September 9, 2013

Accident Benefits Update – “Lawyer Dropped the Ball” is No Answer to Missed Deadline

ACCIDENT BENEFITS UPDATE

For the week of September 9 to September 13

Park v. Dominion of Canada General Insurance Company- Preliminary Issue Arbitration; FSCO A12-000712

The applicant, Mr. Park was injured in a motor vehicle accident on August 7, 2008. He applied for and received a variety of statutory accident benefits from his insurer, the respondent Dominion.  Following termination of these benefits, and Mr. Park’s attempt at mediation with the Financial Services Commission of Ontario had failed, he applied for arbitration.

Dominion argued that Mr. Park was out of time to apply for arbitration under the Statutory Accident Benefits Schedule (“SABS”), and therefore his application should be dismissed.

At this Preliminary Issue hearing, Arbitrator Sapin held that Mr. Park was out of time to arbitrate all but two of the disputed benefits.  Under the SABS, an applicant has 2 years to file for mediation or arbitration from the date of denial of a benefit, with an additional 90 days following the mediator’s report to arbitrate following a failed mediation. The arbitrator found that Mr. Park had properly filed for mediation within the statutory timeline, but had failed to meet the 90 day deadline post-mediation to file for arbitration, and for all but the last two, had exceeded the two year period to file for arbitration.

Mr. Park’s argued via an interpreter that the only reason he missed the deadline was his former lawyer’s failure to file on his behalf.  Arbitrator Sapin dismissed this argument, and suggested that he take it up with the Law Society of Upper Canada.  She reviewed the two-part test from Smith v. Co-operators General Insurance Company, [2002] 2 S.C.R. 129, to determine whether an insurer is entitled to rely upon the two-year limitation in the SABS: the refusal must be clear, unequivocal and include reasons; and the insured person must be informed of his right to dispute the refusal to pay the benefit.  Unfortunately for Mr. Park, Arbitrator Sapin found that the Smith test was met in this case.

As success was divided, Mr. Park was self-represented, and he really had no choice but to argue this preliminary issue, each party bore its own costs.

IMPLICATIONS

Insurers are well aware of the Smith test, and have implemented procedures to ensure that it is met in the majority of cases.  Even the combination of a language barrier and professional negligence was not enough to overcome the “clear and unequivocal” test in this Arbitrator’s opinion. This decision serves as a stern reminder to plaintiffs’ counsel that inadvertent or not, a failure to adhere to the statutory timelines in the SABS can have disastrous consequences for our clients.

If you have questions or comments about this post, contact info@md-lawyers.ca