The Divisional Court recently gave its stamp of approval to a decision permitting the combining of psychological and physical impairments when assessing catastrophic impairment, an issue the insurance bar has been debating since a 2004 Superior Court ruling.
“It means there’s some clarity in the law now that three judges have approved of including psychological impairment in this whole person impairment test,” says plaintiff lawyer Troy Lehman. “It means that when medical assessors or professionals are doing their calculation . . . they’re going to have to include psychological impairments.”
Divisional Court Justice Jane Ferguson last month dismissed a leave to appeal application from the defence in Arts v. State Farm Insurance Co. Superior Court Justice Robert MacKinnon ruled in May on the question of law raised by the statement of claim involving Nigel Arts.
State Farm sought a ruling on whether it is “permissible to assign percentage ratings in respect of a person’s psychological or psychiatric impairments and combine them with a percentage ratings in respect of the person’s physical impairments, for the purpose of determining whether the person’s impairments meet the definition of catastrophic impairment as defined by . . . the Statutory Accident Benefits Schedule.”
In a 2001 application, assessors for Arts found that, under the American Medical Association’s Guides to the Evaluation of Permanent Impairment dealing with whole person impairment, Arts scored 23 per cent from neuromusculoskeletal injuries, and 40 per cent WPI in terms of mental and behavioural impairment, wrote MacKinnon. If both ratings were combined, his injuries would meet Ontario’s definition of catastrophic impairment, the judge noted.
He rejected State Farm’s argument that the AMA guides prohibit the inclusion of psychological impairment.
“The guides are intended to be interpreted liberally,” he wrote. “They make it clear that physicians must use their clinical judgment to arrive at impairment ‘estimates.’”
MacKinnon’s ruling was in line with the 2004 Superior Court decision in Desbiens v. Mordini, which asserts that “the guides clearly permit the use of clinical judgment to enable the assessor to assign percentage ratings to psycho-emotional impairments for the purpose of calculating WPI,” wrote MacKinnon.
“The guides were clearly not designed by the AMA for the purpose directed by the Ontario legislature,” the judge continued. “They must be interpreted in a manner that is contextually consistent with the language of the [Statutory Accident Benefits Schedule].”
MacKinnon went on further, writing, “The legislature’s definition of ‘catastrophic impairment’ is intended to foster fairness for victims of motor vehicle collisions by ensuring that accident victims with most health needs have access to expanded medical and rehabilitation benefits. That definition is intended to be remedial and inclusive, not restrictive.”
The judge also noted that the financial services commission - whose decisions are not binding on a court - has approved of the reasoning in Desbiens in a set of arbitration and appeal decisions.
“FSCO decisions are generally accorded court deference because of the commission’s interpretive expertise. While in the case at bar I do not defer to FSCO reasoning, I find it correct, weighty, and helpful,” wrote MacKinnon.
The judge also quoted Superior Court Justice Harvey Spiegel’s comments on Charter issues in his Desbiens ruling.
“In my view, to deprive innocent victims of motor vehicle accidents the right to recover much needed health care expenses because their psychological impairments cannot be combined with their physical impairments in considering their overall WPI is unjust,” Spiegel is quoted in the decision.
“Moreover, it is inconsistent with the principles and norms of s. 15 of the Charter . . . In my view the defendant’s interpretation tends to discriminate against persons who have a mental disability.”
Lehman, a Barrie lawyer who represented Arts in the case, says the matter has since been settled out of court. Arts is now eligible to receive medical and rehabilitation benefits for the rest of his life up to a limit of $1 million, says Lehman.
He would have received $100,000 in benefits over 10 years if not deemed catastrophically impaired, says Lehman. Attendant care also is dramatically increased if catastrophic impairment exists, he says.
But on top of garnering results for his client, Lehman says MacKinnon’s decision is instructive to the insurance bar, particularly with much squabbling regarding the correctness of the Desbiens decision. He adds that many lawyers facing similar issues contacted him to find out when the leave to appeal would be heard.
But Ian Kirby of Gilbert Wright & Kirby LLP, who represented State Farm, saysuncertainty remains.
“With the greatest of respect, I think [MacKinnon] is wrong,” says Kirby.
He asserts that the legislation specifically requires the fourth edition of the AMA guides to be consulted, and that book says percentage rating should not be used for psychological impairment.
“The judges seemed to have overlooked that,” he says.
Kirby said that while the Arts case didn’t meet the Divisional Court’s two-part test for leave to appeal, the issue could still end up being taken up by the Divisional Court. He says an unhappy party whose matter was dealt with by the financial services commission has a right for application for judicial review to the Divisional Court, which doesn’t require a leave to appeal motion.
“So it’s going to get there eventually,” says Kirby. “I guess it’s just going to take a little longer.”
Lehman says Arts’ treatment was largely on hold before the decision, as his $100,000 in non-catastrophic care benefits ran out.
“It’s of great significance to him, because he can now get the care that he needs,” says Lehman.