Shooing Away Applications for Unreasonable CAT Assessments: R.M. v. Certas By: Aryeh Samuel and Melia Muboyayi

In the recent Licence Appeal Tribunal (“LAT”) decision, R.M. v. Certas Home and Auto Insurance Company[1], ZTGH LLP was successful in defending a LAT Application where the applicant sought entitlement to $22,400 for catastrophic impairment assessments (“CAT Assessments”). The LAT found in Certas’ favour and dismissed the Application.

The Law:

Section 45(1) of the Statutory Accident Benefits Schedule (“SABS”) provides that an insured who sustains an impairment as a result of a motor vehicle accident may apply to the insurer for a determination of whether the impairment is a catastrophic impairment (“CAT Impairment”).

Section 25(1)5 of the of the SABS provides that an insurer shall pay reasonable fees incurred by or on behalf of an insured for preparing an application under section 45 of the SABS, including any assessment necessary for that purpose. Section 25(5)(a) stipulates that the insurer shall not pay more than $2,000.00 in respect of fees and expenses for conducting any one assessment or examination and the preparation of the related report.

The Facts:

The applicant in this case submitted that it was reasonable and necessary to conduct assessments to determine whether she suffered a CAT Impairment because it is possible that she may be catastrophically impaired. The applicant further argued that she does not have the financial means to incur the costs of the CAT Assessments on her own and that the insurer was required to fund the CAT Assessments under section 25 of the SABS.

The insurer argued that that the correct test for entitlement to a CAT Assessment is that firstly it must be found that the assessments themselves are reasonable and necessary and then it must also be found that the fees charged for each assessment are reasonable. It further argued that the applicant bears the onus to show that each constituent element that makes up the proposed assessment is reasonable and necessary and that the applicant failed to discharge its burden of proof. The Tribunal agreed.

The Decision:

Avril A. Farlam, Vice Chair at the LAT, found that entitlement to payment for a CAT Assessment is not absolute and that an insurer is only obligated to fund those that are reasonable and necessary. It was also found that the whether or not an applicant has the financial means to incur the cost of CAT Assessment on their own is not relevant to the analysis.

In this instance, the LAT found  that there was no reasonable basis to investigate whether this particular applicant was catastrophically impaired, as insufficient objective medical evidence was filed to suggest that she could possibly qualify for such designation. Importantly, Adjudicator Farlam noted that while assessments by their very nature are speculative and their very purpose is to determine if an impairment exists or not, for an assessment to be reasonable and necessary, “there must be some suggestion that the specific condition exists and arose from the accident”. The LAT found that was lacking in this instance.

In R.M. v. Certas it was acknowledged that the applicant may have sustained an injury in the motor vehicle accident and that she may have undergone some treatment as a result, however the LAT found that “the weight of the applicant’s medical evidence does not approach catastrophic impairment levels” and therefore the proposed assessment were not reasonable and necessary. 

The Lesson:

In light of recent decisions[2] finding that the costs of CAT Assessments are to be excluded from the limit for medical benefits, some legal representative seek to apply to insurers for  CAT Assessments, even on files where such assessments are not warranted. Where some do this out of an abundance of caution out of concern that to not explore this issue could be tantamount to negligence, others are attempting to leverage the cost of these assessments into a higher cash settlement. Insurers should be mindful that when faced with proposed CAT Assessments, that the onus is on the insured to  prove that the assessments themselves are reasonable and necessary in the circumstances of that particular case.