Catastrophic Impairment is a Label, Not a Benefit

The Divisional Court has answered a question that has long plagued lawyers and the claimants who submit an Application for Catastrophic Impairment (OCF-19) claiming they suffer from a catastrophic impairment.  If the insurer denies that application is there any time limit surrounding the commencement of dispute proceedings?

In The Guarantee Company v. Dong Do, 2015 ONSC 1891 (CanLII), just released April 14, 2015, the Divisional Court, on an application for judicial review, upheld the decision of the Director’s Delegate.  Both the Arbitrator at first instance and the Director’s Delegate had held that the denial of catastrophic impairment status was not a “refusal to pay a benefit” and as such, was not in fact caught by the two year limitation otherwise contained in section 281.1(1) of the Insurance Act, which otherwise governs all other denials of benefits.  The Divisional Court also agreed.

“Catastrophic Impairment” is merely a label which does not by itself bestow any monetary award.  It simply entitles the claimant to make application for a greater level of benefits, which must still be specifically adjudicated and determined to be reasonable and necessary.  When an insurer refuses to accept a claimant as having a catastrophic impairment the insurer is not refusing a benefit.

Accordingly, even though Mr. Do commenced an arbitration proceeding two years and nine months after The Guarantee Company first refused his application for catastrophic impairment, his arbitration was not statute barred.  He could proceed with his arbitration. The Guarantee Company also had to pay costs to Mr. Do in the sum of $11,000 for commencing the application for judicial review at the Divisional Court.