Canada: Assessments Payable, Even Though Medical And Rehabilitation Limits Were Exhausted

On May 4, 2015, Director's Delegate Blackman released his decision in Cook and RBC[1], which deals with the payment of catastrophic ("CAT") assessments under the Statutory Accident Benefits Schedule—Effective September 1, 2010[2] ("2010 SABS").

In this case, the Applicant brought a Motion for an Order that the Insurer pay him $12,960.00 for CAT assessments. Arbitrator Mutch found that the funding of a rebuttal CAT assessment was most properly characterized as an interim expense rather than an interim benefit. Although an award of interim expenses of at least some of the claimed expense was warranted, Arbitrator Mutch found that he was prevented from ordering payment by Sections 18(3) and 18(5) of the 2010 SABS. Subsection 18(5) placed the Applicant under the $50,000.00 cap for both treatment and assessments in non-catastrophic cases, which had been exhausted.

Director's Delegate Blackman agreed with the Insurer that the $50,000.00 cap extended beyond strictly medical and rehabilitation expenses. However, Section 18(5) did not cover all fees and expenses for conducting assessments and examinations preparing reports. Rather, there were two general qualifications:

  1. the fee or expense is in connection with any benefit or payment; and,
  2. the benefit or payment is under this Regulation, meaning the 2010 SABS. [emphasis in original]

Director's Delegate Blackman noted that catastrophic impairment, by itself, is a threshold, not a benefit. As the Insurer argued, the appeal did not determine catastrophic impairment. Rather, the Applicant claimed payment under Section 25(1)(5) of the 2010 SABS for the costs of assessments for preparing a Section 45 CAT Application. However, the fee or expense sought was still for a threshold determination, not in connection with any benefit or payment. Accordingly, Sections 18(3) and 18(5) did not apply.

Director's Delegate Blackman stated:

Without giving reasons, the Arbitrator presumed that subsections 18(3) and (5) applied to reports and assessments regarding CAT determinations. The Arbitrator gave a very good reason why those provisions should not apply, namely, that in this case "the very question of whether [Mr. Cook] can claim more than the $50,000 in medical and rehabilitation benefits hangs in the balance." I am persuaded that the Arbitrator erred in not following his own reasoning.

I am also persuaded that the Arbitrator erred in law in applying subsections 18(3) and (5) to an award of interim legal expenses under subsection 282(11.1) of the Insurance Act. A provision of the Insurance Act is clearly not under "this Regulation" which, as noted, means the 2010 Schedule.

Director's Delegate Blackman found that by limiting Section 18(5) to any benefit or payment "under this Regulation", the provision excluded payment of legal expenses under the separate and superior Insurance Act[3]. Director's Delegate Blackman did not accept that the expenses needed to be "incurred"; a prerequisite of "incurred" conflicted with the Bernicky criterion that the insured person was "unable to carry the expenses claimed". Even if the expenses needed to be "incurred", it was sufficient if the reasonable necessity of the service or item and the amount of the expenditure were determined with certainty.

Arbitrator Mutch noted that the Insurer had done a thorough CAT assessment and thought that a responding report for the Applicant was a reasonable and necessary expense for the conduct of the Arbitration. Director's Delegate Blackman was not persuaded that the Arbitrator erred in characterizing the request as a request for interim expenses. Nor was he persuaded that allowing an interim payment of legal expenses was tantamount to determining catastrophic impairment without a hearing on the matter. Rather, to allow an interim award of legal expenses was to allow a meaningful hearing on the issue.

Director's Delegate Blackman noted that the issue of catastrophic impairment had not been formally added to the Arbitration. Accordingly, any award of interim legal expenses was conditional upon an Arbitrator adding same as an issue in the Arbitration.

Director's Delegate Blackman was persuaded that Section 5(5) of the Expenses Schedule allowed for payment of up to $1,500.00 per report. The same expert could be entitled to up to $1,500.00 for each separate report that he or she prepared. He was not persuaded that Section 5(5) allowed the same report to be broken up into stages such as "essential clinical tasks" or "collating" as a means of getting around "the hard limits on reports". He held that the Applicant was entitled to $6,000.00 for four separate reports, plus HST.


Director's Delegate Blackman ultimately found that the expenses were properly characterized as interim legal expenses, assuming that the issue of catastrophic impairment was formally added to the Arbitration. Accordingly, his comments regarding whether the costs of CAT assessments are payable as a medical and rehabilitation benefit are only of persuasive value.

CAT assessments are often costly. If CAT assessments are not payable out of the medical and rehabilitation limits, this could result in additional costs to insurers. I expect that we will see further case law on this issue


[1] FSCO Appeal P14-00038 (Director's Delegate Blackman, May 4, 2015).

[2] O Reg 34/10.

[3] RSO 1990, c I.8.

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