Volume. 5 Issue. 54- December 15, 2021
This week’s edition features two must read cases, the first case involves the applicability of discoverability further to Tomec regarding an IRB claim, initiated well over 4 years post accident. Does this mean IRB claims are inherently ‘open ended’?
In the second case, the Tribunal references and penalizes behaviour that attracted a 35% award against the insurer.
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IRB Entitlement Now Open Ended Courtesy of Tomec?
Tomec and IRB Discoverability – Yes Again – We have earlier reported upon issues involving considerations of the “discoverability” principle and claims for IRB. Once again, the Tribunal in Pena v Allstate (20-007893) wrestled with this concept.
Pena, injured in an August 5, 2014 accident returned to work August 7, 2014. Following receipt of his application for benefits, Allstate issued an explanation of benefits (EOB), indicating that Pena was not entitled to receive an income replacement benefit because he had returned to work during the seven-day waiting period. Subsequently, Pena submitted an OCF3, indicating there to be no disability from employment, Allstate issuing a further denial upholding the original denial based both upon the OCF3 as well as the employer’s confirmation of a return to full duties September 27, 2014.
Pena continued to work until March 13, 2019, and on June 4, 2019 submitted an OCF3 indicating both a substantial inability to perform his employment tasks as well as a complete inability to carry on a normal life. In response, Allstate issued an EOB denying IRB as the claim was statute barred for being made outside the two-year limitation period. Allstate submitted that the Court of Appeal decision in Tomec cannot be analogized to a claim for income replacement benefits, and further that “in line with Bonilla v. Preszler the limitation period in s. 56 of the Schedule is triggered by a single event, the refusal to pay an income replacement benefit claimed…”.
The Tribunal however agreed with a statement made in an earlier decision, M.L. v Unifund (19-009999), “that the question of whether the discoverability principle applies to income replacement benefit claims remains unsettled…”. This, despite the adjudicator in the case cited upholding limitation given that “there is no indication that the Tomec court overturned its decision in Bonilla, where it declined to import the discoverability rule to income replacement benefits…”. Regarding Bonilla, the Tribunal opined that “it is not clear that the court would have found discoverability inapplicable in circumstances where a quantum of income replacement benefits is claimed for the first time.”
Considering the case at hand, the Tribunal was “persuaded by Pena’s submission that he had not claimed an income replacement benefit before June 2019 because he was working and was therefore statutorily barred from claiming the benefit. He had not discovered his claim.” Further, a “plain reading of s. 56 is that the limitation period begins with an insurer’s refusal to pay “an amount claimed”. It is impossible to refuse to pay nothing when nothing is claimed.” Therefore, the initial September 5, 2014 denial was said to be invalid, “because it was premature. It did not deny an existing claim.”
The Tribunal then considered the applicability of s.7 of the LAT Act in the event they were wrong about the applicability of the discoverability principle. Interestingly, the Tribunal found that the circumstances of the case weighed in favour of exercising the discretion to extend limitation. Pena “demonstrated diligence” in having pursued his claim three months following his March 2019 work cessation. Additionally, while he had continued to work for 4.5 years post accident, the Tribunal was “prepared to accept that the applicant’s employment during this period was marked by considerable difficulty and a gradual deterioration in his condition.”
Once again, one is left to ponder whether “the Tribunal appears to suggest in fact that claims for IRB are inherently “open ended”, despite the SABS stipulating that eligibility is only found in scenarios wherein a “substantial inability” is determined within 104 weeks after the accident.”
35% Award on IRB Withheld for One Year
35% Award on $22,000 IRB Payment – The Tribunal awarded a significant 35% award in Foucade v Coachman (19-005660),finding Coachman unreasonably withheld IRB for one year, until reinstating with a $22,000 lump sum payment.
The Tribunal found that IRB was unreasonably withheld or delayed based solely upon the report of an IE and in the process “ignoring pertinent medical information and not re-assessing the decision promptly once in receipt of further medical information.” The Tribunal found that there was “no reason provided by the adjuster or the respondent as to why an IE for the IRBs was required”, and that at the time of the IE “the respondent had enough information to continue to pay IRBs without the need for an IE…(and) acted in a manner that was inflexible and stubborn when it came to the findings of the IE.” Further, “the papering of a termination of IRBs by obtaining a favourable IE report is not protection against an award when the respondent relies only on that report while closing its mind to the other medical information available that should be used to affect its decision to determine entitlement of IRBs.”
Coachman was found to have relied upon the IE, “despite there being credible information in the file that shows that the applicant’s family doctor, chiropractor and orthopaedic surgeon are telling the applicant that he cannot go back to his physically demanding job…”. Coachman also acted unreasonably by relying upon the IE “without reading it critically to ensure that the premise and the conclusions were logical” This was in context of the IE assessor making “findings that in my view are problematic and nonsensical based on the information available.”
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