Toronto Injury Lawyer Blog
In Ontario, we have a very complicated system of no fault car insurance. Regardless of fault, accident victims are required to claim accident benefits from their own insurance company. That means that the other driver could have been 100% at fault, yet still, the injured party must first make a claim for accident benefits from his/her own car insurer. Weird right!?!?
Accident benefits are NOT damages for pain and suffering. They are benefits mainly for health care items which are not covered by the OHIP System. Things like physiotherapy, massage, occupational therapy, psychological counselling, social work, PSW services, counselling, CBT, neuropsychological examinations, chiropractic care etc. If accident benefits don’t get paid, then the injured accident victim will need to pay for these benefits out of his or her own pocket. If they don’t pay for the treatment, then they won’t receive the treatment because it’s not free. The same goes for assistive devices.
Treatment is important to getting better and to returning the accident victim to the life and level of function which they once knew. Treatment also helps injured accident victims get back on their feet in order to restore dignity and independence.
But treatment in the form of accident benefits is often denied by large car insurers following car accidents.
Why does treatment get denied?
There are limited monetary incentives for insurers to approve treatment and to pay out on those treatment expenses.
The financial incentives for an insurer to approve treatment are the hopes that the treatment does what it’s supposed to do and get the accident victim back to health. If the accident victim returns to health, then there won’t be any need for the insurer to pay out for more treatment.
The other incentive is that if the treatment is unreasonably denied, then the insurer may be found guilty of bad faith or improper claims handling. If there is such a finding, a Judge can impose a financial penalty on the insurer and force them to pay the Plaintiff a damages award. These punitive damage awards, or bad faith damage awards don’t happen very much in accident benefit cases. These sort of bad faith claims generally arise in long term disability cases. They are very rare and require significant proof that the insurer did not treat the accident victim’s claim with the utmost good faith. They require proof the the insurer crossed the line and deliberately and maliciously mistreated the accident victim. Again, these cases are very hard to run, and very hard to prove.
Knowing this, insurers don’t have very much in terms of financial incentives, to approve claims for accident benefits.
Insurers will save more money by denying a claim, then by approving a claim. Every dollar the insurer doesn’t have to spend, is a dollar saved and retained so that they can either invest it, or deploy it elsewhere to earn a profit.
Insurers are in the business of making money. Most of the large car insurers in Canada, are publicly traded corporations. You can look up their stock prices to see if they’ve done up, or down that day. When insurers make money, their stock value rises, thereby giving increased value to their shareholders. The reverse is true when they loose money. When you understand this, you understand why insurers act they way that they do. For the most part, it’s nothing personal against the accident victim. Rather, is a cold, heartless, business decision on their end which is driven by profits and losses. This calculation is diametrically oppose to how most accident victims view, and approach their cases. For accident victims, the cases are tremendously personal because they injuries impact their everyday lives. Accident victims care deeply about their everyday lives as they should. So, from one end of the spectrum you have powerful emotion about loss of life, dignity and function in the form of the accident victim. On the other side of the spectrum you have a team of accountants and financiers doing the calculations on the risk/reward analysis for the value of the claim. You can see why the parties would butt heads in the course of the litigation.
What happens after your accident benefit claim for treatment has been denied?
If your treatment claim gets denied, you cannot go to Court and sue your own insurer. The government of Ontario took that right away from accident victims. Instead, you will need to challenge the finding at a government tribunal called the License Appeals Tribunal or LAT.
There are a lot of problems at the LAT. For starters, cases are not heard by Judges. They are heard by adjudicators who may have some legal training, or not. There is a delay at the LAT in hearing disputes. This is particularly important when it comes to treatment. If you need physiotherapy for an injured back; then what good is that treatment if you can’t get a hearing date at the LAT for over 1.5 years? This does not include the time to release the decision, or the potential of an appeal to make its way through the Court. The accident victim is expected to wait 1.5 years for physiotherapy, or pay for the treatment out of his or her own pocket until their hearing date. That’s not how the system was designed to work. But, this is what’s happening.
A LAT hearing is like a trial. Except the issue of liability is not really examined. There might be a challenge from the insurer (preliminary issue) on whether or not there is in fact coverage for the accident. But, for the most part, the mechanism of the accident itself is rarely in dispute because of Ontario’s no fault system of accident benefits. So long as it’s agreed upon that there was an accident arising from the use or operation of a motor vehicle, then the parties will move along to the next set of issues. Having a lengthy trial over whether or not physiotherapy, or some form of other treatment is reasonable and necessary is not the way the system should work. There is often more money spent on the lawyers and LAT staff than the value of the treatment plan itself.
