*Edited by Patrick Brown
Court strikes Plaintiff’s Statement of Claim alleging bad faith and punitive damages by her insurer in the administration of her statutory accident benefits. The License Appeal Tribunal has exclusive jurisdiction at first instance.
Date Heard: March 5, 2018 | Full Decision [PDF]
On this Rule 21 motion brought by the Defendant, Justice Ramsay was asked to decide if a claimant receiving statutory accident benefits could still sue his or her insurer for extra-contractual damages in court.
The Plaintiff, a fifteen year old girl, restricted her claim against Economical for bad faith, negligent/fraudulent misrepresentation, negligent/fraudulent infliction of mental distress, and claimed aggravated, punitive, and exemplary damages for the handling of her claim. There was no claim for a denied or terminated benefit. She had suffered a traumatic brain injury, GCS score of 6, skull fractures, brain bleed, fractures of the ribs, clavicle, scapula, and pelvis, lacerated spleen, lacerated kidney, and a pulmonary contusion. The plaintiff argued the legislation may prevent her from suing for accident benefits, but it does not bar her independent claims for bad faith in the administration of accident benefits.
The Defendant took the position the Plaintiff’s claims were barred by s. 280 of the Insurance Act, which in part provides:
280 (1) This section applies with respect to the resolution of disputes in respect of an insured person’s entitlement to statutory accident benefits or in respect of the amount of statutory accident benefits to which an insured person is entitled.
(2) The insured person or the insurer may apply to the Licence Appeal Tribunal to resolve a dispute described in subsection (1).
(3) No person may bring a proceeding in any court with respect to a dispute described in subsection (1), other than an appeal from a decision of the Licence Appeal Tribunal or an application for judicial review.
The question before Justice Ramsay was whether a dispute “in the respect of an insured person’s entitlement to statutory accident benefits or in respect of the amount of the statutory accident benefits to which an insured person is entitled” includes a claim for administration of accident benefits fraudulently, negligently or in bad faith. Justice Ramsay agreed with the court in Nowegijick v. The Queen et al. that the phrase “in respect of” is probably the widest of any expression intended to convey some connection between two related subject-matters. He also noted the specific intention behind enacting the Fighting Fraud and Reducing Insurance Rates Act was to provide a cost efficient and fair mechanism for resolving disputes by giving the LAT exclusive jurisdiction.
Justice Ramsay concluded that “there is no reason to doubt that the legislature, in enacting the present s. 280 of the Insurance Act, intended to deprive a claimant of resort to the court at first instance whenever the claim is based on denial of accident benefits, no matter how the denial is characterized in legal terms.” Accordingly, the statement of claim was struck without leave to amend.
Read the full decision [PDF]
