Soloway Wright Partner and civil litigation lawyer, Tara Sweeney, recently presented on Attendant Care Benefits at the Canadian Defense Lawyers Association Fall Classic. The following article provides further detail on sections of the Statutory Accident Benefits Schedule and regarding “incurred” and “deemed incurred” expenses and recent cases that may impact future accident benefits and insurance litigation.
Attendant Care: Recent Cases on “Incurred” and “Deemed Incurred” Benefits
Tara M. Sweeney
Partner, Soloway Wright LLP
Associate, Soloway Wright LLP
Pursuant to section 19 of the Statutory Accident Benefits Schedule (the “Schedule”), an insurer is required to pay an Attendant Care Benefit (“ACB”) for all reasonable and necessary expenses “incurred” on behalf of an insured person as a result of a motor vehicle accident for services provided by an aid or attendant. If injuries are characterized as “non-minor injury” or “catastrophic”, as defined under the SABS, an individual may be entitled to ACBs to a maximum of $3,000 per month for up to five years (non-minor injury) or $6,000 per month for life (catastrophic), respectively. A Form 1 – Assessment of Attendant Care Needs, generally prepared by an occupational therapist (“OT”), sets out the services and amount of attendant care required by an individual as well as the monthly amount payable by the insurer.
Fortunately for injured parties, especially those with financial limitations, an “aid or attendant”, for the purposes of ACBs, need not possess any special qualifications; they may in fact be a family member or friend of the insured.1 However, if a family member or friend is providing attendant care and is not regularly employed as such (see s. 19(3), para. 4) or in an equivalent role, or is not suffering an economic loss by providing such care, then no expense has been “incurred” and the insurer is not required to pay for the benefit. In this regard, section 3(7)(e) of the SABS provides as follows:
… an expense in respect of goods or services referred to in this Regulation is not incurred by an insured person unless:
- the insured person has received goods or services to which the expense relates,
- the insured person has paid the expense, has promised to pay the expense or is otherwise legally obligated to pay the expense, and
- the person who provided the goods or services,
- did so in the course of the employment, occupation or profession in which he or she would ordinarily have been engaged, but for the accident, or
- sustained an economic loss as a result of providing the goods or services to the insured person.
There is, however, an exception to the requirement that an expense be in fact “incurred”. Pursuant to section 3(8) of the SABS, if the License Appeal LAT (the “LAT”) finds that an expense was not incurred because the insurer unreasonably withheld or delayed payment of a benefit in respect of the expense, the LAT may, for the purposes of determining an insured’s entitlement to the benefit, deem the expense to be incurred.
What does it mean for an insurer to unreasonably withhold or delay payment of a benefit so as to allow an expense to be deemed incurred? Under what circumstances will an expense be held to have been “incurred” in satisfaction of section 3(7)(e) of the SABS? We have reviewed several recent cases which address these issues, along with a ‘bonus’ case which speak to the circumstances under which ACBs may be retroactively awarded.
17-001681 v Motor Vehicle Accident Claims Fund
Injured parties in accident benefit cases often undergo multiple medical assessments over the course of their claim, with some being conducted on their own behalf and others on behalf of the insurer. As made clear by the LAT in 17-001681 v Motor Vehicle Accident Claims Fund2, if an insurer prefers its own assessments over those of the claimant, and ultimately relies on its own assessment reports to deny a benefit, it must be able to provide an evidentiary basis to support its preference. If this evidence is lacking, or if its assessment reports are found to contain flaws, the insurer may be found to have unreasonably withheld payment of the benefit.
In 17-001681, the applicant was catastrophically injured in a single vehicle accident that occurred on May 1, 2015. The motorcycle driven by the applicant was not insured and, as a result, the applicant applied for accident benefits, including ACBs, from the Motor Vehicle Accident Claims Fund (the “respondent”). The respondent denied several of the benefits claimed and the matter was brought before the LAT.
The applicant maintained that he was entitled to ACBs in the amount of $6,000 per month, the maximum amount available to an individual deemed catastrophically impaired. In support of his claim, the applicant relied on two Form 1s completed by his OT, which recommended $7,716.34 and $8,415.77 per month in ACBs. The respondent, on the other hand, relied on a Form 1 completed by its own OT which recommended $0 per month. Based on the evidence before it, the LAT ultimately found the applicant entitled to ACBs in the amount of $6,000 per month.
Having determined the extent of entitlement, the LAT turned to the question of whether expenses for attendant care had actually been incurred by the applicant or, alternatively, whether they could be deemed incurred pursuant to section 3(8) of the Schedule. At the hearing it was freely admitted by the applicant that he had not in fact incurred ACBs in the amount of $6,000 per month as he could not afford to pay for such services. Therefore, the sole issue became whether the expense could be deemed incurred.
Having already found that the service was reasonable and necessary, the LAT next considered whether the benefit had been unreasonably withheld or whether payment had been delayed. While doing so, it specifically noted that an insurer has a duty to review all of the medical documentation available to it and that the failure to do so may prove fatal to its position.
In the case at bar, the applicant had been assessed by a neuropsychologist and several OTs who recommended 24-7 attendant care and supervision. The applicant was also assessed by a psychiatrist and an OT on behalf of the respondent who were both of the opinion that the applicant was not in need of any attendant care. The respondent relied entirely upon these latter practitioners’ assessments to support its denial of benefits. The LAT, however, found that these practitioners were biased in their assessments and that their reports were significantly flawed. By way of example, the LAT noted that the respondent’s psychiatrist had been highly selective of the records that she referenced in her report – she included evidence that supported her conclusion and ignored evidence that conflicted with it.
In light of the foregoing, the LAT held that the respondent had failed to fulfill its responsibility “to review its assessments with a critical eye to ensure that they were medically sound and unbiased.” Furthermore, the LAT noted that the respondent had failed to present any evidence as to why it preferred the reports of its own assessors over those of the applicant or any evidence explaining why it failed to consider other compelling medical documentation in making its decision to deny benefits. The LAT consequently held that the respondent had acted unreasonably by relying on flawed medical reports and deemed the expenses incurred from the date of the psychiatrist’s flawed report to the date of the hearing and ongoing.
18-000169 v TD Home and Auto Insurance Company
As previously noted, attendant care services may be provided by a friend or family member of the injured party, if they do so in the course of their employment, occupation or profession or, alternatively, if they sustained an economic loss. Perhaps unsurprisingly, such attendants may suffer from their own psychological and emotional disabilities stemming from their loved one’s involvement in an accident. As 2016 by the decision in 18-000169 v TD Home and Auto Insurance Company3, it is important in such cases for insured’s counsel to be able to demonstrate that the economic loss sustained by the attendant was because of their provision of care to the injured party, rather than because of their own pre-existing or independent disability.
In 18-000169, the applicant had sustained multiple serious physical and psychological impairments in an accident. Following the accident, the respondent insurer paid the applicant medical and rehabilitation benefits up to the $50,000 limit for non-catastrophic impairments. After a series of assessments, the respondent concluded that the applicant’s impairments were non-catastrophic and denied any treatment beyond the limits prescribed by the SABS. In doing so it also denied the applicant’s claim for ACBs on the basis that the applicant’s attendant, his father, had not suffered an economic loss and that, in any event, the benefit was unavailable 104 weeks after the accident given that the applicant had not been deemed catastrophically impaired. The applicant disagreed and the matter was brought before the LAT.
At the hearing the LAT concluded that the applicant was catastrophically impaired. Accordingly, the LAT was required to consider whether attendant care services provided to the applicant by his father were reasonable and necessary and in fact incurred pursuant to section 3(7)(e) of the Schedule.
As part of its deliberations, the LAT considered two distinct time periods: first, the days and weeks immediately following the accident, and second, the time after this initial period up to the date of the hearing. With respect to the first time period, the LAT noted that the applicant had been in considerable pain and had difficulty completing day-to-day tasks due to his injuries, particularly his broken neck. As a result, it concluded that attendant care services during this time would have been reasonable and necessary. Furthermore, based on the testimony of the applicant and his father, the LAT accepted that the applicant had, in fact, received attendant care from his father during this time in the form of emotional support and physical assistance, meal preparation and help with medication allotment.
With respect to the second time period, however, the LAT found that the care provided by the father amounted mainly to scheduling, taking the applicant to appointments, and calming him down during emotional outbursts. The LAT concluded that such services were not justified as reasonable or necessary in the years post-accident. It went so far as to note that keeping an injured person calm and on schedule is not the type of post-104 attendant care contemplated by the Schedule.
In any event, the LAT found that the third component of the “incurred” definition contained in section 3(7)(e) was fatal to the applicant’s claim for ACBs, the father did not suffer an economic loss while caring for the applicant. On the evidence before it, the LAT noted that the father was off work at the time of the accident and during the attendant care period. As of the date of the hearing, the father had not yet returned to work in any capacity and was in fact receiving CPP Disability and Income Replacement Benefits from the respondent insurer, owing to his own psychological and emotional difficulties stemming from his son’s accident. On this basis, the LAT found that any economic loss that might have been suffered by the father was not because of his role as an attendant, but rather because of his own impairments related to his son’s accident. It also held that the father’s disability did not equate to an economic loss for purposes of section 3(7)(e). Consequently, the LAT held that attendant care expenses had not been incurred and refused to find them to be deemed incurred given a lack of any evidence that the respondent had unreasonably withheld or delayed payment.
17-005010 v Aviva Insurance Canada
One can easily imagine a situation where an injured party was in receipt of ACBs and incurred expenses, but not to the extent that they might have had the insurer not unreasonably withheld or delayed payment of benefits. Under such circumstances, query if an argument be made that expenses should be deemed incurred, even though only a portion of expenses were actually incurred? As confirmed by the LAT in 17-005010 v Aviva Insurance Canada4, the answer is yes.
In 17-005010, the applicant was involved in an accident on September 12, 2015 and sustained various physical injuries. He subsequently applied to the respondent insurer for accident benefits. The applicant participated in an in-home assessment on December 1, 2015 and an initial Form 1 was prepared which specified a maximum entitlement of $2,830.57 per month in ACBs. Upon receipt of this Form 1, the respondent agreed to pay for attendant care expenses incurred up to the maximum amount specified. However, the applicant did not obtain attendant care services at that time.
In February of 2016, the applicant participated in a second assessment at the respondent’s request. A second Form 1 was prepared which specified a maximum entitlement of $592.88 (44.1 hours) per month. On February 12, 2016 the respondent advised the applicant that it would only pay for services incurred up to the limit outlined in this second Form 1.
In April of 2016, the applicant finally began receiving attendant care services. Shortly thereafter, the applicant applied to the LAT to dispute the amount of his entitlement. In doing so, he claimed that, but for the respondent’s position, he would have incurred additional attendant care expenses following receipt of the second Form 1 and that such expenses should be deemed incurred.
In light of the foregoing, the LAT was required to consider whether attendant care expenses can be deemed incurred for a period during which only some of the expenses are actually incurred. In this regard, the respondent argued that incurring any expense on account of ACBs, as the applicant had clearly done following receipt of the second Form 1, precluded any expenses from being deemed incurred pursuant to section 3(8) of the Schedule. The LAT disagreed, noting that the SABS do not expressly state that that an applicant incurring a portion of an expense bars a finding that any additional expense would have been incurred but for the unreasonable withholding or delay in payment. However, the LAT also noted that the applicant’s own behaviour contradicted his assertion that additional expenses would have been incurred. In particular, it recognized that the applicant had failed to obtain attendant care services during the period spanning December 2015 to April 2016. As the LAT noted:
The respondent advised the applicant that there was an entitlement up to $2,830.57 per month and that the respondent would pay for any attendant care expenses during this period, subject to the monthly limit, yet the applicant did not incur any expenses.
Furthermore, it was noted that, when the applicant finally sought out attendant care services, he did not incur more services than those which were suggested by the second Form 1; being a maximum of 44.1 hours per month. Rather, following receipt of the second Form 1, the applicant only incurred on average 18.14 hours of care per month. Given the foregoing, the LAT held that the respondent’s adjusting of the claim did not impact the amount of attendant care services incurred by the applicant and consequently refused to deem any additional ACBs incurred.
18-002075 v Certas Direct Insurance Company
Pursuant to section 38(8) of the Schedule, an insurer has a statutory obligation to provide reasons as to why it considers recommended goods, services, assessments and examinations, or the proposed costs of them, to be unreasonable and unnecessary. As in the case of 18-002075 v Certas Direct Insurance Company5, if such reasons are insufficient, the insurer may be found to have unreasonably withheld or delayed payment of the expense, thus allowing the expense to be deemed incurred.
In 18-002075, the applicant applied to the respondent insurer for accident benefits after being injured in an accident on February 16, 2016. The applicant was denied several benefits by the respondent and submitted an application to the LAT. One of the benefits denied was the cost of an in-home attendant care assessment that had been recommended by the applicant’s physical therapists. As noted by the LAT, the purpose of such an assessment is to assess the degree to which an insured is limited with respect to carrying on his or her activities of daily living due to accident-related impairments and to quantify the amount that might be required in terms of monthly ACBs.
The applicant argued before the LAT that the in-home assessment was reasonable and necessary and that the expense should be deemed incurred pursuant to section 3(8) of the Schedule as it had been unreasonably withheld or denied by the respondent.
The respondent maintained that the benefit had been properly denied. In this regard, the respondent argued that no evidence had been submitted to support the applicant’s claim that he was unable to engage in self-care tasks.
The LAT, however, disagreed with the respondent and found that the applicant had submitted sufficient evidence to support his claim. In particular, it noted that the applicant had reported to all assessors, including Insurer’s Examination (“IE”) assessors, that he was struggling to carry out his activities of daily living, with examples of such struggles being noted in the assessors’ reports. Consequently, the LAT found that it was reasonable and necessary to investigate whether the applicant required attendant care assistance.
With respect to whether the benefit had been unreasonably denied, the LAT found that the respondent’s letter to the applicant denying the benefit failed, amongst other things, to provide adequate medical reasons; it merely stated that “Based on Section 38.8, medical and all other reasons, the proposed total body assessment is not reasonable and necessary.” The LAT found this to be an insufficient explanation as to why the in-home assessment was denied. Furthermore, the LAT noted that the respondent had overlooked the applicant’s consistent reports to all of the assessors with respect to his struggles with his activities of daily living. Accordingly, it found that the respondent had unreasonably denied the benefit and deemed it incurred.
18-000790 v Jevco Insurance Company
Pursuant to the Schedule, an insurer is not required to pay ACBs for periods prior to the submission of a Form 1. However, as recognized by the LAT, including most recently in G.A. v Allstate Insurance Company of Canada-003574/AABS6, the failure to file a Form 1 does not, in and of itself, disentitle an applicant from their right to apply for ACBs. Consequently, as was the case in 18-000790 v Jevco Insurance Company7, it may be possible, under certain limited circumstances, for an applicant to establish a retroactive claim for benefits for a period prior to the date of submission of the Form 1.
The applicant in 18-000790 was significantly injured on November 1, 2007 after being struck by a vehicle while crossing a street. All parties acknowledged that the applicant’s injuries were catastrophic and that she required $6,000.00 per month in attendant care. However, due to a series of events, the applicant did not apply to the respondent insurer for ACBs until December 16, 2015. The respondent agreed to pay for the benefit for periods after the date of application but not before. The applicant therefore applied to the LAT for a ruling that she was entitled to ACBs for the earlier period.
Given the circumstances of this case, a brief overview of Ontario’s accident benefits regime may be beneficial. Accident benefits are available to individuals involved in motor vehicle accidents in Ontario typically without regard to whether the claimant was a driver, a passenger or a pedestrian. A pedestrian’s claim for benefits is generally made to their own motor vehicle insurer. If they have no insurance, they may apply to the insurer of the vehicle that struck them or, depending on the circumstances, to any vehicle involved in the accident. If there is no coverage available, the application is made to the Ontario Motor Vehicle Claims Fund.
In this case, the applicant did not have her own motor vehicle insurance. The driver of the vehicle that struck the applicant also did not advise her that the respondent was his insurer, nor did he report the accident to the respondent. As such, the applicant was unaware of the respondent and was unable to apply to them for benefits immediately following the accident. Further, the applicant was a Quebec resident and was therefore not entitled to benefits from the Fund.
Two years following the accident, in October 2009, the applicant commenced a tort action against the driver that had struck her. The driver only then notified the respondent, his insurer, about accident. It was only through the tort claim that the applicant finally became aware of the respondent. Over the course of the following five years, however, the respondent insurer denied that it insured the vehicle involved in the accident and refused to defend or indemnify the driver. It was not until September 14, 2014 that the respondent finally agreed that it was obligated to insure the driver’s vehicle. Following that admission, the applicant formally applied to the respondent for accident benefits and submitted a Form 1.
In light of the foregoing, the main issue before the LAT was whether the applicant could establish a retroactive claim for ACBs. Accordingly, the LAT first had to determine what the applicant was required to prove in order to establish such a claim, or whether such a claim could even be brought. In doing so it considered s.42(5) of the Schedule, which provides as follows:
… an insurer may, but is not required to, pay an expense incurred before an assessment of attendant needs… is submitted to the insurer.
The LAT interpreted the foregoing to mean that an insurer was not required to pay ACBs for periods prior to the submission of a Form 1, but also noted that two exceptions to this rule may apply. The first, established through caselaw (for instance 16-000372 v Unica Insurance Inc.), provided that where “urgency, impossibility or impracticability” prevents completion of a Form 1, retroactive payment of ACBs may be warranted. The second exception is established via s.34 of the Schedule, which provides that:
… a person’s failure to comply with a time limit set out in this Part does not disentitle the person to a benefit if the person has a reasonable explanation.
Based on the foregoing, the LAT concluded that to establish a claim for retroactive ACBs, an applicant has to prove either 1) that “urgency, impossibility or impracticality” prevented them from applying for ACBs and submitting a Form 1 earlier, or 2) that they had a “reasonable excuse” for not doing so earlier.
In the case before it, the LAT concluded that it would have been impossible for the applicant to apply for ACBs prior to the commencement of the tort claim, as she had no knowledge of the respondent insurer’s existence. However, the LAT also noted that, after the tort action was commenced, the applicant became aware of the respondent and could have started a claim for accident benefits. That being said, the LAT recognized that the applicant had been suffering from catastrophic injuries at the relevant time, including cognitive difficulties, and that the respondent insurer had failed to inform the applicant of her rights to accident benefits despite their obligation to do so. Consequently, the LAT concluded that applying for benefits would have been impractical under the circumstances created by the respondent’s non-coverage position or, at the very least, that the applicant had a “reasonable explanation” for not doing so.
For the above reasons the applicant was ultimately awarded ACBs from November 9, 2007, the date she was discharged from hospital, to December 16, 2015, the date on which she submitted the Form 1, along with interest payable from the retroactive date.
In order to substantiate a claim for ACBs, an insured must be able to prove that attendant care expenses were in fact “incurred”. In this regard, if the insured’s attendant was a friend or family member, the insured generally must prove that the attendant suffered an economic loss by providing the care or that they were ordinarily employed as an attendant or equivalent profession. However, the LAT may, for the purposes of determining an insured’s entitlement to ACBs, deem an expense incurred if the insurer unreasonably withheld or denied payment of the benefit. Based on our review of the foregoing cases, it appears that the LAT may consider expenses to have been “unreasonably withheld” if the insurer relied on flawed assessments or failed to consider compelling medical documentation in making its decision to deny the benefit. Likewise, an expense may be deemed incurred if the insurer failed to provide sufficient reasons as to why it considered recommended goods, services, assessments and examinations, or the proposed costs of them, to be unreasonable and unnecessary. Therefore, if insured’s counsel is unable to present sufficient evidence to prove that an expense was in fact “incurred”, they may be able to maintain their client’s claim for ACBs, provided that they can show unreasonable behavior on the part of the insurer.
1 O.Reg. 34/10: Statutory Accident Benefits Schedule – Effective September 1, 2019, s.3(7) (c).
2 17-001681 v Motor Vehicle Accident Claims Fund, 2018 CanLII 112134 (ON LAT), online: <http://canlii.ca/t/hw8bx>.
3 18-000169 v TD Home and Auto Insurance Company, 2019 CanLII 22189 (ON LAT), online: <http://canlii.ca/t/hz9d6>.
4 17-005010 v Aviva Insurance Canada, 2018 CanLII 81879 (ON LAT), online: <http://canlii.ca/t/htrs1>.
5 18-002075 v Certas Direct Insurance Company, 2016 CanLII 153059 (ON LAT), online: <http://canlii.ca/t/j1f9h>.
6 G.A. v Allstate Insurance Company of Canada-003574/AABS, 2019 CanLII 94037 (ON LAT), online: <http://canlii.ca/t/j2rx8>.
7 18-000790 v Jevco Insurance Company, 2019 CanLII 22200 (ON LAT), online: <http://E/canlii.ca/t/hz9d9>.