I find that the key criteria on the facts of this case in assessing the amount of the Special Award is the requirement that it be proportionate to the vulnerability of the insured person and the harm or potential harm directed at the insured person. One of the other key factors in this case is that the benefit of the attendant care relates to the living conditions of the Applicant with significant injuries that not only constituted new injuries to his body, and painful ones as well, but that also aggravated serious pre-existing conditions. The delay here, whether counted in three years, as submitted by the Applicant, or six months, as submitted by State Farm, is certainly less in time than the withholding of the death benefit for many years as was the case in Stewart and Liberty Mutual, relied on by State Farm. The difference is that the Applicant (who had to suffer through the period) and his wife (who was providing the attendant care and had given up her work to do so) bore the burden of the failure.
Another key criterion is blameworthiness of the Insurer’s conduct. I find that the delay of six months that finally ended with the $30,000 payment is not well explained by State Farm. The evidence of the adjuster dealt with the transfer of responsibility for the file, assessment of the file, getting approvals from senior levels, her taking a vacation, etc. so that the calculation of the benefit owing and interest was not done in full and approvals obtained even in the period from April to September, thereby necessitating the “down payment” of $30,000.
There is a deterrent aspect that must be respected in the setting of the Special Award so that insurers, when their own assessors support a catastrophic impairment designation, move promptly in their reassessment of denied benefits. The criteria that must be met for such a designation are deliberately high and the raised policy limits are only available to those with the most serious of injuries. The legislation is intended to provide an expeditious dispute resolution process but more importantly it is supposed to ensure that benefits are paid promptly and that was not done in this case. It is trite law that this legislation is consumer protection legislation. As pointed out by Arbitrator Feldman in Melchiorre and Wawanesa Mutual Insurance Company, it is not clear that even the maximum Special Award would be a deterrent for large companies such as State Farm or Wawanesa and,
Too small an award will amount to little more than a “slap on the wrist” or, even worse, a licence to engage in similar conduct in the future.
Therefore I find that State Farm is understating the extent of its failure to meet its obligations to this Applicant and minimizing its obligations. The award needs to be sufficient to provide incentive to insurers to act more promptly than six months. Disruptions in the availability of care can have adverse effects on recovery and lead to very onerous responsibilities on family members that they should not have to bear. Ms. Maraj testified that once an applicant was deemed catastrophic, the file is passed over to a catastrophic claims adviser. She became responsible for the file on June 2, 2016. If State Farm’s processes require a change in personnel dealing with a file once a catastrophic impairment designation is given, that transition must be expeditious to permit the re-examination of benefits promptly, more so than in this case.
ADS Forensics calculated the interest under the Schedule and the Special Award interest. The claim by the Applicant is close to the amount of the Special Award interest and in my view, is too onerous and out of line with the awards of other cases where the handling of the benefits file was filled with more errors of many sorts rather than the one glaring issue on attendant care and the others relating to mischaracterization of the prescriptions and failure to reassess the medical benefits. In my view an award of an amount close to the Schedule interest is proportionate to the harm done to the Applicant and is logical both in its adherence to the criteria for setting the award and in the intended deterrence. Therefore, on the Special Award related to attendant care, I find that the Applicant is entitled to an award of $42,000.00.
With respect to the medical and rehabilitation benefits, I agree with the Applicant that $10,000 is an appropriate amount on the facts of this case, given the nature of the benefits that were delayed and that the quantum is so small as not to constitute a real deterrent unless it approximates the maximum potential award.
I therefore find that the Applicant is entitled to a Special Award totalling $52,000.00.
