The Sufficiency of Reasons (Or Not)

April 3, 2017 | Evan Bawks

A recent FSCO appeal decision from Director’s Delegate Rogers in State Farm and Asamoah (Appeal P16-00067, March 21, 2017) sheds some light on the requirement of adjudicators to provide sufficient reasons when determining entitlement and quantum of benefits under the Statutory Accident Benefits Schedule.

Mr. Asamoah was awarded Income Replacement Benefits (IRBs), medical/rehabilitation benefits, attendant care benefits, housekeeping and home maintenance benefits, and costs of examination in the Arbitrator’s decision of August 2, 2016. The Accident occurred on August 25, 2010. State Farm sought to set aside the Arbitrator’s entire decision, while the claimant appealed the dismissal of his claim for a special award and for limiting the period of the IRBs and attendant care benefits.

Delegate Rogers pointed out many issues with the Arbitrator’s reasons. The award for attendant care and housekeeping benefits included a period in excess of two years post-accident, while the Schedule limited recovery of attendant care more than two years after the accident to claimants who have sustained a catastrophic impairment (the claimant in this case had not). The Arbitrator ordered the insurer to pay everything claimed for medical/rehabilitation benefits and examinations, including a $3,500 orthopedic assessment dated a month prior to the accident and which exceeded the $2,000 limit on examinations. Further, Delegate Rogers noted that the Arbitrator provided no reasons in making those awards.

While the Arbitrator cited some awareness of medical evidence and suggested this should have triggered a resumption of IRBs, attendant care, and housekeeping benefits, Delegate Rogers found that the Arbitrator did not discuss the impact of the accident on the claimant’s ability to attend to his own care or what assistance he needed as a result. There was no discussion of what housekeeping and home maintenance activities the claimant was engaged in or impact his injuries had on his ability to do this activities. Delegate Rogers stated that while the reasons might explain why the claimant could be entitled to some benefits, there was no explanation for the amount that was awarded. Finally, while the Arbitrator found the medical/rehabilitation expenses were reasonable and necessary, the reasons did not contain any discussion as to why they were reasonable and necessary.

The Arbitrator had awarded the claimant IRBs at $400 per week from the date of the accident until November 24, 2012, when the more stringent post-104 week test would have applied. The Arbitrator’s reasons did not discuss the more stringent test. The claimant had shoulder surgery in early August 2012, several weeks before the more stringent test would have applied to his IRB entitlement. While the insurer appealed the IRBs on entitlement and quantum, the claimant appealed the disentitlement of IRBs as of November 24, 2012.

Delegate Rogers found that the Arbitrator had given sufficient reasons to conclude the August 2012 surgery was as a result of the accident. While the Arbitrator did not expressly refer to the change in the test for IRBs required as August 25, 2012 (being post-104 weeks after the accident), Delegate Rogers agreed “the only available conclusion” was that the claimant’s shoulder injury caused a complete inability to engage in any employment. The Arbitrator therefore engaged in the necessary post-104 weeks analysis despite not specifically citing it. Additionally, Delegate Rogers declined to rescind the Arbitrator’s finding that the rate of IRBs should be at $400 per week as the matter of the quantum of IRBs had not been disputed before the Arbitrator and was first raised on appeal.

Furthermore, Delegate Rogers determined the Arbitrator’s reasons for ending IRBs on November 24, 2012 were not appropriate. The Arbitrator did not refer to any evidence that the three-month recovery from the surgery was adequate and did not provide a basis for disentitlement specifically on November 24, 2012. Therefore, the Arbitrator’s decision limiting IRBs to three months post-surgery was arbitrary.

Finally, the Arbitrator’s decision stated that the delay in payment of some benefits was unreasonable. Such a finding would trigger a Special Award under Insurance Act (which states that a Special Award “shall” be made if there is a finding that benefits have been unreasonably withheld or delayed). Despite the Arbitrator’s finding, the Special Award claim was denied. Delegate Rogers found that this conclusion could not stand given the statute.

The appeal decision therefore rescinded the Arbitrator’s decision almost in it its entirety and the matter was remitted to a new hearing before a new adjudicator. The only portion of the order that was not rescinded was the award of IRBs, including the post-104 week IRB award. Further, the finding limiting IRBs to three months post-surgery (ending on November 24, 2012) was rescinded, putting the issue of further entitlement to IRBs to the new hearing.

Arbitration decisions must provide adequate reasons for their findings on both entitlement and quantum of benefits awarded. Further, their reasons cannot be contradictory or arbitrary and must align with the appropriate statutory and regulatory provisions. Failure to do so opens the avenue to appeal. It is unfortunate both insurers and insureds are put to the further expense of litigating disputes to obtain “reasons” for decisions.


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