrator Wilson, October 15, 2010): This is a decision of arbitrator Wilson which considers the growing problem of dealing with assessments which failed to properly consider an accident victim's situation and which often apply inappropriate "cookie-cutter" principles. Mr. Cowans was injured in a motor vehicle accident on April 2, 2007 and received income replacement benefits until they were terminated on or about May 8, 2009. Benefits were reinstated prior to the arbitration, but Mr. Cowans and his lawyer proceeded to hearing to determine the question of whether he was entitled to a special award.

The primary issue in this case was whether the insurance company acted unreasonably in terminating benefits. However, the arbitrator viewed this case in a larger context, noting:

To a degree, as well, Mr. Cowans' claims bring into question the way Motors and perhaps other insurers deal with the determination of entitlement to benefits in a post-DAC world and how the system of insurer's assessments that replace the DAC system fits into such determinations. 2

The foundation of Mr. Cowans' claim for special award is his allegation that the insurance company failed to properly consider his education, training and experience, and especially his work record and history for earning a significant income when it made its determination to terminate income replacement benefits at the 104-week mark. Mr. Cowans was an immigrant to Canada with limited education and poor reading and writing skills. However, he made a significant income due to his willingness to work long hours at difficult labour.

The arbitrator reviewed the case law and noted that an insurance adjuster and her supervisors need to be held to a standard of sound and moderate judgment. However, in this particular case, the insurance company commissioned a cookie-cutter vocational evaluation which identified six alternative occupations for Mr. Cowans. The evaluation gave little if any consideration to Mr. Cowans' pre-accident income level. Even worse, the insurance adjuster who read the evaluation only gave it a cursory examination, and admitted "he merely assumed that all relevant information was taken into consideration."3 The arbitrator found that the adjuster failed to give the report close scrutiny, failed to analyze its conclusions in a critical manner, and basically merely reviewed the conclusions followed by a decision to adopt the most favourable recommendation.

The arbitrator was also critical of the independent examination process as a whole. He noted that although it was referred to as a multidisciplinary assessment, there was no attempt to bring forward a consensus report as to collective recommendations made by the team, but rather a doctor who did not participate in the assessment process, who simply summarized the opinions of others without making any attempt to interrelate the findings or observations of the different members of the "team."

The insurance company also failed to consider credible information provided to it by the claimant. It also failed to recognize its own report was flawed. The insurance company's vocational assessor conducted testing confirming Mr. Cowans was functioning at a grade 3 reading level and grade 4 spelling and arithmetic level and had a low aptitude in reasoning, math, language, general learning, verbal aptitude, and numerical aptitude. However, he was found to be an excellent candidate for on-the-job learning and was improperly found to possess "some high school education." The arbitrator had no trouble concluding that the jobs proposed were totally unsuitable. Not only did Mr. Cowans not possess proper qualifications, but his own experts confirmed that it would take him almost 10 years to progress on the wage scale to anything close to his pre-accident income level.

The arbitrator was critical of the entire process. He did not view the flawed methodology as being specific to Mr. Cowans' case, but rather saw it as a systemic problem. He was particularly critical of the admitted methodology and workload of the primary assessor, Dr. Finkel, noting with scorn:

Assuming for example that the 40-50 assessments figure related to a month, that would mean that Dr. Finkel on some weeks may have performed at least 10 assessments per work week. The time permitted to review, assess and report on any individual would have been at most 4 hours from start to finish, including the reading of voluminous documentation.

Whether Dr. Finkel was biased or prejudiced or not, I find that it tests credulity to believe that an assessment mill such as described by Dr. Finkel could ever generate meaningful results.4

Arbitrator Wilson voices a concern many of us have, that the processes and methodology used in insurance litigation makes it practically impossible for some of our clients to obtain fair and impartial individual assessments. He did recognize the fact that the insurer, in this case, did reinstate benefits prior to the arbitration hearing. Accordingly, he reduced the special award from the 50% maximum he would have otherwise awarded to 40%. As a practical matter, this decision presents an opportunity to challenge assessment centres and defence medical examiners who might arguably demonstrate systemic bias.


Ms. G and Pilot Insurance Company (FSCO A04-000446, Arbitrator Blackman, June 21, 2006).

This is a decision coming out of our office which has an interesting discussion with respect to both special awards and costs. Ms. G and Pilot was a divisive file which resulted in the parties going to court or arbitration no less than nine times with respect to various disputes relating to accident benefits, including catastrophic injury determination, the provision of nanny services as a medical and rehabilitation expense, disputes concerning expenses, and arguments as to whether Pilot should be obligated to pay a special award. This particular decision of arbitrator Blackman, as he then was, dealt with the proper expenses to be paid arising from a motion as well as whether a special award was warranted.

In this particular file, we had successfully argued that our client, who had elected to receive income replacement benefits, was nevertheless entitled to receive nanny services pursuant to s. 15(5)(l) of the SABS.5 This decision is helpful to plaintiff's counsel and law clerks looking to successfully advance an argument that they should be entitled to hourly rates greater than the legal aid minimum. The arbitrator specifically found that the efficiency in presenting an argument, as well as experience, advocacy, and thorough preparation justified allowing a lawyer to claim an hourly rate above the legal aid minimum. Similarly, in this case, my then-law clerk, Tracy Romanowski, was awarded an hourly rate of $50 per hour rather than the $23 per hour normally awarded to law clerks for proceedings at that time. This award was based upon the arbitrator's assessment of her as a "very capable professional" whose participation was deemed helpful and increased the efficiency of the process. As far as I am aware, this case remains a high water mark for hourly rates awarded to a law clerk. It should likely be part of any successful claimant's submissions with respect to costs.

The case also includes a helpful discussion regarding when conduct by the insurance company might give rise to a special awards claim. In this case, Pilot refused to pay for nanny service benefits even after a DAC had determined that the benefits were reasonable and necessary. Despite the fact that this was a "pay now, dispute later" benefit, Pilot constructed a new and different argument after not receiving a favourable DAC report. Arbitrator Blackman was critical of this approach and viewed it as a failure to respect the SABS which was, prima facie, unreasonable. He found that a special award had to discourage an insurance company from seeking to benefit by wrongfully withholding benefits. He noted:

The advantage to an insurer in delaying benefits is delaying benefits. One takes judicial notice that a significant portion of an insurer's profit is from the investment of the significant monies to which it is entrusted. If money is the advantage to be gained, the imposition of a monetary award can be an effective deterrent.

In this case, based on the evidence and the submissions before me, I have little, if any, confidence that Pilot, if it even now had the opportunity to go back in time to when the DAC report was released, would make any meaningful change in its adjusting approach to the issue of "pay now, dispute later." Accordingly, I am persuaded that a significant award is called for to deter, in the future, any similar disrespect for the Schedule.6

There is little doubt that this case has been a particular thorn in the side of Pilot Insurance. During the recent Five-Year Review of changes to the Insurance Act, the Insurance Bureau of Canada made no less than three references to this decision in urging the government of Ontario to overturn by legislation such unreasonable decisions by arbitrators. However, this case supports the proposition that insurance companies should not be able to act in clear contravention of the obligations as set out in the SABS without risking significant bad-faith awards.


Rocheleau and Allstate Insurance (FSCO A05 - 002849, Arbitrator Ashby, May 30, 2011)

An important recent decision that everyone representing claimants before the Financial Services Commission of Ontario should note is Rocheleau and Allstate. In this case, the arbitrator released a decision on May 23, 2008, ordering Allstate to pay income replacement benefits and a special award of $25,000. The arbitrator reserved on the question of expenses, ruling that the parties may request an expense hearing before her if they were unable to resolve the issue. Negotiations between the parties proceeded at a slow pace. The claimant submitted a bill of expenses on February 3, 2011. During the expense hearing, the insurance company argued that expenses were no longer payable because of the long delay and because rule 79 of the Dispute Resolution Code which indicates that stipulates for an expense hearing should be made within 30 days. The arbitrator accepted Allstate's submissions noting that while she had the authority to set aside the 30-day time limit set out in rule 79, there was not a compelling reason in this case to extend it for a period of two years and six months based on the reasons provided by the claimant.

This case stands for the proposition that plaintiff's counsel delays applying for an expense hearing at its own peril. We would strongly suggest that, absent an agreement to waive any limitation argument, plaintiff's counsel and their law clerks should ensure that the appropriate application for expense hearing is brought within the 30-day period.


Cromwell v. Liberty Mutual (2008), CanLii 3409 (Ont. S.C.);
Vanderkop v. Personal Insurance (2009), ONCA 511 (CanLii).

A common arbitration issue is whether other collateral benefits received may be properly deducted from income replacement benefits. Two interesting cases that deal with the relationship between long-term disability benefits, and the settlement thereof, and income replacement benefits are Cromwell and Vanderkop.

In Cromwell, the plaintiff received income replacement benefits, on and off, of $311.49 per week. The Plaintiff also had a disability benefits policy issued by Sun Life. When Sun Life refused to provide coverage pursuant to that policy, the plaintiff commenced an action against it for benefits for breach of contract as well as extra-contractual damages for bad faith and mental distress. In December, 2003, the plaintiff settled her claim against Sun Life for $15,000 in benefits that were deemed "taxable" and $160,000 which was designated by all parties as "non-taxable." Liberty Mutual argued that the entire payment from Sun Life constituted payment of collateral benefits which resulted in an overpayment which it was entitled to recoup pursuant to Section 47 of the SABS. The judge agreed that the Sun Life policy was a policy of indemnification and could be deducted from the income replacement benefits. However, he refused to allow Liberty Mutual to deduct any portion of the $160,000 lump sum from income replacement benefits. The plaintiff presented evidence from in-house counsel from Sun Life who testified that the total settlement amount of $199,900 was not arrived at through any principled calculation, but rather on the basis that that was the maximum authority of approval of the person who was instructing her. The court considered the leading case of Tsiaprailis v. Canada,7 and distinguished payments for arrears and future benefits noting:

Sun Life was not obliged, under the terms of its policy to pay a lump sum with respect to future payments. There is no evidence before me that the lump sum paid was in any way calculated taking into account the future value of those payments but was rather arrived at on the basis of the amount of money available under the authority of the person authorizing the settlement. I also consider that the Release delivered also released claims against Sun Life with respect to mental stress, aggravated and punitive damages for which Sun Life denied liability in the Release. On that basis, the payment does not qualify as "net weekly payments for loss of income.. .under any income continuation benefit plan".8

Historically, my office has had some reluctance with respect to settling a long-term disability claim prior to resolution of the accident benefits claim. However, this case stands for the proposition that, in appropriate circumstances, it is actually preferable to settle a long-term disability case first provided that you can work out a satisfactory arrangement with the disability insurance company.

Vanderkop is a decision of the Ontario Court of Appeal which stands for the proposition that an accident benefits insurer is not permitted to deduct "hypothetical" long-term disability benefits. In this case, the plaintiff was injured in a car accident in February, 1997. She attempted to return to work, but ended up applying for both income replacement benefits and long-term disability benefits. After disputes with both insurance companies, Ms. Vanderkop first received retroactive income replacement benefits, and then later settled her case with the long-term disability insurance company, Manulife, in which she released all entitlement to past, present and future benefits for $57,500. Her accident benefits carrier, The Personal, was present at the mediation. During negotiations at the mediation, the issue of coordination of benefits was at the forefront. The Personal did nothing to encourage her to settle her case with Manulife, nor did it take the position that it would be entitled to reduce future payments of IRBs, to the point of extinguishment, by virtue of the fact that she had settled her claim with Manulife.

However, after the mediation, The Personal refused to pay IRBs to Ms. Vanderkop even though she met the test for entitlement because of the Manulife settlement. The Personal argued that it could deduct any LTD payments that might happen to be payable had she successfully litigated with ManuLife. The parties referred to this as the "hypothetical payments." The Court of Appeal agreed with the trial judge's finding that the Manulife settlement was not deductible from income replacement benefits. The court rejected the argument that settling the LTD claim should be treated as voluntarily withdrawing the application for LTD benefits, and as such, this entitled her to continuing IRBs. It is noteworthy, however, that all parties agreed that if The Personal had followed the necessary statutory procedures set out in the legislation, it could have recouped the $57,500 paid to her by Man ulife. With respect to the Ontario Court of Appeal, given the analysis discussed above in Cromwell, it is our view that there was a good argument to be made that even if The Personal had followed proper procedures, it should not have been entitled to deduct all of the $57,500 paid by Manu life.

Longo and Lombard Gen. Insurance (FSCO, A07 - 000768, Arbitrator Miller, December 19, 2007).

Another important issue that is sometimes discussed in my office is whether collateral deductions and post-accident income should be deducted from the gross amount calculated for income replacement benefits under s. 6(1) or from the income benefit actually payable calculated pursuant to s.7(1)2 of the SABs. In this case, Ms. Longo's income replacement benefit was calculated pursuant to s. 6(1) at $532 per week, but pursuant to s.7(1)2, her income replacement benefit was capped at $400.

Arbitrator Miller was asked to decide whether post-accident income earned by Ms. Longo should be deducted from the $532 amount or the $400 amount. Notwithstanding her obvious sympathy for the claimant, arbitrator Miller relied on authority establishing that the SABS do not purport to put accident victims back to where they would have been but for the accident, but rather, are intended only to provide limited compensation to victims of motor vehicle accidents on a no-fault basis. Therefore, pursuant to the clear wording of the legislation, arbitrator Miller found that post-accident income is deductible from the $400 per week maximum set out at s. 7(1)2.


Kohl v. ING Insurance Company (2011), ONSC 2138 (CanLii). (April 5, 2011).

This is a recent decision in which the court attempts to address some of the prejudice arising from the massive increase in delays that claimants are facing when they file for mediation of denied accident benefits with the Financial Services Commission of Ontario. In this case, Mr. Kohl was injured in an accident in 2005. He alleged that he was catastrophically impaired as defined by the SABS, and he properly filed the mediation with FSCO in support of same. Subsequently, and after completion of Examinations for Discovery in the civil action, he filed a motion to amend his Statement of Claim to ask for various additional benefits he alleged he was entitled to pursuant to the SABS. In fact, he asked to amend the Statement of Claim to seek a declaration that, as a result of the accident, he was entitled to all benefits pursuant to the SABS which were available to him as a result of being catastrophically injured in the motor vehicle accident.

The plaintiff had applied to FSCO for mediation of medical and rehabilitation benefits regarding behavioural therapy on June 14, 2010, physiotherapy on June 7, 2010, and income replacement benefits on July 30, 2010. FSCO had acknowledged receipt of the applications for mediation, but replied that due to a backlog, they were experiencing an increase in processing time and it was taking longer to complete applications as a result. As of the date of the motion, no one had heard anything further from FSCO.

At the motion, ING argued that amending the Statement of Claim to seek rehabilitation and other benefits that were awaiting a FSCO mediation were premature until such time as they were the subject of a failed mediation as required by s.281(2) of the Insurance Act. ING took the position that the courts had no jurisdiction to hear the plaintiffs claim until the mediation process was complete. Justice DiTomaso rejected those submissions, preferring instead the argument of the plaintiff that the additional claims were sufficiently interconnected with the existing claims to allow the amendments to proceed and that they should, therefore, be dealt with within the existing action. The motions judge noted that the plaintiff had already gone through a mediation and was "prepared to proceed to mediation in respect of these other claims but there is no telling when such mediation will ever take place. Mr. Kohl finds himself in a state of suspended animation not of his own creation regarding further mediation of his additional claims."9 He went on to allow the amendment, noting:

I agree that Mr. Kohl has participated in a failed mediation concerning his claim for catastrophic impairment. There is no need to go through an additional mediation for the other benefits being the subject of the amendment which are dealt with under the same insurance policy arising out of the same accident and which are also directly related to the claim for catastrophic impairment. In my view, it would create unnecessary expense and certainly unnecessary delay as we do not know how long it will take before any further mediation can take place before FSCO regarding these other claims. To wait for an undetermined period of time for further mediation to take place without further amendment to Mr. Kohl's Statement of Claim would be prejudicial. However, ING will suffer no prejudice as a result of the proposed amendments. I find that the amendments are fair, necessary and just. It is entirely appropriate that these proposed amendments be dealt with within the context of these existing action for the reasons stated at this time. To make Mr. Kohl wait for an unspecified period of time to amend in these circumstances makes no sense and is not in the interests of justice.10

It is worth noting that a number of law firms are taking this argument even further. Given that the legislation governing the mediation process stipulates that FSCO is obligated to schedule a mediation within 60 days of receiving the application, a number of firms have resorted to issuing a Statement of Claim on the 61st day following an application for mediation. Our understanding is that insurance companies are in the process of moving to strike the Statements of Claim as being contrary to s. 281(2) of the Insurance Act. As of the date of the preparation of this paper, we are not aware of any decisions regarding this attempt to deal with the increasingly unreasonable delays claimants are facing when attempting to have their denials mediated.

However, in situations where there has been at least one mediation already with respect to a file, Kohl at least opens up the argument that further denials can be added to the existing action, and hopefully prevent further unwarranted delays.


Bisnath and State Farm (FSCO A08-000007, Arbitrator Lee, October 27, 2010).

An interesting decision which, in our view, has troubling implications is Bisnath and State Farm. In this determination of a preliminary issue, the arbitrator found that State Farm had failed to comply with sections 35, 37 and 42 of the SABs, however, this failure did not automatically entitle the claimant to continue to receive income replacement benefits until State Farm provided proper notice.

In this case, Ms. Bisnath attended Insurer's Examination in September, 2007. A report was issued shortly thereafter, and the claimant continued to receive benefits. However, in the middle of 2008, the State Farm adjuster contacted the assessment company again and asked for clarification with respect to some elements of the report. A subsequent report was generated in August, 2008, and State Farm terminated benefits by letter dated November 11, 2008, based upon that subsequent report. The arbitrator found that State Farm breached s.37(6) of the SABS and specifically noted that the legislation did not allow an insurer to await a "remaining report" before making a final determination. The arbitrator also found that State Farm was delinquent in a number of ways, including not giving Ms. Bisnath an opportunity to provide relevant information or a new disability certificate, not acting in a timely fashion, and conducting a paper review to determine entitlement to income replacement benefits notwithstanding that the SABS specifically require that an insurer may not determine whether it intends to discontinue IRB's without conducting an in-person examination.

However, when asked to consider the consequences of noncompliance with the SABS, the arbitrator relied upon two Ontario Court of Appeal decisions,11 which he held were binding on him. Notwithstanding that State Farm committed procedural flaws which ultimately led to the issuance of a Notice of Termination, those flaws did not invalidate an otherwise clear and unequivocal Notice of Termination. Nor did they entitle the claimant to continued and ongoing benefits until proper notice was given. In order to receive benefits, the claimant was still obligated to prove her disability at a full hearing.

On the one hand, this case appears to stand for the proposition that there is little recourse in situations such as this where the insurance company fails to meet its obligation pursuant to the legislation. However, this case may provide some benefit to claimants who are unreasonably forced to wait long periods of time for assessments to be completed. It is ironic that insurers are free to disregard their statutory obligations while seeking to use technical breaches of the claimant's, often brought as a result of frustration over delays, in order to delay a determination of disputes on the merits.


Mamaca v. Coseco (2007), CanLii 8890 (Ont. S.C.)

Mamaca is an interesting decision concerning the scope of litigation privilege permissible by an insurance company. This decision deals with a motion to compel a further and better Affidavit of Documents in a case where the plaintiff alleges that the defendant was improperly attempting to claim litigation privilege.

This case stands for the proposition that even after there is a reasonable contemplation of litigation, accident benefits insurer who continues to investigate and assess the plaintiff's claim may be bound to continue to produce its internal claims documents unless it can establish that they were created for the dominant purpose of that litigation as opposed to claims assessment. Further, even in cases where litigation privilege is established, that privilege may be pierced in cases where there is prima facie evidence of bad faith conduct.

In this case, the defendant initially suspected a staged accident and as a result conducted an investigation and consulted with the Insurance Crime Prevention Bureau. The concerns about the accident being staged were not proven, and Coseco adjusted the claim in the usual course. Eventually, a number of matters were in dispute, and the file proceeded to litigation. The insurance company took the position that all documentation was privileged from the point that they had a suspicion that there would be litigation. However, the Master rejected the submission noting:

It is however not sufficient to establish litigation privilege that documents be prepared or actions be taken at a time when litigation is reasonably contemplated. The documents for which litigation privilege is claimed must also have been prepared for the dominant purpose of that contemplated litigation, that is for assistance in preparation for or conduct of that litigation. There is a distinction between the creation of a document for the dominant purpose of investigation and claim determination as opposed to creation of the document for the dominant purpose of anticipated litigation. After determining that there is "a real prospect of litigation reasonably supported by the evidence.., the question then is whether the dominant purpose of the documents in question was to investigate the accident and the claim or to assist the Defendant in the contemplated litigation." It would not be sufficient to establish that the ongoing investigation and resulting documents were for the dual purpose of claims assessment and anticipated litigation. The dominant purpose must be to assist in the anticipated litigation.

In this case, the Master concluded that the defence had led insufficient evidence to establish that any documentation prior to receipt of the Statement of Claim was protected by litigation privilege. While he agreed that there may have been some contemplation of litigation, the fact remained that the file was still being adjusted and there had been no evidence led to convince him that the dominant purpose of the creation of the documentation was for litigation purposes as opposed to adjusting the file. Even in the event that he was incorrect, the Master further found that there was evidence of prima facie bad faith with respect to how the claim had been adjusted and he would have therefore ordered production in any event. He ordered production of just about everything in Schedule "B" of the Affidavit of Documents with the exception of the reserve amount up until delivery of the Statement of Claim.

This case offers a significant opportunity for lawyers and law clerks to challenge whether they have received complete and proper production of the claims file. Given that most adjusters normally continue to make ongoing determinations on a file, even after there have been some denials and perhaps even applications for mediation and arbitration, it is likely that in many cases we are receiving less than appropriate production.

Benjamin v. Belair Insurance (FSCO A07-001740, Arbitrator Ashby, August 26, 2010)

On the other side of the production question, Benjamin holds that insurance companies are not entitled to decoded OHIP summaries. These summaries are often provided to insurance counsel as a matter of course notwithstanding the commonly held belief that insurers ask for them in order to conduct fishing expeditions.

In the case of Ms. Benjamin, her weekly caregiver benefits, housekeeping and home maintenance benefits, and medical and rehabilitation benefits were suspended pursuant to section 33 of the SABS due to her alleged failure to provide information including the OHIP summary. She was terminated even though she had contacted the adjuster by telephone to advise that she was having difficulty completing the forms and that she intended to retain counsel. The arbitrator completely rejected the insurance company's position. He noted that Belair had detailed records from the treating doctor which provided sufficient information to enable it to distinguish Ms. Benjamin's pre- and post-accident impairments. From the doctor, they had reports of various specialists who had conducted pre-accident assessments. They had conducted their own in-home assessment. They had interviewed Ms. Benjamin and found her descriptions of her pre-and post accident impairments were consistent with her physician's records. The arbitrator therefore concluded that none of the documentation that they have requested was reasonably required to determine Ms. Benjamin's entitlement to housekeeping and home maintenance benefits. Further, providing a decoded OHIP summary "is not a reasonable condition precedent to receiving benefits under the Schedule." 12


Jaggernauth and Economical Mutual (FSCO A08-001413, Arbitrator Feldman, December 20, 2010).

Perhaps the biggest battle being fought out in the accident benefits arena is the fight between claimants and insurance companies with respect to what claims should, and should not, be considered catastrophic impairments pursuant to the SABS. Jaggernauth is the latest decision dealing with the contentious issue of whether physical and mental or behavioral impairments (that is impairments under (f) and (g) of the SABS) should be combined in determining whether a claimant meets the test for 55% whole person impairment and should therefore be deemed to be catastrophically impaired.

The leading case here is the Ontario Superior Court decision of Desbiens v. Mordini,13 which has been followed in many cases both before the Courts and at FSCO. Justice Spiegel held that it was appropriate to combine physical and mental or behavioural impairments. The arguments in favour of combination were summarized by Justice Feldman as follows:

1. The language used in Chapter 14 of the Guides concerning this issue is equivocal. If the Guides are ambiguous, they ought to be construed in a large and liberal fashion in favour of the insured person.

2. It is not really an assessment of the "whole person" if you exclude consideration of psychological impairments and it would be unfair to the injured person to ignore significant psychological impairments just because they fall below the level of "marked" or "extreme".

3. The 4th edition of the Guides does not say to ignore mental or behaviour impairments when assessing impairment of the whole person; it simply anticipates using word descriptors for such impairments rather than trying to reduce the mental or behavioural impairments to a numeric (percentage) rating.

4. Behavioural impairments are specifically given a whole person impairment rating in the 4th edition of the Guides when such impairments are neurologically-based. To fail to rate virtually identical behavioural impairments that are psychologically-based would be discriminatory and might well fail to withstand challenge under either the Ontario Human Rights Code or the Canadian Charter of Rights and Freedoms.

5. Previous and subsequent versions of the AMA Guides (for example, the 2nd and 6th editions) do permit the inclusion of a numeric rating for mental or behavioural impairments as part of the estimation of whole person impairment.

6. Many other jurisdictions that use or have used the 4th edition of the AMA Guides have found a way to permit a whole-person impairment assessment that provides a numeric impairment rating that reflects both physical and psychological impairments. (either through regulation, through judicial interpretation of the 4th edition of the Guides or by abandoning the 4th edition and moving on to the 6th edition of the Guides.).

Arguments against including a rating for mental or behavioural impairment as part of the whole person impairment rating are based on the recent Ontario Superior Court decision of Kusnierz v. Economical.14 The arguments of Mr. Justice Lauwers were summarized by the arbitrator as follows:

1. On this issue, the Guides are not ambiguous. They deliberately do not permit the mental and behavioural disorders in Chapter 14 to be assessed in percent terms and combined with the percentage values derived from impairments assessed under the other chapters of the Guides for the purpose of determining whole person impairment.

2. The structure of the Schedule reinforces the bright line demarcation between mental and behavioural impairments on the one hand (which are dealt with under clauses 2(1.1)(g) or 2(1.2)(g) of the Schedule, depending upon the date of the accident) and other types of impairments on the other hand (which are dealt with under clauses 2(1.1)(f) and 2(1.2)(f) of the Schedule).

3. This interpretation is consistent with the legislative purpose of limiting catastrophic designation to rare and exceptional cases including those where, as a result of a motor vehicle accident, a person has suffered a marked or extreme mental or behavioural impairment (clause (g)) or where, based on other types of impairments, the person has sustained impairments that, in accordance with the AMA Guides, 4th edition, results in 55 per cent or more impairment of the whole person (clause (f)).15

However interesting this debate may have been to arbitrator Feldman, he determined that it was not his place to decide the question. The arbitrator noted,

Were I unfettered, I would need to enter into a detailed analysis of these opposing views and, ultimately, I would have to decide one way or the other. I am not unfettered however. I am bound by the FSCO appeal decision of Pilot and Ms. G. In that case, one of the grounds of appeal by the insurer was that the arbitrator allegedly erred in following the Desbiens approach (i.e., arriving at a numeric rating based upon mental or behavioural impairments and adding this number to other WPI ratings to arrive at an overall WPI rating of 55%). The Director's Delegate hearing the appeal upheld the original decision and explicitly approved of the methodology adopted by the hearing arbitrator. Until the appeal level of FSCO or the Ontario Divisional Court, the Court of Appeal or the Supreme Court of Canada says otherwise or the Schedule is amended in such a way as to overrule the interpretation that FSCO has given to this part of the Schedule, the Pilot and Ms. G. decision will continue to govern the approach I must take with respect to this issue.16

Arbitrator Feldman adopted, what is in my view the correct approach, and held that he was obliged to follow existing appellate authority. It is worth noting, however, that the question of combining physical and mental/behavioural impairment is about to be considered by a higher authority. The recent FSCO decision of Augello is currently scheduled to be argued before the Ontario Divisional Court on November 23, 2011. More importantly, Kusnierz is scheduled to be argued before the Ontario Court of Appeal on November 16, 2011.

Given recent changes to the Insurance Act by the Liberal Government, it has never been more important to ensure that seriously injured clients are deemed to be catastrophically impaired where appropriate. Both sides debating this issue agree that close to 80% of motor vehicle accident victims who are found to be catastrophically impaired are determined to be so using the 55% whole person impairment test and combining physical and mental/behavioural impairments. If this system were to be modified either through judicial determination or regulatory change by government, many individuals who desperately require enhanced medical and rehabilitation benefits would be forced to cope with a reduced accident benefits system which provides them, at best, with up to $50,000 coverage. These individuals would be forced back into an already overtaxed public system.

Individuals suffering from such serious injuries will obviously be amongst the largest files that any of us have in our cabinet. Lawyers and law clerks seeking to represent these accident victims to the best of our abilities should be aware of the arguments raised by arbitrator Feldman in Jaggernauth and it should be keenly interested in both how the appellate courts resolve these questions in November and how whichever government is elected in Ontario in October responds to pressure to modify the test for catastrophic impairment.


As I indicated initially, given the tremendous complexity associated with arbitrating SABS disputes at FSCO, it is impossible to identify which cases you will need to consider to successfully represent your client at your next arbitration.

However, the cases canvassed in this paper deal with creative arguments and analyses of difficult questions that we are likely to encounter on a continuing basis. The underlying principles of successful counsel are fearlessness and creativity. Many years ago, my mentor indicated to me that law was a tool to advance the cause of justice. For every wrong there should be a remedy. As accident victims in Ontario have more and more of their entitlements stripped from them by legislative amendment, it becomes more difficult to continue to advance that principle. However, in my view, there continues to be room for creative counsel to advance fearless and tenacious argument on behalf of our clients.


1 I would like to acknowledge the considerable assistance I received from my colleague Nicole Vaillancourt and from my Senior Law Clerk, Lee-Ann Fournier, with respect to the research and drafting of this paper.

2 Page 2.

3 Page 8.

4 Page 17

5 This dispute was appealed to the Directors Delegate, the Ontario Divisional Court, and finally to the Ontario Court of Appeal where leave to appeal was denied.

6 Page 23.

7 [2005] S.C.C. 8.

8 Supra, para. 40.

9 Supra, para. 26.

10 Supra, para. 31.

11 Stanges v. Allstate [2010] ONCA 457 and Turner v. State Farm and FSCO [2005], O.J. No. 351.

12 P. 14.

13 (2004) CanLII 41666 (Ont. S.C.)

14 [2010] O.J. No. 4462 (Ont. S.C.)

15 P. 51.

16 P. 52.