On November 28, 2013 FSCO's Director's Delegate rendered the much awaited Appeal Order in Scarlett v. Belair Insurance Co. ([2013] O.F.S.C.D. No. 42). The Arbitrator's Order dated March 26, 2013 which had stated that the Applicant, Mr. Scarlett, was not precluded from claiming expenses beyond the $3,500 limit within the Minor Injury Guideline is now rescinded. The matter is now remitted to a full hearing.
Mr. Scarlett was injured in a motor vehicle accident and applied for statutory accident benefits from his insurer, Belair Insurance Company Inc. ("Belair"). He received medical and rehabilitation benefits for his soft tissue injuries which were capped at the $3,500 limit in accordance with the Minor Injury Guideline (the "MIG"). Counsel for Mr. Scarlett maintained that their client suffered from pre-existing psychological disabilities and advanced the position that his injuries were not minor and not subject to the MIG cap.
The preliminary issue of whether Mr. Scarlett's medical and rehabilitation benefits were capped by the MIG was considered by Arbitrator John Wilson. In his decision Arbitrator Wilson had determined that it was the "Insurer's burden to prove any exception to or limitation of coverage on the civil balance of probabilities" and that the MIG was a "non-binding legislative aid". Ultimately Arbitrator Wilson determined that Belair did not meet this burden and, accordingly, Mr. Scarlett was not limited by the $3,500 cap for medical and rehabilitation expenses established under the MIG.
On appeal the Director's Delegate rescinded the arbitrator's order for failing to:
- Address why Mr. Scarlett's psychological disabilities were distinct from his soft tissue injuries and therefore not "minor";
- Consider whether Mr. Scarlett's injuries were predominantly minor injuries, as per the relevant test in the MIG;
- Find that the burden of proof always rests on the insured to prove that they fall within the scope of coverage they are claiming;
- Find that the criterion for "compelling evidence" for pre-existing conditions as an exception in the MIG comes from the Statutory Accident Benefits Schedule (the "SABS") and means more than simply credible evidence;
- Find that the MIG is binding as it is incorporated by reference into the SABS; and
- Provide the parties with notice and an opportunity to respond to the arbitrator's own research of case law and statutory provisions raised after the hearing.
The Director's Delegate discouraged similar preliminary issue hearings related to the MIG in the future, and a new hearing was ordered before a different arbitrator for all matters at issue in the case.
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