It is fair to assume that the personal health information provided to medical professionals is kept confidential. Medical professionals and institutions set up policies and procedures to ensure that...
It is fair to assume that the personal health information provided to medical professionals is kept confidential. Medical professionals and institutions set up policies and procedures to ensure that the information is collected, stored, and used in an appropriate manner and in compliance with privacy regulations. Recently, an individual took The Queensway Carleton Hospital to Court alleging that their procedure for surgery bookings caused her significant damages.
The facts of this case are straightforward. The Plaintiff was told that she required surgery. While waiting for a date for the surgery, she received a paper surgical booking package that she had to complete. The Plaintiff testified that she dropped off the completed booking package in the Hospital’s drop box. However, about a week later, it was returned to her by Canada Post. Despite the Plaintiff’s complaints, no one from the Hospital accepted responsibility for the misplaced booking records. The Information and Privacy Commissioner of Ontario was unable to make a determination regarding who was responsible for the privacy breach. The Plaintiff commenced a claim for damages for intrusion upon seclusion, breach of confidence, and public disclosure of embarrassing facts. She also sought punitive damages.
The Court found, on a balance of probabilities, that the Hospital received the records and they were misplaced. The Plaintiff relied on three causes of action to support her claim – intrusion upon seclusion; breach of confidence; and, public disclosure of embarrassing facts.
In dealing with intrusion upon seclusion, the Court found that a single act of inadvertence, assuming that was what happened, was not sufficient to prove recklessness. In fact, the Court found that the Hospital’s protocol for handling booking records did not create an obvious or serious risk. The Court found that the system worked quite well despite this one instance. There was not a deliberate and significant invasion of personal privacy as required in order to satisfy the threshold for damages.
Second, to establish the tort of breach of confidence, the Plaintiff had to show that the Hospital made unauthorized use of her booking record and misused it to her detriment. Once again, the Court found that this claim was not satisfied, as there was insufficient evidence that the Hospital misused the booking record.
Third, the Court found that the tort of public disclosure of embarrassing facts was not established. There was no evidence that the Hospital “published” the booking record or that the records were deliberately made publicly available. The evidence showed that the record could only be seen by postal workers in Montreal to determine where the record should be returned to. This was not sufficient to establish damages.
The Court considered the provisions of the Personal Health Information Protection Act. Section 71(1)(b) provides a statutory immunity for health information custodians where there has been an attempt at good faith compliance with the Act. The Court found that the evidence did not establish that the Hospital’s use of surgical booking packages was unreasonable. Additionally, there was no evidence that there had been any issues with other booking records, either before or after this incident.
Finally, the Court considered whether the Claimant was entitled to damages based on her “humiliation, anxiety and distress” arising from the receipt of the envelope for Canada Post which contained the booking records. The Plaintiff did not establish, on a balance of probabilities, that she suffered anxiety or psychological upset that rose to the level of requiring compensation. Similarly, there was no high-handed, arrogant or contumelious behaviour on the Hospital’s part that would warrant a finding of punitive damages.
Hospitals are particularly vulnerable to privacy claims – they are required to gather a significant amount of personal health information in a very short period, store and protect that information, and use it in an appropriate way. Healthcare organizations must implement robust safeguards and procedures to ensure their patients’ information is properly collected, used, and disclosed. Taking these reasonable steps will lower an organization’s financial and litigation risk. A good place to start is creating privacy policies or hiring an experienced counsel to review existing policies and their implementation.
The Ontario Court of Appeal has held that business interruption claims are not subject to a rolling limitation period.
In Marvelous Mario's Inc. v. St. Paul Fire, the appellant insureds commenced two actions claiming insurance coverage under a commercial insurance policy issued by the insurer respondent. That policy covered “direct loss from any Peril”, including business interruption loss and loss of property due to theft or wrongful handling.
The trial judge dismissed the First Action in its entirety, finding those claims were not covered under the policy. In the Second Action, the trial judge dismissed the property claim as time-barred, but allowed the business interruption claim to proceed in part. She held that business interruption claims were subject to a “rolling limitation period” and that some of those claims were preserved. She reasoned:
 For the reasons set out above, the second claim, being the claim for business interruption losses, commenced latest on the day the sale to Amore Sweets closed. It was at that time that the plaintiffs knew or had the means of acquiring the knowledge that they had a claim for business interruption losses arising out of the loss of their property.
 However, a claim for business interruption losses is, by its nature, an ongoing claim. As the Saskatchewan Court of Appeal stated in Treeland Motor Inn Ltd. v. Western Assurance Co., 1985 CarswellSask 165 (Sask C.A.) at para. 4, the alleged interruption of the plaintiffs’ business might have commenced with a particular event (in that case, a fire; in this case, the closing of the sale to Amore Sweets) “but continued to accrue from day to day thereafter, and cannot therefore be said to have “occurred” on the day of the event which triggered it”.
 In effect, the plaintiffs’ business interruption claim is subject to a rolling limitation period. A new claim accrues each day for the business losses sustained that day. I thus conclude that the plaintiffs’ claim for business interruption (to the extent it can be proven in the next phase of this trial) beginning one year before the commencement of the second action is not out of time - that is, the business interruption losses suffered commencing November 16, 2001 are not barred by reason of the contractual limitation period. To the extent the plaintiffs seek recovery for business interruption losses they suffered before November 16, 2001, those claims were not advanced within the contractual limitation period and are therefore barred. [emphasis added]
The insureds appealed on the other issues and the insurer cross-appealed on the rolling limitation issue.
The Court of Appeal dismissed the appeals but allowed the cross-appeal. The Court acknowledged that there were no cases directly on point on whether business interruption claims were subject to a rolling limitation period. Accordingly, the Court considered “first principles”:
The jurisprudence suggests that a rolling limitation period may apply in a breach-of-contract case in circumstances where the defendant has a recurring contractual obligation. The question is not whether the plaintiff is continuing to suffer a loss or damage, but whether the defendant has engaged in another breach of contract beyond the original breach by failing to comply with an ongoing obligation. In cases where there have been multiple breaches of ongoing obligations, it is equitable to impose a rolling limitation period. [emphasis added]
The Court found:
[T]he policy covered business interruption losses and the respondent was obliged to pay those losses in their totality, subject to any limits in the policy. The fact that there was a 24-month cap on the business interruption losses does not convert the respondent’s obligation to indemnify into a recurring contractual obligation. Therefore, this was not a proper case for the application of a rolling limitation period.
It followed that the limitation period for the business interruption claims started on the day the insureds knew that they had suffered a loss or damage. The fact that the extent of damages may not have been known with precision did not stop the commencement of the limitation period.
This is the first Ontario decision that has considered whether business interruption claims are subject to a rolling limitation period.
Facebook has made history today, but not in a good way. The US Federal Trade Commission (“FTC”) announced this morning that Facebook will pay a record-breaking $5 billion penalty, submit to new restrictions, and modify the company’s corporate structure to settle the charges that the company violated a 2012 FTC order. Not only is this the largest penalty in FTC history but it is also almost 20 times greater than the largest privacy or data security penalty ever imposed worldwide.
In making this determination, the FTC Chairman, Joe Simons, explained “[d]espite repeated promises to its billions of users worldwide that they could control how their personal information is shared, Facebook undermined consumers’ choices.” The underlying 2012 order included a prohibition that Facebook make misrepresentations about the privacy or security of consumers’ personal information or the extent to which this information was shared to third parties. It also required Facebook to maintain a reasonable privacy program that safeguarded the privacy and confidentiality of user information.
The FTC’s new 20 year settlement order will require Facebook to establish an independent privacy committee that will be appointed by an independent nominating committee. In addition, Facebook will be required to designate compliance officers who have to submit FTC quarterly certifications that the company is in compliance with the privacy program mandated by the FTC order. An annual certification must also be completed. Not only will the certifications need to be made by compliance officers, but they will also have to be endorsed by Facebook’s CEO, Mark Zuckerberg. Any false certification will subject the parties to individual civil and criminal penalties.
The order also strengthens external oversight of Facebook and provides that an independent third party assessor will evaluate the effectiveness of the privacy program and identify any gaps. The assessor will not simply rely on the assertions made by Facebook’s management. The third party assessor’s biennial assessments of the company’s privacy program must be based on the assessor’s independent fact gathering, sampling and testing. The third party assessor must also report to the privacy committee on a quarterly basis.
The privacy program covers not only Facebook but also WhatsApp and Instagram. Any new or modified product, service or practice must undergo a privacy review before it is launched. Any decisions about privacy in these circumstances must be documented.
There are also positive obligations in the event of a data breach. Specifically, the order requires Facebook to document incidents where the data of 500 or more users have been compromised. The company must also document what efforts it made to address the incident. This information must be sent to the FTC and the third party assessor within 30 days.
Other requirements of the Order include:
Facebook must exercise greater oversight over third-party apps, including by terminating app developers that fail to certify that they are in compliance with Facebook’s platform policies or fail to justify their need for specific user data;
Facebook is prohibited from using telephone numbers obtained to enable a security feature (e.g., two-factor authentication) for advertising;
Facebook must provide clear and conspicuous notice of its use of facial recognition technology, and obtain affirmative express user consent prior to any use that materially exceeds its prior disclosures to users;
Facebook must establish, implement, and maintain a comprehensive data security program;
Facebook must encrypt user passwords and regularly scan to detect whether any passwords are stored in plaintext; and,
Facebook is prohibited from asking for email passwords to other services when consumers sign up for its services.
Most notably, Facebook agreed with the FTC settlement. Facebook will be actively and voluntarily engaged in revising their privacy policies and procedures. This stands in stark contrast to their behavior following the Office of the Privacy Commissioner of Canada’s findings that Facebook must alter their approach to privacy, a mere three months ago. Although the FTC settlement is borne out of the US, the effect will be felt worldwide. It will be interesting to see the fallout this decision will have on other organizations, especially in light of numerous other organizations that are facing a similar, yet much less financially burdensome, fine (i.e. British Airways).
Laura has a diverse practice where she focuses on accident benefits, bodily injury claims, product liability, cyber liability, privacy law and drone liability. Read more ...
Although privacy issues have been taking over the headlines in recent months, healthcare organizations have been subject to stringent privacy regulations for a number of years. Organizations providing healthcare services...
Although privacy issues have been taking over the headlines in recent months, healthcare organizations have been subject to stringent privacy regulations for a number of years. Organizations providing healthcare services are particularly susceptible to issues of unauthorized access and public disclosure of personal health information (“PHI”). More specifically, professionals working in healthcare are required to maintain a high level of confidentiality with respect to their patient’s PHI.
Early this year, Ms. Hamilton, a registered practical nurse (RPN), was involved in a professional disciplines hearing with the College of Nurses of Ontario. The allegations made by the College revolved around comments Ms. Hamilton made with respect to an elderly client at the facility she worked at who suffered from Alzheimer’s disease and dementia. The allegations stemmed from an incident that occurred in December 2016.
On December 2, 2016, the client’s child (Child A) posted a publicly available message on Facebook expressing concerns about the client’s Power of Attorney (“POA”), who was also the client’s child (Child B). The same post also expressed concern about the care that the client was receiving at the facility. Numerous family members commented on this post.
The following day, on December 3, Ms. Hamilton published several comments as direct responses to Child A’s Facebook post. The comments were public and disclosed the client’s PHI including her name, identifying her as a resident at the facility, identifying herself as an RPN and employee of the facility, referring to the client’s POA, and referring to her experiences dealing with the client’s medical conditions.
More specifically, Ms. Hamilton posted:
I’m sorry but there are 2 sides to every story. I happen to work at this facility and there is no way [the Client] or any of our residents are treated as these people speak of. How dare you imply that she is neglected in any way. Our residents receive more care hours than the provincial average in Ontario long term care home. Our staff are the hardest working I’ve seen in any LTC facility I know. I’m disgusted that you would even post this filth and lies on social media. Shame on you!
We don’t have a problem with the POA [Child B]. This is your personal business which you have chosen to hang out to dry on Facebook. I will gladly call you a liar because I spend more time with your mother than you do.
When Child A’s children (the client’s grandchildren) made posts defending Child A, Ms. Hamilton was noted to have made inappropriate and unprofessional comments such as one of the grandchildren having a “bad mouth” and that the client “would be disappointed” in the grandchild for their language. Ms. Hamilton also implied that the grandchild was uneducated regarding her medical condition and had no understanding of their grandmother’s health. She also told the grandchild to “shut up” or “grow up”.
Ms. Hamilton also posted “Oh [grandchild A] I look forward to meeting you the next time you visit your grandmother – I see we have much to discuss”, which the grandchild interpreted to be a threat.
The comments were deleted, but the family members captured them.
In the course of the disciplinary hearing, Ms. Hamilton admitted that it was inappropriate to engage in such dialogue with the client’s family, especially given such a public forum like Facebook. She further acknowledged that she breached the client’s privacy and disclosed her PHI without her consent or authorization.
Professional Standard and the Allegations
In 2004, the College issued a Practice Standard titled Confidentiality and Privacy – Personal Health Information, which was updated in 2009. The standards issued by the College represent the standard of care that is expected of all member of the organization. This particular standard largely reflected the personal health information protections codified in the Personal Health Information Protection Act (“PHIPA”). Some of the standards noted in the Practice Standard included the following provisions:
Maintaining confidentiality of clients’ personal health information with members of the healthcare team, who are also required to maintain confidentiality, including information that is documented or stored electronically…
Not discussing client information with colleagues or the client in public places such as elevators, cafeterias and hallways…
In the Notice of Hearing, dated December 7, 2018, the College made allegations against Ms. Hamilton that she: (1) engaged in an act of professional misconduct; (2) gave information about a patient to a person other than the patient or her authorized representative without the consent of the patient and without being required or allowed to do so by law; and, (3) that she engaged in conduct that would reasonably be regarded by members of the profession as disgraceful, dishonourable, or unprofessional.
Decision and Reasoning
The committee noted that the College bore the onus of proving the allegations on a balance of probabilities based upon clear, cogent, and convincing evidence. The College found that Ms. Hamilton committed the acts of professional misconduct.
The College found that Ms. Hamilton’s conduct showed disregard for private information of clients and inappropriate use of social media. The College further noted that Ms. Hamilton’s conduct was unprofessional as it fell below the standards of nursing with respect to confidentiality and trust. In short, she showed a persistent disregard for her professional obligations. The College further noted that disclosing PHI and breaching the client’s privacy in an open public forum was unacceptable and fell well below the standards of the profession.
The College ordered several penalties including a suspension for three months and further privacy training with a regulatory expert. Training was to focus on a review of professional standards, confidentiality, and privacy regarding PHI. The College found that these penalties achieved the purpose of specific deterrence, general deterrence, and rehabilitation and remediation.
Lessons from this Case
Organizations providing healthcare services to patient are required, by law, to maintain their patient’s PHI confidential. This includes proper cyber security safeguards, physical security safeguards, and policies aimed at ensuring staff are aware of their professional obligations. Organizations should develop policies that can be monitored and, more importantly, enforced on a regular basis. Ongoing staff training aimed at ensuring that staff and healthcare professionals are aware of their legal obligations to their patients are critical in meeting the appropriate standard of care.
This case is a perfect example of the impact social media has on an industry that traditionally does not have any connection to social media. Organizations should consider implementing social media policies to outline the obligations and expectations of their staff, which should be continually reinforced in the workplace. Failure to do so may result in disclosure of patients’ PHI and expose the professional and the organization to regulatory penalties and civil claims.
Stas practices in insurance-related litigation. He has a broad range of experience including tort claims, accident benefits, subrogation, priority and loss transfer disputes, WSIB matters, and fraudulent claims. Read more...
The Ontario Court of Appeal has upheld Justice Ramsay’s determination that the LAT has exclusive jurisdiction at first instance over all claims in respect of accident benefits, including extra contractual claims such as bad faith conduct.
By way of background, Ms. Stegenga started an action in Superior Court against her accident benefit insurer, Economical, claiming aggravated, exemplary and punitive damages for breach of contract, negligence, misrepresentation, infliction of mental distress and bad faith. Economical brought a motion to strike the claim pursuant to Rule 21 of the Rules of Civil Procedure, on the basis that the LAT had exclusive jurisdiction at first instance, not the court.
Economical took the position that s. 280 of the Insurance Act, which came into effect April 1, 2016, was clear and unambiguous in taking jurisdiction from the courts and giving it to the LAT. They argued that the legislature had made a policy choice to grant exclusive jurisdiction to the LAT and limit the remedies the LAT could grant.
The Plaintiff argued that the language of s. 280 of the Insurance Actwas not clear and unambiguous enough to take away the Superior Court’s inherent jurisdiction over certain claims, and in particular claims for bad faith. She also argued that the fact that the LAT cannot award aggravated, exemplary or punitive damages supported this conclusion.
Economical was successful and the Plaintiff’s claim was struck on the motion, with Justice Ramsay finding:
There is no reason to doubt that the legislature, in enacting the present s. 280 of the Insurance Act, intended to deprive a claimant of resort to the court at first instance whenever the claim is based on a denial of accident benefits, no matter how the denial is characterized in legal terms.
The Plaintiff appealed to the Court of Appeal.
Once again the Plaintiff, now the Appellant, argued that her claim was for bad faith handling of her accident benefit claim and not a claim “in respect of an insured person’s entitlement to statutory accident benefits or in respect of the amount of statutory accident benefits to which an insured person is entitled”. As a result, she took the position that her claim did not fall within the ambit of s. 280 of the Insurance Act, which provides jurisdiction to the LAT and prohibits access to court other than on appeal or judicial review.
To understand the decision it is helpful to review the language of s. 280 of the Insurance Act, which falls under the title“Dispute Resolution- Statutory Accident Benefits”:
Resolution of disputes
280 (1) This section applies with respect to the resolution of disputes in respect of an insured person’s entitlement to statutory accident benefits or in respect of the amount of statutory accident benefits to which an insured person is entitled. 2014, c. 9, Sched. 3, s. 14.
Application to Tribunal
(2) The insured person or the insurer may apply to the Licence Appeal Tribunal to resolve a dispute described in subsection (1). 2014, c. 9, Sched. 3, s. 14.
Limit on court proceedings
(3) No person may bring a proceeding in any court with respect to a dispute described in subsection (1), other than an appeal from a decision of the Licence Appeal Tribunal or an application for judicial review. 2014, c. 9, Sched. 3, s. 14.
Resolution in accordance with Schedule
(4) The dispute shall be resolved in accordance with the Statutory Accident Benefits Schedule. 2014, c. 9, Sched. 3, s. 14.
Orders, powers and duties
(5) The regulations may provide for and govern the orders and interim orders that the Licence Appeal Tribunal may make and may provide for and govern the powers and duties that the Licence Appeal Tribunal shall have for the purposes of conducting the proceeding. 2014, c. 9, Sched. 3, s. 14.
Orders for costs, other amounts
(6) Without limiting what else the regulations may provide for and govern, the regulations may provide for and govern the following:
1. Orders, including interim orders, to pay costs, including orders requiring a person representing a party to pay costs personally.
2. Orders, including interim orders, to pay amounts even if those amounts are not costs or amounts to which a party is entitled under the Statutory Accident Benefits Schedule. 2014, c. 9, Sched. 3, s. 14.
The Court of Appeal dismissed the appeal and upheld the motion judge’s decision, finding that the legislative purpose, use of expansive language and the jurisdiction given to the LAT in the Insurance Act, Statutory Accident Benefit Scheduleand in Regulation 664all supported a broad interpretation of the LATs jurisdiction, therefore prohibiting access to the courts. J. Zarnett,, writing for the Court of Appeal, stated:
If the dispute relates to the insurers compliance with obligations to the insured concerning SABS, the timeliness of performance of those obligations and/or the manner in which they were administered, it falls within the broad reach of the dispute resolution provisions, and within the jurisdiction of the LAT. The prohibition on court proceedings will apply.
Having found that the dispute resolution provisions are broad enough to give the LAT jurisdiction, the Court of Appeal considered the Appellant’s argument that because bad faith is a standalone cause of action it could not be captured by the language of s. 280 “in respect of entitlement or amount of benefits”. The Court concluded that “it does not follow that this automatically takes the subject matter of the claim, even when characterized as one for bad faith, outside of s. 280”, noting that it is the nature and subject matter of the dispute that are determinative, not the legal characterization.
Ultimately, the Court held that the facts giving rise to the disputes between the parties allrelated to the Appellant’s entitlement to benefits or the amount of entitlement. These were all disputes captured by the broad language of s. 280(1) of the Insurance Actand the LAT’s jurisdiction under s. 280(2), and therefore fall within the prohibition on court proceedings in s. 280(3).
Lisa has an insurance law practice that has focused exclusively on insurance defence for 15 years. Her practice focuses on complex insurance-related litigation, including accident benefits and bodily injury. Read more ...
Adjudicator Letourneau has held that the LAT does not have jurisdiction to award interim benefits in 18-007113 v Allstate Insurance-007113/AABS, 2019 CanLII 63379 (ON LAT). This follows on the decision of his colleague Adjudicator Hines, in 17-007152 v State Farm Insurance, 2018 CanLII 141015 (ON LAT), who similarly found that LAT lacked the jurisdiction to award interim benefits.
There is now what appears to be a growing body of LAT caselaw confirming that LAT will not award interim benefits.
In the most recent case, there was a lag of over year between the date of the application for accident benefits and the in-person hearing on the issue of attendant care. In that period, the applicant claimed to have incurred more than $18,000 in attendant care. The applicant argued that this financial burden created a risk that he would not be able to receive adequate care before the LAT hearing on the issue of attendant care benefits. The Applicant wanted an order awarding him attendant care benefits until such time as the issue was decided before the LAT.
FSCO made interim awards of benefits all the time, the applicant complained, why can’t the LAT do the same? After all, the SPPA (Statutory Powers Procedure Act) allows for interim orders and the LAT Act says the LAT tribunal has all the powers necessary to carry out its duties. Shouldn’t that be enough to empower the LAT to grant interim orders for benefits?
In response, the LAT adjudicator noted that the Tribunal’s powers to make orders with a view to resolving the applicant’s dispute are limited to what is provided for in the Insurance Act and the SABS. Section 280(4) of the Insurance Act states specifically that, “the dispute shall be resolved in accordance with the Statutory Accident Benefits Schedule”.
The LAT Adjudicator further pointed out that there have been specific changes to the Insurance Act in recent years that clearly show the legislator’s intention to restrain the Tribunal’s jurisdiction. Section 280(6) of the Insurance Act was amended to say that “regulations [under the insurance act] may provide for interim orders to pay amounts to which a party is entitled under the SABS”. Interim benefits are not amounts that a party is entitled to under the SABS, the adjudicator concluded. This omission amounts to be a clear intention to bar the LAT tribunal from reading in power to grant interim orders for benefits.
In its past two decisions regarding orders for interim benefits, at least two LAT adjudicators are harmonizing the edict in the old standby karaoke favorite that you can’t hurry love.
In the decision of English v. Manulife Financial Corporation, the Ontario Court of Appeal has weighed in on when a change in circumstances may allow an employee to revoke a seemingly clear resignation.
For the purposes of this blog, the facts in English are fairly straight forward. Ms. English was a senior customer relationship manager with Standard Life for 9 years. Standard Life was acquired by Manulife Financial Corporation. As part of the acquisition, Manulife planned to implement a new computer system. Ms. English, being in her 60s decided to retire early as she did not want to re-train on the new system. She provided a letter to her supervisor to that effect on September 22, 2016. Her last day of work was to be December 31, 2016. There was some discussion with her supervisor about Ms. English being able to change her mind.
Several weeks later, and while Ms. English was still working, Manulife announced they would not be implementing the new system. Ms. English attempted to take back her resignation. Her immediate supervisor did not immediately raise this as an issue, but approximately one month later Manulife advised Ms. English that they would not recognize the rescission of her resignation.
On a motion for summary judgment, the motion judge found that the resignation was clear and unequivocal, and once accepted by the employer, she could not take it back. In the event he was wrong, the judge found that 12 months would be an appropriate notice period taking into account the usual factors.
The Court of Appeal disagreed. The general rule in employment law is that an employee’s resignation must be clear and unequivocal. The Court found that Ms. English’s resignation was not equivocal given the circumstances in which she presented it to Manulife. The evidence supported that Ms. English was not entirely ready to retire and the impetus was the computer conversion. She was also told she could change her mind. Importantly, when the conversion was cancelled, she immediately spoke to her supervisor who did not indicate this would be a problem.
The Court found that the resignation was equivocal and condoned by Manulife through the actions of her supervisor. Ultimately, the Court agreed with the determination of 12 months.
The facts matter, folks. Proving a clear and unequivocal resignation is always a difficult hurdle for employers. In this case, there were several facts that pointed towards a sympathetic employee who likely felt forced out of her job early by advancing technology. Not least of which was the employer’s representations that she could “take it back” and its failure to raise her revocation as an issue immediately.
Employers who have accepted an employees resignation need to stick to their principles if they want to rely on that resignation. In the present case, the failure of the employee’s supervisor to immediately raise a concern was found to condone the rescinding of the resignation. This case is a good reminder that instructions and position need to be communicated both up and down the chain of command in a consistently applied fashion.
A recent decision by the Alberta Privacy Commissioner has confirmed that in some cases, an organization’s requirement for independent contractors to install GPS tracking devices on their vehicles will not...
A recent decision by the Alberta Privacy Commissioner has confirmed that in some cases, an organization’s requirement for independent contractors to install GPS tracking devices on their vehicles will not violate applicable privacy legislation but does the data collected may be considered “personal information”.
Order P2019-04 involved a complaint by independent contractors retained by NAL Resources Management LTD. NAL required the contractors to install GPS devices on their vehicles, with a default setting of “on”. The devices were intended to “promote good driving behavior” and allow NAL to locate the contractor in the event of a “Safety Line call out.” The independent contractors filed a complaint alleging the data was “personal information” and therefore NAL required their consent for its use, collection, or disclosure.
This decision investigated the difference between the definition of “employee” in Alberta’s Personal Information Protection Act, and whether the information collected by the GPS constituted “personal employee information” versus “personal information”. If information was considered “personal information”, the contractor’s consent would be required for the use, collection, and disclosure of said information. However, if the information was considered “personal employee information” no consent was required.
“Personal information” was defined as “information about an identifiable individual”. The act generally requires the consent of an individual for the use, collection, or disclosure of “personal information”. In contrast, “personal employee information” was defined by the act as personal information reasonably required by the organization for the purposes of establishing, managing, or terminating an employment or volunteer-work relationship, or managing a post-employment or post-volunteer-work relationship between the organization and the individual. This type of information did not require the consent of the employees.
In the present case, the commissioner found that the GPS data had a personal dimension given that the data collected would enable NAL to determine the physical location of the contractor, as an individual, which could be expected to have personal consequences for the contractors as individuals. Accordingly, the GPS tracking data was “personal information.”
However, the commissioner determined that in the present circumstances the GPS data was not “personal information” but rather “personal employee information” because the independent contractors were considered “employees” under the act.
The commissioner noted that s. 1(1)(e) of PIPA goes well beyond the common law definition of employee to include directors, office-holders, volunteers, students, contractors or agents of an organization. Consequently, information about a contractor reasonably required by an organization to manage a contractual relationship would be “personal employee information” under PIPA, regardless of the fact that at common law, independent contractors are not considered employees.
The Take Away
This decision is interesting for employers and privacy professionals alike. It is a solid reminder that words such as “employee” can carry different meanings across different legislation. It is also a reminder that employers need to seriously consider whether any productivity/data tracking services are collecting “personal information” under their province’s specific privacy legislation. While this was a decision of Alberta’s privacy commissioner, the definition of “personal information” is mirrored in the federal privacy legislation PIPEDA that applies to provinces such as Ontario, as they do not have substantially similar legislation.
In March, 2015, in recognition of the growing concern about cyber bullying and more particularly, the increasing number of incidents of “revenge porn”, the federal government made it a criminal offence to share intimate images. The recent case of R. v. JS provided a thorough review of the relevant case law dealing with this offence.
The charges stemmed from the offender’s decision to post a nude photograph of his wife in a men’s chat group at his church. The photo was posted after the couple separated. At issue was the appropriate sentence for the offence following the accused’s guilty plea.
The Court noted although the criminal charge was relatively new, the case law had begun to proliferate. In considering the nature of the offence, the Court cited the decision of R. v. AC (2017 ONCJ 317), which held:
The provision protects privacy. At its core, privacy is about a person’s ability to control access to something, whether it is private information or a private image. As in this case, someone like [the victim] may agree to have private photographs or videos taken that will not be seen by anyone apart from a romantic partner. Where someone shares an intimate image without consent, he violates the depicted person’s privacy because he has gone beyond that limited, consensual use. The more people to whom the image is exposed, the greater the invasion of privacy and the greater the harm caused to the victim.
The Court noted that the majority of the sentences for these types of cases involved a period of incarceration. However, the ultimate goal for the sentencing for this charge was denunciation and deterrence of this type of behaviour.
The Court found that this case was not on the low end of the spectrum as the intimate image was accessible to a chat group; the accused did not voluntarily remove the image; and, the victim was identifiable to viewers. The actions were designed to humiliate and degrade the victim. The most significant mitigating factor was the limited number of people in the group so it was not disseminated more widely. Although the victim had not provided a statement, the Court inferred substantial harm to the victim as a result of the actions. The Court found that an appropriate sentence was a two year suspended sentence.
Privacy rights are strengthening with every privacy case being heard in Canada, and the definition of “appropriate use” continues to be refined on a regular basis. The modern reality is that individuals will use technology for personal, private, and sometimes intimate purposes. The Court’s interpretation and application of privacy principles must continue to clarify the appropriate use of the private information and data. This case, the line is quite clear.
Can the insurer, who is required to waive reliance on the priority rules and pay accident benefits, still pursue indemnification from the priority insurer? A Superior Court judge says “yes”.
In Continental Casualty Company v. Chubb, the claimant was catastrophically injured when he was struck by a motor vehicle as a pedestrian. He ended up applying to Chubb for accident benefits. Chubb insured his personal vehicles and he was a named insured on that policy.
At the time of the accident, the claimant was the owner, President, and CEO of a forest products company. Its vehicles were insured with Continental (CNA). The CNA policy included optional coverage that provided up to an additional $1 million for medical and rehabilitation expenses, thus increasing the total available coverage to $2 million.
The claimant eventually submitted an OCF-1 to Chubb, who initiated a priority dispute against CNA. In a decision, dated April 4, 2018, Arbitrator Kenneth Bialkowski concluded that CNA was the priority insurer, and thus responsible to pay the claimant’s benefits. The arbitrator found that the claimant was a deemed named insured under the CNA policy because his company made its vehicles available for his regular use at the time of the accident. Accordingly, the arbitrator found that the claimant had coverage equally under both policies and that he would have chosen to claim from CNA to take advantage of the optional benefits.
On appeal, Stinson J disagreed with the arbitrator.
Before delving into the decision, some background information is necessary on the interplay between optional benefits and priority disputes.
Why are We Interested in Optional Benefits and Priority Disputes?
The SABS contains various “standard” accident benefits that are part of every motor vehicle liability policy in Ontario. However, insureds can purchase “optional benefits” that enhance the standard coverages.
Meanwhile, section 268 (2) of Ontario’s Insurance Act contains a priority pecking order:
An accident victim first has recourse against any policy that insures her as an insured (named insured, spouse, dependent, listed driver).
If she is not insured under such policy, she next has recourse against the insurer of the vehicle she was in (occupant) or insurer of the vehicle that struck her (non-occupant).
If there is no recourse under #2 (i.e., in the case of an uninsured or unidentified vehicle), she next has recourse against the insurer of any other vehicle involved in the accident.
If there is still no insurer under #3, she finally has recourse against the Motor Vehicle Accident Claims Fund.
Sections 268 (4) – (5.2) of the Act contemplate situations where a claimant might have recourse against more than one insurer for accident benefits under the priority rules. For example, Tim could be a listed driver on one policy and a dependant of a named insured (Fiona) on another. Section 268 (5) would break the tie and would make Fiona’s insurer the priority insurer (named insured, spouse, or dependant trumps listed driver). Likewise, suppose Krista and Mike each have their own vehicles and insurance with different policies. If they were involved in an accident while occupants of Krista’s vehicle, Krista’s insurer would have priority over Mike’s insurer because they were occupants of her vehicle.
But what if Tim and Mike had optional benefits on their respective policies? The priority rules would preclude them (and Krista) from receiving the optional benefits that they had purchased.
To solve this problem, the Superintendent of Insurance approved the OPCF 47 Endorsement called Agreement Not To Rely On Sabs Priority Of Payment Rules. As the endorsement’s title states, the OPCF 47 requires an insurer who has sold a policy with applicable optional benefits to waive the priority rules and pay the claim for standard and optional benefits purchased.
In sum, the OPCF 47 endorsement entitles claimants to receive the optional benefits they have purchased from their insurer, despite any priority rules mandating that they have recourse elsewhere. The insurer that has sold the optional benefits must pay accident benefits (standard and optional) to its insured(s) and cannot rely on the priority rules to defeat coverage.
Does this mean that the actual priority insurer gets a free pass?
Why do We Care about Priority if the OPCF 47 Says we Must Pay?
Having found that the claimant was not a deemed named insured of CNA (more on this below), the appeal judge found that Chubb had priority over CNA for accident benefits because, at best, the claimant was only a listed driver on CNA's policy (recall that named insured trumps listed driver). However, as a listed driver on the CNA policy, the OPCF 47 applied to the claimant and CNA, meaning CNA was precluded from relying on the priority rules to deny the claim.
However, the judge referred to another arbitrator’s decision in Echelon v. Co-operators (2015), wherein the arbitrator found, among other things:
It seems to me that the insurer paying a claim in conjunction with an OPCF-47 endorsement would have the right to reimbursement from a higher ranking insurer, at least to the extent of the mandatory benefits … . Simply put, nothing whatsoever has been done to limit or restrict the optional benefit insurer from pursuing the reimbursement aspect under the priority rules as they exist.
The appeal judge agreed with and adopted the arbitrator’s reasons from Echelon. Accordingly, CNA was required to handle and pay standard/optional benefits for this claim. However, CNA was entitled to reimbursement from Chubb for the cost of all mandatory SABS benefits paid by CNA to the claimant, and reimbursement from Chubb for all expenses associated with administering the mandatory SABS benefits.
It is unknown at this time whether Chubb will be seeking leave to appeal the decision.
What Does this Mean???
The law in Ontario, as it relates to optional benefits and priority is, as follows:
Where a claimant has applicable optional benefits on their policy, they have recourse against their insurer despite the priority rules. The insurer must accept the claim and pay the claimant mandatory and optional benefits, in accordance with the terms, limits, etc. in the SABS.
However, the insurer responsible for paying optional benefits can now seek reimbursement from the priority insurer for any mandatory benefits it has paid on the claim, plus apparently any administration expenses (which could mean surveillance, adjusting fees, etc.).
What Should We Do?
If you are the insurer that receives an application for benefits under a policy with applicable optional benefits (“Optional Benefits Insurer”):
Accept the claim and pay the standard/optional benefits pursuant to the various provision in the SABS.
Investigate priority and give any higher-ranking insurer a priority dispute notice.
Any disputes as to whether the other insurer has priority (under sections 268(2) - 5(1.2) would be resolved in arbitration.
The priority insurer would be obligated to reimburse you for any standard benefits paid, and administration expenses.
If you are the insurer who actually has priority (“Priority Insurer”):
You are required to reimburse the Optional Benefits Insurer for any standard benefits paid, and administration expenses incurred.
There will likely be issues as to whether the Priority Insurer could challenge the way the Optional Benefits Insurer has handled the claim and paid benefits, much like we see in loss transfer disputes.
What Should We Do Now?
If you are the Optional Benefits Insurer, consider bringing a new claim against the Priority Insurer for reimbursement, keeping in mind there might be a 90-day notice issue to overcome (this is a topic for a future blog).
If you are the Priority Insurer, you can expect to receive new notices for reimbursement.
What does the Future Look Like?
Appeal opportunities aside, in my opinion this decision could cause an administrative nightmare for insurers going forward, especially if more consumers continue to purchase optional benefits:
It will be extremely difficult for Priority Insurers to set reserves properly, to capture not only benefits that another insurer is paying (like in loss transfer), but also the cost of insurer assessments and administration expenses (which is not an issue in loss transfer because those expenses are not recoverable).
There is no process in place now governing how the Optional Benefits Insurer could seek reimbursement from the Priority Insurer. Likewise, there is no process in place now governing how the Priority Insurer could dispute the reasonableness of payments made (both benefits and administrative expenses).
There will undoubtedly be a significant increase in reimbursement claims, which will not only lead to significant legal costs but also place a burden on already-busy claims handlers, who will now need to consider a new reimbursement process for ongoing priority dispute claims.
What about reimbursement for legal expenses arising from any LAT disputes between the Optional Benefits Insurer and the claimant? Must the Priority Insurer reimburse the Optional Benefits Insurer for those expenses too?
What was that About Regular Use?
Continental v. Chubb will be forever known as the optional benefits case, but the appeal judge’s decision on regular use is also very noteworthy. The judge wrote:
…[I]n the present case, the evidence is uncontradicted that at no time did Mr. Ekstein make use of any of the company vehicles. Indeed, most of the vehicles insured by the CNA policy were tractor-trailers, although some were smaller trucks used in the business operations of the company. Although, because he was the President, CEO and owner of the company, it was theoretically open to Mr. Ekstein to have access to and choose to drive any of the insured vehicles, he never did so. The only vehicles that he actually drove were expressly insured under his personal Chubb policy.
 Thus, while there was an element of so-called "residual control" over the vehicles covered by the CNA policy, what is missing in this case is any evidence of those vehicles "being made available for [Mr. Ekstein's] regular use".
 In my view, it was unreasonable for the Arbitrator to impute regular usage to Mr. Ekstein when none existed. His decision contains no proper analysis of the evidence before him addressing the regular use provisions of s. 3(7)(f) in relation to the facts of this case. The Arbitrator failed to consider Mr. Ekstein's evidence that he never used a company vehicle prior to or at the time of the accident, or that a company vehicle was not being made available to him at the time of the accident. In so doing, the Arbitrator failed to follow the analytical approach set out in such cases as ACE INA Insurance v. Co-operators General Insurance Co.,  CanLII 13625.
 I conclude that the Arbitrator's decision is unreasonable because he failed to carry out the proper analysis, it is inconsistent with underlying legal principles, and the outcome ignores or cannot be supported by the evidence. To the contrary, the evidence supports the finding that no automobiles that were subject to the CNA policy were made available for Mr. Ekstein's regular use by the company.
It appears the appeal judge imputed into the regular use provisions in the SABS a requirement that there be evidence of actual use of a vehicle.
Does regular use require evidence of actual use? Contact me.