Consequences for Unreasonable Delay

Explore What May Happen if an Insurance Company Unreasonably Delays Payment

This issue was the central focus of the recent decision of the License and Appeal Tribunal (“Tribunal”) called Blas v. Aviva Insurance Canada.[1]

Ms. B was injured in a MVA on August 24, 2017. She sought statutory accident benefits from Aviva. Aviva denied most of her requested benefits on the grounds that they were not reasonable and necessary. Ms. B applied to the Tribunal for dispute resolution.

An applicant has the onus of proving that the proposed treatment, its goals and cost, are all reasonable and necessary.[2]

The particular benefits that Ms. B had sought included a number of examinations, assessments, services and treatment related to alleged physical and psychological impairments. In its final decision, the Tribunal determined that she was entitled to a psychological examination and psychological services plus an award and costs.

The medical benefits and costs of examination that Ms. B sought with respect to her chronic physical pain were dismissed largely because of insufficient evidence and because the insurance company provided alternative opinions by independent examination (IE) assessors. She relied mostly on the Form OCF-18; however, it is commonly known that the OCF-18, while a piece of supporting evidence, is not enough to prove that medical benefits are reasonable and necessary. The OCF-18 provides insight on the reasonableness of the treatment goals, how the goals would be met and that the costs of the treatment would be reasonable, but provides no insight on the extent of the injuries, the limitations or whether the treatment is medically recommended. In addition to an OCF-18, objective evidence – including supporting medical reports and opinions – is helpful to meet the reasonable and necessary requirement.

On the other hand, Ms. B was granted the costs of her psychological examination and proposed psychological treatment plan. According to her expert evidence, she sustained adjustment disorder with mixed anxiety and depressive mood and specific phobia (traveling in and around vehicles). The IE assessor made no formal diagnosis. The Tribunal favored Ms. B’s expert evidence on the psychological impairment over the IE assessor because it found a contradiction in the IE assessor’s opinion: they had found that Ms. B’s psychological impairment took her outside of the MIG, but that the proposed psychological treatment plan was not reasonable and necessary.

As well, Ms. B succeeded in her claim to an award pursuant to s. 10 of O. Reg. 664 which enables the Tribunal to make an award against the insurance company and in favor of the insured, in an amount that equals roughly 10% of the total value of the benefits, if the insurance company unreasonably withheld or delayed payments. The test is whether the insurance company’s conduct was “immoderate, imprudent, inflexible or excessive”.[3] In this case, Aviva had waited 16 weeks to approve some of her treatment plans after its own IE assessor had determined that she was outside the MIG. The court held that Aviva’s conduct satisfies the test and that the conduct blocked Ms. B’s access to increased pool of funds for an unreasonable period of time. Aviva was ordered to pay Ms. B an award of $200.

Lastly, the court also made a costs award of $200 against Aviva for its unreasonable conduct.

[1] 2021 ONLAT 19-009266/AABS (CanLII).

[2] O. Reg. 34/10 Statutory Accident Benefits Schedule (“SABS”), made under the Insurance Act, s. 15.

[3] Blas v. Aviva Insurance Canada, 2021 ONLAT 19-009266/AABS (CanLII), Para. 33; quoting from Plowright v. Wellington Insurance Company, 1993 OIC File No. A-003985 (FSCO) (CanLII).