The Court of Appeal for Ontario recently released its decision in Pastore v. Aviva, allowing the appeal and restoring the Director’s Delegate’s order.
the claimant was involved in a car accident back on November 16, 2002. She
suffered a fractured left ankle. Her injury didn’t heal properly, requiring several surgeries over the
next five years, and right knee replacement when the ankle pain led to a
change in her gait. She applied for a catastrophic impairment determination in 2005. Catastrophic impairment was supported by a DAC assessment but rejected by the insurer. The issue in dispute
was whether the claimant was catastrophically impaired due to a mental or
behavioural disorder, under subsection 2(1.1)(g) of the SABS.
The arbitrator accepted that a Class 4
impairment (based on the AMA Guides to the Evaluation of Permanent Impairment, 4th edition) in one area of function was sufficient to meet the definition of
“catastrophic impairment”. This was the only area of function she
reviewed in detail. On this basis, she concluded that Pastore had
suffered a catastrophic impairment. On appeal, the Director’s Delegate agreed
with the arbitrator that a Class 4 (marked) impairment was required in only one of four
areas of functioning to establish a catastrophic impairment.
The Divisional Court disagreed with FSCO
and granted the insurer’s application for judicial review. The Court found that
the Director’s Delegate had failed to properly appreciate the effect of incorporating the Guides into the SABS - that the Guides must be treated as part of the legislative scheme. Justice Matlow disagreed in part. He
found there was nothing in the Guides which required more than a single finding
and there was no requirement to evaluate each of the four areas of functional limitations before a "marked" impairment
can be found to qualify. He held that the Guides are not “part of the
legislation” and are only guidelines.
This is just another in a series of decisions on the impact of psychological impairment on the determination of catastrophic impairment under the SABS. In Kusnierz v. Economical Mutual Insurance Company,
the Ontario Court of Appeal confirmed last year that
psychological impairments should be combined with physical impairments
to determine whether a person injured in a car accident has sustained a
Prior to that the Ontario Superior Court of Justice’s 2004 decision in Desbiens v. Mordini was the leading trial decision regarding catastrophic impairment.
The Superintendent's Report on the Definition of Catastrophic Impairment in the SABS attempts to mitigate some of the decisions by recommending the elimination of psychological impairments from the SABS definition and replacing them with psychiatric impairments. As well the Superintendent's report recommends that physical impairments and psychological impairments not be combined. The court decisions reinforce my opinion that a regulatory prohibition on combining psychological and physical impairments will ultimately fail. The courts will find ways around it. Instead a better solution might be to develop a more rationale model that acknowledges that psychological impairments can push physical impairments over the catastrophic threshold but that is less susceptible to manipulation. The WSIB has been combining psychological and physical impairments for quite a number of years.
The Superintendent's report was submitted in December of last year but has not been acted upon. The Minister of Finance conducted a stakeholder consultation over the summer. As well, stakeholder discussed the report during presentations to two Standing Committees of the Legislature during May and July of this year.
the Pastore Divisional Court decision is here..
the Pastore Court of Appeal decision is here...