Despite the mandatory language of the SABS time requirements (the insurer “shall”…), a Superior Court judge has held that an insurer’s failure to comply with those requirements in setting up a CAT DAC assessment does not mean that it loses its right to require that the assessment be done.
In Gray v. Pilot Insurance, the plaintiff was injured in a motor vehicle accident. She applied for and received statutory accident benefits from her insurer, Pilot Insurance. A neurological assessment indicated that she was catastrophically impaired. Pilot advised the plaintiff that it would require her to undergo an assessment at a Designated Assessment Centre to determine whether she was “catastrophically impaired” under the provisions of the Insurance Act.
Through inadvertence, Pilot failed to respond to the plaintiff’s “application for determination of catastrophic impairment” within the 30-day period mandated by the SABS. Upon discovering its error, Pilot agreed to continue the plaintiff’s benefits, on a without prejudice basis, while the “CAT DAC” assessment was held. However, the plaintiff refused to undergo the assessment, taking the position that Pilot’s failure to comply with the SABS timelines relieved her of any oblgiation to undergo the assessment.
On this motion, the plaintiff asked the court to declare that because of its failure to observe the SABS time requirements, Pilot no longer had any right to dispute that she was catastrophically impaired. Counsel for the plaintiff relied heavily on the mandatory language of the SABS (e.g., the insurer “shall” give notice within 30 days of a requirement that the insured undergo an assessment).
However, Mr. Justice Sidney Lederman rejected this contention. He noted that the SABS are “silent as to the consequences of missing the timelines set out therein” and that they “impose no sanctions for failing to meet the timelines”. He went on to find that the plaintiff had not been prejudiced. Accordingly, the plaintiff’s motion was dismissed.
The decision is a significant one because of the mandatory language of the SABS and the absence of any provision setting out the consequences of non-compliance. Justice Lederman’s intepretation seems a reasonable one:
Timelines are important for the purpose to ensure that claims are dealt with expeditiously.
Errors, however, will inevitably occur. Whether they amount to mere procedural irregularities which should be relieved against, or matters of substance, must depend on the circumstances of each case.