The starting principal in accident benefit insurance, made clear by the Supreme Court of Canada in Smith v Co-operators, is that no fault Insurance law is consumer protection law: that is its legislative purpose and the ultimate goal.
Insurers and adjusters are well versed in the world of accident benefits: how to apply, what may trigger exposure, and how to adjust the claim accordingly. At the outset of a claim, the insurer has the obligation to provide application forms and information regarding the benefits available under the Schedule, as well as to provide information to assist the person in applying for benefits.
More often than not, the insured doesn’t have the faintest clue of his or her potential entitlements. Particularly in the context of a catastrophic injury, procedural compliance with the Schedule is the last thing on the mind of an accident victim.
On March 18, 2001, Mr. Mulhall was in a serious and violent car crash. He was in a coma for weeks with his parents by his side at St. Michael’s Hospital. He sustained a serious head injury and doctors thought he might not live. Part of his brain was surgically removed. Within days of the accident, the claim was reported to Mr. Muhall’s insurer. Shortly thereafter, the responsible adjuster assigned a case manager and met his family in hospital, where Mr. Mulhall remained in the critical care unit. Mr. Mulhall’s parents signed the application for accident benefits and the insurer maintains all available benefits were explained at that time. A form was completed indicating he could not eat, walk, toilet, or bathe on his own. He remained in a coma.
In mid-May 2001, Mr. Mulhall was responsive to therapy and moved to a long term care facility. Finally, on July 27, 2001 – nearly four months after the accident – Mr. Mulhall was discharged home under his family’s care. Upon discharge, the long term facility noted:
It was quite clear that throughout Mr. Mulhall’s stay here, because of problems with attention, concentration, impulsivity, poor safety awareness and poor judgments, which he needed this constant supervision to maintain his safety. It was also important to help teach the family about the significant impacts his injury would have on him for now and life long.
The insurer paid Mr. Mulhall many medical and rehabilitation benefits including a child youth worker, rehabilitation specialist, and speech pathologist. The insurer did not pay for attendant care benefits (ACB) until they were formally applied for by Form 1 on December 7, 2006. ACBs prior to December 7, 2006 were not paid, on the grounds that no formal claim or Form 1 had been advanced for such benefits at that time.
Mr. Mulhall sued the insurer for attendant care benefits from the date of loss. Prior to trial, a preliminary issue was argued to determine whether interest could be payable, in the event that Mr. Mulhall was able to establish entitlement to attendant care benefits prior to the first Form 1 being submitted on December 7, 2006. Mr. Mulhall took the position that interest should be paid from the date that the insurer knew or ought to have known that he had attendant care needs for which funding was available under the Schedule. Relying on the cases of TN v The Personal, Michaelski v Wawanesa, and LF v State Farm, he argued in effect that the application should be deemed to have been made at the time that the insurer knew he had attendant care needs, but took no steps to assist him in accessing funding. The insurer took the position that interest was not owed until it was “overdue” (10 days after the submission of the retroactive form 1) as per the recent decision in Grigoroff v Wawanesa.
The motion on interest was heard over three days in Lindsay, Ontario.
Ultimately, Justice Gunsolus agreed with Mr. Mulhall. Grigoroff did not deal with the question of what the insurer knew when, which was critical to the outcome in this case. The Court found no finding of fault against the insurer, but did find that interest would accrue from May 3, 2001 (30 days after the completion of the application for accident benefits) on the basis that the insurer has sufficient information by which it ought to have been able to consider to pay or deny attendant care benefits.
- Assigned a case manager given Mr. Mulhall’s severe brain injury
- Was aware of his cognitive and behaviour issues stemming from his injuries
- Had the application for accident benefits
- Had the OCF-12 detailing that Mr. Mulhall could do nothing for himself
- Had all medical record requests answered and received updates from Mr. Mulhall’s health care team
- Set reserves for attendant care benefits on the prospect that Mr. Mulhall would require the benefit
The Court concluded that the insurer had the information necessary to assess exposure to attendant care benefits and sufficient medical documentation to support a claim for benefits. While the adjuster may have assisted Mr. Mulhall’s family in completing the application for accident benefits, it was not made sufficiently clear that care provided by family members could be compensable under the Schedule.
This is therefore another reminder that insurers have a duty to proactively adjust accident benefits files, and to meaningfully assist accident victims to navigate the complex procedures necessary to obtain accident benefits under the Schedule. Ultimately, it is the insurer who bears to onus to prove that this assistance has been provided. Maintaining careful records of what information is provided to claimants in the claims process is critical to meeting that onus.
Mulhall stands for the proposition that when a benefit is known to be owed by the insurer, it is deemed to have been made. Had the insurer facilitated the claims process and had formal claims still not been advanced, it is possible that the outcome might have been different in this case.