October 21, 2013

SABS Update – Appeal Confirms CAT Denial Does Not Trigger Limitation

For the week of October 21 to October 25, 2013

Guarantee Company of North America v. Dong Do, Appeal P12-00037, October 11, 2013, Delegate Lawrence Blackman

MVC: October 9, 2005. In December 2006, the Insured applied to his Insurer for a determination that as a result of his accident, he had sustained a catastrophic impairment (“CAT”) as defined by the Statutory Accident Benefits Schedule (“SABS”). The Insurer sent the Insured to an Independent Medical Assessment and advised the Insured, by letter and OCF-9 on May 2, 2007, that the Insurer determined that the Insured did not sustain a catastrophic impairment pursuant to the SABS. The Insured subsequently submitted a rebuttal report. The Insurer advised by letter dated April 10, 2008 that its opinion regarding catastrophic impairment remained unchanged.

The Insured applied for mediation on February 19, 2010 and for arbitration on March 14, 2011. The Insurer argued that the Insured was time barred from proceeding to arbitration because the limitation period was triggered by its letter of denial dated May 2, 2007. Arbitrator Alves held that the Insured was not time barred from proceeding. The Insurer appealed.


Delegate Blackman noted that at first glance, it seemed self-evident that an insurer’s refusal of CAT designation should trigger a limitation period. However, the limitation period under subsection 281.1(1) of the Insurance Actdoes not commence upon “any refusal by an insurer”, but rather by “the insurer’s refusal to pay the benefit claimed”. He noted that the May 2, 2007 letter does not deny any stated benefit under the SABS, nor does it deny any monetary payment or amount; it does not specifically refuse payment of attendant care or housekeeping and home maintenance expenses. Delegate Blackman confirmed that a CAT determination is not a benefit, but a prerequisite upon which a benefit may be based. He also confirmed that other designations, such as minor injury or “sustaining an impairment as a result of an accident” are not “benefits”. As a result, Delegate Blackman confirmed Arbitrator Alves’ decision and dismissed the appeal.

Note, however, that Delegate Blackman found that Arbitrator Alves erred in law in holding, as a general percept, that an insurer’s determination of CAT would be final and unequivocal only after the insurer confirms a prior clear and unequivocal refusal upon receiving a rebuttal report.


This important decision clarifies when the limitation period is triggered with respect to denials of designations such as CAT and minor injury guideline. If the explanation of benefits only speaks to the designation, the two year limitation period is not triggered. However, care must be taken to ensure that it does not address particular benefits, such as the denial of housekeeping and home maintenance, attendant care, or any other benefit particular to the designation. If benefits are specified, the limitation period is triggered for those particular benefits. This creates a conundrum for counsel – and the client. If the benefits are not applied for they will be lost to the extent that there is a delay between making the CAT application and determination of the issue. It is usual that applications are made when benefits under the non-CAT limit are or are about to be exhausted. Careful timing of the application and the benefit requests is required.

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