The dispute in this case related to the attendant care services that were provided to Ms. Kelly by her parents, as well as those not services not covered by OHIP, between the period of April 6, 2009 and June 23, 2009. No Form 1 was provided until February 1, 2013 covering this time period.
The insurer denied the payment of attendant care benefits firstly on the basis that retroactive Form 1s were not compliant with the provisions of the Schedule. Concerns were also raised as to whether the benefits were “incurred” by the insured.
Arbitrator John Wilson held that although a Form 1 may be a pre-condition to the payment of attendant care expenses, it would be unacceptable to require an injured person in every circumstance to complete all the paperwork required of them prior to incurring attendant care benefits. This was particularly the case involving seriously injured individuals. As there was nothing explicitly denying the availability of retroactive Form 1s in the Schedule, absent stronger statutory language, the insured was permitted to proceed in such a manner.
The Court conclusively found that benefits were not payable, in the case of a retroactive Form 1, until the Form 1 is submitted...
This approach has been upheld by the Courts. In Grigoroff v. Wawanesa Mutual,4 a decision of the Divisional Court on appeal from a trial judge of the Superior Court, the Court was clear that the failure to submit a Form 1 merely delays the payment of attendant care benefits, it does not forfeit the right of the insured to make that claim. The Court conclusively found that benefits were not payable, in the case of a retroactive Form 1, until the Form 1 is submitted:
In the case at bar, an insurer is not required to pay a claim for attendant care needs until 10 business days after it receives an assessment of attendant care needs. In the case of the disputed benefits, that did not happen until February of 2009, when a revised assessment of attendant care needs was filed for the period from January 20, 2002 to August 1, 2003.
In T.N. v. Personal Insurance,5 Arbitrator Bayefsky clarified that the insurer is entitled to delay the payment of attendant care benefits due to the absence of a Form 1. However, the benefits cannot be denied on that basis once the Form 1 is submitted:
In my view, section 39(3) of the Schedule does not displace an insurer's basic obligation to pay reasonable and necessary attendant care benefits determined in accordance with a duly prepared Form 1. Section 39(3) establishes an insured's obligation to claim attendant care benefits in accordance with a Form 1, and an insurer's right to await a Form 1 before assessing an insured's entitlement to attendant care benefits. Section 39(3) allows an insurer to pay attendant care benefits without a Form 1. It states that an insurer is not required to pay attendant care benefits before a Form 1 is submitted. This does not, in my view, mean that an insured forfeits their right to attendant care benefits, or that an insurer is released of any obligation to pay attendant care benefits, prior to the Form 1 being submitted. In my view, significantly stronger statutory language would be required to effect this purpose. The section as it now reads simply ensures the orderly determination of a person's need for attendant care (in accordance with a proper attendant care needs assessment), and protects an insurer from having to determine what it should pay in the absence of a specific and legitimate attendant care needs assessment.
Delegate Evans, in the recent FSCO appeal of MG v. Economical Mutual Insurance,6 also held that section 39(3) allows an insurer to delay payment, but not deny benefits on that basis. The section concerns a matter of timing.
It is worth noting at this stage that merely submitting a Form 1 does not conclusively establish the insured's entitlement to attendant care benefits. It remains open to the insurer to challenge the evidence (or lack thereof) put forth by the insured, and dispute the reasonableness and necessity of the benefits claimed. As stated by Arbitrator Bayefsky:
... this can only be answered in light of the evidence at the relevant times. The question at that point will be whether the evidence prior to the receipt of the Form 1 reflects the assessment contained in the Form 1.
Interest is payable on overdue benefits...
Interest - Date of Entitlement or of Submission?
Interest is payable on overdue benefits. If the interest runs from the date that the insured became entitled to attendant care benefits, the insurer faces the potential of a large interest award despite a relatively short denial period. If the interest runs from the date of the submission of the Form 1, in cases of retroactive Form 1s at least, the insured has essentially forfeited their right to interest on all retroactive amounts.
Section 51 of the Schedule, previously section 46, states as follows:
(1) An amount payable in respect of a benefit is overdue if the insurer fails to pay the benefit within the time required under this Regulation.
(2) If payment of a benefit under this Regulation is overdue, the insurer shall pay interest on the overdue amount in accordance with this section for each day the amount is overdue.
Therefore, interest is payable on overdue amounts. An amount is “overdue” if the insurer has failed to pay the benefit within the required time under the Schedule.
In order to determine this issue, arbitrators and judges often refer to the nature of interest itself. Justice Major, speaking on behalf of the unanimous Supreme Court of Canada in Bank of America Canada v. Mutual Trust Co., highlighted that interest is meant to compensate for the time-value of money:
Compensation is one of the chief aims of the law of damages, but a plaintiff who is successful in his action and is awarded a sum for damages assessed perhaps years before but now payable in less valuable dollars finds it quite obvious that he has been shortchanged. Equally obviously, payment of interest on his damage award from some relevant date is one way of redressing this problem.
The overwhelming opinion today of Law Reform Commissions and the academic community is that interest on a claim prior to judgment is properly part of the compensatory process.7
In other words, interest is not intended to serve a punitive function.
Grigoroff, as cited above, is the most authoritative decision currently on the issue of interest in the context of a retroactive Form 1. As it was a decision of the Divisional Court citing in appeal of the Superior Court of Ontario, its comments are binding as precedent on trial judges. The Court held that attendant care benefits only become “overdue” once 10 days have passed since the submission of a Form 1. Interest cannot be applied retroactively.
Interestingly, the date of loss in Grigoroff was on December 7, 2001. The Court referred to then section 39(1):
An application for attendant care benefits for an insured person must be in the form of an assessment of attendant care needs for the insured person that is prepared and submitted to the insurer by a member of a health profession who is authorized by law to treat the person's impairment.
Within 14 days after receiving an application for an attendant care benefit, an insurer shall...
However, this was not section 39(1) in 2001. This amendment was made in 2005 via O. Reg. 546/05. Prior to this date, section 39(1) stated as follows:
Within 14 days after receiving an application for an attendant care benefit, an insurer shall,
(a) give the insured person notice that it has approved the application, if the insurer determines that it is required to pay for the expenses described in the application; or
(b) give the insured person notice that the insurer required the insured person to furnish a certificate from a member of a health profession who is authorized by law to treat the person's impairment stating that the expenses described in the application are reasonable and necessary for the person's care.
This was emphasized by Justice Gunsolus in Mulhall v. Wawanesa Mutual Insurance.8 Justice Gonsolus correctly stated that in 2001, the law did not require the submission of a Form 1, and therefore, the decision in Grigoroff did not apply to the case before him (which had a similar date of loss):
Therefore, pursuant to s. 39(1), a claim for attendant care benefits must be in the prescribed form of an Assessment of Attendant Care Needs. As counsel for the plaintiff suggested, before the amendment an injured party had only to file an application in response to which the respondent insurer would either: a) agree to the payments, or b) take the further step of requiring the applicant to submit a form prepared by their health care professional (Form 1).
Despite the fact that Justice Gonsolus did not have to follow the Divisional Court's ruling in Grigoroff because of the different legislation, he then indicated that he would not have followed the Court's binding precedent because the Court did not deal with the consumer protection aspect of insurance law:
“interest in this case should begin to accrue from the date that the insurer had sufficient information to be able to assess whether the benefit should have been paid regardless of whether or not the plaintiff or his parents specifically applied for attendant care expenses”.
In any event, FSCO arbitrators have applied Grigoroff with ease. In a recent decision Nadesu v. Zurich Insurance Co.9, Arbitrator Rogers followed the approach of the Divisional Court in Grigoroff:
8 In my view, the decision of the Divisional Court in Grigoroff v. Wawanesa Mutual Insurance Co. precludes the approach Mr. Nadesu suggests. In that case the insurer paid ACBs pursuant to an Assessment the plaintiff delivered shortly after the accident. About 7 years later, the plaintiff delivered a retroactive Assessment, claiming further ACBs. The insurer did not pay pursuant to the retroactive Assessment. At trial, the plaintiff was found to be entitled to further payment from a date preceding delivery of the retroactive Assessment and the trial Judge ordered payment of interest from the date of entitlement.
9 The Divisional Court reversed the trial Judge's decision. The Court concluded that delivery of the Assessment is critical to entitlement to interest. The Court noted that: "pursuant to s. 39(1), a claim for attendant care benefits must be (emphasis added) in the prescribed form of an assessment of attendant care needs..."
Further, in Whyte v. State Farm Mutual Automobile Insurance Co.,10 the arbitrator did not award interest on retroactive attendant care benefits, using the same reasoning as the Divisional Court in Grigoroff: there is no obligation on the insurer to pay interest on the attendant care benefits until it received a Form 1.
The decisions above indicate that an absence of a Form 1 is not a bar to retroactive claims for attendant care. However, with respect to the interest payable on the retroactive attendant care expenses, the law has been less certain. Although decisions in Grigoroff and Nadesu ruled that interest was calculated after the Form 1 was submitted, the decision in Mulhall stated that interest should begin to accrue from the date that the insurer has sufficient information to be able to assess whether attendant care benefits should have been paid.
Until the matter comes before the Court of Appeal for Ontario, the Divisional Court's ruling in Grigoroff remains the binding precedent to be followed by trial judges and arbitrators alike.
1 Statutory Accident Benefits Schedule – Effective September 1, 2010, O. Reg. 34/10.
2 Kelly v. Guarantee Company of North America, FSCO A12-006663 (August 7, 2014).
3 Statutory Accident Benefits Schedule – Accidents on or after November 1, 1996, O. Reg. 403/96.
4 Grigoroff v. Wawanesa Mutual Insurance Co., 2015 ONSC 3585 (Div. Ct.).
5 T.N. v. Personal Insurance Co. of Canada, FSCO A06-000399 (July 26, 2012).
6 MG v. Economical Mutual, 2014 CarswellOnt 10513 (FSCO App.).
7 Bank of America Canada v. Mutual Trust Co., 2002 SCC 43 citing Mary Anne Waldron, The Law of Interest in Canada (Scarborough, Ont.: Carswell, 1992), at pp. 127-128
8 Mulhall v. Wawanesa Mutual Insurance, 2015 ONSC 7495.
9 Nadesu v. Zurich Insurance Co., 2016 CarswellOnt 1577 (F.S.C.O. Arb.) (“Nadesu”).
10 Whyte v. State Farm Mutual Automobile Insurance Co., 2015 CarswellOnt 11967 (F.S.C.O. Arb.).