V1201 – The Court of Appeal’s Review of Limitations and Discoverability for Accident Benefits Claims
In March of 2018, we reflected on the troubling decision of S.T. and Economical Mutual Insurance Company (LAT 16-003034/AABS). This case involved terminations of attendant care benefit and housekeeping and home maintenance benefit. The terminations had been issued at the 104-week anniversary of the accident date and were based on the fact that there was no ongoing coverage in the absence of a confirmed catastrophic impairment. Economical issued written notice describing how to dispute the terminations and warning of the two-year limitation for pursuing such disputes.
S.T. eventually achieved a catastrophic impairment status and subsequently tried to access the attendant care and housekeeping benefits; given her now enhanced coverage, she expected the benefits to be extended. Economical denied her access to the benefits given that the prior denials remained in place and given that the two year limitation period for disputing the terminations had already expired.
The LAT’s decision confirmed Economical’s position. Arguments by applicant counsel that the limitation period should not begin to run until the catastrophic impairment was first discovered were dismissed. Economical was thus able to maintain its denials of the benefits.
S.T.’s case was subsequently heard at the Divisional Court. Now identified as Tomec, the Court upheld the LAT’s decision. The court acknowledged this as being a harsh result for the appellant but reasoned that, as with any hard limitation period (i.e. a limitation to which the rule of discoverability does not apply), there are policy considerations on both sides. It noted the insurer has no control over when an insured applies for a catastrophic designation and inferred that the legislature thought it important to provide for a reasonable period, after which the insurer’s obligation would be discharged, regardless of whether meritorious claims may be discovered later.
This decision had rippling impacts within the industry and for injured claimants. Many found themselves barred from accessing benefits given missed limitations periods that had not previously been recognized. For others, those for whom limitations had yet to expire, applications had to be made to the LAT in advance of catastrophic impairment applications being considered, submitted, or accepted. Speculation of how the LAT would decide such cases was worrisome. The inefficiency and risk of pursuing such disputes, combined with the probable overwhelm to the LAT, was expected to be costly.
We are relieved to review the Court of Appeal’s decision on this issue. In Tomec v Economical, the concept of the limitation period and discoverability have been revisited. The decision finds in favour of Ms Tomec and allows her access to claim the previously denied benefits.
To highlight comments made by the court:
“The decisions below and Economical’s narrow interpretation of the limitation are incongruous with the SABS’ consumer protection purposes. The appellant falls within a small category of victims who suffer from lasting and very serious health impacts as result of a motor vehicle accident. The SABS is supposed to maximize benefits for that class of victims. A hard limitation period prevents the appellant from making a claim for the benefits the SABS are intended to provide. I do not see how such a result could be consistent with consumer protection legislation designed to provide fair compensation and minimize economic disruption in the lives of accident victims.”
“The impossible position a hard limitation places [upon] the appellant is best illustrated by having regard to Economical’s counsel’s oral submissions. Counsel denied that the appellant was put in a lose-lose situation. She argued that the appellant could have applied to the LAT before the expiry of the limitation period for a declaration that, in the future, she would be entitled to extended benefits if she were subsequently found to be CAT.
I start by noting that courts must be cognizant of the significant disparity in resources between large insurance companies and their insureds, who do not have unlimited resources to bring multiple proceedings…
…if such a proceeding were commenced for a declaration, it is difficult to imagine how it could succeed. At best, the appellant could only lead speculative evidence that she might be CAT at some unknown point in the future. Faced with that evidentiary record, the LAT would likely decline to make the requested declaration.
In my view, the hard limitation period puts the appellant in an impossible situation, where the time for claiming a benefit commences when she is ineligible to make such a claim. This is an absurd result. To choose it, as the LAT did, is unreasonable.”
This Court of Appeal decision is certainly a welcomed outcome. We are grateful to William Keele from Oatley Vigmond (formerly of McLeish Orlando) who represented Ms Tomec throughout the lower court levels and who co-counseled with John Adair, Michele Valentini, and Joseph Cescon before the Court of Appeal. We are pleased and relieved to see this issue settled in favour of accident victims.
Tomec v. Economical Mutual Insurance Company, 2019 ONCA 882