Insured entitled to Accident Benefits after 21 month delay to apply.

January 18, 2014, Kitchener, Ontario

Posted by: Robert Deutschmann, Personal Injury Lawyer

DECISION ON A PRELIMINARY ISSUE HEARING

Heard Before: Arbitrator Knox M. Henry

Date of Decision: November 25, 2013

Issues:

Angelo Consales was injured when he was rear ended in a motor vehicle accident on September 14, 2007.  He reported the accident to his insurer, Kingsway now operating as Jevco Insurance.  However, he did not apply to Jevco within 30 days of the accident, to receive statutory accident benefits that would have been payable under the Schedule. Mr. Consales Filed his Application for Accident Benefits OCF-1 on June 6, 2009. Jevco denied the claim on the basis Mr. Consales failed to apply for SABs within 20 days of the accident as required in the Schedule.

The Issues in this Preliminary Hearing are:

1. Did Mr. Consales’ Application for Accident Benefits fail to comply with the time limit set out in section 32 of the Schedule?
2. If so, did Mr. Consales have a reasonable explanation pursuant to section 31 of the Schedule?

Result:

1. Mr. Consales is not precluded from proceeding to arbitration because he failed to file his Application for Accident Benefits within the prescribed time limit, pursuant to section 32 of the Schedule.
2. His explanation meets the test to be considered reasonable pursuant to subsection 31.(1) of the Schedule.

As a result, the pre-hearing discussion will reconvene to establish the process for the arbitration.

Background

The parties do not dispute these facts. Mr. Consales was injured in the car accident and advised his insurer. Jevco sent a letter to Mr. Consales enclosing an Accident Benefits Package and OCG-1 Form advising him that he would have to return the application by October 18, 2007. Mr. Consales was visited by an adjuster in his home on September 18, 2007. She took his statement and left an Accident Benefits Package with him. By letter dated June 6, 2008, Mr. Consales advised Jevco that he would not be making a claim under the Schedule.      

Cariati Law, on behalf of the Applicant, filed an Application for Accident Benefits (OCF-1) dated June 5, 2009.[6]  This Application was received by Jevco on June 10, 2009. Jevco advised Mr. Consales that it was denying payment of any benefits under the Schedule.

At the time of the accident Mr. Consales -- a 20-year employee of the Ontario Ministry of Labour -- was an Occupational Health and Safety Inspector.  Mr. Consales stated that after the accident, he advised his automobile insurer (Jevco) of the accident but that he did not file an Application for Accident Benefits form with Jevco as he fully expected to soon return to his employment at the Ministry of Labour.  It never crossed his mind he would not be returning to work. He also stated that, as an employee of the MoL, he was eligible for, and elected to receive benefits from the Ontario Workplace Safety and Insurance Board (“WSIB”).

Mr. Consales underwent two separate operations to repair damage to his neck.  Following the second operation, the neurosurgeon told him that due to the severity of the damage to his neck, and in spite of the two corrective operations, it was unlikely that he would be able to return to work. Mr. Consales then retained legal counsel who advised him to file a tort claim against the Third Party driver.  Initiating this action required that Mr. Consales withdraw his election to receive WSIB benefits and instead seek Accident Benefits from Jevco.

The Arbitrator reviewed the Statutory Framework and Discussion and determined that the provisions in the Schedule which prescribe timelines for application for benefits. Mr. Consaes failed to file an OCF within the prescribed timelines. Notwithstanding these facts the Arbitrator was faced with determining whether Mr. Consales’ explanation for filing his application late does or does not meet the test to be considered reasonable pursuant to subsection the Schedule.

There is no definition of reasonable in the in the Insurance Act. In paragraph 6 of Horvath v. Allstate Insurance Co. of Canada, Arbitrator Leitch summarized the principles to be considered when determining whether an insured person has provided a “reasonable explanation” in subsection 31 (1) of the Schedule:

• An explanation must be determined to be credible or worthy of belief before its reasonableness can be assessed.
• The onus is on the insured person to establish a “reasonable explanation”.
• Ignorance of the law is not a “reasonable explanation”.
• The test of “reasonable explanation” is both a subjective and objective test that should take account of both personal characteristics and a “reasonable person” standard.
• The lack of prejudice to the insurer does not make an explanation automatically reasonable.
• An assessment of reasonableness includes a balancing of prejudice to the insurer, hardship to the claimant and whether is is equitable to relieve against the consequences of the failure to comply with the time limit.

Mr. Consales testified, as stated earlier, that he felt it was unnecessary to submit an OCF-1 claim form to Jevco, as he honestly believed he would soon be returning to his full-time position at the MoL, he was eligible for, and was receiving adequate benefits from the WSIB, and it would be unethical to receive benefits from two providers at the same time.

The Arbitrator found Mr. Consales’ testimony to be credible and worthy of belief.  Mr. Consales appeared to be hard-working, sincere, and honest.  The Arbitator believed Mr. Consales assertion that he was determined to return to his full-time job at the MoL.  Certainly, his frustration of being disabled is most evident.  He appears ashamed that he has to depend upon his family to assist him in merely accomplishing his daily personal hygiene and other activities of daily living.

The Arbitrator ruled that Mr. Consales has provided, what in his mind, is a reasonable explanation for his declining to file an OCF-1 within the 30-day limitation period.  Mr. Consales’ failure to submit the OCF-1 within the prescribed time limit could have a devastating effect upon his future income.

Mr. Consales learned that he could not pursue a tort claim if he was receiving WSIB benefits.  To elect to de-enlist from receiving WSIB benefits, and declining to file the OCF-1 as required, placed Mr. Consales in a very difficult situation -- he has no support from Jevco; his income replacement from WSIB has ceased; and, WSIB is demanding repayment of approximately $100,000.00 in benefits it had provided to him.

There is definitely some prejudice to the insurer as it has been delayed in adjusting the claim.  On the other hand, the apparent hardship to the Applicant far outweighs any prejudice to the insurer.

On a balance of probabilities, the Arbitrator found it is equitable to relieve against the consequences of the failure by Mr. Consales to comply with the time limit.  Mr. Consales has met the onus of providing a “reasonable explanation” for not filing the OCF-1 with his insurer within the prescribed time period.  The Pre-Hearing discussion will be reconvened at a time convenient to the parties to finalize the procedures for the Arbitration Hearing.

About Deutschmann Law

Deutschmann Law serves South-Western Ontario with offices in Kitchener-Waterloo, Cambridge, Woodstock, Brantford, Stratford and Ayr. The law practice of Robert Deutschmann focuses almost exclusively in personal injury and disability insurance matters. For more information, please visit www.deutschmannlaw.com or call us at 1-519-742-7774.

It is important that you review your accident benefit file with one of our experienced personal injury / car accident lawyers to ensure that you obtain access to all your benefits which include, but are limited to, things like physiotherapy, income replacement benefits, vocational retraining and home modifications.