Decision Clarifies Independent Assessors’ Obligations to Accident Benefits Claimants

By Emma Gardiner

A recent decision of the Ontario Superior Court of Justice provides some important insights into the role and obligations of assessment companies and individual assessors in the accident benefits regime under the Statutory Accident Benefits Schedule (“SABS”).

I. Background

The decision relates to a motion to strike pleadings in an action brought by an accident benefits (“AB”) claimant. The plaintiff was a minor who was injured in an automobile accident, when the vehicle in which she was a passenger was struck by a vehicle that fled the scene. She was insured under a policy provided by her mother’s accident benefits insurer (the “Insurer”). The plaintiff brought three separate proceedings in relation to her injuries as a result of the automobile accident:

  • a dispute with respect to her entitlement to accident benefits, brought first to the Financial Services Commission of Ontario (“FSCO”) and then continued before the License Appeal Tribunal (“LAT”)
  • a tort claim brought against the unidentified driver who fled the scene and against the Insurer, on the basis of unidentified driver liability insurance coverage
  • an action challenging the Insurer’s administration of her claims for accident benefits under SABS (the “Action”).

Named as defendants in the Action included:

  1. The Insurer,
  2. several employees of the Insurer,
  3. Cira Medical Services Inc. (“Cira”), an assessment company providing independent medical assessments under section 44 of SABS; and
  4. several employees and independent contractors of Cira (collectively the “Cira Defendants”).

Shortly before the motion, the Insurer settled with the plaintiff. The Cira Defendants brought a motion to strike the Statement of Claim in the Action.

The Court found that the Statement of Claim should be struck for reasons including that:

  1. the Court did not have subject matter jurisdiction over her claim; and
  2. the pleading contravened Rule 21.01(1)(b), as plaintiff had not pleaded a legally tenable cause of action against any of the defendants.

The Court’s analysis on these grounds provides some insight into the obligations of assessment companies and assessors under SABS.

II. Subject Matter Jurisdiction

The Statement of Claim raised a large number of complex allegations against the defendants. These claims included allegations that the defendants:

  1. were involved in a scheme to charge more than the $2,000 cap per section 44 assessment, set out in SABS, by holding back inquiries so that follow-up assessments would need to be conducted at a later date;
  2. drafted inaccurate reports to downplay the extent of the plaintiff’s injuries;
  3. destroyed the “paper trail” with respect to falsifying reports; and
  4. caused the plaintiff’s treating physicians to be misled about the extent of her injuries as a result of the “falsified” reports.”

The Court concluded that it did not have subject matter jurisdiction over any of the plaintiff’s claims, as these claims were within the exclusive jurisdiction of the LAT,  which succeeded FSCO and was given exclusive jurisdiction to resolve SABS disputes pursuant to s. 280 of the Insurance Act. The Court cited the Ontario Court of Appeal’s decision of Stegenga v. Economical Mutual Insurance Co., 2019 ONCA 615, which found that sections 279 and 280 of the Insurance Act were intended to cover a broad range of disputes, including disputes about how an insurer handled a SABS claim, and placed those disputes within the exclusive jurisdiction of the LAT.

III. Legally Tenable Cause of Action

Under Rule 21.01(1)(b), a party can move to strike out a pleading on the ground that it disclosed “no reasonable cause of action.” A pleading discloses no reasonable cause of action where it is “plain, obvious, and beyond doubt that the plaintiff cannot succeed in the claim.”

The Court’s consideration of some of the claims advanced by the plaintiff provide insight into the correct interpretation of SABS and the role of an independent assessor in that scheme.

A.  Inducing Breach of Contract

The plaintiff alleged that the Cira Health Defendants were liable for breach of contract for inducing her Insurer to breach several provisions of SABS, specifically the provisions of SABS setting out the procedure to be followed for section 44 assessments. As outlined above, the plaintiff raised a number of allegations regarding inappropriate conduct in the assessment process. This claim failed on several grounds, including that the provisions of SABS were not terms of the contract of insurance between the insurer and plaintiff.

Significantly, the court found that even if these provisions of SABS were contractual terms, the sections of SABS with respect to section 44 assessments are for the benefit of the insurer, not for the benefit of the accident benefit claimant, or the plaintiff in this case. The assessment process exists to assist the insurer to make a medically informed decision regarding benefits claimed. Accordingly, even if the plaintiff could establish breach of contract, the plaintiff could not establish damages.

The court approvingly cited from the Cira Defendants’ factum as follows:

A flawed or biased IME amounts to a squandered opportunity to investigate the claim and exposes the insurer to an adverse result in the LAT. The SABS regulation also provides its own punitive remedy for benefits denied in bad faith. There is no cause of action against the IME provider or the expert assessors. They owe the plaintiff no legal duty. 

B. Breach of Fiduciary Duty

The plaintiff pleaded that the Cira Defendants had breached a fiduciary duty to the plaintiff on the basis that the plaintiff’s treating physicians would see and may rely on the assessment reports, and also because the reports could impact the plaintiff’s legal position on the tort matter. The court found these arguments to be “nonsense,” on the basis that the assessors owed the plaintiff no fiduciary duty.

The court first noted that whether or not an implied fiduciary duty exists depends on the following factors:

  1. the alleged fiduciary has scope for the exercise of some discretion or power;
  2. the alleged fiduciary can unilaterally exercise that power or discretion so as to affect the beneficiary’s legal interest;
  3. the alleged beneficiary is peculiarly vulnerable to or at the mercy of the fiduciary holding the discretion or power; and
  4. the alleged fiduciary either implicitly or expressly has undertaken or accepted a responsibility to act in the best interest of the alleged beneficiary and to act in accordance with a duty of loyalty.

Regarding the second factor, the court rejected the argument that the contents of the report prepared by the Cira Defendants impacted the legal position of the plaintiff with respect to any tort claim. The report was created for the purpose of assisting the insurer to determine entitlement to benefits under SABS. The evidence for the tort claim will be prescribed by the law of evidence and by the Rules of Civil Procedure, not by SABS.

Likewise, regarding the report being relied upon by treating physicians, the court noted that the report is not prepared for the benefit of treating physicians. Even where a treating physician reviews such a report, it would not relieve the physician of their own professional responsibilities to provide proper diagnosis, care, and treatment.

Regarding the third factor, the court rejected that the plaintiff was in a particular circumstance of vulnerability because the plaintiff’s treating physicians could receive inaccurate or incomplete information from the report prepared as part of the process under section 44 or section 45 of SABS. The plaintiff was under no obligation to share the report with her treating physicians, and she was free to obtain any treatment she wished.

Finally, regarding the fourth factor, the Court found that SABS does not explicitly or implicitly impose a duty of loyalty or a duty of care to the insured onto persons arranging or conducting section 44 or 45 assessments, as the assessment is not for the insured’s benefit. The assessment is for the benefit of the insurer as well as to “ensure the viability of the compulsory no-fault insurance regime of the Insurance Act, which is designed to be to the benefit of all Ontarians who do not have to prove fault to receive accident benefits.”

Conclusion

The Court’s analysis provides some helpful insights into the correct interpretation of SABS, including:

  1. The LAT has broad exclusive jurisdiction to deal with disputes about how an AB file was handled, including the manner in which any section 44 or 45 assessments were conducted by assessment companies or individual assessors.
  2. The assessment process under SABS is not for the benefit of the AB claimant, but is for the benefit of
    1. the insurer, to assist in making medically informed decisions with respect to the entitlement of to benefits; and
    2. all Ontarians, by ensuring the viability of the compulsory no-fault insurance regime.
  3. Assessment companies and individual assessors do not owe a fiduciary duty to the AB claimants on either of the grounds that:
    1. The report may impact the AB claimant’s legal position in the tort matter; or
    2. The report may be relied upon by the AB claimant’s treating physicians.

For more information about independent assessments and the obligations of assessors and assessment companies, contact us.

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