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Accident Benefits

Surprise, surprise, surprise!

 Mar 22, 2019 5:00 PM
by Lisa Armstrong

In a very surprising turn of events, the long awaited judicial review of MVAC v. Barnes, P16-00087 FSCO was dismissed as moot when it was revealed that the outcome of the judicial review would have no effect on either of the parties appearing before the Divisional Court.

The underlying case considered whether the amendments to the definition of “incurred” in the Statutory Accident Benefit Schedule, which came into effect February 1, 2014,  after the accident, only applies to accidents after the date  the amendment came into force , or whether it also applies to all services provided after that date, regardless of the date of the accident.

Barnes v MVACF and MVACF v Barnes

The claimant, Ms. Barnes,  was involved in a January 3, 2012 accident. Attendant care services were provided by her mother (a non-professional service provider) who took an unpaid leave from her employment. Services continued to be provided after February 1, 2014. The applicable Form 1 amount is unclear, though the claimant was seeking monthly benefits at the statutory maximum for catastrophic impairments of $6,000.00.

Prior to the February 2014 amendment, the general understanding informed by the prevailing jurisprudence was that economic loss served as a criteria for benefit entitlement; it did not affect the quantum of benefits. The quantum of attendant benefits in particular was determined by the applicable Form 1 amount. Once economic loss was established, assuming all other conditions for entitlement, were met, then the quantum was payable in accordance with the Form 1, subject to applicable limits. As Delegate Rogers states “the full prescribed cost of the services was recoverable, up to the maximum payable”. He cites Henry v. Gore as support that economic loss was a “threshold requirement” not intended to limit quantum.

At first instance Arbitrator Sone found that the applicant’s rights vested when she was involved in the accident and that the February 2014 amendments to the SABS did not apply to her.

On appeal, Director’s Delegate Rogers concluded that it was:

... illogical to apply the concept of vested contractual rights to a relationship in which the parties have no direct input in the terms of their relationship, and the terms may be amended from time to time without their input.

Delegate Rogers began his analysis with an examination of subsection 268(1) of the Insurance Act, noting that though the language is “general”, it is also clear, establishing principles that:

  1. displace the concept of a motor vehicle liability policy as a private agreement between an insurer an its insured;
  2. make the SABS a part of every policy; and
  3. make all amendments to the SABS part of every policy, including all terms, conditions, provisions, exclusions and limitations.

Subsection 268(1) states:

Every contract evidenced by a motor vehicle liability policy, including every such contract in force when the Statutory Accident Benefits Schedule is made or amended, shall be deemed to provide for the statutory accident benefits set out in the Schedule and any amendments to the Schedule, subject to the terms, conditions, provisions, exclusions and limits set out in that Schedule.

Delegate Rogers’ characterization of the right at issue is also critical to this decision. He found that the claimant had no right to attendant care after February 1, 2014; this right was “contingent upon her ongoing need, the provision of services, and her incurring an expense.”[1] Applying the February 2014 amendment to accidents pre-dating it therefore does not have retrospective effect, but rather is “legislation of immediate application.

The Delegate criticized earlier decisions for not considering the effect of section 268(1) of the Insurance Act

Divisional Court

It what appears to have been a day of revelations by the parties, described as Surprise #1 and Surprise #2 in the judgment, the panel of three judges of the Divisional Court learned that neither party would actually be affected by the outcome of a decision, if they choose to make a decision.

First the Court was advised, that in fact, Ms Barnes’ mother and care provider earned more than the maximum amount available for attendant care under the policy, so regardless of the outcome of this case the applicant would be entitled to the same amount under the old and the new provision of the SABS. 

Secondly, it was disclosed that there had been a priority dispute regarding which insurer was liable to pay the applicant’s benefits and it was not the MVACF. While that decision is under appeal, there was no stay in place, so subject to the decision being overturned, the MVACF would not be effected by a decision.

Ultimately, the Court found that resolution of whether the retrospective application of the new regulation results in  injustice, or is arbitrary, or if it affects someone so unfairly so as to outweigh its beneficent purpose, are factual inquiries and those facts did not arise in this case.

Meanwhile, in B.D. v. Wawanesa Mutual Insurance Company, 17-005604/AABS the Licence Appeal Tribunal dealt with the application of the February 1, 2014 amendments to the definition of “incurred” under the SABS 2010. It involved a motor vehicle accident that occurred in January 21, 2014. The Adjudicator found that the amendments to the incurred definition that came into effect February 1, 2014 (after the accident) were of “immediate application” and applied to the services adopting the reasoning of Director’s Delegate Rogers in the FSCO appeal decision, MVAC v. Barnes, P16-00087 FSCO.

It seems just a matter of time before this issue will be before the Divisional Court again.

See Barnes v. Motor Vehicle Accident Claims Fund, 2019 ONSC 1782 (CanLII)

 


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 ...


  

 

 
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