*Since the writing of this blog the decision is affirming, not overturned.

The content of “incurred” services as set out in section 3(7)(e) of the Schedule has been the subject of debate since the new SABS debuted in 2010. From there, efforts were made to further define it both substantively and procedurally via case law through the appeals of Henry v. Gore Mutual Insurance Co., [2012] ONSC 3687, Simser v. Aviva (A11-004610, January 16, 2013) and (P13-00004, January 3, 2014, and Aidoo and Security National (A13-001238, September 26, 2014) and (P14-00039, September 24, 2015); the February 2014 changes to section 19 of the Schedule (the “Henry v. Gore amendments”); and subsequent cases of Shawnoo v. Certas, 2014 ONSC 7014; Walsh and Echelon (A16-007448); and, Barnes and MVAC, (A13-005372, November 23, 2016) and (P16-00087, April 6, 2017; to name a few.

More recently the content of section 3(7)(e) was under scrutiny in the appeal decision of Terranova and Economical (A15-001653, April 1, 2016) and (P16-00033, December 5, 2017). At issue was whether services were incurred by a professional service provide in the course of employment as set out in section 3(7)(e)(3A):

(e) subject to subsection (8), an expense in respect of goods or services referred to in this Regulation is not incurred by an insured person unless,

(3) the person who provided the goods or services:

A. did so in the course of the employment, occupation or profession in which he or she would ordinarily have been engaged, but for the accident, (“section 3A”)or
B. sustained an economic loss as a result of providing the goods or services to the insured person (“section 3B”)

In a FSCO appeal decision released on December 5, 2017,  Director’s Delegate Evans upheld Arbitrator Mongeon’s decision in Terranova and Economical not to award attendant care benefits, but not his legal reasons for doing so. Instead, it was felt the Arbitrator’s findings, namely that services were not incurred in the course of employment, were findings of fact not subject to review. 

Those facts include the following: Mr. Terranova was catastrophically impaired on February 4, 2014 and claimed maximum attendant care benefits as provided by his daughter Jennifer, a child and youth worker, with whom he lived.   During the material time, Jennifer worked at Oakdale Child and Family Services providing care to youth and young adults. It was argued her position was analogous to that of an attendant care provider. She lost no time from work in providing for her father’s care and continued to work full-time post-accident.

Mr. Terranova sought to have Jennifer considered a professional under section 3A.

Economical sought to have Jennifer considered a non-professional under section 3B.

Recall, non-professional service providers are subject to the “Henry v. Gore amendments” in section 19(3)(4) of the Schedule and can only be paid, dollar for dollar, for the specific economic losses incurred. Professional service providers are not.

Arbitrator Mongeon found 4 reasons why Mr. Terranova was not entitled to claim benefits:

  1. Family members must sustain an economic loss: the Arbitrator cited Henry v. Gore in that section 3A was intended to address the arm’s length service provider, not family or friends. Shawnoo v. Certas was cited for the proposition that section 3A requires family members to prove an economic loss. In sum, the Arbitrator decided section 3A was not meant for family members, rather the Schedule required family members to show an economic loss. Where Jennifer sustained no such loss, no benefits were payable.
  2. Jennifer was not providing care in the course of employment: Jennifer’s day job providing care to youth and young adults was not the same as caring for her father. It would be inappropriate for her father to convalesce at the youth facility.
  3. There was no legal obligation to pay: Jennifer submitted various benefit forms that the Arbitrator felt were lacking in particulars. There was no legal contract, and rather, the forms were merely a strategy employed to access benefits.
  4. It was not reasonable or necessary for Jennifer to provide care: Jennifer was the only family member to claim for services despite a) being the only family member employed on a full time basis and b) the services requiring no special training or skill. 

Respecting reasons 2, 3 and 4, Director’s Delegate Evans was of the opinion that Arbitrator Mongeon simply did not believe Jennifer had done the work she claimed to have done. He was critical of the fact that the Arbitrator failed to explicitly say so.

Notably, other than a brief mention in a footnote in the appeal decision, it went almost entirely undiscussed that Mr. Terranova was receiving, and Economical was paying for attendant care services provided by a third party services provider, Modern Angels. This may have played into the Arbitrator’s credibility assessment, to the extent Jennifer was claiming to be a secondary professional service provider.

Where it was not the Delegate’s place to weigh the evidence, there was no reason to intervene with respect to the factual finding that Jennifer did not provide services in the course of employment, and as such, the Arbitrator’s decision stood and attendant care was not payable.

What is more interesting, though, is the discussion surrounding reason number 1, the suggestion that family members must sustain an economic loss in claiming benefits.  For the purposes of the appeal, the parties agreed the Arbitrator erred when he stated section 3A was not meant to apply to family members. The Applicant raised arguments under the Charter of Rights and Freedoms and the Human Rights Code in this regard for being discriminatory against family members, though these were found to be moot where both the Director’s Delegate and Economical agreed the Arbitrator was incorrect.

In discussing the economic losses of family members, Delegate Evans was critical of the recent LAT decision of M.P. and Certas. In M.P., the Adjudicator imported a causation analysis into section 3A by way of the “but for” phrasing contained therein. Similar to the facts in Terranova, in M.P., the Applicant’s wife, an accredited professional, provided care post-accident while continuing to work at the same frequency and without sustaining any economic loss. Because she incurred no economic loss, there was no entitlement to benefits. Director’s Delegate Evans found that the LAT Adjudicator in M.P. used the “but for” phrasing to adopt into section 3A a causation test for economic loss that already existed in section 3B. In so doing, the Adjudicator rendered a separate section 3A analysis redundant. Director’s Delegate Evans felt the Adjudicator in M.P. had misinterpreted the legislation. He confirmed in Terranova that issues of economic loss belong under 3B and should not be imported into 3A;

“…the ‘but for’ test in this case is simply descriptive: the issue is whether the attendant care done before the accident equates between with that done afterwards”.

All of this discussion, however, is technically obiter, given the deference shown by the Director’s Delegate to the Arbitrator’s findings of fact.  From this obiter, however, we can deduce that section 3A remains available to non-arms length care providers including family and friends and despite it including the “but for” phraseology, it does not import an economic loss causation test into the analysis.

Where the care done before must equate with the care done afterwards it does, however, beg the question; how similar must the care be in order to equate, and where will the line be drawn? On the one hand, Terranova seems to suggest that had the service provider been believed, the services actually provided, and forms adequately particularized, benefits may have been awarded without having to equate pre and post-accident services. On the other, it suggests insurers can rely on this case to narrow the reach of section 3A, that it is not enough for the care to be analogous and that section 3A applies only to service providers providing the specific type of care being claimed.

It will be interesting to see how and if this case is interpreted and applied in the LAT context as the content of the definition of “incurred” services continues to evolve.

If you have a question about this blog or a similar file, please contact Eric Grossman at 416-777-5222