LAT is not the only option for CAT disputes after April 1, 2016

January 18, 2017 | Ashleigh T. Leon

Director’s Delegate Evans has decided that issues can be added to an existing FSCO arbitration after April 1, 2016 instead of commencing an application at the LAT, when the issues to be added “necessarily arise from the issues already in dispute”.

In Aviva Canada Inc. v. Le Minh Duong (Appeal P16-00048), the Director’s Delegate was asked to determine whether or not two issues (determination of CAT and a $2,000 treatment plan) both of which were mediated after April 1, 2016 could be added to an existing arbitration.

On April 1, 2016, the dispute resolution system for statutory accident benefits was overhauled.  The new regulation removed the requirement for mediation and mandates that all disputes in relation to an insured person’s entitlement to accident benefits be handled by the LAT.

The arbitration on behalf of Ms. Duong was initially commenced in June 2013 with the issues in dispute including ongoing entitlement to attendant care and housekeeping benefits as well as various medical benefits.  Eventually non earner benefits and an additional medical benefit were added to the arbitration on consent of both parties following failed mediations.  However, Ms. Duong sought to add the issues of CAT determination as well as the cost of a $2,000 treatment plan following a failed mediation regarding those two issues on May 25, 2016.  Aviva objected to the addition but was overruled by Arbitrator Drory who decided that he had the jurisdiction to add issues to a proceeding where “it would be fair and efficient to do so”.  He further found that “adding issues to an existing proceeding is different from commencing a proceeding, which is the prohibition”.

Delegate Evans focussed his appeal decision on whether adding issues to an existing arbitration proceeding is different from commencing a proceeding.

After reviewing the applicable legislation and case law, Delegate Evans found that after the April 1, 2016 time limit has expired and an arbitration proceeding has not been commenced regarding a specific issue, that issue can only be added to an existing proceeding if it meets the narrow exception criteria of “necessarily arising from the issues already in dispute”.

In Ms. Duong’s case, that means that the issue of CAT determination was allowed to be added to the existing proceeding even though mediated and requested to be added after April 1, 2016 because the issues of ongoing entitlement to housekeeping and attendant care were already part of the proceeding.  Delegate Evans found that ongoing entitlement to housekeeping and attendant care necessarily meant that catastrophic determination was going to be at issue in the previous arbitration as those benefits could not be ongoing past 104 weeks if the insured was not CAT.

Conversely, the $2,000 treatment plan was not allowed to be added as it did not meet the exception criteria.  Further, there was a second strike against the treatment plan because it was not even denied by Aviva until after April 1, 2016.

The decision gives us a lot of guidance in terms of allowing additional issues on existing arbitrations but does not clarify whether an issue that is or may be “necessarily arising from the issues already in dispute” but which is denied after April 1, 2016 can be added to an existing proceeding.

Insurers and insureds must be extremely cautious of reviewing and discussing what issues are to be arbitrated on existing proceedings during the pre-hearing stage in order to limit or expand the potential issues to be decided at the end of the day.  With that said, the FSCO mandate at this time is to have all arbitration heard by December 2017 which means most disputes moving forward will be heard at the LAT in any event or the parties will be facing extremely tight timeframes to collect and prepare necessary evidence for quickly approaching FSCO arbitrations on newly added issues.


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