Canada: Changes To The Accident Benefits Regime

In August of 2015, the Ontario government proposed significant amendments to the province's no-fault automobile benefits regime, effective June 1, 2016.1 These amendments, made primarily to two existing regulations, echo announcements made by the government in its 2015 Budget.

The most notable changes are to the following areas: (a) non-earner benefits; (b) non-catastrophic and catastrophic benefits limits; and perhaps most important, (c) the definition of what constitutes a catastrophic impairment.

(a) Non-Earner Benefits

Under the current Statutory Accident Benefits Schedule ("SABS"), non-earner benefits are paid after a six month waiting period following the accident and up to two years post-accident at a rate of $185.00 per week. To qualify, the insured must suffer a complete inability to carry on a normal life. There is no change in the test post 104 weeks (unlike the entitlement test for income replacement benefits). However, if the individual continues to meet the disability test after two years post-accident and was enrolled in school at the time of the loss, then the non-earner benefit increases to $320.00 per week.

As of June 1, 2016, the current 26-week waiting period has been replaced by a 4-week waiting period. While the waiting period was reduced, an insurer will no longer be responsible for payment of non-earner benefits once two years have elapsed since the accident.

(b) Non-Catastrophic and Catastrophic Benefits Limits

Under the current legislation, medical/rehabilitation and attendant care benefits for individuals who suffer a non-catastrophic impairment are capped at $50,000.00 and $36,000.00 respectively. Attendant care is further capped at $3,000.00 per month. These benefits are available for up to 10 years post-accident.

Under the new legislation, medical/rehabilitation and attendant care benefits are subject to one global limit of $65,000.00. Attendant care continues to be further capped at $3,000.00 per month. These benefits will be available for up to 5 years post-accident, which begins to run once an insured turns eighteen years of age.

Under the current legislation, individuals who suffer from a catastrophic impairment are entitled to benefit limits of $1,000,000.00 for medical/rehabilitation and attendant care benefits respectively (combined $2,000,000.00).

The new legislation, in the spirit of merging the limits of several benefits, is combining the two types of benefits under one limit and that is $1,000,000.00 to cover both medical/rehabilitation and attendant care. This effectively halves the insurer's potential exposure in a catastrophic claim.

(c) The Definition of a Catastrophic Impairment

A catastrophic impairment increases the amounts available to an insured for both the attendant care and medical/rehabilitation benefits. Therefore, it comes as no surprise that one of the key issues in accident benefits legislation has been what kind of impairment would qualify as a catastrophic impairment. This definition has been drastically altered under the new accident benefits regime.

We are told that the new definition of catastrophic impairment was revised to reflect up-to-date medical information from the Superintendent's 2012 report on the definition of catastrophic impairment. The definition includes new and/or updated criteria and definitions for traumatic brain injuries for adults and children, amputations, ambulatory mobility, loss of vision, and mental and behavioural impairments. Also, the new catastrophic definition introduces a new process for combining physical and mental and behavioural impairments. Finally, the revised definition also provides for an automatic designation of catastrophic impairment for children with traumatic brain injuries in specified circumstances.2

For example, the highly problematic and often-controversial Glasgow Coma Scale ("GCS") has been removed. This test, considered relatively outdated, qualifies impairment as catastrophic if an individual scored 9 or less. To place this number in context, 15 (the maximum score) would mean an individual is completely alert, and 3 would qualify as "totally unresponsive".

In Liu v. 1226071 Ontario Inc. (Canadian Zhorong Trading Ltd.)3, the insured was involved in a motor vehicle accident. Four GCS scores were recorded. Two of those scores were below 9, while the remaining two increased as time passed. The insured's representative argued that only one GCS score of 9 or less was sufficient to deem the insured catastrophically injured. The Ontario Court of Appeal agreed.

For spinal cord injuries, practitioners are now to evaluate individuals by using the American Spinal Injury Association ("ASIA") classification. This test aims to grade spinal cord injury in a way that considers prognosis and allows injuries to be followed over time to assess changes in neurological status. (ASIA-A being the most serious, ASIA-B being less serious etc.).

Furthermore, another test will include assigning the mental whole person impairment ("WPI") using the American Medical Association's Guides to the Evaluation of Permanent Impairment, 6th Edition. This particular method derives three scores by evaluating claimants using three different scales: (a) brief psychiatric rating scale; (b) the global assessment of functioning scale; and (c) the psychiatric impairment rating scale. The brief psychiatric rating scale focuses on measuring the major symptoms of major mental disorders by rendering a score sum of 24 items ranging from anxiety and depression to excitement and motor hyperactivity. The enumerated items are given a score from 1 (not present) to 7 (extremely severe) which are based on a combination of the claimant's self-report and observed behavioural speech. The global assessment of functioning scale gives a numeric scale (1 through 100) to rate subjectively the social, occupational and psychological functioning of individuals involved in a motor vehicle accident. The psychiatric impairment rating scale assesses behavioural consequences of psychiatric disorders on 6 different scales, each of which evaluates an area of functional impairment. Lastly, all three scales are weighed in order to obtain three mental WPI scores after which the medial value of the three is chosen.

Finally, the last test that is added to the new SABS is the Extended Glasgow Outcome Scale ("GOS-E"). This test was developed to address various limitations that were inherent in the original Glasgow Outcome Scale ("GOS"). The GOS was developed in 1975 for use in outcomes research and clinical trials. It has become the most widely utilized scale for assessing outcome after head injury. However, many of GOS users have identified various issues with this criterion. Some of the limitations of GOS included short interviews, no written protocol, variable results among individual assessors and ambiguous criteria for certain categories.

As a result, the GOS-E was designed to expand the original GOS and address its shortcomings. The GOS-E test extends the original GOS categories from five to eight. The eight categories are: upper good recovery, lower good recovery, upper moderate disability, lower moderate disability, upper severe disability, lower severe disability, vegetative state and death. The GOS-E enables systematic consideration of effects on social activities, family and friendships and changes in an individual's roles. This particular test has been proven to be reliable, predictive and pragmatic. As of June 1, 2016, the new SABS will transition from GOS to GOS-E.

Changes to the Forum and Procedure

(a) Bill 15 — Fighting Fraud and Reducing Automobile Insurance Rates Act, 20144

The Fighting Fraud and Reducing Automobile Insurance Rates Act ("Bill 15"), is an omnibus bill that received royal assent and was passed into law on November 20, 2014. The proposed purpose of Bill 15 was to help protect drivers and reduce costs and uncertainty by tackling fraud and abuse in Ontario's automobile insurance system.

Bill 15 seeks to accomplish this by moving the automobile insurance claim dispute resolution system from the Financial Services Commission of Ontario ("FSCO") to the Ministry of the Attorney General's Licence Appeal Tribunal ("LAT"). It is worth noting that the primary reason for this switch was to cut down on consumer frustration as well as curb financial and administrative stress on the system, which can increase insurance rates and costs.

Under the new SABS regime, mandatory mediations will no longer be required. Under the current system, when an insurer denies accident benefits to an insured, the insured commences the process by filing an application for mediation with FSCO. Furthermore, the existing SABS system requires a failed or deemed failed mediation in order for an insured to file an application for arbitration at FSCO. However, under the new SABS the mandatory mediations will be a part of the past. Therefore, as of April 1, 2016, the insured will no longer be required to conduct mandatory mediation before filing the application with the LAT.

(b) Licence Appeal Tribunal

The Licence Appeal Tribunal Act established the LAT and set out its duties and powers.5 Once Bill 15 is implemented, an insured that had his or her accident benefits denied by an insurance company will have an opportunity to commence proceedings against the insurance company before the LAT. The LAT is an adjudicative tribunal that is part of the conglomerate of the Safety, Licensing Appeals and Standards Tribunals Ontario ("SLASTO"). Its mandate is to provide a fair, efficient and impartial way to appeal decisions concerning compensation claims and licensing activities regulated by various ministries of the Ontario government. Most importantly, effective April 1, 2016, the LAT will begin accepting applications to the new Auto Accident Benefits Service ("AABS") system that aims to quickly resolve disagreements between individuals and insurance companies about accident benefits.

To begin, the new LAT process will no longer require parties to conduct mandatory mediations in advance of arbitration; but rather, the insured will be able to apply for arbitration immediately after having his or her benefit denied. Before the arbitration proceedings commence, the insurance company will be encouraged to conduct an internal review upon being advised that the applicant disagrees with a decision to deny a benefit. Once this is completed and the applicant continues to disagree with a decision to deny a benefit, the applicant is allowed to commence arbitration at the LAT. The arbitration process will mirror some steps that the current FSCO proceedings had for years.

First, the claimant will file an Application for Arbitration. This application will be more simplified than the one that is currently used by FSCO.

Second, the insurance company representative will file a Response to the Application for Arbitration. Once this latter step is completed, the action can be scheduled for a case conference. Before the case conference can take place, both parties will file a case conference summary. This document will outline documents to be used at the hearing, issues, preference as to the type of hearing, a list of witnesses and the details of the settlement offers.

Third, both parties will attend the case conference before a case conference arbitrator. The case conference arbitrators will have power to grant any Order that would be considered proper for the conduct of the proceeding.

Fourth, if the settlement discussions at the case conference fail, the matter will be scheduled for a hearing. There are three types of hearings and the facts of each case will depend on the type of hearing that is chosen. The disputes that determine whether an applicant falls within the minor injury guideline ("MIG") or disputes under $10,000.00 will be conducted as paper review hearings. These disputes will be completed within 135 days following the filing of the Application for Arbitration. On the other side of the spectrum, the disputes that involve catastrophic impairment determination, entitlement to post-104 week income replacement benefits and substantial attendant care claims will be conducted as full in-person hearings. These disputes will be completed within 360 days following the filing of the Application for Arbitration. The third type of hearings would encompass disputes that fall within the middle ground between the two previously-mentioned types and will be conducted as expedited hearings. These disputes will be completed within 210 days following the filing of the Application for Arbitration.

Finally, upon the completion of the hearing, either party will have an option to request the Executive Chair of the SLASTO to reconsider the decision. It is important to note that this step is optional and that parties may choose to appeal the decision to the Superior Court of Ontario without requesting the Executive Chair's reconsideration of the decision. Lastly, there will be no internal appeal dispute mechanism, such as at FSCO.

Conclusion

In conclusion, the changes to the accident benefits legislation will include across the board alterations to medical and rehabilitation, attendant care, non-earner benefits and catastrophic impairment definition. Furthermore, the legislative changes will completely alter the forum in which accident benefits disputes are brought and argued.

It is often said that the grass is always greener on the other side. It remains to be seen whether the changes to the accident benefits regime, as well as changes to the forum and procedure under which those disputes are to be brought, are truly greener grass, or simply a new system plagued by the same old systematic issues.


1 SABS - effective September 1, 2010 (O. Reg. 34/10) and Automobile Insurance (R.R.O. 1990, Reg. 664)
2 Changes to Automobile Insurance Regulations; Guideline Update Bulletin No. A-06/15.
3 (2009), 97 O.R. (3d) 95 (Ont. C.A.), rev'g [2007] O.J. No. 1564 (Ont. Sup. Ct. J.).
4 Bill 15 can be accessed at the Legislative Assembly of Ontario

5 Licence Appeal Tribunal Act, 1999, S.O. 1999, c. 12, Sched. G.

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