The Court upheld the motion judge’s ruling that the Insurance Act did not allow an Insurer to bring an action for a declaration that the Insured had not suffered a catastrophic impairment

Liberty Mutual Insurance Co. v. Fernandes, [2006] O. J. No. 3514, Ontario Court of Appeal

The Respondent Insured was injured in a car accident on April 7, 1999 and was eligible to receive statutory accident benefits from the Appellant Insurer under the Insurance Act, R.S.O. 1990, c. I.8 (the “Act”) and the Statutory Accident Benefits Schedule – Accidents On Or After November 1, 1996 O. Reg. 403/96 (the “SABS”). In accordance with the SABS, he was assessed for catastrophic impairment at a Designated Assessment Centre (“CAT DAC”) where it was determined that he had suffered a catastrophic impairment in the accident and was therefore entitled to a higher level of certain benefits. In order to dispute this finding, the Appellant Insurer first initiated mediation in accordance with the Act. After the mediation failed, the Insurer commenced an action for a declaration that the Insured had not suffered a catastrophic impairment. The Insured then brought a motion under Rule 21 to strike the Insurer’s claim on the basis that the Act did not allow an Insurer to bring such an action.

The Court found that the Act and the provisions formed a complete Code for dispute resolution which could work effectively and fairly for all parties. The Court found that Insurers were not entitled to apply to the Court for a Declaration regarding catastrophic injury. Rather, the legislation provided a remedy for Insurers who disagreed with the outcome following a CAT DAC.

To stay current with the new case law and emerging legal issues in this area, subscribe here.