Under the Statutory Accident Benefits Schedule, Effective September 1, 2010, Ont. Reg. 34/10 (the "SABS") an insured person who qualifies for certain benefits must show that an expense was "incurred" in order to receive compensation for services that have been provided. The SABS provides that an expense is not incurred unless the person who provided the service did so in the course of his or her ordinary employment or sustained an economic loss as a result of providing the goods or services to the insured person. It has been stated that one of the intents of the "economic loss" requirement is to prevent family members who do not work outside the home from profiting from an attendant care benefit when they would likely have been at home and looked after the injured person without compensation anyway.
In Henry v. Gore Mutual Insurance Company1, the insured was left a paraplegic after a motor vehicle accident on September 28, 2010 and required full-time 24 hour care. This care was provided by the insured's mother who took an unpaid leave of absence from work. The insurer did not dispute that the insured's mother sustained an economic loss. At issue was whether the insurer was required to pay attendant care benefits for the entire 24 hours per day that the respondent required care, and that the mother provided care; or only for the care provided during the 40 hours per week of paid employment foregone by the mother.
Economic Loss is a Threshold Requirement
At first instance, Justice Timothy Ray held that once economic loss is established, the attendant care provider is entitled to payment for the attendant care services outlined on the Form 1, even if the value of these services exceeds the economic loss related to forgone employment income.
On appeal, the insurer argued, among other things, that an economic loss was only sustained for attendant care services provided during the hours that the insured's mother would have otherwise worked and that it was only required to pay for attendant care in respect of those hours. It also argued that the application judge erred by finding that the insurer must pay all of the expenses described in the Form 1.
The Ontario Court of Appeal (the "Court") disagreed with the insurer's argument, finding that an "economic loss" is a threshold requirement. That is, a family member must demonstrate that he or she has suffered an economic loss in order to qualify for attendant care benefits. Once that threshold is met, the amount of the economic loss is not a factor in measuring the amount of benefits to be paid by the insurer.
Quantum Determined by Form 1
Once entitlement and economic loss are established, the quantum of attendant care benefits is based on the insured's need for care – not the economic loss suffered by the attendant care provider.
The Court held that the amount of attendant care benefits is determined by the Form 1. The insurer may however, challenge the quantum of the benefit in the Form 1 and request proof that services were incurred.
Interestingly, the Court recognized that the SABS "was intended to provide a check on payments to family care-givers." In the Court's view, however, the purpose of the "economic loss" threshold was not to restrict the amount of the payment for attendant care, but to provide a "rough check" on attendant care costs.
Definition of "Economic Loss"
In Gore, the appellant argued that because "economic loss" is not defined in the SABS, that insurers may face claims for attendant care benefits where only a de minimis – or trivial – monetary loss has been sustained. The appellant urged the Court to define "economic loss."
On the facts of this case, the economic loss sustained by the respondent's mother was clear, as she had given up full time paid employment to provide care for her son. As such, the Court declined to address this issue2.
Implications for Insurers
Insurers cannot deny expenses for attendant care benefits on the basis that the economic loss is less than the value of services outlined on the Form 1.
It remains nonetheless open to insurers to assess the quantum of the expenses outlined in the Form 1 through an insurer examination, or by requesting evidence that the attendant care services were actually provided.
12013 ONCA 480
2The issue of economic loss will be considered by Director's Delegate Blackman in the appeal of Simser v. Aviva Canada Inc., scheduled to be heard on July 25, 2013.