Insurer's conduct lacked consideration for the appellant's severe vulnerabilities: court
The Ontario Superior Court of Justice directed the Licence Appeal Tribunal (LAT) to reconsider its denial of a special award for housing benefits to an individual who sustained catastrophic injuries in a motor vehicle accident.
The appeal in McDonald v. Aviva Insurance Company, 2024 ONSC 6030 concerned the interpretation of section 10 of Regulation 664 under the Insurance Act, which permits additional awards when insurers unreasonably withhold or delay payments.
The appellant, severely disabled and requiring 24-hour care, initially faced prolonged delays from his insurer regarding a treatment plan for housing and accessibility needs totaling $924,671. This plan included funding for a new home, renovations, and a wheelchair-accessible vehicle. The insurer disputed the claim, citing erroneous policy limits and procedural obstacles, despite the appellant's eligibility for benefits up to $3 million. Ultimately, the insurer agreed to pay the full amount shortly before the LAT hearing, after nearly a year of delays.
At the LAT hearing, the adjudicator ruled the insurer’s conduct as excessive, stubborn, and lacking in consideration for the appellant’s severe vulnerabilities. The LAT awarded the appellant a special award equal to 50 percent of certain benefits, citing the insurer’s indifference and failure to adjust the file with due diligence. However, the LAT declined to apply this special award to the housing benefits, reasoning that no evidence of the renovation cost for the appellant's pre-accident home had been provided.
The appellant appealed the LAT’s denial of the special award on the housing benefits, arguing that the adjudicator erred in law by requiring adjudication of the housing benefit amount under s. 16(4)(c) of the Statutory Accident Benefits Schedule (SABS) despite the insurer’s agreement to pay the full claim.
The Superior Court sided with the appellant, concluding that the LAT misinterpreted s. 10. The court clarified that when an insurer has agreed to pay a specific amount, there is no need for additional adjudication to determine the benefit amount under s. 10. The court emphasized that s. 10 is designed to protect consumers and deter unreasonable conduct by insurers. The requirement to adjudicate benefits already agreed upon would create inefficiencies and undermine the legislation’s consumer protection purpose.
The Superior Court set aside the LAT’s denial of the special award for housing benefits and remitted the matter back to the LAT for reconsideration based on the agreed benefit amounts.
