The Practical Strategies webinar aired on April 30, 2013.
This webinar will update you on how lawyers and health care providers are coping with the evolving challenges of working in the constantly changing auto insurance system. You will learn strategies that will benefit you and your clients, including:
- Establishing “incurred expense” and “economic loss” in attendant care claims.
- Recent developments in catastrophic impairment.
- Common pitfalls in clinical note taking and report writing.
- Preparing for giving evidence in the Courtroom.
Mr. Smith suffered serious injuries in a single vehicle collision involving a rental car owned by Enterprise Rent-A-Car. Mr. Smith was a passenger in the car and the driver of Mr. Smith’s vehicle held her own insurance policy with liability limits of $1 million. Enterprise brought a summary judgment seeking to be released from the action, because Enterprise could not be liable for any amount over $1 million.
McLeish Orlando successfully defended the motion on behalf of Mr. Smith.
On October 16, 2012, Justice McCarthy of the Ontario Superior Court of Justice ruled that Enterprise was required to remain a party to the action. Justice McCarthy agreed with the plaintiff’s position that the 2006 amendments did not modify the applicable principles of vicarious liability or joint and several liability. Specifically, his honour made the following findings:
- Legal liability for the accident and legal liability to pay the claim are “distinct considerations.”
- Section 267.12 of the Insurance Act clearly contemplates the “continuing legal exposure” of a lessor for vicarious liability.
- The plaintiff clearly had a right of action in vicarious liability against Enterprise and that right of action was not displaced by the operation of section 267.12.
- The provisions of the Insurance Act did not prevent the plaintiff from maintaining an action against Enterprise.
The Smith decision is significant in that it establishes that rental companies must remain parties to an action despite the availability of other insurance. This is especially important to plaintiffs as there will still be an owner’s insurance policy available if the driver’s insurer denies coverage during the litigation. This ensures that the plaintiff will not be left without an insurance company to satisfy a judgment.
The full text of the decision may be found online at CanLii Smith v. Smith, 2012 ONSC 5872 (CanLII).
The Ontario Trial Lawyers Association has recently sent out a newsletter to every MPP in Ontario regarding the Insurance Bureau of Canada misinforming officials about insurance premiums, claims cost and profits.
McLeish Orlando stands behind OTLA in ensuring that MPP officials are well informed. See below for the newsletter sent out by OTLA.
The Ontario government is completing a review on what constitutes a “catastrophic impairment” when a person is injured in a car accident. The definition is critical: a person who has suffered a catastrophic impairment is entitled to access much greater levels of benefits for care and treatment. This is not akin to a lottery ticket. A catastrophically injured person must still prove that the benefits are reasonable and necessary. All the definition does is raise the ceiling so that the most seriously injured accident victims may gain access to the treatment and care that they legitimately need. Last week, an expert medical panel completed a review of the definition of catastrophic impairment. The recommendations are based on a technical review. In yesterday’s Toronto Star, Dale Orlando wrote an article urging the Ontario government to consider not just rigid technical definitions but also to consider the real needs of severely injured individuals.
The text of the article is reproduced below:
‘Catastrophic impairment’: What’s at stake
Published On Sun Apr 17 2011
President of the Ontario Trial Lawyers Association
“If any changes are to be made to this definition of injury, the government should ensure that everyone who needs the additional level of coverage has access to it. It is important to remember that, just because someone is deemed to be catastrophically impaired, that does not confer an automatic right to benefits. They must demonstrate need on an ongoing basis in order to receive benefits from their insurer.”
After September 1, 2010, car insurance companies and brokers across Ontario will be presenting consumers with new choices for their auto insurance renewals. A daunting process is ahead. The insurance system in Ontario is one of the most complicated systems in North America.
Even though car insurance is a major budgetary item for many families, many consumers are unfamiliar with the coverage they actually have. After September 1, consumers will be given a number of choices as to amount of benefits they wish to purchase. By giving such a choice, the intent was to give them a break on premiums being paid.
The new basic auto policy being sold contains far less benefits than what existed before September 1. With benefits being drastically reduced, one would of course expect to see some significant reductions in how much one has to pay in premiums.
Therefore it is absolutely critical that each consumer ask their insurance company and brokers what are they buying and at what price. Like shopping in a supermarket, each item ought to have a price tag. Continue reading
[This is the fifth of a five part series by Patrick Brown on upcoming changes to auto insurance]
Injured accident victims will have a significant amount of their benefits reduced due to assessment costs. Despite the dramatic slashing of benefits reported in my previous blogs, consumers will also face further reductions based on the fact that the cost of assessments will come out of the amount of benefits available.
For example, if a consumer is injured in a car accident and the injuries are not considered to be catastrophic, they presently have $100,000 in benefits for medical and rehabilitation treatment. Any assessment costs to obtain the benefit are over and above the $100,000.
Under the new standard policy without buy ups, the consumer will only have $50,000 available in benefit dollars. That $50,000 includes assessments costs. Therefore, if $5,000 is paid for an assessment to obtain the benefit, then the amount available to the injured person is reduced down to $45,000. Continue reading
[This is the fourth part of a series by Patrick Brown on upcoming changes to Ontario’s Auto Insurance Laws]
Starting September 1, 2010, many family members who provide basic care needs to their injured family members will be cut out from receiving any compensation for these essential services. The new law eliminates any benefits going to a family member who help the disabled family member unless they show they suffered an “economic loss” because of it.
This will have a devastating impact on families who chose to have family members look after their severely injured loved ones. The new law was passed at the request of the insurance industry. It will force families to use outside agencies. Right now for instances, if a family member is hit by a car and suffers serious injury to the extent they can no longer dress, bathe or feed themselves, a benefit is available up to either 3,000 or 6,000 per month so that other families members can help. Under the new system, this funding will stop unless mom, dad or sibling can show they lost money somehow [i.e. they have to quit work or miss work without pay]. The only way to access the benefit is to have a third party care agency come in and provide the services. Continue reading
This is the second of a series where Patrick Brown discusses the upcoming changes to auto insurance.
The Ontario Government has now stepped up and restored both dignity and respect to the senior community and those families that have lost a loved one at the hands of a bad driver.
The Minister of Finance announced that effective September 1, 20010, the deductible in auto related wrongful death cases will be eliminated. The right to a grandparent to receive compensation when they lose a grandchild will be restored. As well, grandchildren will also be able to advance meaningful claims for compensation when they lose a grandparent to a negligent driver.
This is the first of a series where Patrick Brown discusses the upcoming changes to auto insurance.
Starting this September, if you are injured in a car accident, the benefits available to assist you in getting better will be drastically reduced.
The insurance industry has set it self up, once again, for record profits. Following intensive lobbying by the insurance industry, the Ministry of Finance released the new Regulations for Auto Insurance on www.e-laws.gov.on.ca. These regulations are now law. As of September 1, 2010, all persons who are injured in an incident involving a car (this includes cyclists and pedestrians) will face reduced benefits when hurt.
Dollars used to care for the injured victims will be deflected away from the insurance industry to the public health system. The last time the government gave a break to the auto insurance industry was in 2003 when they reduced compensation to be paid out to victims of accidents. Back in 2003 the industry was crying poor and pressing the panic button on rising health care costs and increased premiums. After the 2003 changes were made profits soared. In 2004, Canada’s property and casualty insurance industry made $4.7 billion. It went on to make $4.6 billion in 2005 and about $5.8 billion in 2006. Continue reading
The case of Fernandes v. RBC Life Insurance Company is a reminder of the need to be completely honest and thorough when completing applications for insurance coverage. Where an insured is anything less than completely honest, the consequences can be severe.
Avelino Fernandes worked as a rough carpenter. Mr. Fernandes bought a policy of long-term disability insurance with RBC Life Insurance Company in November 2000. In approximately January 2001, he became disabled from acute meningitis and was unable to return to his work as a rough carpenter. He applied for disability benefits and RBC denied his claim. RBC stated that Mr. Fernandes’ policy of insurance was void because he had made misrepresentations and failed to disclose important medical information on his application. Mr. Fernandes sued RBC for payment of his benefits. At trial, Madame Justice Susan Chapnik found that the application required Mr. Fernandes to disclose the identity of his attending physician, his consulation with that physician four or five months before the date of the application for lumbar pain, and his attendances and treatment from an orthopaedic surgeon on several occasions from 1998 to 2000. Justice Chapnik concluded that Mr. Fernandes failed to disclose and, in some instances, misrepresented facts relating to each of those matters. He dismissed Mr. Fernandes’ claim against RBC.
Mr. Fernandes appealed to the Ontario Court of Appeal. Continue reading
Nathalie Blanchard was diagnosed with depression about a year and a half ago. Since then Ms. Blanchard, 29, has been on leave from her job at IBM.
During that time Manulife, her insurance company, paid her monthly short-term disability benefits.
According to Ms. Blanchard, her doctor advised her to socialize, take vacations and have fun as a way of improving her condition. She did – and posted photos of herself at a party, a Chippendales show, and on a sun holiday. Ms. Blanchard also says that she told Manulife that she was going to be taking the trip.
In what has become a widely-discussed case, Manulife terminated Ms. Blanchard’s benefits this fall. When Ms. Blanchard called Manulife to find out why, she says she was told “I’m available to work, because of Facebook.”
A recent decision out of British Columbia reminds us all to pay close attention to the limitation period for suing an insurance company for denying disability benefits.
Sander v. Sun Life involved a dispute between Kenneth Sander, a dentist, and his insurance Company, Sun Life Assurance Company of Canada. In early 1998, Dr. Sander was diagnosed with cataracts in both eyes. The cataracts interfered with Dr. Sander’s ability to carry on his dentistry practice. In July 1998, Dr. Sander filed a claim for disability benefits with Sun Life. Sun Life approved Dr. Sander’s claim and started paying benefits to him. in September 2000, Sun Life wrote to Dr. Sander to tell him that Sun Life expected him to undergo surgery to correct cataracts. If he did not, Sun Life said that it would extend benefit payments for the time that Dr. Sander would have been expected to be disabled if he had proceeded with the surgery, and then it would close his claims file. In February 2001, a judge decided that Dr. Sander’s refusal to undergo cataract surgery was unreasonable under the terms of the policy. In June 2001, Sun Life wrote to Dr. Sander to advise that Sun Life was terminating Dr. Sander’s disability benefits.
History has a way of repeating itself, particularly when it comes to the insurance industry.
Everyone recognizes that the insurance industry is a cyclical business, but history has shown that claims costs rise in a predictable and consistent way. Since a large portion of insurance company revenues come from investment income, the cycles in insurer profitability has to do with variations in return on invested premium dollars and not claims costs. The cycles in profitability of the insurance industry are entirely due to the conduct of insurance companies in the way they price their product during the “good times” and the level of risk assumed by various insurers in their investment decisions. When those decisions work in their favour, the insurance industry enjoys hundreds of millions of dollars in profits as they did during for the period from 2003 to 2007 with all time records profits being achieved in 2004 and 2005. When the insurance market softens and the stock market slips, the industry expects Ontario drivers to bailout them out of their risky business decisions.
The recent demand by the industry for insurance reform and premium increases is a rehash of the pleas heard by the same parties in 2002. Unfortunately, the Ontario government has bowed to insurance industry demands yet again with a slate of proposed legislative amendments that further erode the rights of accident victims. Record profits in the following years have shown that the “insurance crisis” that occurred 7 years ago was a fabrication of the insurance industry. Time and history will show that the same is true this time around.