The long-awaited appeal decision in Belair Insurance Company Inc. and Scarlett was recently released.
Mr. Scarlett was injured in an accident on September 18, 2010 in which he suffered sprains and strains. He also claimed that he suffered from pre-existing conditions and subsequent psychological impairments that took him out of the Minor Injury Guideline (MIG). He was also diagnosed with Temporomandibular Joint Disorder (TMJ) syndrome, a pain disorder, severe depression, and chronic symptoms of Post Traumatic Stress Disorder following the accident.
At the preliminary issues hearing, Arbitrator Wilson concluded that Mr. Scarlett's injuries fell outside of the MIG. In reaching this conclusion, Arbitrator Wilson also made the following findings, which were of concern to insurers: the MIG is informational and non-binding and the insurer has the onus of proving that a claimant was subject to the $3,5000.00 monetary limits in the MIG; in other words, the insurer has the onus of demonstrating that the claimant has sustained a minor injury.
Although the determination of whether Mr. Scarlett fell within in the MIG was ultimately remitted for a new hearing, Director's Delegate Evans allowed Belair's appeal and rescinded the decision on the preliminary issues hearing.
The Test under the MIG
Although Arbitrator Wilson had considered whether the totality of Mr. Scarlett's injuries put him outside of the MIG, this was not the proper test. In determining whether a claimant falls within the MIG, Director's Delegate Evans concluded that the relevant test is whether the claimant's impairment is predominantly a minor injury, not simply whether any particular injury is a minor injury.
Burden of Proof
Director's Delegate Evans found that the ultimate burden of proof always rests with the insured when it comes to claiming benefits. Section 18 of the Statutory Accident Benefits Schedule (SABS) provides three tiers of coverage: $3,500.00 for an impairment that is predominantly a minor injury, $50,000.00 if the impairment is not a minor injury and is not catastrophic, and $1,000,000.00 for a catastrophic impairment. He stated:
I find that there is no difference in principle between these tiers, that the $50,000.00 is not some sort of default coverage, and that the burden of proof remains on insureds throughout to shows that they are entitled to benefits at whatever level.
The term “compelling evidence” appears in section 18 of the SABS. A claimant may fall outside of the MIG if his health practitioner provides compelling evidence that he has a pre-existing medical condition that will prevent him from reaching maximal recovery from the minor injury if he is subject to the MIG monetary limits.
Delegate Evans concluded that “compelling evidence” means more than credible evidence, again disagreeing with Arbitrator Wilson. Arbitrator Wilson had relied upon the French version of the MIG in reaching this conclusion, which was an error in Director's Delegate Evans' view.
The MIG is Binding
In addition, Directors' Delegate Evans found that the MIG is binding as it is specifically issued pursuant to section 268.3(1.1) of the Insurance Act, the definition of MIG in the SABS refers to section 268.3(1.1), and the MIG is then applied in section 18(1) and (2), thereby incorporating the MIG into the SABS by reference. He concluded that the MIG is as binding as the SABS.
Arbitrator Wilson had relied on cases and statutory provisions he raised on his own accord after the hearing without notifying the parties or giving them a chance to respond. Director's Delegate Evans found that this was a breach of procedural fairness. Therefore, a new hearing was required.
Preliminary Issues Hearings and the MIG
Director's Delegate Evans opined that the determination of whether a claimant falls within the MIG should not be determined at a preliminary issues hearing. The determination of whether or not a claimant is subject to the MIG will often involve determinations of credibility and disputed facts or conflicting medical reports. These are the same kinds of issues that would arise at the main hearing. It would be duplicative to hear these matters twice. Director's Delegate Evans would discourage similar preliminary issues hearings in the future.
Insurers will no doubt be pleased with this decision. Several important principles emerge from this decision. This decision clarifies that the claimant has a positive burden of establishing that he is entitled to accident benefits. The insurer does not have the burden of proving that the claimant has sustained a minor injury and is thus only entitled to $3,500.00 of coverage. Further, this decision affirms that the MIG is binding and not merely interpretative.
Finally, counsel should be wary of attempting to use a preliminary issues hearing to deal with a determination of whether the claimant falls within the MIG. Based on Director's Delegate Evans' comments above, it may be prudent to deal with this issue in a full hearing.
FSCO Appeal P13-00014 (November 28, 2013)