On November 28, 2013 FSCO's Director's Delegate rendered
the much awaited Appeal Order in Scarlett v. Belair Insurance Co.
( O.F.S.C.D. No. 42). The Arbitrator's Order dated March
26, 2013 which had stated that the Applicant, Mr. Scarlett, was not
precluded from claiming expenses beyond the $3,500 limit within the
Minor Injury Guideline is now rescinded. The matter is now remitted
to a full hearing.
Mr. Scarlett was injured in a motor vehicle accident and applied
for statutory accident benefits from his insurer, Belair Insurance
Company Inc. ("Belair"). He received medical and
rehabilitation benefits for his soft tissue injuries which were
capped at the $3,500 limit in accordance with the Minor Injury
Guideline (the "MIG"). Counsel for Mr. Scarlett
maintained that their client suffered from pre-existing
psychological disabilities and advanced the position that his
injuries were not minor and not subject to the MIG cap.
The preliminary issue of whether Mr. Scarlett's medical and
rehabilitation benefits were capped by the MIG was considered by
Arbitrator John Wilson. In his decision Arbitrator Wilson had
determined that it was the "Insurer's burden to prove any
exception to or limitation of coverage on the civil balance of
probabilities" and that the MIG was a "non-binding
legislative aid". Ultimately Arbitrator Wilson determined that
Belair did not meet this burden and, accordingly, Mr. Scarlett was
not limited by the $3,500 cap for medical and rehabilitation
expenses established under the MIG.
On appeal the Director's Delegate rescinded the
arbitrator's order for failing to:
Address why Mr. Scarlett's psychological disabilities were
distinct from his soft tissue injuries and therefore not
Consider whether Mr. Scarlett's injuries were predominantly
minor injuries, as per the relevant test in the MIG;
Find that the burden of proof always rests on the insured to
prove that they fall within the scope of coverage they are
Find that the criterion for "compelling evidence" for
pre-existing conditions as an exception in the MIG comes from the
Statutory Accident Benefits Schedule (the "SABS") and
means more than simply credible evidence;
Find that the MIG is binding as it is incorporated by reference
into the SABS; and
Provide the parties with notice and an opportunity to respond
to the arbitrator's own research of case law and statutory
provisions raised after the hearing.
The Director's Delegate discouraged similar preliminary
issue hearings related to the MIG in the future, and a new hearing
was ordered before a different arbitrator for all matters at issue
in the case.
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