A obstacles defence is possibly the most powerful defence in existence. Its application completely extinguishes someone’s declare, essentially on a technicality, no matter whether such declare has merits.
The limitation period for coincidence benefits claims is defined in segment 56 of the Statutory Accident Benefits Schedule. It states that arbitration in admire of a benefit “will be began inside two years after the insurer’s refusal to pay the amount claimed.”1 This drawback period changed into not changed within the 2010 or 2016 amendments and, therefore, ought to follow to all open claims. Prior to April 1, 2016, this hassle period could be extended below the circumstance that events commenced mediation court cases underneath s. 280 of the Insurance Act inside years of the denial. However, that extension additionally no longer applies to current claims given that we are now more than three years publish the April 2016 amendments.
The Supreme Court of Canada held in Smith v Co-operators General Insurance Co that there are necessities for an insurer to trigger the two yr challenge period:2
(a) There need to be a clear and unequivocal refusal, with reasons, for the insurer’s dedication.Three A “clear and unequivocal” refusal has been interpreted as that means “unambiguous and not liable to misunderstanding.”four
(b)There need to be an good enough clarification, in lay phrases, of the proper of the insured individual to dispute the refusal and the process for doing so.Five
The above prison check has been diagnosed and followed continually by way of adjudicators and is a settled legal precept.6
It is essential to word that an insurer may be stopped from counting on a quandary duration defence if a claimant fairly is predicated at the insurer’s conduct after the refusal to his or her detriment.7For example, if an insurer’s otherwise unambiguous denial is eventually made ambiguous (e.G. With the aid of a letter, verbal exchange, or other form of conduct that could propose to a fairly minded claimant that the insurer might not be depending upon the sooner denial), then this may invalidate the dilemma length. This happens most usually while an insurer is presented with new statistics (such as clinical notes and information or an impartial clinical file) and reconsiders its in advance decision. If the insurer’s reconsideration misled the claimant as to the reputation of his or her declare for benefits or indicates that the insurer changed its function in admire to the benefit,eight or shows that the time restriction for arbitration turned into waived or brought on the Applicant into a fake feel of safety about the walking of the drawback period,9 then the insurer may be prevented from relying upon a dilemma duration defence.
That stated, the fact that an insurer reconsiders its in advance selection does not mechanically re-start the drawback period. The tribunal in Zeppieri v Royal Insurance Company of Canada recounted that an insurer is obliged to adjust claims in properly religion, which necessitates reconsidering a terminated gain once it is supplied with new facts (in preference to ignoring the brand new facts in favour of blindly relying upon the earlier denial). Arbitrator Naylor in Zeppieri held that to indicate this reconsideration would re-start a predicament period could efficiently render the two-year issue period meaningless. This case has been followed in subsequent cases.10
If a letter of refusal includes clear and unequivocal language, and with that letter are enclosures, which imply each the dispute decision method and the trouble length, then the obstacle period might be triggered. In 17-006863 v Aviva General Insurance Company, Aviva despatched the insured a letter of refusal, which blanketed motives why the claimant changed into not eligible for Income Replacement Benefits. After giving all the reasons, the letter stated: “Based at the above stated statistics, you do no longer qualify for Income Replacement Benefit”. Aviva enclosed with the letter a document which supplied a little by little guide to disputing the insurer’s choice. This letter additionally blanketed a clear warning approximately the two-12 months quandary. This is a legitimate trigger for the predicament date11.The Ontario Licence Appeal Tribunal (“the Tribunal”) made clean that even if there may be an invite for the claimant to submit further documentation, this doesn’t override a valid refusal and the dilemma duration remains induced.
An insurer mistaking the suitable termination date in next correspondence to a claimant will now not save you an insurer from depending upon a dilemma period defence. Specifically, if an insurer terminates a advantage on a specific date and then, in subsequent correspondence, mistakenly references a later date as being the date of termination, such a mistake will now not invalidate the refusal furnished the claimant understood the termination was not later than the wrong date.12 In other phrases, the mistake ought to be such that an inexpensive individual could be pressured about whether or not a difficulty period is strolling or has expired.
To make certain the hindrance period is induced after a denial, an insurer have to explicitly nation that coverage is denied, refused, terminated and/or stopped (as honestly declaring that coverage or a advantage is “unavailable” is ambiguous). Submitting a clean software after a valid refusal will no longer restart the trouble length as long as the insurer is predicated upon the sooner denial as the premise for denying the fresh utility. Finally, suspending blessings is not considered a valid refusal (as a “suspension” is considered transient while a “denial” is considered clean and unambiguous).
In sixteen-000216 v Aviva Insurance Company Canada, the insurer sent the claimant a refusal letter that said: “You do no longer qualify for the Attendant Care gain as there may be no insurance for this below the Minor Injury Guideline.” In the identical letter, Aviva had denied insurance of other advantages via declaring “Not Eligible/Stoppage of Benefit.”thirteen The Tribunal held that advising a claimant that they do now not qualify for a advantage because there is “no insurance” is not similar to refusing to pay a benefit that has been claimed. The Tribunal reasoned this changed into an invalid refusal. Although the letter said what recourse the claimant had if the blessings were denied with the phrase “Not Eligible/Stoppage of Benefit”, however it did now not imply what recourse the claimant had while the insurer said “coverage now not available.” Therefore, they located this to be language that did no longer fit the Smith criteria of being clear and unequivocal. This became not a right refusal, and the difficulty period become no longer brought on.