September 27, 2012

Special FSCO Update: Court of Appeal Confirms One Marked Impairment Sufficient for CAT Impairment

Pastore v. Aviva Canada Inc., 2012 ONCA 642

November 16, 2002 MVC-Pedestrian. The insured sustained a fractured ankle, requiring multiple surgeries, and a right knee replacement when the ankle pain led to a change in her gait. Due to her limited mobility, she is no longer able to do housekeeping or participate in recreational activities and is entirely dependent on others for her personal care needs. The insured was diagnosed with Pain Disorder Associated with Psychological Factors. The insured applied to her Insurer to have her injuries designated as causing a “catastrophic impairment”. The Arbitrator held that a marked impairment in one function was sufficient for a catastrophic impairment. After a number of appeals, the Court of Appeal has affirmed that her injuries caused a “catastrophic impairment” as defined by section 2(1.1)(g) of the SABS.

Analysis

“Catastrophic impairment” is defined under section 2(1.1)(g) of the SABS to include:

subject to subsections (2) and (3), an impairment that, in accordance with the American Medical Association’s Guides to the Evaluation of Permanent Impairment, 4th edition, 1993, results in a class 4 impairment (marked impairment) or class 5 impairment (extreme impairment) due to mental or behavioural disorder. [the Guide]

The Court of Appeal affirmed that a marked impairment in only one of the following four functions listed in the Guide was sufficient for the finding of a catastrophic impairment: activities of daily living; social functioning; concentration, persistence and pace; and deterioration or decompensation in work or work-like settings. This conclusion fulfills the remedial purpose of the legislation, and if the legislature intended the market impairment to be “overall”, it would have said so. The Court noted that the text of the Guide is also silent on how many functions at class 4 are required to qualify a catastrophic impairment.

The Court also affirmed that, where the mental disorder itself involves pain and includes pain associated with a general medical condition, it is not necessary to remove all physical sources of pain from consideration in conducting the mental impairment assessment for the purposes of section 2(1.1)(g). In such a case, it is reasonable to include pain from the general medical condition to the extent that such pain is connected with the diagnosed mental disorder. A multi-disciplinary approach can be taken to try to factor out physical causes of pain, but if unsuccessful, a cumulative approach is appropriate.

Implications

So long as the insured suffers a marked impairment in one of the four functions provided in the Guide due to a mental or behavioural disorder, a catastrophic impairment application is found. Where the mental disorder involves physical sources of pain, the mental impairment assessors should take a multi-disciplinary approach to try to factor out physical sources of pain. Where the physical sources of pain and the mental disorder are so interrelated that it is difficult to separate, the inclusion of the related pain will not disqualify the mental impairment assessment for the purposes of section 2(1.1)(g).

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