- FSCO has released a revised Attendant Care Hourly Rate Guidelines, which increases the minimum attendant care rate to $11 per hour effective June 1 to match new Ontario minimum wage. The other attendant care hourly rates remain unchanged.
- Telematics are changing driving habits and providing those who do change with discounts.
- Quebec's automobile insurance board says it has fired an employee for allegedly accepting bribes in return for helping 90 prospective drivers cheat on their tests.
- Good2Go®, specialists in offering minimum coverage auto insurance, introduces a cell phone safety discount in Pennsylvania for drivers that install a device that blocks distracting phone functions such as text messaging, email, and Internet browsing.
- Here's an early look at Volvo's self-parking, driverless car, due to hit streets in 2017.
Friday, May 30, 2014
Insurance News - Friday, May 30, 2014
Here are the leading auto insurance headlines from ONTARIO AUTO INSURANCE TOPICS ON TWITTER for Friday, May 30, 2014:
Wednesday, May 28, 2014
Action Dismissed for Failing to Provide Municipal Notice
A recent decision dismissed a plaintiff's claim against a municipality for failing to give notice within 10 days, as required by the Municipal Act.
In Seif v. City of Toronto, 2014 ONSC 2983 (S.C.J.), the plaintiff tripped and fell on a sidewalk. She did not provide notice to the City for four months. She stated she was unaware of the Municipal Act notice requirement. She was on painkillers for 3 days, was mobile within a week of the accident and was able to focus on a job search in the weeks after the accident. The Court found that the delay in giving notice was as a result of her indecision as to whether to bring an action.
Justice Morgan dismissed the action. Even though the notice requirement is "very unfair", it is a specific statutory requirement that can only be changed by the legislative. The exception to the notice requirement is to accommodate plaintiffs whose delay is as a result of their injuries. The plaintiff had no reasonable excuse for the failure to comply with the notice requirement. Whether or not the City was prejudice was not relevant.
This is a useful decision for those dealing with a notice issue.
In Seif v. City of Toronto, 2014 ONSC 2983 (S.C.J.), the plaintiff tripped and fell on a sidewalk. She did not provide notice to the City for four months. She stated she was unaware of the Municipal Act notice requirement. She was on painkillers for 3 days, was mobile within a week of the accident and was able to focus on a job search in the weeks after the accident. The Court found that the delay in giving notice was as a result of her indecision as to whether to bring an action.
Justice Morgan dismissed the action. Even though the notice requirement is "very unfair", it is a specific statutory requirement that can only be changed by the legislative. The exception to the notice requirement is to accommodate plaintiffs whose delay is as a result of their injuries. The plaintiff had no reasonable excuse for the failure to comply with the notice requirement. Whether or not the City was prejudice was not relevant.
This is a useful decision for those dealing with a notice issue.
Monday, May 26, 2014
Insurance News - Monday, May 26, 2014
Here are the leading auto insurance headlines from ONTARIO AUTO INSURANCE TOPICS ON TWITTER for Monday, May 26, 2014:
- A drivers advocacy group is lobbying to have the speed limit on 400-series highways raised to 120-130 km/hour; suggests it would improve safety.
- WSAT declares traumatic stress provisions of Workplace Safety and Insurance Act are unconstitutional because mental stress claims have legal restrictions while physical claims do not.
- California's new self-driving car regulations prohibit falling asleep at the wheel among other things.
- Warren Buffett suggests self-driving cars will be good for society but a real threat to insurers as lower accident rates will reduce premiums and impact on insurers' bottom line.
- B.C. Supreme Court dismissed a claim and accepted the position of the insurer that the claimant burned his own car and claimed it was stolen.
Friday, May 23, 2014
What the Ontario Party Platforms Say About Auto Insurance
The policy platforms for the major parties in the Ontario provincial elections are out. Here is what you can expect from each of the parties with respect to auto insurance if they should win the election.
Liberals
The Liberal platform for auto insurance was essentially set out in the 2014 Spring Budget which was failed to pass before the election was called.
The Liberals indicates that the rate reduction strategy is on target and average rates will be 8% lower by August 2014 and 15% lower by August 2015. However, the Budget document does not point to any specific initiative that will specifically work towards achieving those targets. Average rates are down 5.6% as of the end of the first quarter of 2014. In addition, the Liberals point to the recently released “Automobile Insurance Transparency and Accountability Report” which highlighted that, without these reforms, insurance rates would have needed to increase significantly.
In March 2014, the Liberals introduced Bill 171, the Fighting Fraud and Reducing Automobile Insurance Rates Act, 2014. The Bill proposed a number of initiatives to address barriers to rate reductions. The Bill includes legislative amendments for the transformation of the dispute resolution system, and further action to crack down on fraud and abuse, as well as other cost-saving measures. The government is building on the steps it has taken by developing a dedicated investigation and prosecution office on serious fraud, with an initial focus on auto insurance fraud. The development of this fraud office would be based on the Task Force’s principle that fraudsters should be vigorously pursued and prosecuted where evidence warrants. The Bill was never passed but would be introduced by the Liberals if they formed the next government.
The Liberals introduced legislation to regulate the towing industry but that Bill also did not pass before the election was called . The Liberals also tried to address storage-fee issues by introducing legislative amendments as part of Bill 171 that would provide regulation-making authority for the determination of vehicle storage periods and fair value regarding daily fees.
The Liberals had retained an independent third party to provide annual Automobile Insurance Transparency and Accountability Expert Reports to assess its efforts to reduce auto insurance costs and rates. An interim report was delivered in April 2014, and annual reports will be delivered in August of each year of the Strategy. The reports will also assess the industry’s efforts to lower costs and pass on savings to drivers. The interim report highlights that further action is needed to support the government’s Cost and Rate Reduction Strategy. The report also concludes it is important that insurers continue working to achieve efficiencies and reduce costs in the auto insurance system through initiatives such as better claim management, more sophisticated pricing methods (such as usage-based insurance) and improved fraud-prevention practices.
The Liberals would encouraging insurance companies to offer consumers usage-based insurance, which uses technology to identify and offer discounts for safe driving habits.
New Democratic Party
The NDP were slow to get their platform out to the public. The NDP pressured the Liberal government in 2013 to reduce auto insurance premiums by 15%. Their position since then is that the government is taking too long to lower rates and that most consumers haven't seen any rate decreases. They have promised to lower rates by 15% within a year of forming a government.
That promise sounds like a big win for consumers but is not really a big change from the status quo. The Liberals two-year commitment to lower rates ends on August 15, 2015. If the NDP win the election next month, their commitment would end on June 12, 2015. That only shortens the process by 2 months. Rate reductions would be effective on renewal which is also the status quo.
The other commitments are to make transparent rate-setting permanent and provide consumers with a voice in the rate-setting process. It's not at all clear how these promises would be implemented. On transparency, the reference could be to the announced 15% average rate reduction. Perhaps the NDP would set annual average rate change targets that the regulator would have to meet. As for consumer input on rate-setting, that might involve rate hearings where consumers could express views on proposed rate changes. Or perhaps the NDP have another mechanism in mind to bring consumers into the process.
Progressive Conservatives
The Conservatives have had an auto insurance action plan for some time now. They too believe that auto insurance premiums are too high. The PC plan proposes reforms in four key areas: eliminate red tape, fight insurance fraud, make the dispute resolution system more effective and ensure auto insurers are accountable to customers.
There is a reference to the use of private mediators in the dispute resolution system to expedite the process and reduce costs. Users could opt for a private mediator instead of a government one in order to reduce wait times. Although the consensus is that the dispute resolution system needs more reforms than what is in the PC plan. In addition, they would establish an independent peer-reviewed medical assessment system by standardizing assessment procedures and requiring multiple assessments be performed by medical professionals of the same specialization. This does seem to resemble the former DAC system to a certain extent.
The PC plan calls for moving away from the current rate approval process which requires prior approval and moving to a file-and-use system. The PCs claim that prices in the marketplace would be more competitive if red tape were to be eliminated. Following large rate increases approximately 10 years ago, several Canadian jurisdictions abandoned file-and-use systems. The PCs would also like to see more discounts available to consumers.
Another PC auto insurance commitment would be to use the Health Claims for Auto Insurance (HCAI) electronic billing system to identify fraud. As well, they would establish a special office of Crown Attorney to prosecute fraudsters.
Finally, they would increase accountability by making senior insurance executives personally and financially liable for the conduct of their company.
Liberals
The Liberal platform for auto insurance was essentially set out in the 2014 Spring Budget which was failed to pass before the election was called.
The Liberals indicates that the rate reduction strategy is on target and average rates will be 8% lower by August 2014 and 15% lower by August 2015. However, the Budget document does not point to any specific initiative that will specifically work towards achieving those targets. Average rates are down 5.6% as of the end of the first quarter of 2014. In addition, the Liberals point to the recently released “Automobile Insurance Transparency and Accountability Report” which highlighted that, without these reforms, insurance rates would have needed to increase significantly.
In March 2014, the Liberals introduced Bill 171, the Fighting Fraud and Reducing Automobile Insurance Rates Act, 2014. The Bill proposed a number of initiatives to address barriers to rate reductions. The Bill includes legislative amendments for the transformation of the dispute resolution system, and further action to crack down on fraud and abuse, as well as other cost-saving measures. The government is building on the steps it has taken by developing a dedicated investigation and prosecution office on serious fraud, with an initial focus on auto insurance fraud. The development of this fraud office would be based on the Task Force’s principle that fraudsters should be vigorously pursued and prosecuted where evidence warrants. The Bill was never passed but would be introduced by the Liberals if they formed the next government.
The Liberals introduced legislation to regulate the towing industry but that Bill also did not pass before the election was called . The Liberals also tried to address storage-fee issues by introducing legislative amendments as part of Bill 171 that would provide regulation-making authority for the determination of vehicle storage periods and fair value regarding daily fees.
The Liberals had retained an independent third party to provide annual Automobile Insurance Transparency and Accountability Expert Reports to assess its efforts to reduce auto insurance costs and rates. An interim report was delivered in April 2014, and annual reports will be delivered in August of each year of the Strategy. The reports will also assess the industry’s efforts to lower costs and pass on savings to drivers. The interim report highlights that further action is needed to support the government’s Cost and Rate Reduction Strategy. The report also concludes it is important that insurers continue working to achieve efficiencies and reduce costs in the auto insurance system through initiatives such as better claim management, more sophisticated pricing methods (such as usage-based insurance) and improved fraud-prevention practices.
The Liberals would encouraging insurance companies to offer consumers usage-based insurance, which uses technology to identify and offer discounts for safe driving habits.
New Democratic Party
The NDP were slow to get their platform out to the public. The NDP pressured the Liberal government in 2013 to reduce auto insurance premiums by 15%. Their position since then is that the government is taking too long to lower rates and that most consumers haven't seen any rate decreases. They have promised to lower rates by 15% within a year of forming a government.
That promise sounds like a big win for consumers but is not really a big change from the status quo. The Liberals two-year commitment to lower rates ends on August 15, 2015. If the NDP win the election next month, their commitment would end on June 12, 2015. That only shortens the process by 2 months. Rate reductions would be effective on renewal which is also the status quo.
The other commitments are to make transparent rate-setting permanent and provide consumers with a voice in the rate-setting process. It's not at all clear how these promises would be implemented. On transparency, the reference could be to the announced 15% average rate reduction. Perhaps the NDP would set annual average rate change targets that the regulator would have to meet. As for consumer input on rate-setting, that might involve rate hearings where consumers could express views on proposed rate changes. Or perhaps the NDP have another mechanism in mind to bring consumers into the process.
Progressive Conservatives
The Conservatives have had an auto insurance action plan for some time now. They too believe that auto insurance premiums are too high. The PC plan proposes reforms in four key areas: eliminate red tape, fight insurance fraud, make the dispute resolution system more effective and ensure auto insurers are accountable to customers.
There is a reference to the use of private mediators in the dispute resolution system to expedite the process and reduce costs. Users could opt for a private mediator instead of a government one in order to reduce wait times. Although the consensus is that the dispute resolution system needs more reforms than what is in the PC plan. In addition, they would establish an independent peer-reviewed medical assessment system by standardizing assessment procedures and requiring multiple assessments be performed by medical professionals of the same specialization. This does seem to resemble the former DAC system to a certain extent.
The PC plan calls for moving away from the current rate approval process which requires prior approval and moving to a file-and-use system. The PCs claim that prices in the marketplace would be more competitive if red tape were to be eliminated. Following large rate increases approximately 10 years ago, several Canadian jurisdictions abandoned file-and-use systems. The PCs would also like to see more discounts available to consumers.
Another PC auto insurance commitment would be to use the Health Claims for Auto Insurance (HCAI) electronic billing system to identify fraud. As well, they would establish a special office of Crown Attorney to prosecute fraudsters.
Finally, they would increase accountability by making senior insurance executives personally and financially liable for the conduct of their company.
Reimbursement of Travel Expenses in an OWCP claim
In a recent policy statement, OWCP clarified procedures for travel reimbursement. OWCP continues to hew to the 100 mile round trip limitation on travel, unless it is for a medical examination that OWCP directs you to attend. If you are traveling more than 100 miles round trip for medical care, be prepared for a constant harassment by your claims examiner. For claimants who live in rural areas or areas of the country where it is very difficult to find a medical provider willing to accept FECA benefits, you may want to complain to your congress person about this unreasonable situation.
Subject: Reimbursement of Travel Expenses for Claimants and Providers Providing Transportation Services
References:
5 U.S.C. §8103 of the Federal Employees' Compensation Act (FECA) provides that an injured employee is entitled to receive medical services, appliances or supplies which a qualified physician prescribes or recommends and which OWCP considers necessary to treat the work-related injury. This section further provides that an employee may be furnished necessary and reasonable transportation and expenses incident to the securing of such services, appliances and supplies when authorized. See 5 U.S.C. 8103. This circular briefly describes the circumstances and limitations on authorizing and paying for transportation services.
Effective August 29, 2011, 20 CFR §10.315, provides in pertinent part as follows with regard to payment for transportation to obtain medical treatment:
Purpose: The purpose of this Bulletin is to address the manner in which travel procedure codes will be processed and paid by the Central Bill Processing (CBP) system when submitted for authorized examinations/treatments.
Applicability: Appropriate National Office and District Office personnel and FECA medical billing contractor.
Action:
A. Mileage Reimbursement for Examinations/Treatment. Periodically and in certain situations, travel to authorized examinations and/or treatment could exceed the allowable 100 mile distance outlined in 20 CFR 10.315(a) as noted above. When a claimant submits a reimbursement request (on Form OWCP-957, Medical Travel Refund Request) in excess of 100 miles for a single date of service, the bill will be automatically suspended and the CBP provider will send notification to the claims examiner seeking authorization. The notification sent by CBP will include the applicable date(s) of service, as well as the miles being claimed.
DOUGLAS C. FITZGERALD
Director, Federal Employees' Compensation
| FECA BULLETIN NO. 14-02 Issue Date: January 29, 2014 |
Subject: Reimbursement of Travel Expenses for Claimants and Providers Providing Transportation Services
References:
5 U.S.C. §8103 of the Federal Employees' Compensation Act (FECA) provides that an injured employee is entitled to receive medical services, appliances or supplies which a qualified physician prescribes or recommends and which OWCP considers necessary to treat the work-related injury. This section further provides that an employee may be furnished necessary and reasonable transportation and expenses incident to the securing of such services, appliances and supplies when authorized. See 5 U.S.C. 8103. This circular briefly describes the circumstances and limitations on authorizing and paying for transportation services.
Effective August 29, 2011, 20 CFR §10.315, provides in pertinent part as follows with regard to payment for transportation to obtain medical treatment:
(a) The employee is entitled to reimbursement of reasonable and necessary expenses, including transportation needed to obtain authorized medical services, appliances or supplies. To determine what is a reasonable distance to travel, OWCP will consider the availability of services, the employee's condition, and the means of transportation. Generally, a roundtrip distance of up to 100 miles is considered a reasonable distance to travel. Travel should be undertaken by the shortest route, and if practical, by public conveyance. If the medical evidence shows that the employee is unable to use these means of transportation, OWCP may authorize travel by taxi or special conveyance.
(b) For non-emergency medical treatment, if roundtrip travel of more than 100 miles is contemplated, or air transportation or overnight accommodations will be needed, the employee must submit a written request to OWCP for prior authorization with information describing the circumstances and necessity for such travel expenses. OWCP will approve the request if it determines that the travel expenses are reasonable and necessary, and are incident to obtaining authorized medical services, appliances or supplies. Requests for travel expenses that are often approved include those resulting from referrals to a specialist for further medical treatment, and those involving air transportation of an employee who lives in a remote geographical area with limited local medical services.
Background: The change to requiring suspension of the reimbursement request and referring the request for claims examiner review whenever the request involves more than 100 miles per day of mileage reimbursement (Section A below) was effective January 17, 2013. The additional procedures outlined in this Bulletin were effective July 17, 2013.Purpose: The purpose of this Bulletin is to address the manner in which travel procedure codes will be processed and paid by the Central Bill Processing (CBP) system when submitted for authorized examinations/treatments.
Applicability: Appropriate National Office and District Office personnel and FECA medical billing contractor.
Action:
A. Mileage Reimbursement for Examinations/Treatment. Periodically and in certain situations, travel to authorized examinations and/or treatment could exceed the allowable 100 mile distance outlined in 20 CFR 10.315(a) as noted above. When a claimant submits a reimbursement request (on Form OWCP-957, Medical Travel Refund Request) in excess of 100 miles for a single date of service, the bill will be automatically suspended and the CBP provider will send notification to the claims examiner seeking authorization. The notification sent by CBP will include the applicable date(s) of service, as well as the miles being claimed.
1. If the request is for a single trip and the mileage claimed is allowable, such as for a scheduled Second Opinion (SECOP) or Independent Medical Examination (IME), the Claims Examiner (CE) will simply authorize the reimbursement.
2. In limited circumstances it may be necessary for a claimant to travel more than 100 miles on a regular basis, such as to be seen by his/her treating physician or therapist if the claimant lives in a remote area. Upon receipt of notification from CBP in these instances, the CE should provide a range for this ongoing authorization, including both total miles and period that the authorization covers. This range should be calibrated to the claimant's treatment location and can extend up to 900 miles and up to six (6) months in length, using Procedure Code A0080.
3. Should the claimant exceed the miles authorized within this period, the CE will again be notified by CBP. If such travel is medically necessary for the work-related conditions, the CE has the authority to authorize an extension of the mileage, but can only do so after writing a memo to the case file to justify the increased number of miles allowable.
4. If the need for increased mileage continues past the initial six month authorization period, another authorization and memo to the file is also required for an additional 6 month period. Such authorization and documentation is required every 6 months.
5. If the proper authorization is on file, or the requested mileage does not exceed 100 miles for a single date of service, the bill will simply be processed by CBP. There will be no need for a notification to be sent to the CE.
B. Incidental Charges. Periodically, a claimant could incur incidental charges that may exceed $75.00 while travelling to authorized examinations.1. If the claimant requests reimbursement for any of the following procedure codes (including those that require prior authorization), and the charge exceeds $75.00, the system will post Edit 501 (Service exceeds Allowable amount, Original Receipt/Invoice of the charge is required).
A0110 – Taxi
A0120 – Mini Bus
A0130 – Wheel Chair Van
A0140 – Air Travel
A0170 – Tolls/Parking
A0180 – Lodging
A0190 – Meals
A0200 – Lodging Escort
A0210 – Meals Escort
A0120 – Mini Bus
A0130 – Wheel Chair Van
A0140 – Air Travel
A0170 – Tolls/Parking
A0180 – Lodging
A0190 – Meals
A0200 – Lodging Escort
A0210 – Meals Escort
2. If the receipt/invoice is present, a notification will be sent to the CE to obtain authorization for the amount. However if the receipt/invoice is not present, the service will be denied for Edit 501. CBP will not send a notification to the CE if there are no receipts attached; it will simply deny the charge.
3. If the claimant submits a request for reimbursement of "TRANS," and there is no description present for using this code or the description is equal to "GAS," the system will post Edit 520 (A description of the service is required. Please provide the description and resubmit. Gas is not covered.) and deny the charge since charges for gasoline are not permitted in addition to mileage reimbursement.
Note: Where a claimant has been denied authorization for treatment or reimbursement for expenses related to transportation, a formal decision with appeal rights will be issued upon claimant request. Amounts paid (including amounts paid under the OWCP fee schedule) for medical services are not appealable to ECAB. See 20 C.F.R. § 10.625.]
C. Payment to Transportation Providers. The OWCP-1500 Form is to be used by those providing authorized transportation to claimants for medical treatment/appointments.1. If the charge for these services exceeds $75.00, prior authorization is required and the bill must be accompanied with an invoice justifying the charge.
2. A provider must have prior authorization for any of the following transportation procedure codes if the charge billed exceeds $75.00:
A0100 - Taxi
A0110 – Bus
A0120 – Mini Bus
A0130 – Wheel Chair Van
A0140 – Air Travel
A0170 – Tolls/Parking
A0110 – Bus
A0120 – Mini Bus
A0130 – Wheel Chair Van
A0140 – Air Travel
A0170 – Tolls/Parking
If there is not an authorization on file or the provider fails to submit an invoice, the system will post Edit 501 and deny the bill. In those instances where the amount being billed exceeds the amount authorized, CBP will send a notification to the CE requesting direction to extend the dollar amount of the authorization, to pay only the authorized amount, or deny the service.
3. If the billed charge is less than $75.00, no edit will post and the bill will be processed through the system, even without a receipt or invoice.
4. Providers who bill using mileage codes A0080 and/or A0090 will be paid based on the current GSA mileage rate, and prior authorization is required if the miles/units billed is for more than 100 miles/units for a single date of service. If an authorization is not on file, the CBP will deny the bill.
D. Mileage Reimbursement for Pharmacy Pick upA claimant may claim mileage for pharmacy pick up to his or her local pharmacy; reimbursement is generally limited to the closest pharmacy by the shortest route.
Disposition: This bulletin is to be retained until the FECA PM has been updated.DOUGLAS C. FITZGERALD
Director, Federal Employees' Compensation
Wednesday, May 21, 2014
Insurance News - Wednesday, May 21, 2014
Here are the leading auto insurance headlines from ONTARIO AUTO INSURANCE TOPICS ON TWITTER for Wednesday, May 21, 2014:
- It is likely that self-driving car will provide the solution to distracted driving laws and bans on texting.
- Did you know that Google's self-driving cars have never gotten a ticket?
- How big is the market for usage-based insurance and what do customers expect?
- Telematics are on the road to widespread adoption among US truck fleets.
- Two New York bills, if passed, will attempt to deter staged accidents by introducing significant jail time for fraud convictions, as well as harsher penalties for leaving the scene of an accident.
- The California Department of Motor Vehicles announced it has created rules governing how self-driving or autonomous cars are tested by manufacturers on California roads.
Actuarial Research on the Effectiveness of Collision Avoidance Systems
A study was recently released by Ron Actuarial Intelligence reviewing he effectiveness of a Forward Collision Warning (FCW) system and a Lane Departure Warning (LDW) system on bodily injury claim costs in Israel.
The researchers had access to claims data from all insurance companies going back to 1985. They were able to compare the claim costs of vehicles with the FCW and LDW systems and those without to establish the net impact of the systems on claims frequency. The goal was to develop a model that would allow actuaries to properly price risk premium for vehicles with the systems.
What they found was that vehicles with the systems had 45% fewer claims. However, the impact on claims severity is unclear. In addition, the sample size (only 0.082% of vehicles had the systems) and claims frequency were both small so the results are subject to some deviance.
They recommend a 15% discount be offered to drivers with similar systems as more data is collected and analyzed over the coming years.
The complete study can be found here.
The researchers had access to claims data from all insurance companies going back to 1985. They were able to compare the claim costs of vehicles with the FCW and LDW systems and those without to establish the net impact of the systems on claims frequency. The goal was to develop a model that would allow actuaries to properly price risk premium for vehicles with the systems.
What they found was that vehicles with the systems had 45% fewer claims. However, the impact on claims severity is unclear. In addition, the sample size (only 0.082% of vehicles had the systems) and claims frequency were both small so the results are subject to some deviance.
They recommend a 15% discount be offered to drivers with similar systems as more data is collected and analyzed over the coming years.
The complete study can be found here.
Lawyer Swearing Affidavit for Motion does not Waive Solicitor-Client Privilege
Solicitor-client privilege is an important right, as seen in a recent appeal of a Master's decision.
In Elgner v. Freedman Estate, 2014 ONSC 1989 (S.C.J.), the defendant brought a motion for particulars. A lawyer from the firm representing the defendant swore an affidavit in support of the motion. Plaintiff's counsel cross-examined on the affidavit and a number of refusals were given. On a motion for the refusals, the issue was whether the tendering of litigation counsel's affidavit in support of a motion amounts to "a total waiver of privilege over a lawyer's file." The Master held it did not and Justice Morgan upheld the decision on appeal.
The refusals were extremely broad, including things such as accounts, letter of advice, dockets, and the initial retainer. The plaintiff argued that since defence counsel swore they had no information (and therefore needed particulars), the only way to test their assertion was to ask to see everything. Plaintiff's counsel also argued they needed to see everything in order to test the assertion the affidavit was made for "no improper purpose". Justice Morgan disagreed, holding that the onus is on the party asserting the affirmative, not the party stating a negative. If a statement that an affidavit is sworn "for no improper purpose" requires cross-examination, it would "burden all affiants with limitless cross-examination". The plaintiff's motion was a fishing expedition aimed at undermining their ability to conduct the litigation. The appeal was dismissed.
In Elgner v. Freedman Estate, 2014 ONSC 1989 (S.C.J.), the defendant brought a motion for particulars. A lawyer from the firm representing the defendant swore an affidavit in support of the motion. Plaintiff's counsel cross-examined on the affidavit and a number of refusals were given. On a motion for the refusals, the issue was whether the tendering of litigation counsel's affidavit in support of a motion amounts to "a total waiver of privilege over a lawyer's file." The Master held it did not and Justice Morgan upheld the decision on appeal.
The refusals were extremely broad, including things such as accounts, letter of advice, dockets, and the initial retainer. The plaintiff argued that since defence counsel swore they had no information (and therefore needed particulars), the only way to test their assertion was to ask to see everything. Plaintiff's counsel also argued they needed to see everything in order to test the assertion the affidavit was made for "no improper purpose". Justice Morgan disagreed, holding that the onus is on the party asserting the affirmative, not the party stating a negative. If a statement that an affidavit is sworn "for no improper purpose" requires cross-examination, it would "burden all affiants with limitless cross-examination". The plaintiff's motion was a fishing expedition aimed at undermining their ability to conduct the litigation. The appeal was dismissed.
Monday, May 19, 2014
Great post on certificates of insurance
Gene Killian of the Killian Law Firm offers an excellent blog post on the uselessness of certificates of insurance.
Sunday, May 18, 2014
Insurance News - Sunday, May 18, 2014
Here are the leading auto insurance headlines from ONTARIO AUTO INSURANCE TOPICS ON TWITTER for Sunday, May 18, 2014:
- Google did a parking-lot test with 100 cyclists driving around a self-driving car. It was able to see all of them and track their movement.
- Originally heralded as the death knell for independent agents and brokers, online auto insurance comparison sites now seem not only to be relatively toothless, but actually on their way out.
- Rhode Island regulators recently issued a bulletin notifying the state’s auto insurers of their filing requirements and deadlines for the Rhode Island Insurance Verification System (RIIVS) to track uninsured motorists.
- Actuaries are adapting to the telematics revolution. They have also found that telematics more or less affirms the old rating factors.
- Actuaries will also have to adapt to driverless cars.
- A little-noticed amendment to the United Nations Convention on Road Traffic agreed last month would let drivers take their hands off the wheel of self-driving cars. It was pushed by Germany, Italy and France, whose high-end car-makers say they are ready to zoom past American tech pioneers and bring the first "autonomous vehicles" to market.
Friday, May 16, 2014
U.S. District Court holds no bad faith sanctions in subrogation action where insured spoliated evidence
Fireman's Fund Insurance Company brought a products liability subrogation action against Bradford-White Corporation. It alleged that a design defect in a water heater manufactured by Bradford White caused a leak that damaged the property of its insured, Bell Partners, Inc.
After the leak was discovered, Fireman's requested that Bell retain the subject water heater. However, Bell disposed of the water heater without contacting Fireman's and before Bradford-White had an opportunity to inspect or test it.
Fireman's expert asserted that other water heaters in the same building were similar to the subject water heater. Bradford-White contested that, arguing that they were manufactured earlier and kept in outside closets instead of inside closets.
Bradford-White moved that the case against it be dismissed on the ground of spoliation of evidence, or, at the least, that the court preclude Fireman's from arguing at trial that any evidence or test results obtained from the other supposedly similar water heaters is relevant to the condition of the subject heater.
In Fireman's Fund Ins. Co. v. Bradford-White Corp., 2014 WL 1515266 (D. Mass.), the United States District Court for the District of Massachusetts held that Fireman's Fund did not act in bad faith. It had asked Bell to retain the heaters and Bell did not contact it before removing the heater. Fireman's failure to take additional steps to secure the heater was at most negligent. The court held that the appropriate spoliation sanction is an instruction to the jury that it may draw a spoliation inference against Fireman's Fund.
The court utilized a straightforward spoliation analysis. I was surprised that it did not address an argument that an inference can be drawn against Fireman's Fund because as the subrogee of Bell it stands in Bell's shoes. If Bell had brought its own claim against Bradford-White, would the court have analyzed the sanctions differently? I don't know offhand if there are any Massachusetts decisions on the issue, but it is certainly where I would have started.
After the leak was discovered, Fireman's requested that Bell retain the subject water heater. However, Bell disposed of the water heater without contacting Fireman's and before Bradford-White had an opportunity to inspect or test it.
Fireman's expert asserted that other water heaters in the same building were similar to the subject water heater. Bradford-White contested that, arguing that they were manufactured earlier and kept in outside closets instead of inside closets.
Bradford-White moved that the case against it be dismissed on the ground of spoliation of evidence, or, at the least, that the court preclude Fireman's from arguing at trial that any evidence or test results obtained from the other supposedly similar water heaters is relevant to the condition of the subject heater.
In Fireman's Fund Ins. Co. v. Bradford-White Corp., 2014 WL 1515266 (D. Mass.), the United States District Court for the District of Massachusetts held that Fireman's Fund did not act in bad faith. It had asked Bell to retain the heaters and Bell did not contact it before removing the heater. Fireman's failure to take additional steps to secure the heater was at most negligent. The court held that the appropriate spoliation sanction is an instruction to the jury that it may draw a spoliation inference against Fireman's Fund.
The court utilized a straightforward spoliation analysis. I was surprised that it did not address an argument that an inference can be drawn against Fireman's Fund because as the subrogee of Bell it stands in Bell's shoes. If Bell had brought its own claim against Bradford-White, would the court have analyzed the sanctions differently? I don't know offhand if there are any Massachusetts decisions on the issue, but it is certainly where I would have started.
Insurance News - Friday, May 16, 2014
Here are the leading auto insurance headlines from ONTARIO AUTO INSURANCE TOPICS ON TWITTER for Friday, May 16, 2014:
- Although the insurance industry purports to embrace online technology for consumers seeking quotes and other interaction, a new secret shopper study shows that only 44% of online quote requests get both a call and email response from the insurer or agent--and 17% received no response at all.
- A telematics device recently exposed a $91,000 auto insurance fraud case. Information stored on the device revealed that a car accident was not as significant as claimed by those involved in the crash.
- Lawyers launches class action suit against WSIB on behalf of Ontario injured workers for reducing awards for pre-existing conditions.
- Have the Liberals kept their auto insurance rates commitment?
- Latest Ontario seat projections have PCs winning 53 seats (current 37), Liberals winning 35 seats (current 49) and NDP with 19 seats (current 21).
Wednesday, May 14, 2014
Court of Appeal Rejects Discoverability Argument
A recent example shows that the new summary judgment rule may be used in cases where plaintiffs claim they did not discover they had a claim within the limitation period.
In Yelda v. Vu, [2014] ONSC 2168 (C.A.), the plaintiff was injured in a motor vehicle accident in 2002. She did not commence an action until 2011. She alleged that she did not discover her injuries met the threshold for a claim until she had an x-ray of her back in 2009. A motions judge disagreed, and granted summary judgment dismissing the action. The plaintiff appealed.
The Court of Appeal dismissed the appeal. The plaintiff's own evidence was that she had "really bad" back pain "half the time" each month following the accident. She was never really pain free at any time, and at all times she attributed the pain to the accident. Apart from occasional visits to hospital emergency departments, the plaintiff took no active steps to investigate the back pain from 2002 to 2009. The motions judge held that it was implausible that a reasonable person would consistently take over the counter medication, have "really bad" pain, be unable to function a couple of days each month, and would find pain so bad as to need to attend the emergency department, yet fail to do anything to investigate the cause. The Court of Appeal held there was no error in the motion judge's finding.
In Yelda v. Vu, [2014] ONSC 2168 (C.A.), the plaintiff was injured in a motor vehicle accident in 2002. She did not commence an action until 2011. She alleged that she did not discover her injuries met the threshold for a claim until she had an x-ray of her back in 2009. A motions judge disagreed, and granted summary judgment dismissing the action. The plaintiff appealed.
The Court of Appeal dismissed the appeal. The plaintiff's own evidence was that she had "really bad" back pain "half the time" each month following the accident. She was never really pain free at any time, and at all times she attributed the pain to the accident. Apart from occasional visits to hospital emergency departments, the plaintiff took no active steps to investigate the back pain from 2002 to 2009. The motions judge held that it was implausible that a reasonable person would consistently take over the counter medication, have "really bad" pain, be unable to function a couple of days each month, and would find pain so bad as to need to attend the emergency department, yet fail to do anything to investigate the cause. The Court of Appeal held there was no error in the motion judge's finding.
Monday, May 12, 2014
Why doesn't OWCP have a document that I sent?
I frequently hear from OWCP claimants who complain that they have sent a document in to OWCP yet the claims examiner claims it was not received. Any document you submit with your file number clearly marked on each page should be scanned and show up in your file. The most common reason that a claims examiner is telling you that something was not received into your file is that the document actually was received but it was coded incorrectly. For instance, many claimants receive notices that a completed 1032 form was not received to their file. More often than not, the form is in the file, its just that it was not indexed as a 1032 form. If you are being told something is not in your file, and it should be in your file, telephone OWCP and ask the customer service rep or your claims examiner to look at the actual documents received to your file, not just the index. Its probably there but not properly indexed.
Friday, May 9, 2014
Insurance News - Friday, May 9, 2014
Here are the leading auto insurance headlines from ONTARIO AUTO INSURANCE TOPICS ON TWITTER for Friday, May 9, 2014:
- Licensing of health care facilities by FSCO has been moved back to December 1, 2014. Applications will be accepted starting June 1, 2014.
- Consumer Federation of America claims auto insurance rates in New York went up after the introduction of file-and-use.
- WSIB is attempting to change its policy on pre-existing conditions.
- One in 10 Canadian customers switch auto insurance carriers as there is little brand awareness in the marketplace.
- At least 10 U.S. Insurance Regulators have warned drivers about ride-sharing mobile apps and how it may impact on their auto insurance policies.
Wednesday, May 7, 2014
Plaintiffs Denied Costs of Jury Trial
A London judge recently denied costs to plaintiffs following a jury trial which saw them recover less than 10% of their claim.
In Mayer v. 1474479 Ontario Ltd., 2014 ONSC 2622 (S.C.J.), the defendant admitted liability for a 2008 motor vehicle accident. The action proceeded to a jury trial on damages. The Statement of Claim sought damages of $1.1 million, and mid-trial the prayer for relief was amended to $2 million. The jury awarded the primary plaintiff $137,000 (reduced to $116,000 after the deductible and collateral benefits), her daughter $3,300 (reduced to $0 after the deductible) and her husband $0, for a total recover of $119,300. The plaintiffs sought costs of $422,000.
Justice Leach went through the factors in r. 57.01. Some of the factors considered were:
1. The plaintiffs fell "drastically short" of the amounts claimed;
2. The time and resources devoted by the plaintiffs were disproportionate to what the case was worth, as determined by the jury;
3. There were disbursements for experts who either did not add much to the proceeding or overlapped with other experts;
4. The case was scheduled for 2 weeks and ran to 4 weeks, for which the plaintiffs were largely responsible; and
5. Various disbursements were not permissible in any event, such as a "day in the life" video which was not used, the cost of a trial that was adjourned by the plaintiffs, and the cost of a voluntary mediation.
The defendants made several offers; however, they were not r. 49 offers as they failed to separate interest from damages, did not make it clear whether the offer was global for all plaintiffs or severable, and were not clear as to whether the plaintiffs could retain future collateral benefits. But for the deficiencies in the offers, the defendants would have been entitled to partial indemnity costs in the amount of $181,000. Even though they were not r. 49 offers, the defendants' offers were taken into account in exercising the Court's discretion. Justice Leach held that each party should bear their own costs.
Mayer should be reviewed by counsel as guidance in making offers, as well as in deciding what resources should be put into a particular file.
In Mayer v. 1474479 Ontario Ltd., 2014 ONSC 2622 (S.C.J.), the defendant admitted liability for a 2008 motor vehicle accident. The action proceeded to a jury trial on damages. The Statement of Claim sought damages of $1.1 million, and mid-trial the prayer for relief was amended to $2 million. The jury awarded the primary plaintiff $137,000 (reduced to $116,000 after the deductible and collateral benefits), her daughter $3,300 (reduced to $0 after the deductible) and her husband $0, for a total recover of $119,300. The plaintiffs sought costs of $422,000.
Justice Leach went through the factors in r. 57.01. Some of the factors considered were:
1. The plaintiffs fell "drastically short" of the amounts claimed;
2. The time and resources devoted by the plaintiffs were disproportionate to what the case was worth, as determined by the jury;
3. There were disbursements for experts who either did not add much to the proceeding or overlapped with other experts;
4. The case was scheduled for 2 weeks and ran to 4 weeks, for which the plaintiffs were largely responsible; and
5. Various disbursements were not permissible in any event, such as a "day in the life" video which was not used, the cost of a trial that was adjourned by the plaintiffs, and the cost of a voluntary mediation.
The defendants made several offers; however, they were not r. 49 offers as they failed to separate interest from damages, did not make it clear whether the offer was global for all plaintiffs or severable, and were not clear as to whether the plaintiffs could retain future collateral benefits. But for the deficiencies in the offers, the defendants would have been entitled to partial indemnity costs in the amount of $181,000. Even though they were not r. 49 offers, the defendants' offers were taken into account in exercising the Court's discretion. Justice Leach held that each party should bear their own costs.
Mayer should be reviewed by counsel as guidance in making offers, as well as in deciding what resources should be put into a particular file.
Tuesday, May 6, 2014
Superior Court holds that contractual choice of law clause does not apply to case over validity of policy term
Catlin Specialty Insurance issued two consecutive claims-made Professional and Pollution Legal Liability Insurance policies to AMSC and its subsidiary Windtec. The first policy had a policy period of April 1, 2010 to April 1, 2011.
On December 6, 2010, Ghodawat notified the insured that it was terminating a 2008 license agreement between the two due to technical problems with the wind turbine that was the subject of the agreement and that the insured had supplied and installed. Ghodawat leveled an accusation of gross negligence and stated that it would pursue a claim unless an amicable resolution was reached. Settlement discussions followed in February 2011.
In the meantime, the insured submitted an application for a second year of coverage with Catlin. In the application it denied any claim, suit, notice or action had been brought or that it was aware of any other circumstances or incidents which may result in a claim being filed against it. A new policy was issued without Catlin being informed of the Ghodawat allegations.
On May 12, 2011 Ghodawat commenced arbitration proceedings against the insured. The insured requested coverage from Catlin.
In Catlin Specialty Is. Co. v. Am. Superconductor Corp., 2014 WL 840693 (Mass. Super.), the Superior Court held that there was no coverage for the claim under either policy because the policy provided coverage only if a claim was both made and reported during the same policy period. The claim was made in the first policy period and reported in the second policy period.
The court noted that the purpose of the requirement that notice of a claim be given within the policy period is fairness in rate setting. Therefore an inquiry into whether an insurer has been prejudiced with respect to the particular claim, relevant to an occurrence policy, is irrelevant to a claims-made policy.
AMCS argued that under New York law coverage can be denied for breach of the notice provision only if there is prejudice. The court did not reach that issue because it held that under Massachusetts conflict of law doctrine Massachusetts law applies to the coverage dispute.
The court held that a choice of law clause in the policies, providing that the "policy shall be subject [to] interpretation under the law of the State of New York" did not apply because the disputed issue is not one of policy interpretation but the validity of the policy clause requiring that claims be made and reported in the policy period.
On December 6, 2010, Ghodawat notified the insured that it was terminating a 2008 license agreement between the two due to technical problems with the wind turbine that was the subject of the agreement and that the insured had supplied and installed. Ghodawat leveled an accusation of gross negligence and stated that it would pursue a claim unless an amicable resolution was reached. Settlement discussions followed in February 2011.
In the meantime, the insured submitted an application for a second year of coverage with Catlin. In the application it denied any claim, suit, notice or action had been brought or that it was aware of any other circumstances or incidents which may result in a claim being filed against it. A new policy was issued without Catlin being informed of the Ghodawat allegations.
On May 12, 2011 Ghodawat commenced arbitration proceedings against the insured. The insured requested coverage from Catlin.
In Catlin Specialty Is. Co. v. Am. Superconductor Corp., 2014 WL 840693 (Mass. Super.), the Superior Court held that there was no coverage for the claim under either policy because the policy provided coverage only if a claim was both made and reported during the same policy period. The claim was made in the first policy period and reported in the second policy period.
The court noted that the purpose of the requirement that notice of a claim be given within the policy period is fairness in rate setting. Therefore an inquiry into whether an insurer has been prejudiced with respect to the particular claim, relevant to an occurrence policy, is irrelevant to a claims-made policy.
AMCS argued that under New York law coverage can be denied for breach of the notice provision only if there is prejudice. The court did not reach that issue because it held that under Massachusetts conflict of law doctrine Massachusetts law applies to the coverage dispute.
The court held that a choice of law clause in the policies, providing that the "policy shall be subject [to] interpretation under the law of the State of New York" did not apply because the disputed issue is not one of policy interpretation but the validity of the policy clause requiring that claims be made and reported in the policy period.
Friday, May 2, 2014
USPS and OWCP claims for hearing loss
Many Postal workers do not realize that the hearing loss they suffer over many years from noise exposure on their job is considered a compensable work injury by OWCP. It is important to be aware that a claim for this type of injury must be filed within three years of when you were last exposed to noise on the job. Sometimes a claim can be filed beyond the three year time limitation if the hearing loss was previously documented through a program of annual hearing tests conducted by the employing establishment.
Thursday, May 1, 2014
2014 Ontario Budget - Auto Insurance Commitments
The 2014 Ontario Budget outlined a number of commitments, however many are initiatives that have been previously been announced.
Auto Insurance Cost and Rate Reduction Strategy
The government indicates that the rate reduction strategy is on target and average rates will be 8% lower by August 2014 and 15% lower by August 2015. However, the document does not point to any specific initiative that will specifically work towards achieving those targets. Average rates are down 5.6% as of the end of the first quarter of 2014. In addition, the government points to the recently released “Automobile Insurance Transparency and Accountability Report” which highlighted that, without these reforms, insurance rates would have needed to increase significantly.
Transforming the Dispute Resolution System and Fighting Fraud to Reduce Rates
In March 2014, the government introduced Bill 171, the Fighting Fraud and Reducing Automobile Insurance Rates Act, 2014. The Bill proposes a number of initiatives to address barriers to rate reductions. The Bill includes legislative amendments for the transformation of the dispute resolution system, and further action to crack down on fraud and abuse, as well as other cost-saving measures. The government is building on the steps it has taken by developing a dedicated investigation and prosecution office on serious fraud, with an initial focus on auto insurance fraud. The development of this fraud office would be based on the Task Force’s principle that fraudsters should be vigorously pursued and prosecuted where evidence warrants.
Addressing Towing, Vehicle Storage and Collision Repair Practices
The government has introduced legislation to regulate the towing industry. The government has taken action to address storage-fee issues by introducing legislative amendments as part of Bill 171 that would provide regulation-making authority for the determination of vehicle storage periods and fair value regarding daily fees. As part of the next phase of this initiative, the Province will continue consulting to address issues of fraud and abuse relating to collision repair practices. There are initiatives that are in progress and are not new initiatives.
Increasing Automobile Insurance Transparency and Accountability
The government has retained an independent third party to provide annual Automobile Insurance Transparency and Accountability Expert Reports to assess its efforts to reduce auto insurance costs and rates. An interim report was delivered to the Minister of Finance in April 2014, and annual reports will be delivered in August of each year of the Strategy. The reports will also assess the industry’s efforts to lower costs and pass on savings to drivers. The interim report highlights that further action is needed to support the government’s Cost and Rate Reduction Strategy. The report also concludes it is important that insurers continue working to achieve efficiencies and reduce costs in the auto insurance system through initiatives such as better claim management, more sophisticated pricing methods (such as usage-based insurance) and improved fraud-prevention practices.
Rewarding Safe Drivers: Usage-Based Insurance
The government is encouraging insurance companies to offer consumers usage-based insurance, which uses technology to identify and offer discounts for safe driving habits. The Financial Services Commission of Ontario (FSCO) has already communicated key consumer protection requirements to the insurance industry, and many companies have implemented or are planning to implement usage-based insurance.
Auto Insurance Cost and Rate Reduction Strategy
The government indicates that the rate reduction strategy is on target and average rates will be 8% lower by August 2014 and 15% lower by August 2015. However, the document does not point to any specific initiative that will specifically work towards achieving those targets. Average rates are down 5.6% as of the end of the first quarter of 2014. In addition, the government points to the recently released “Automobile Insurance Transparency and Accountability Report” which highlighted that, without these reforms, insurance rates would have needed to increase significantly.
Transforming the Dispute Resolution System and Fighting Fraud to Reduce Rates
In March 2014, the government introduced Bill 171, the Fighting Fraud and Reducing Automobile Insurance Rates Act, 2014. The Bill proposes a number of initiatives to address barriers to rate reductions. The Bill includes legislative amendments for the transformation of the dispute resolution system, and further action to crack down on fraud and abuse, as well as other cost-saving measures. The government is building on the steps it has taken by developing a dedicated investigation and prosecution office on serious fraud, with an initial focus on auto insurance fraud. The development of this fraud office would be based on the Task Force’s principle that fraudsters should be vigorously pursued and prosecuted where evidence warrants.
Addressing Towing, Vehicle Storage and Collision Repair Practices
The government has introduced legislation to regulate the towing industry. The government has taken action to address storage-fee issues by introducing legislative amendments as part of Bill 171 that would provide regulation-making authority for the determination of vehicle storage periods and fair value regarding daily fees. As part of the next phase of this initiative, the Province will continue consulting to address issues of fraud and abuse relating to collision repair practices. There are initiatives that are in progress and are not new initiatives.
Increasing Automobile Insurance Transparency and Accountability
The government has retained an independent third party to provide annual Automobile Insurance Transparency and Accountability Expert Reports to assess its efforts to reduce auto insurance costs and rates. An interim report was delivered to the Minister of Finance in April 2014, and annual reports will be delivered in August of each year of the Strategy. The reports will also assess the industry’s efforts to lower costs and pass on savings to drivers. The interim report highlights that further action is needed to support the government’s Cost and Rate Reduction Strategy. The report also concludes it is important that insurers continue working to achieve efficiencies and reduce costs in the auto insurance system through initiatives such as better claim management, more sophisticated pricing methods (such as usage-based insurance) and improved fraud-prevention practices.
Rewarding Safe Drivers: Usage-Based Insurance
The government is encouraging insurance companies to offer consumers usage-based insurance, which uses technology to identify and offer discounts for safe driving habits. The Financial Services Commission of Ontario (FSCO) has already communicated key consumer protection requirements to the insurance industry, and many companies have implemented or are planning to implement usage-based insurance.
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