Insured Held To “Hard” Deadline In Limitation Period

Limitation periods play an important role in personal injury law, setting deadlines for victims of accidents to begin a claim or contest a denial within a certain period of time. If someone files a claim outside of the limitation period, they can be denied benefits. But as most people know, deadlines aren’t always “hard,” meaning there may be one deadline in writing, but another deadline in practice. The Ontario Superior Court of Justice recently heard a case where the court had to decide whether the limitation periods under the province’s Statutory Accident Benefits Schedule (“SABS”) was “hard” or “soft.” The former would mean the clock started ticking when a claim is denied, while the later means the clock begins to tick when the insured’s right to claim it is discovered.

The background

The applicant was injured in a motor vehicle accident on September 12, 2008 and sought benefits pursuant to the SABS. She was struck while walking across an intersection. She suffered injuries, including multiple fractures on her left shoulder. Her injuries required hospitalization and surgery.

The applicant submitted an application for accident benefits under the SABS on October 13, 2008. She was found to be entitled to, and received, attendant care and housekeeping for two years from the date of the collision.

After two years, or 104 weeks, had passed, the applicant’s doctor applied for approval of an assessment or examination to the insurer for a file review to evaluate the issue of catastrophic impairment. The insurer responded with a denial, writing,

“In accordance with Section 18(2) of the Statutory Accident Benefits Schedule, no attendant care benefit is payable for expenses incurred more than 104 weeks after the accident unless you have been determined to have sustained a Catastrophic Impairment as defined by the Statutory Accident Benefits Schedule.

“In accordance with Section 22(3) of the Statutory Accident Benefits Schedule, no payment for housekeeping and home maintenance benefits are payable for expenses incurred more than 104 weeks after the accident unless you have been determined to have sustained a Catastrophic Impairment as defined the Statutory Accident Benefits Schedule.

“Please note that should you disagree with our assessment of your claim and wish to dispute, mediation must be commenced within 2 years from your receipt of this letter. The dispute process has been outlined in the Explanation of Benefits Payable (OCF-9/59) which is attached for your records.”

Four years pass

Four years passed, and on May 5, 2014, the applicant was discovered to have developed osteoarthritis in her left knee as a result of the collision, which necessitated the use of a cane. Soft tissue damage and functional limitations were also discovered. As a result, her doctor submitted an Application for Determination of Catastrophic Impairment on May 13, 2015. In addition, between August 26, 2015 and September 17, 2015, the applicant was deemed to have passed the threshold for catastrophic impairment. The insurer notified the applicant that it had accepted this application on November 4, 2015. However, the insurer then “denied payment of past benefits owing, and denied ongoing attendant care benefits and housekeeping benefits on the basis that these benefits had been denied at the two-year mark pursuant to ss.18(2) and 22(3) of the SABS, and the applicant had not mediated this denial within two years of that date.”

The applicant’s position

The applicant argued two points. The first being that the denials she received in 2010 were not valid because at the time they were made, there had been no determination of catastrophic impairment. Secondly, she argued the limitation period could not have started to run in 2010 since she had not discovered she was catastrophically impaired, thus entitled to increased benefits, until 2015.

The Vice-Chair of the License Tribunal rejected the applicant’s claim on September 7, 2017, stating (as the court summarized) “the applicant is barred from proceeding with her application for attendant care benefits and housekeeping benefits despite having a catastrophic impairment because she did not dispute the stoppage of those benefits within two years of the respondent’s denial.” The Vice-Chair also cited s.281(1) of the Insurance Act, which stated “A mediation proceeding or evaluation under s.280 or 280.1 or a court proceeding or arbitration under s.281 shall be commenced within two years after the insurer’s refusal to pay the benefit claimed.”

The court upheld the Tribunal’s decision, adding policy considerations, writing

“In the case of a hard limitation period, there are policy considerations on both sides.  In the case of the Insurance Act, and claims under the SABS, an insurer has no control over when an insured applies for a designation of catastrophic impairment.  An insurer would not continually assess a claimant if ongoing expenses are not being submitted.  Presumably, the legislature thought it important to provide for a reasonable period, after which an insurer’s obligation would be discharged, whether or not meritorious claims may be discovered later.”

There are many strict limitation periods that apply to someone’s right to sue following an accident. It’s important to contact an experienced personal injury lawyer as soon as possible if you have suffered an accident so as not to miss a limitation period and your rights to compensation. The skilled personal injury lawyers at Derfel Injury Law work tirelessly to achieve the best possible resolution to our clients’ accident benefits claims. Please call us at 416.847.3580 or reach us online to see how we can help you today.