Insurance News - Monday, March 30, 2015

Here are the leading auto insurance headlines from ONTARIO AUTO INSURANCE TOPICS ON TWITTER for Monday, March 30, 2015:

• Ontario may increase mandatory reporting limit for collisions with no injuries to $2,000, from the $1,000 level set in 1998.  Five provinces have already increased their limits.
• Toronto Uber provides drivers with little information about insurance, including the name of their insurer.  Consumers should be aware that drivers' insurance policy may not provide them with coverage.
• New York’s top financial watchdog warned insurers this week about charging higher prices to customers least likely to shop around, the latest state to raise questions about how the industry uses data when setting rates.
• Alberta road safety bill has been passed by Legislature and will introduce demerit points for drivers convicted of distracted driving.
• Google explains why they created the driverless car.

New Inspection Powers to Address Auto Insurance Fraud

New inspection powers that were included in the Fighting Fraud and Reducing Automobile Insurance Rates Act, 2014 come into effect on April 1, 2015.

The Consumer Protection Act, 2002 has amended to regulate consumer transactions involving tow and storage services and establishes rules for the towing and vehicle storage industries through measures that tackle questionable practices.

As examples, rules are provided for:

1. Disclosure of information to consumers.
2. Requirements that tow and storage services provided to consumers be authorized.
3. Deviating from estimated payment amounts.
4. The provision of itemized invoices.
5. Insurance requirements.
6. Publication of rates.
7. A Tow and Storage Consumers Bill of Rights.
8. Requirements that consumers be allowed to remove personal property from towed or stored vehicles.
9. The establishment of qualifications for tow and storage providers.

New inspectors will be appointed under the Consumer Protection Act in order to take a more preventative and targeted approach to enforcement through the use of education and awareness materials and new tools such as warning letters.

With these new changes, inspectors will be able to:

• Proactively enter a place of business in Ontario Examine documentation relevant to an inspection 
• Require the person being inspected to cooperate in the inspection 
• Issue orders to address and correct consumer issues, where appropriate.

This is part of an ongoing process in implementing recommendations made by the Automobile Insurance Anti-Fraud Task Force.

Westerhof v. Gee - Expert Testimony

The much anticipated appeal decision in Westerhof v. Gee was released yesterday.  It can be found at 2015 ONCA 0206 (C.A.).  In Westerhof, the trial judge refused to let in evidence on history, diagnosis, and prognosis from medical practitioners who were treating practitioners or non-party experts.

The Court of Appeal overturned the Divisional Court decision, which held that the key factor in determining whether r. 53.03 applies is whether the evidence is fact or opinion.  Instead, the Court held:

[60]     Instead, I conclude that a witness with special skill, knowledge, training, or experience who has not been engaged by or on behalf of a party to the litigation may give opinion evidence for the truth of its contents without complying with rule 53.03 where:

·        the opinion to be given is based on the witness’s observation of or participation in the events at issue; and

·        the witness formed the opinion to be given as part of the ordinary exercise of his or her skill, knowledge, training and experience while observing or participating in such events.

Rule 53.03 does not apply to the opinion evidence of a non-party expert where that person has formed a relevant opinion based on personal observations or examinations relating to the subject matter of the litigation for a purpose other than the litigation.  The court retains its gatekeeper function and may require compliance with r. 53.03 if the expert goes beyond the scope of opinion formed in the course of treatment or observation for purposes outside of the litigation.

Given the decision in Westerhof  it will now be permissible for treating practitioners and accident benefits assessors to testify without complying with r. 53.03.

Be sure to update your life insurance beneficiary(s)

I have many clients who unfortunately have serious disabling injuries that will prevent them from returning to work for the rest of their lives. In the madness that is living with a life altering injury and dealing with OWCP, people sometimes never get around to updating their life insurance beneficiary choice. Recently, a client passed away who had never updated his life insurance to list his wife of many years. Instead, his life insurance went to a cousin who had had little involvement with them for many years. The forms to select a beneficiary are available on the OPM website, complete the necessary form and follow the instructions for submitting the forms:
http://www.opm.gov/healthcare-insurance/life-insurance/designating-a-beneficiary/#url=Forms-for-Designations

Surveillance Must be Disclosed Before Trial

A recent decision from the Ontario Court of Appeal dealt with the use of surveillance evidence at trial.

In Iannarella v Corbett, 2015 ONCA 110 (C.A.), the plaintiff (Iannarella) had been rear-ended by the defendant (Corbett) and claimed that he had injured his rotator cuff as a result of the incident. Before trial, the defence filmed 130 hours of surveillance video of the plaintiff, but failed to disclose the existence of this surveillance in an affidavit of documents. Nevertheless, the trial judge allowed the defence to play the surveillance video at trial and to cross-examine Iannarella on its contents for the limited purpose of impeaching his credibility.

The jury found that Corbett was not liable for Iannarella’s injury. In the event that Corbett had been found liable, the jury would have awarded Iannarella $32,000 in general damages, $40,571 for past income loss and nothing for future income loss. Iannarella appealed.

In its decision, the Ontario Court of Appeal first concluded that the trial judge had incorrectly directed the jury on the issue of liability. The Court next turned its attention on the defence’s use of surveillance at trial. The Court explained that the Rules of Civil Procedure require that a party serve an affidavit of documents – whether or not the other side requests it – and this affidavit of documents must disclose the existence of any surveillance. Failure to properly disclose surveillance in this way means that said surveillance cannot be used at trial without leave of the court.

In this case, because the disclosure did not occur until the trial was well underway, the Court held that leave should not have been granted. The Court determined that the plaintiff had lost the chance to factor the surveillance’s existence into pre-trial settlement negotiations and had inadequate time to prepare an examination-in-chief that could properly respond to the surveillance. The Court said that, by allowing the defence to use the surveillance at trial, the trial judge had enabled a “trial by ambush.”

Due to these errors, among others, the Court substituted a finding of liability against the defendant and ordered a new trial on the issue of damages.

Defence counsel who wish to use surveillance at trial should be aware of Iannarella, and serve an updated Affidavit of Documents 90 days before trial in compliance with r. 30.09.

Uber Drivers, Consumers at Risk

I'm featured in the news report below on Uber and insurance.

Mon, Mar 23: Customers who used ride-sharing services like UberX may be at risk if the driver is involved in an accident. As Sean O’Shea reports insurance experts say drivers are violating insurance rules and may be putting themselves and their fares in jeopardy.

Insurance News - Sunday, March 22, 2015

Here are the leading auto insurance headlines from ONTARIO AUTO INSURANCE TOPICS ON TWITTER for Sunday, March 22, 2015:

• The Court of Appeal for Ontario has ruled in favour of the insurer on a dispute regarding the two-year limitation period and bad faith in Blake v. The Dominion.
• Lying about where you garage your car to save on auto insurance is about to become a crime in New Jersey.
• Ohio becomes 38th state to approve the use of electronic proof of insurance.  Still no Canadian jurisdiction has introduced an electronic insurance card.
• Half of young Britons who drive for work fear being replaced by driverless cars before retirement.
• Another possible impact of driverless cars: Police forces may shrink as there will be no need for traffic enforcement.

Insurance News - Friday, March 20, 2015

Here are the leading auto insurance headlines from ONTARIO AUTO INSURANCE TOPICS ON TWITTER for Friday, March 20, 2015:

• Driveless cars may drive down your insurance costs.
• Not surprising, some insurance companies have suggested that driverless cars  may be a possible financial threat.
• Google has announced the introduction of a United States version of its Google Compare auto insurance shopping site, which has been operating in Britain for two years.
• Who is going to own and control the automotive market when driverless cars are introduced? Car manufacturers or technology companies?
• Uber and Lyft fail to convince judges their drivers are merely 'contractors'.
• Uber's "low-cost" UberPop service has been banned in Germany after a court decided it violated transport laws.

SJC holds that under PIP statute any licensed health care practitioner can conduct IME

I posted a few months ago, here, about a Massachusetts Appeals Court decision in Ortiz v. Examworks, Inc. in which plaintiff Flor Ortiz sued his insurer for having an IME for a PIP claim conducted by a physical therapist.  The Appeals Court dismissed the claim on the basis that Ortiz suffered no damages, and did not address whether the insurer had acted in bad faith. 




In Ortiz v. Examworks, Inc., 2014 WL 7930423 (Mass.), the SJC has now taken up that question. 


The SJC quoted the PIP statute, Mass. Gen. Laws ch. 90 §34M, which provides that an injured person claiming PIP benefits "shall submit to physical examinations by physicians."  The SJC held that the word "physicians" in the statute refers not only to medical doctors, but also to "additional types of licensed health care practitioners."  The court stated, "We interpret the statute to intend the broader definition of the word because it is the one most consonant with the statutory purpose." 

No Costs Awarded to Either Party

A recent decision confirms the decision a court has to make no award of costs to either party.

In Swatridge v. Waters Estate (2014), ONSC 5333 (S.C.J.), the defendant in a motor vehicle action made an offer to settle of $5,000 all inclusive.  The plaintiff's offer was for $85,000 ($55,000 net of the deductible) plus costs and disbursements.

At trial, the jury awarded $10,000 gross for general damages, and $0 for loss of income, housekeeping/home maintenance and medical/rehabilitation expenses.  After the deductible was applied, the new result to the plaintiff was $0.

Justice Ferguson declined to award costs to either side, holding that "The court cannot be blinded by the somewhat artificial characterizations of both the offer to settle and the trial result."  The reality was that an offer to settle amounting to zero dollars was made and rejected, and a trial was held and the result was a judgment for zero dollars. 

Appeals Court affirms trial decision on commissions due to insurance agent

Marguerite Cocco owned an insurance agency.  In 2002 she contracted with another insurance agency, LJM, to refer customers to it in exchange for fifty percent of commissions received from her referrals.


After a number of years LJM reduced the percentage of commissions paid and then abruptly ceased paying all commissions.  Cocco sued.


The trial judge allowed LJM's motion to preclude any evidence of unpaid commissions owed prior to August 13, 2004, based on the six year statute of limitations for breach of contract. 


After the jury-waived trial the judge found in favor of Cocco and awarded her damages for commissions due from and after August, 2004.  The judge offset the amount due by $2,000 on the ground that LJM had paid that amount in 2008. The total amount awarded was $23,058.57 plus interest. 


Cocco appealed the preclusion of evidence and the offset. 


In Cocco v. LJM Ins. Agency, Inc., 87 Mass. App. Ct. 1106, 2015 WL 709623 (unpublished), the Massachusetts Appeals Court affirmed the rulings of the trial court.


The Appeals Court held that, contrary to Cocco's argument, nothing in LJM's 2008 payment was intended to renew its promise to her so that the statute of limitations would be reset. 


The court also held that the judge properly offset the 2008 payment from the judgment.  Cocco argued that the payment should have been applied to payments due prior to 2004.  The court held, "as the judge excluded all evidence of debts prior to 2004 on statute of limitations grounds, there was no evidence properly before the court of debts prior to August, 2004."  This ruling only makes sense if Cocco made no proffer of evidence of the pre-2004 debt for the purpose of showing that the 2008 payment was for the older debts.  The exclusion of evidence of debts prior to 2004 for the purpose of recovering those debts does not equal the exclusion of debts prior to 2004 for the purpose of showing that certain payments were to offset those debts.


It is worth noting that the court also held that both of  Cocco's arguments were deemed waived as not properly preserved for appeal.   


One of the hats I wear is as an appellate lawyer.  This case serves as a reminder that the time to start thinking about an appeal is at the beginning of the case.

Government Begins FSCO Mandate Review

The Ontario government has launched a review of the mandates of the Financial Services Commission of Ontario (FSCO) and the Deposit Insurance Corporation of Ontario (DICO).

The mandate reviews were announced as part of the 2014 Ontario Fall Economic Statement.  A panel of experts has not been established to take the lead on the mandate reviews:

• George Cooke - former president and CEO of The Dominion of Canada General Insurance Company, and current chair of the board of directors of OMERS Administration Corp. 
• James Daw - former Toronto Star personal finance columnist who has written extensively about all facets of Ontario's financial system.
•  Larry Ritchie - Osler, Hoskin & Harcourt LLP partner and former vice-chair of the Ontario Securities Commission.

The FSCO mandate review is timely given a number of government actions.  In the fall, the government passed Bill 15 which includes provisions that when enacted will remove the auto insurance dispute resolution system from FSCO and create a new system at the Licence Appeal Tribunal.  In addition, the 2014 Auditor General report  proposed assigning the regulation of a number of entities (e.g., agents, adjusters and mortgage brokers) to industry associations. 

 The review will include broad consultations with the financial services sectors regulated by FSCO including the insurance sector and pension plans. As well, a consultation paper will be posted online and the public will be invited to comment on the issues being examined. The government will consider any necessary legislative changes based on the outcomes of the review. The government expects the review to be completed by early next winter.

No Duty on Municipality to Stop Teens from Climbing Trees

The Court of Appeal has dismissed an appeal from a trial decision which held that a municipality was not liable for a teenager who fell out of a tree and was rendered paraplegic.

In Winters v. Haldimand (County), 2015 ONCA 98 (C.A.), the 16-year-old plaintiff was "hanging out" with friends at a municipal park.  The tree from which he fell was one he and friends had climbed numerous times and was a type of willow found all over Ontario.  The evidence was that generations of teenagers had climbed the tree and there had never been a report of an injury before the plaintiff's incident, save when someone twisted an ankle getting out of the tree.  None of the park personnel who were at the park weekly observed anyone in the tree.  The plaintiff's mother had never seen anyone in the tree and was unaware her son and his friends used it.

The Court of Appeal held that there was no error in the trial judge's decision, stating:

[16]      Any danger posed by this tree was an obvious one.  If you chose to climb it you could fall and be injured. There is no duty to warn of such an obvious and self-evident danger nor any duty to monitor beyond what the Township is doing at the time of this most unfortunate accident.

The Court also upheld the trial judge's decision to award costs against FLA claimants, holding that there is no general rule that no costs should be awarded against FLA claimants.

Congratulations to Sheila Handler and Brian McCall of McCall Dawson Osterberg Hanlder LLP, who were counsel at trial and on appeal.

Insurance News - Tuesday, March 3, 2015

Here are the leading auto insurance headlines from ONTARIO AUTO INSURANCE TOPICS ON TWITTER for Tuesday, March 3, 2015:

• IBC CEO Don Forgeron is suggesting that Ontario look at Nova Scotia on how to do auto insurance reforms.
• If 90% of auto accidents are due to human error, then who becomes liable when there are driverless cars on the road?
• In fact a University of Michigan study suggests that driverless cars will not be a panacea for road deaths, and could even worsen road safety for other drivers during the long transition period.
• Apple is being sued for poaching engineers to work on driverless car technology.
• A U.S. senator is urging the Justice Department to investigate insurance companies and auto repairs done at their 'preferred' repair shops across the country, because of safety concerns.