Focus: Insurer rebuffed on attendant-care benefits

The Ontario Court of Appeal has shot down an insurer’s attempt to tie attendant-care benefits to the lost wages of family members acting as caregivers in a move one personal injury lawyer says would have set accident benefits claims back two decades.

In Henry v. Gore Mutual Insurance Co., Tyrone Henry’s mother took an unpaid leave of absence from her $2,100-per-month job in order to look after her son, who became paraplegic following a vehicle accident in September 2010.

A Form 1 assessment of Henry’s attendant-care needs came in at $9,500 per month, well above the legislated $6,000 maximum. But Gore Mutual claimed it should only have to pay a pro-rated amount of $2,100, based on his mother’s eight-hour workday, rather than the 24-hour care she was providing as assessed in the Form 1.

In the early 1990s, Ontario’s first statutory accident benefits schedule required insurers to reimburse family members for lost income up to a maximum of $3,000 per month. In 1994, a change to the schedule tied the payable benefits to the Form 1 and removed the need for family members to prove a loss of income.

That changed again in the most recent version of the schedule introduced in 2010 that requires family members to show an economic loss before insurers will pay attendant-care benefits.

Last year, a Superior Court judge sided with Henry and ordered Gore Mutual to pay the full $6,000 benefit per month. Then on July 16, the Ontario Court of Appeal dismissed the insurer’s appeal, ruling economic loss “serves as a threshold for entitlement” to attendant-care costs and “not as a measure or factor in quantifying the amount.”

“I conclude this based on the language used, the scheme and logic of SABS-2010, and the fact that the legislature could have, but did not, include a provision in SABS-2010 for calculating the amount payable where a family caregiver sustains an economic loss as a result of providing required care to an insured,” wrote appeal court Associate Chief Justice Alexandra Hoy on behalf of a unanimous three-judge panel.

“In this case, the appellant does not challenge the Form 1, assessment of attendant care needs prepared in respect of the insured. That form established the need for 24-hour care and the amount payable for that care. As long as the care was provided and the family member who provided the care sustained an economic loss in so doing, the amount payable is not reduced only because the number of hours of paid employment forgone by the family member was fewer than the number of hours of care provided pursuant to the Form 1.”

Joseph Obagi of Ottawa’s Connolly Obagi LLP acted for Henry in the appeal. He says the family was “ecstatic” about the court’s decision.

“They saw it as an attempt by the industry to make the amount of attendant-care benefits dependent on the income ability of the person who provides the care, not the need of the injuries, which is where the focus should be,” says Obagi.

“It was almost as if the insurance industry was attempting to do a full circle and go back to how things were 20 years ago. It was quite unfair then because if you happened to be a large-income earner, the injured plaintiff would get more money. But if you happened to be in a family where your mother or whoever was a lower-income earner, you got a lower benefit.”

Despite the victory, Obagi says the economic loss threshold still creates unfairness for caregivers who can’t trigger the attendant-care benefits, such as stay-at-home or retired parents, because they forfeited no income to care for the family member.

“When you decide to stay at home, you’re signing on for certain responsibilities. But if your child gets a catastrophic injury requiring 24/7 care, that’s a lot different than what you signed up for,” says Obagi.

It wouldn’t be such an issue, he says, if Form 1 rates were closer to the real market value for attendant care. According to Obagi, the shortfall in payable benefits effectively forces many family members into playing a role in care themselves at below market rates.

“If you ever have a catastrophic claimant with no family, they’re in trouble. Because with $6,000 a month for 24-hour care, you’re not going to find anyone who can provide that,” says Obagi.

Daniel Strigberger, a partner in the insurance litigation group at Miller Thomson LLP, says the next step for insurers is to get a more specific idea of what constitutes an economic loss in these types of cases since the regulations are completely devoid of guidance.

“What the industry really needs is an answer to that bigger question. If I take the bus to go to the house to take care of a relative, is that an economic loss?” he asks.

Gore Mutual had asked the appeal court to define the term in order to head off claims based on broad interpretations encompassing minimal monetary loss such as travel costs, something it argued would defeat the whole point of the 2010 amendments. The judges refused to do so, noting the economic loss was clear on the facts of the case before them.

Strigberger says insurers have now pinned their hopes on a Financial Services Commission of Ontario arbitration case involving Kevin Simser and Aviva Canada Inc. that’s currently going through its appeal system.

Earlier this year, arbitrator Edward Lee rejected an expert opinion introduced by Simser’s counsel that would have broadened the concept of economic loss beyond monetary loss to include opportunity costs as well as loss of time devoted to labour or leisure.

If the expert’s definition prevailed, “every service provider will incur an economic loss in every instance. This would render the distinction between professional and lay service providers meaningless,” Lee wrote in the Jan. 16 decision. “Rather I find that ‘economic loss,’ as applied in the schedule, must relate to some form of financial or monetary loss.”

Lee heard two of Simser’s relatives produced minimal documentary evidence of their economic loss incurred in caring for him but claimed the work interfered with their jobs and studies. In addition, Simser claimed Aviva’s reimbursement of a caregiver’s out-of-pocket expenses was a tacit acknowledgment she had suffered an economic loss. But Lee found the $50 payment for gas, parking, and restaurant invoices “insufficient to trigger the full payment” of attendant-care benefits.

If the Simser matter or some other case ever does reach the appeal court, Toronto personal injury lawyer Michael Smitiuch is confident any definition of economic loss would keep the threshold low to include people who give up part-time jobs or some of their work hours to provide necessary care for family members.

“Although it doesn’t specifically address the issue of economic loss, I believe Henry v. Gore supports the proposition that any time missed from work will constitute an economic loss. That would be consistent with previous case law which says insurance coverage provisions are to be interpreted broadly, not restrictively,” says Smitiuch.

But Albert Conforzi, a personal injury lawyer with Toronto’s Pace Law Firm, says insurers may want to turn their attention to the legislature, rather than the courts, if they want to definitively prevent attendant-care benefit claims from relying on broad interpretations of economic loss.

“I don’t think the court is going to be particularly interested in making an exhaustive analysis of what constitutes economic loss when it was the legislature that created the mess in its drafting of the legislation. I think they’ll take the view that it’s up to the legislature to clear up what they intended it to mean,” he says.                                            

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