December 2, 2012

Accident Benefits Update – Time Limits in SABS – It May Not Be Too Late

ACCIDENT BENEFITS UPDATE

For the week of December 3 to December 7, 2012 

Time Limits in SABS – It May Not Be Too Late
 
Morelli v State Farm Mutual Automobile Insurance Co., FSCO 3899; November 12, 2012- Arbitrator Lloyd (J.R.) Richards
The Applicant, Ms. Morelli, was injured in a motor vehicle collision on January 29, 1997. Following denial of her Application for Determination of Catastrophic Impairment by the Respondent, State Farm, on March 19, 2007 she submitted a rebuttal report and sought payment for the report under the Statutory Accident Benefits Schedule (the “SABS”) in the amount of $16,896.94 on October 29, 2007. The rebuttal report found that she was not, in fact, catastrophically impaired. State Farm refused to pay for the report, claiming that Ms. Morelli had failed to submit it within the required 80 days after State Farm denied her application.
Arbitrator Richards found that Ms. Morelli had indeed failed to submit the report within the limitation established by s. 42.1(3)3 of the SABS. However, he held that despite this failure, she was entitled to submit and receive payment for the report, because she had provided a reasonable explanation for her non-compliance with the limitation period.
While Arbitrator Richards found that Ms. Morelli received the entire report (composed of two assessments and a review of their findings) on March 19, 2007, her physician, Dr. Persi, never received all three parts. Although this did not affect the triggering of the limitation period, s. 31(1) of the SABS states that a person’s failure to comply with a time limit does not disentitle the person to a benefit if the person has a reasonable explanation. Ms. Morelli’s explanation was that Dr. Persi (who was not aware of the limitation period) chose an occupational therapist to prepare the rebuttal report who was not available to conduct the assessment until August, 2007.
Arbitrator Richards found that this explanation met the test for reasonableness as set out in s. 31(1). He conceded that it would have been best if Ms. Morelli had replied within the 80 days. However, State Farm would not suffer prejudice as a result that would outweigh the hardship Ms. Morelli would suffer if she were compelled to pay for the report. This was bolstered by the fact that Ms. Morelli was not submitting a late report seeking to establish entitlement to catastrophic benefits, but was seeking merely to recover the payment to which she was entitled under the SABS.
Implications
 
While it remains incumbent upon Applicants under the SABS to operate within the applicable limitation periods under the SABS, this decision signals willingness by FSCO to grant relief where the insured has a reasonable explanation for failing to meet the limitation period. This is especially the case where treatment providers are unaware or mistaken with respect to the time lines for reports under the SABS. Despite missing a limitation period, the insured should persist in pursuing entitlement to the benefit where a reasonable explanation can be provided.
 
Accessing This Decision:
If you would like to read the arbitration decisions for yourself, they can be found at http://www.fsco.ca/english/insurance/auto/drs/decisions/default.asp. Please contact FSCO at 1-800-517-2332 ext.7202 to obtain a password to gain access to the site. 
 
 
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