Worthman could induce 'expert chill'

The majority concluded that Grant's status as an independent medical examiner (IME) under the Insurance Act did not give him an automatic right to invoke the "witness immunity defence."

Anne Spafford of Lerners LLP's Toronto office, who represented Grant and his insurer, the CMPA, says the decision could discourage professionals from becoming involved in accident claims.

"The majority's ruling could create expert chill even for potential witnesses who are asked for an opinion before litigation commences," she says. But Susan Chapman of Toronto's Pape Barristers, who with colleague Jonathan Rosen-stein represented Worthman in the Divisional Court, has a different take on the issue.

"The decision means there will be greater responsibility and accountability for IMEs," she said. "And that's a good thing."

Worthman had suffered an injury in a motor vehicle accident in January 1995. She applied to her insurer, AXA, for statutory accident benefits, including a weekly income replacement benefit. Her position was that she had suffered a substantial inability to perform the essential tasks of her employment.

Worthman had a significant pre-existing medical history that included back and neck problems, arthritis, headaches, and depression.

Section 65 of the Statutory Accident Benefits Schedule (SABS) for accidents occurring on or after Jan. 1, 1994 allowed AXA to demand a medical examination "as often as reasonably required."

AXA scheduled the examination at AssessMed's Mississauga, Ont., office, where Grant performed an insurer examination for the company. He concluded that AXA should stop paying income replacement benefits.

Worthman, who saw Grant only once, was not his patient and had not been treated by him.

AXA served a copy of the report and a notice of termination of benefits on Grant, who responded with a request for a designated assessment centre (DAC) examination. However, she did not attend the DAC appointment, but subsequently requested a mediation, which failed. Worthman referred the matter to an arbitration at the Financial Services Commission of Ontario (FSCO).

In October 1998, the arbitrator ruled in Worthman's favour, stating that he preferred the evidence of the physicians called by the plaintiff over Grant's evidence. He ordered reinstatement of Worthman's income replacement benefits.

In June 1999, Worthman sued AssessMed and Grant, claiming damages for bad faith, intentional interference with economic relations, inducing breach of contract, injurious falsehood, negligence, malpractice, and breach of duty of care.

She based her claim entirely on Grant's medical-legal report following the examination.

The defendants moved for judgment, but Justice Ted Matlow of the Ontario Superior Court denied the motion, concluding that genuine issues arose regarding the existence of an immunity or privilege for Grant's report.

Matlow was also not satisfied that the breach of duty claims would inevitably fail.

"Although many of the authorities cited seem to establish the principle that a doctor retained by a third party to examine and report on a person to the third party owes no legal duty to the person other than to avoid injuring her, it may well be that, on the facts of this case, the legal duty owed by the defendants to the plaintiff may have been broader in the context of the mechanism established for the resolution of contested claim for no-fault benefits by the Insurance Act," Matlow wrote.

"As well, it may be that the duty to avoid injuring the plaintiff extended to the avoidance of both psychological and economic injuries."

Justice Janet MacFarland granted leave to appeal from Matlow's decision, noting that his ruling appeared to conflict "with a number of Ontario decisions which have held that plaintiffs examined in the no-fault context by doctors appointed by their insurers are owed only a very narrow duty of care by such examining doctors and their reports and evidence based on such reports are both absolutely privileged."

But the majority in the Divisional Court upheld Matlow's decision allowing the case to proceed to trial.

Justice Denis J. Power, who wrote the reasons for the majority, noted that the "privilege" sought by the defendants was not a privilege "in the sense of control of information as in solicitor/client or settlement discussions privileges."

"It is a dramatically different concept -- i.e., immunity from suit," he wrote.

From that perspective, there was a genuine issue to be tried as to whether Grant's report was "sought or prepared in the context of actual or contemplated litigation." Only documents meeting that threshold, Power said, qualified for immunity.

In this regard, Power cited Swanson v. Wellington Insurance Company, an FSCO arbitration decision, for the proposition that the purpose of the insurer's examination was to adjust an applicant's claim and not to acquire medical evidence to bolster an insurer's case for the arbitration hearing

"In my opinion, based on the record as it now exists, it is not clear that, when the insurer required the plaintiff to be examined, there was a lis or anticipated lis between the parties," Power wrote.

Because Worthman's complaint went beyond mere negligence, she should be allowed to prove that "some malfeasance" was in place from the outset.

"If her allegations are proven," Power observed, "surely it would be contrary to public policy to clothe the defendants with an absolute privilege or immunity."

Matlow had also been correct that the legal duty owed to Worthman may have been broader in the context of the statutory accident benefits scheme.

"This is an important and an evolving area of law and, therefore, this action should not be determined on a summary judgment motion particularly where there are disputes between the parties with respect to material facts," Power wrote.

Spafford and Eric Hoaken of Bennett Jones LLP's Toronto office, counsel for AssessMed, have filed an application for leave to appeal with the Court of Appeal.
"The leave applications are in writing," Spafford said. "It will be a few months until there's a decision."