SABS Related Decision is Accident Victim Win

Aviva Insurance Company of Canada and Statutory Accident Benefits Schedule (SABS) Ontario 2021 Decision

In the recently released decision of Aviva Insurance Company of Canada v. Danay Suarez, 2021 ONSC 6200 (CanLII), the Divisional Court made an important ruling on whether treatment plans had to be “incurred” under the Statutory Accident Benefits Schedule (SABS) before the Licence Appeal Tribunal (LAT) could have jurisdiction in order to make a ruling with respect to an accident benefits claimant’s entitlement to a treatment plan.  In Suarez, Aviva brought a statutory appeal of a LAT decision that it does have jurisdiction to hear disputes with respect to entitlement or quantum of benefits, even where the insured person cannot prove that they have incurred the benefits in dispute. They argued that the LAT did NOT have jurisdiction to rule on disputes with respect to entitlement or quantum of benefits if those benefits have not been incurred.

The Coalition of Citizens with Disabilities – Ontario Health Justice Program Position

The Ontario Trial Lawyers Association (OTLA) and The Coalition of Citizens with Disabilities – Ontario Health and Justice Program intervened in support of the position of the insured respondent, Danay Suarez. OTLA argued that the LAT’s decision was correct, that Aviva was seeking to overturn decades of existing practice and jurisprudence, that its proposed interpretation of the SABS offended its statutory purpose as consumer protection legislation, and that the relief sought by Aviva would render the dispute resolution function of the LAT inaccessible to most claimants.

The Coalition of Citizens with Disabilities – Ontario Health Justice Program argued that the Schedule does not expressly stipulate when treatment expenses must be incurred, and that the statutory provisions at issue ought to be interpreted and applied in a manner that promotes access to justice. They submitted that there was an inherent power imbalance between accident claimants and their insurers, and that a requirement that healthcare treatment expenses be incurred before accessing the LAT would adversely impact low-income persons with disabilities.

Ultimately, the panel of the Divisional Court accepted these arguments. They found that the LAT had broad remedial powers to address accident benefits disputes, and that in interpreting the SABS, the Court must be mindful of the remedial purpose of the legislation. It noted that the SABS is consumer protection legislation, and that the goal of the legislation is to reduce the economic dislocation and hardship of motor vehicle accident victims.

The Court noted that if Aviva’s position were accepted, accident benefits claimants would be required to fund disputed Treatment Plans in advance of an application to the LAT and will be limited to pursuing payment of only that treatment which they can afford to self-fund. Claimants with limited or no access to funds would be at the mercy of their insurers’ goodwill. That would perpetuate the very power imbalance that the legislation is intended to circumvent.

The Court also held that Aviva’s proposed interpretation offended the remedial and consumer-oriented purpose of the legislation and regulations, and also ignored the clear wording of s. 280(1) of the Insurance Act which identifies entitlement and quantum as mutually exclusive issues, as well s. 55(1) of the SABS which is silent on a claimant’s failure to “incur” expenses as a restriction to initiating proceedings.

The Court rejected Aviva’s argument that it would be inconsistent to permit claimants to complete their claim after the fact by incurring expenses while denying insurers the ability to issue compliant denials after the fact. The panel stated that permitting an insurer to issue a compliant denial following a LAT hearing would make the provisions of the SABS which impose strict consequences on insurer intended to minimize delay in accessing benefits meaningless if insurers could avoid those consequences by issuing compliant denials only after a hearing.

The Court also rejected Aviva’s arguments that granting the LAT authority to approve treatment plans which have not yet been incurred would deprive of its ability to dispute invoices or could result in payments in excess of insurance limits. It held that s. 55(1)(3) of the SABS clearly contemplates disputes solely regarding the issue of liability to pay invoices. With respect to potential claims beyond insurance policy limits, the panel found that it would not be challenging in our age of technology to track the benefits claimed in submitted treatment plans and to deny treatment in excess of policy limits when there are outstanding Treatment Plans which are or may be the subject of appeal. It stated that the failure or unwillingness of insurers to track liability for expenses should not be the responsibility of consumers.

Therefore, the Divisional Court held that insured persons may dispute entitlement and quantum of benefits without being required to prove that they have first incurred those benefits. This decision is a victory for the consumer which maintains the accessibility of the dispute resolution system regarding no-fault accident benefits claims. It upholds the fundamental purpose of having an accident benefits system, which is to enable victims of motor vehicle accidents to be able to quickly access and dispute benefits needed for their recovery, and it means that vulnerable accident victims will continue to have a robust ability to challenge the adjustment decisions of powerful, multibillion dollar insurance companies when they make accident benefits claims.