It is very well-established through decades of case law that an automobile insurer’s notice denying Statutory Accident Benefits to a claimant must be clear and unequivocal, failing which the two year limitation period to dispute the stoppage will not be triggered.
As such, over the years insurance companies have become quite adept at drafting denial letters, or denial notices, that meet this threshold: hence the number of claims being extended beyond the two year limitation period has certainly dwindled over time. But as this recent case illustrates, the issue is still alive-and-well, and in this instance, it permitted the claimant to continue with her application for income replacement benefits notwithstanding the insurer’s protestation that the claimant’s application was started too late.
On a preliminary ruling, the LAT decided that the insurer’s denial was not clear and unequivocal. The insurance company appealed to the Divisional Court, and lost.
The appellate court dismissed the insurer’s appeal after concluding that the LAT’s interpretation was not wholly unreasonable, thereby providing no grounds for the appellate court to interfere with this mixed finding of fact and law by the LAT. So what was the “unclear” and unequivocal wording in this instance? The seminal parts of the insurer’s denial letter read as follows:
“As per Section 37 (2) (e) of the Statutory Accident Benefits Schedule (SABS), we are therefore determining your IRB effective February 25, 2015 as you have resumed your pre-accident employment duties. Should you be off work again due to the injuries sustained as a result of the subject motor vehicle accident, we would require an updated Disability Certificate (OCF-3) to determine your eligibility. Per Section 36 (2) (3) of the SABS an applicant for a specified benefit shall submit a completed Disability Certificate (OCF-3) that indicates you meet the disability test. There is no entitlement to benefits for any period before the updated Disability Certificate is submitted.
Should you wish to dispute this decision please refer to the Applicant’s Rights to Dispute on the following pages. Your first step is to apply for mediation. Should you require information regarding your rights to dispute or the appropriate forms please do not hesitate to contact the writer. Please ensure you initiate your dispute within TWO YEARS.”
The LAT concluded that the “denial” letter left open the proposition that with a further completed Disability Certificate, a further entitlement could be recognized.
Distilled to its core, it wasn’t so much that the content of the denial notice was objectionable, but rather the ordering of the paragraphs. By ending with a caution that the claimant had two years to initiate a dispute before the LAT, the court considered the notice was ambiguous because it could mean that the claimant was being told they had two years from the February 25, 2015 stoppage, or two years from any new determination, or that the insurance company will only reconsider new submissions for another two years.
I suspect that the insurance industry will tweak and adjust their denial letters following the release of this decision, to be on the safe-side. Claimants will undoubtedly continue to challenge the degree of clarity contained in insurance company’s SABS denial letters. It will be interesting to see if this recent ruling frees many claims from the shackles of the two year limitation period because it is quite possible that there are many active denial letters out there that have a very similar format (ie: it may be a template-type letter, at least for this insurer).
Traders General Insurance Company v. Rumball, 2022 ONSC 7215
https://www.canlii.org/en/on/onscdc/doc/2022/2022onsc7215/2022onsc7215.html