Volume. 4 Issue. 37 – September 23, 2020

No Waiver of Causation Defence Regarding Premature Birth

Causation Reversal – The Applicant, in 18-001994 v Echelon, was involved in a December 2015 accident “en ventre sa mere”. Four days later, she was born prematurely at 26 weeks, and was diagnosed with cerebral palsy as a result of the premature birth. The Respondent initially began paying ACB, as a result of a paper review assessment regarding causation, which had indicated that the Applicant’s injuries “may be fully related to her prematurity alone.” However, the Respondent, through counsel, sought another opinion to determine if there was a “more definitive finding” that could be made regarding causation. Counsel for the Respondent arranged for this further opinion, which ultimately concluded that the accident in fact did not cause the Applicant’s impairments.

The Respondent as a result commenced its own application as opposed to simply asserting causation as a defence in the existing matter. The Applicant argued that the Respondent could not raise causation as an issue, having approved and funded ACB. The Tribunal noted there to have been no waiver on the part of the Respondent, as “for waiver to succeed, [the Respondent] would have had to have had full knowledge of the facts and choose not to assert their right to deny the benefits. The evidence discloses and I find that [the Respondent] always questioned causation.”

Referencing a recent Court of Appeal decision, Pucci, it was noted that “to foreclose an insurance company from reconsidering its position on causation in the future would delay payments of benefits to injured insureds in the short term while the insurers prudently protected their long-term interests.” Further, “Pucci has clearly established that causation can be raised in a proceeding, regardless of when it is raised. As in Pucci, there is no evidence that [the Respondent]’s actions were an admission or a waiver of its right to raise the issue of causation.”

CRA Sufficient Despite “Compelling Concerns”

Good Enough for the CRA, Good Enough for the Schedule – The Tribunal continues to make clear that CRA records are paramount in terms of calculating IRB quantum. This point is further driven home in 18-009611 v Economical, in which which the Applicant was employed at his father’s automobile shop. The Respondent questioned the veracity of the Applicant’s testimony and financial records in a number of ways. Most notably, “the respondent challenged the provenance of the income reported on the applicant’s 2017 T4A, and, by extension, the amount that was accepted by the CRA.” While accepting that the Respondent had raised “some compelling questions”, the Tribunal nevertheless noted that the Schedule makes clear that “the amount accepted by the CRA is to be used when determining one’s pre-accident income from self-employment.”

Given this fact, “there is no need to peer behind the veil of the corporate ownership structure of his former employer, nor is there is [sic] a need to test the truthfulness of the applicant’s testimony at the Tribunal. Rather, to paraphrase s. 4(3), if it is good enough for the CRA, it is good enough for the Schedule.” Further, “allowing the CRA’s assessment process to be determinative of a self-employed person’s pre-accident income is in line with the consumer protection mandate underpinning the Schedule…it would be unfair…to demonstrate a ‘substantial inability’…but they are still denied the benefit because their insurers require evermore financial records.” Concluding, “by using assessments from the CRA as an objective standard to calculate one’s pre-accident income, s. 4(3) establishes a balance between the interests of self-employed applicants who want quick access to income supports and insurers who want a sense of certainty about the amounts they are being asked to pay.”

“Shall Pay” Due to Procedural Error

Procedural Error Requires Substantive Payment – The Respondent, in 18-001359 v Aviva, sought reconsideration of the Tribunal’s findings that the Applicant was entitled to NEB based upon their non compliance with s.36 of the Schedule. Specifically, they asserted that “procedural errors by an insurer do not automatically result in substantive entitlement”. The Respondent relied upon the Court of Appeal in Stranges, arguing that it was “well-established” that procedural deficiencies do not automatically entitle an insured to non-earner benefits, as it is the insured’s burden to prove that they meet the test under the Schedule.” The Tribunal however noted that the analysis of Stranges by the Tribunal has been confirmed previously by the Tribunal, including two reconsiderations in which the Respondent was a party.

The Tribunal reconfirmed that “Section 36(6) is a clear shall-pay provision: if the insurer fails to comply with 36(4) or (5) within 10 days, it shall pay the specified benefit for the period starting on the day of non-compliance and ending on the day it gives proper notice.” In addition, Stranges was distinguishable as it addressed an older version of the Schedule, wherein the “shall pay” provision was not contemplated. Further, Stranges did not interpret a section equivalent to s.36(6), therefore it cannot be said that the Schedule “is silent on the consequences of an insurer’s failure to comply with the provisions therein.” To the contrary, the Schedule now specifically states that the insurer shall pay the benefit if it fails to comply with s. 36(4).”

Related LAT inFORMER issues:
Consumer Protection Excuses Late CRA Filing

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