Discoverability trumps timeline on catastrophic injury claims: SCC
By Kirsten McMahon
The Supreme Court of Canada’s (SCC) recent dismissal of an appeal in a catastrophic injury benefits matter is “important for personal injury plaintiffs,” says Rhino Legal Finance, President and CEO Larry Herscu.
“The SCC upheld the appeal court’s decision, which provides clarity around the standard of review for limitation periods,” he says.
By dismissing the insurance company’s appeal, the country’s top court upholds the Ontario Court of Appeal’s decision in Tomec v. Economical Mutual Insurance Company, 2019 ONCA 882, which applied a standard of discoverability, rather than a strict timeline, on applications for catastrophic injury benefits.
The matter involved a pedestrian who was hit by a motor vehicle in 2008. Court documents state she was hospitalized and required surgery as a result of the accident. She applied to her insurer and received statutory accident benefits for attendant care and housekeeping benefits.
These benefits are payable for 104 weeks following an accident unless the beneficiary sustains a “Catastrophic Impairment” (CAT) designation. In CAT cases, the 104-week time limit does not apply.
In August 2010, the insurance company sent a letter to the woman, advising her that she would no longer qualify for the benefits past September 12, 2010. At that time, the woman’s injuries did not meet the level of CAT, and she did not appeal the termination of benefits to the License Appeal Tribunal (LAT). However, over the next five years, she underwent various medical tests, and her condition worsened. In 2015, her doctor determined that she met the definition of CAT as a result of the 2008 accident.
Her insurer accepted that she was CAT and provided various elevated statutory accident benefits on that basis but refused to provide further attendant care and housekeeping benefits. The insurance company took the position that it had denied the benefits in its 2010 letter, and the window to dispute that decision had passed.
Herscu explains that under s. 281.1(1) of the Insurance Act and s. 51(1) of the Statutory Accident Benefits Schedule (SABS), there is a two-year limitation period to dispute an insurer’s refusal to pay.
“This leaves a small class of accident victims who suffer from long-lasting, serious injuries in a Catch-22,” he says. “The clock on the limitation period starts running when there is a denial of a benefit. But there can’t be a denial until there is entitlement to that benefit.”
In the Court of Appeal decision, Justice C. William Hourigan states that 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.”
The three-judge panel noted that courts have recognized the rule of discoverability may apply to limitation periods.
“Discoverability generally provides that a limitation period will not begin to run until the material facts on which the cause of action is based are known to the plaintiff or ought to have been known through the exercise of reasonable diligence,” the ruling states.
“It is not a universal rule applicable to all limitation periods but a rule of construction to aid in interpreting limitation periods,” Hourigan continues, citing Pioneer Corporation v. Godfrey, 2019 SCC 42.
Herscu says the Court of Appeal’s analysis is important because it recognized the woman fell within a small category of victims who suffer from lasting and severe health impacts as a result of a motor vehicle accident.
“The appeal court acknowledged that a hard limitation period prevents the appellant from claiming the benefits the SABS are intended to provide,” he says.
“This is not in line with consumer protection legislation designed to provide fair compensation and minimize economic disruption in the lives of accident victims,” Herscu adds.
The Easy Legal Group of Companies is a Canadian litigation financing firm. Its lending solutions service the personal injury sector including plaintiffs with pending injury claims, their legal representatives and the service providers involved in their cases. The firm is registered to conduct business in Ontario, B.C., Alberta and the Atlantic provinces. Services are delivered through three brands: Easy Legal Finance Inc., Rhino Legal Finance and Seahold Legal Finance.