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Focus: WSIB class action to proceed to certification

Focus on: Class Actions
|Written By Judy van Rhijn

The Ontario Court of Appeal has revived the chances for recovery by workers who have had their workers’ compensation benefits cut because of pre­existing conditions.

A class action against the Workplace Safety and Insurance Board, which was previously quashed by the Superior Court of Justice, is alive again.

The case of Pietro Castrillo v. Workplace Safety and Insurance Board, 2017 ONCA 121 related to the reduction of worker’s benefits because of the existence of pre-existing asymptomatic conditions.

This is alleged to have occurred because of an internal policy made illegally in order to save WSIB money by reducing non-economic loss awards.

“This decision is a significant victory for injured workers and their supporters,” says workers’ compensation lawyer Gary Newhouse.

“The proposed class action raises very serious concerns about how, prior to policy changes introduced in November of 2014, the WSIB administered non-economic loss claims of workers. It was derailed by the Superior Court when the court struck the statement of claim. The Court of Appeal has put the class action back on the tracks — but there’s still a long way to go here.”

The representative plaintiff had his award for a permanent shoulder injury reduced for osteoarthritis, which he said had been asymptomatic before the work-related injury and had never affected his shoulder’s functionality. He was successful in an administrative appeal and then became the face of the class action, which alleges misfeasance in public office, bad faith and negligence by the WSIB.

In early 2016, the case came up against a motion to strike based on s. 118 of the province’s Workplace Safety and Insurance Act. In the provincial legislation, the “privative” clause states that board decisions are not open to question or review in a court.

However, the motion judge, Justice Edward P. Belobaba of the Superior Court of Justice, rejected this.

“On the facts of this case, and given the scope and content of the s. 118 privative clause, it is plain and obvious and beyond doubt that the bad faith and misfeasance in public office claims (and the alternative claim in negligence) are not reasonable causes of action,” ruled Belobaba.

Lawyer Richard Fink of Fink & Bornstein PC of Toronto, who is representing the class, successfully appealed to the Court of Appeal.

He received the decision penned by his Justice Peter Lauwers in February 2017.

“The cases make it clear that, as a general principle, the legislature cannot completely oust the jurisdiction of the Superior Court, including, most pertinently, an allegation of misfeasance in public office related to its use of statutory power for an improper purpose. . . . If the WSIB has conducted itself in a way that takes it outside of the shelter of the privative clause, the argument is that the Board cannot shield itself under s. 133 of the WSIA in respect of the damages claim,” said Lauwers in the ruling.

Newhouse welcomes the decision.

“Injured workers often want to sue the WSIB for negligence and acting in bad faith, but it has appeared that this is impossible,” he says.

“This decision indicates that the door may no longer be bolted shut.”

Fink admits to being in a holding pattern right now, given that the WSIB has 60 days to appeal to the Supreme Court of Canada. According to WSIB spokeswoman Christine Arnott, the decision whether to appeal has not yet been made.

“We are discussing the decision with our legal counsel before determining how we will respond. It is important to note that the decision concerns a procedural matter and makes no determinations about the merits of Mr. Castrillo’s case. We continue to deny the allegations made in the lawsuit,” she says.

No matter what the final outcome of the case is, Fink is of the opinion that this preliminary decision will have a lasting impact.

“The case is of astounding importance. It is the first time in Ontario that a court has indicated that the board cannot act with impunity if it is outside the confines of obligations under the statute,” he says.

“This class action has implications well beyond the case itself. The root of the problem is that the WSIB is not conducting itself in good faith in general.”

Fink says he’s now reviewing his existing small claims files and fielding many new enquiries from injured workers in the same position.   

“The loss isn’t the money the WSIB took, which can be recovered from internal appeals,” he says. “It’s the money they had to spend to attempt to recover the loss — legal fees, transportation and other outgoings.”

Newhouse agrees about the importance of the decision.

“Although a great deal of evidence will have to be explored in the proceeding, some important principles have already been established,” he says.

“One is that actions of the board may be open to challenge on the basis of misfeasance in public office, notwithstanding the privative clause in the legislation. Another is that an allegation of bad faith can be an element of or incidental to a misfeasance claim. And finally, the WSIB may be open to a negligence suit in the proper circumstances.”

Fink also sees a door opening in the realm of punitive damages. “Until this class action, workers couldn’t get punitive damages for misfeasance,” he says.

“Workers’ compensation is supposed to be quick and fair without causation. We still have the latter, but quick and fair have gone out the window. The board’s mandate is not to minimize costs but to treat workers fairly in accordance with statute. Instead, it has adopted the same approach as insurance companies.”

Fink points out that when entitlements are sought from an insurance agency, the settlements often minimize amounts owing.

“That’s fine in an insurance context,” he says. “There are remedies in tort litigation and there are punitive damages.”

Fink refers to the case of Whiten v Pilot Insurance Co, 2002 SCC 18, in which the Supreme Court of Canada ordered greater than $1 million punitive damages for the oppressive conduct of the insurer.

“That applies to the WSIB now. Before, what was the downside of the WSIB not paying? If I appeal one of their decisions, there are no legal costs,” he says.

“There is currently a two-and-a-half-year waiting period. A dollar pushed off until tomorrow is a dollar saved. If the worst comes to the worst, they pay what they might have paid years ago. That’s why the Court of Appeal decision is still reverberating.”

Despite these sentiments, Fink sees more prospects of success in law reform as opposed to litigation.

“Lobbying work will be more assistance to the travails of injured workers than my court case, glorious as it was for the day,” he says.

Fink anticipates that other groups will take up the fight.

“Will this case cause the WSIB to reform itself? No. It will be part and parcel of a greater effort. Public unions and private representatives will be more vociferous about having the WSIB restored to trying to assist injured workers rather than minimizing their entitlements. It will be an uphill battle,” he says.

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