Thursday, 18 July 2013

Round 2 of Henry v. Gore Mutual, Claimant Wins Again

The Court of Appeal has released its decision in Henry v. Gore Mutual, unanimously upholding the motion judge’s decision on the meaning of the “economic loss” threshold under the post-September 1, 2010 SABS.

Henry v. Gore Mutual was the first court decision to deal with the SABS definition of "incurred expense" which was introduced on September 1, 2010.

Justice Ray found that as long as a family member providing attendant care sustains "an" economic loss, regardless of the amount of the loss, presuming the injured person pays, promises to or is obliged to pay for the attendant care, the insurer must pay "all reasonable and necessary attendant care".

In this case the actual economic loss was just over $2,000.00 per month. The family was claiming $6,000.00 as determined by a Form 1 submitted to the insurer. The Court found that test of "economic loss" was a threshold finding for there to be an "incurred expense", "but is not intended as a means of calculating the quantum of the incurred expense".

The Court of Appeal agreed with the motion judge and dismissed Gore’s appeal. The Court held that under the SABS, economic loss serves as a threshold for entitlement to (and not as a measure or factor in quantifying the amount of) reasonable and necessary attendant care benefits to be paid by an insurer.  The Court of Appeal refused to provide its own definition of “economic loss” despite Gore’s request to do so.

So what is the impact of these decisions?

I have been told by some in the insurance industry that the benefit payments are intended to be limited to the family member's economic loss. I've also been advised by the plaintiff bar that if a family member used $5 in gas to travel to the claimant then it allows them to claim the full attendant care benefit.

For almost several years I've expressed the view that neither of these interpretations would likely prevail. The intent of the SABS drafting was not to limit payments to the amount of the economic loss. If it had been different language would have been used. In fact during consultations on the Regulation in 2010, some insurers were concerned that the proposed definition was unfair if it limited family members from being compensated for providing attendant care services.

However, to suggest that any economic loss, even the most trivial one, would trigger thousands of dollars in benefit payments would also be contrary to the intent of the Regulation. In fact such an interpretation would make the definition meaningless. Justice Ray recognized that the drafters had intended to exclude non-professional caregivers if they did not incur an economic loss. In his decision he is clear that they type of economic loss that would trigger benefit payments was lost income.

However I am sure there will be lawyers that will take the arguments made in Henry v. Gore Mutual and try to extend it to other economic losses not just income loss. They may even suggest that the $5 in gas consumed to travel to the claimant qualifies as an economic loss under the definition. For now we have to rely on the courts to follow the original intent of the provision. 

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