Canada: Aviva Insurance Company Of Canada v Danay Suarez, 2021 ONSC 6200

Background

Following a motor vehicle accident in 2013, Danay Suarez submitted an Application for Accident Benefits under the Statutory Accident Benefits Schedule - Effective September 1, 2010, O. Reg. 34/10 (the "Schedule") to her insurer, Aviva Insurance Company of Canada ("Aviva"). The application included four chiropractic Treatment Plans submitted that Aviva denied on the basis that they were not reasonable and necessary to treat Ms. Suarez's accident-related injuries.

Following these denials, Ms. Suarez applied to the Licence Appeal Tribunal ("LAT") to resolve their dispute. Although Ms. Suarez had not incurred the expenses associated with these treatment plans prior to the hearing, the LAT ultimately concluded that the Treatment Plans ought to have been approved and ordered that they were payable with interest.

Aviva sought reconsideration of the LAT decision on the basis that the adjudicator had erred in determining entitlement by not considering whether the benefits had been incurred prior to the hearing.  The request for reconsideration was ultimately dismissed.  Adjudicator Grant upheld his decision to approve the treatment plans in question and commented that an adjudicator is permitted to make a finding that treatment is reasonable and necessary and order that a benefit be payable provided that the order complied with the Schedule.

Issues

Following the LAT's decision at first instance (D.S. v Aviva Insurance Canada, 2020 CanLII 30433 (ON LAT)) and its reconsideration decision (D.S. v Aviva Insurance Company of Canada, 2020 CanLII 45478 (ON LAT)), Aviva sought an appeal from the Divisional Court. Aviva submitted that the LAT adjudicator erred in law and appealed on the following grounds:

(1) There was no evidence before the LAT of expenses incurred by Ms. Suarez in advance of the hearing within the meaning of s. 3(7) of the Schedule, and

(2) The LAT lacked the jurisdiction to order Aviva to pay expenses incurred by Ms. Suarez following the completion of the hearing.

Arguments

Aviva submitted that in the absence of a finding that an expense ought to be "deemed incurred" pursuant to s. 3(8) of the Schedule, the LAT only had the authority to order the payment of expenses that had been "incurred" by Ms. Suarez, as defined in s. 3(7)(e) of the Schedule, in advance of the LAT hearing.

Aviva further argued that the LAT was functus officio for payments of expenses incurred after the date of the hearing, meaning they had no jurisdiction to order Aviva to make payment upon the happening of a future event. If the Court found that Ms. Suarez is permitted to complete her claim post-hearing by incurring treatment expenses, they submitted that they should be permitted to take post-hearing action to issue denials that comply with the Schedule.

By contrast, Ms. Suarez submitted that the LAT has broad statutory authority and flexible remedial powers under that statutory authority to resolve disputes between insurer and claimants. She argued that a decision by the LAT that an insured is entitled to coverage for treatment replaces an insurer's approval of the Treatment Plan in dispute. Therefore, the only effective remedy available would be an order that an insurer pay for the proposed treatment once it has been incurred in accordance with the Schedule. This remedy would also support the legislative purpose of the Schedule.

Ms. Suarez also submitted that the LAT's order did not offend the doctrine of functus officio as entitlement and quantum are distinct issues, each of which may be subject to independent adjudication. Further, she submitted that an order for entitlement to benefits is final and binding. Therefore, an insurer being permitted to take post-hearing action to issue denials would effectively thwart the LAT's dispute resolution process.

In support of Ms. Suarez's position, the Ontario Trial Lawyers Association ("OTLA") and the Coalition of Citizens with Disabilities - Ontario and Health Justice Program ("CCD") made submissions.   The third intervenor, the LAT, did not take a position.

OTLA submitted that Aviva was seeking to overturn decades of existing practice and jurisprudence, and that their proposed interpretation of the Schedule offended the statutory purpose as consumer protection legislation. They also submitted that the relief sought by Aviva would render the dispute resolution function of the LAT inaccessible to most claimants.

The CCD submitted that the Schedule does not expressly stipulate when treatment expenses must be incurred and that statutory provisions ought to be interpreted and applied in a manner that promotes access to justice. Because there is an inherent power imbalance between accident claimants and their insurers, a requirement that healthcare treatment expenses be incurred before accessing the LAT would adversely impact low-income persons with disabilities.

Outcome and Reasoning

The appeal was ultimately dismissed by the Court.  The payment of the treatment plans in question were due when incurred as defined in the Schedule, and interest is payable once they have been incurred and payment is overdue in accordance with the Schedule.

The Court reiterated its position that the LAT had broad remedial powers to address Accident Benefit disputes, stressing that the Court must be mindful of the remedial purpose of the legislation as consumer protection legislation.

The Court concluded that LAT Orders approving treatment and permitting claimants to incur and submit treatment expenses are the only effective remedy to a denied Treatment Plan. If Aviva's position were to be accepted, claimants would be required to fund disputed Treatment Plans in advance of an application to the LAT and would be limited to pursuing payment of only that treatment which they can afford to self-fund. Claimants with limited or no access to funds would be at the mercy of their insurer's goodwill, which is the very power imbalance the legislation is intended to circumvent.

Further, the Court concluded that permitting an insurer to issue a compliant denial following a LAT hearing would effectively render s. 38(11) of the Schedule meaningless, and that the results of these hearings would be moot. However, the Court reiterated that determinations of entitlement and quantum are mutually exclusive issues. Therefore, although a determination regarding entitlement was made by the LAT, expenses must still be incurred by Ms. Suarez before they become payable. Aviva would not be precluded from raising any disputes regarding submitted invoices and incurred expenses, including payment of treatments in excess of policy limits.

The parties had agreed on costs fixed at $5,000 inclusive of HST and were ordered payable to Ms. Suarez.

Access to Justice

This is an important decision for accident benefits claimants. It affirms that the Schedule is consumer protection legislation, helping vulnerable accident victims access the benefits they need and are entitled to and further principles of access to justice.  Gluckstein Lawyers is proud to have been part of the legal team representing the intervenor, OTLA.  Our top priority is advocating for our clients who have suffered traumatic injuries. This decision is a step in the right direction to ensure that accident benefits claimants are protected when they need it most.

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