Hard limitation periods put seriously injured people in ‘impossible’ positions with insurance claims, says CoA
Ontario trial lawyers are applauding a recent decision that allows a more liberal interpretation of accident benefits for their most gravely injured clients.
Putting a hard time limit for claiming accident benefits put appellant Sotira Tomec in a situation that was “absurd” and “impossible,” said the November decision, Tomec v. Economical Mutual Insurance Company, 2019 ONCA 882, which overturned the lower court and Licence Appeal Tribunal.
“Here, the decisions below thrust the appellant into a Kafkaesque regulatory regime,” wrote Justice C. William Hourigan, with Justices Mary Lou Benotto and J. Michal Fairburn concurring. “A hard limitation period would bar the appellant from claiming enhanced benefits, before she was even eligible for those benefits.”
Barrie lawyer Steve Rastin, one of the lawyers who represented intervenor Ontario Trial Lawyers Association, says the appeal court’s decision brings timelines for accident benefits for catastrophically impaired people in line with a more familiar legal standard: discoverability, rather than a hard limit. While many laws in Ontario involve a 2-year time limit, only some — such as estate cases — have a policy reason to enforce “hard” limits. Others start the “clock” when a cause of action is “discovered,” he says.
“Generally, most people would agree that hard limitation periods are unfair. Because you're potentially losing your right to sue before you even find out that you have it,” says Rastin, managing partner at Rastin Law and past president of the OTLA.
“If we're going to have hard limitation periods — and there are maybe some situations where we should have them — we should be very careful . . . because it flies completely in the face of everything consumer protections are about.”
Tomec was a pedestrian when she was hit by a car in 2008. After her surgery and hospitalization, she used housekeeping and attendant care benefits — which are payable for 104 weeks following an accident, unless the beneficiary sustains a “catastrophic impairment.”
While Tomec’s benefits were denied by insurance beginning in 2010, her condition continued to worsen, and in 2015 a doctor concluded she was catastrophically impaired as a result of the accident.
But, while Economical accepted Tomec’s status as catastrophically impaired for some purposes, it said she was out of time to claim the housekeeping and attendant care benefits, due to the gap between 2010 and 2015.
Both the Licence Appeal Tribunal and Divisional Court agreed with Economical’s call, noting that while it may seem harsh, “the legislature thought it important to provide for a reasonable period, after which the insurer’s obligation would be discharged, regardless of whether meritorious claims may be discovered later.”
By the time it came to the Court of Appeal for Ontario, the Supreme Court of Canada had released Pioneer Corporation v. Godfrey, 2019 SCC 42. Citing that case, the panel of appeal court judges said that discoverability applies if a limitation period is “conditioned upon accrual of a cause of action or knowledge of an injury.” An illness that builds up over time is different than an estate case — because the triggering element, a death, is “complete in all its elements” at the outset of the estate case, said the appeal court.
William Keele, an associate at Oatley Vigmond LLP in Barrie and one of the lawyers who represented Tomec, says the limitation based on discoverability is fairer for his client. The hard limitation period put his client in a “lose-lose” situation — either wait until a catastrophically impaired diagnosis is confirmed, and be denied because time ran out; or, apply for benefits before time runs out and be denied due to lack of CAT status.
Keele says that prior to the Court of Appeal overturning the lower court’s decision, lawyers were pressured to apply for CAT benefits before the limitation period ended — even if CAT status hadn’t yet been confirmed by doctors.
“In order to protect your client’s rights, you had to almost preemptively make an application for these benefits,” he says. “It created a number of applications that, in our position, didn't need to be brought at that point — because you didn't have enough information to determine whether they were going to be successful or not. People had to bring them to guard against the possibility that if you are catastrophically impaired down the line, the insurer isn’t going to say, ‘No, you're you're out of time because you didn't dispute this within the two years.’”
Alex Voudouris, another lawyer who represented intervenor OTLA, says that the Court of Appeal’s decision should reduce costs and make the system more efficient for the rare client whose worsening symptoms border on catastrophic impairment.
“You were claiming something that you're not entitled to yet — doing it to maintain your limitation period. And then you had to beg for adjournment after adjournment after adjournment — if you’re lucky enough to get them —until you get your CAT report,” says Voudouris.
“It was unnecessary as a cost to the government running the LAT, cost to accident victims, cost to lawyers, cost to insurance companies — they'd have to hire a lawyer to defend a claim that's premature.”
Rastin says that the appeal decision will benefit both lawyers and the public. For the public, the ruling takes into account the consumer protection purpose of insurance legislation, says Rastin. As for lawyers, it saves them from the same catch-22 situation of the victims, Rastin says.
“There were a number of lawyers who were worried that they were going to actually be involved in litigation themselves,” says Rastin. “Lawyers were facing the open question about whether they were going to end up with negligence claims for not pursuing the claim earlier — even though if they had pursued the claim earlier, they would have been unsuccessful. . . .The great thing about this decision is that it provides some fairness in the system.”
Counsel for Economical Mutual Insurance Company declined to comment.