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Catastrophic Impairment Report Consultation


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									                                                                                       Andrew C. Murray
                                                                                       Direct Line: 519.640.6313
                                                                                       Direct Fax: 519.932.3313

May 12, 2011


Sivan Raz
Senior Policy Analyst
Auto Insurance Policy Unit
Financial Services Commission of Ontario
5160 Yonge Street, Box 85
Toronto ON M2N 6L9

Dear Ms. Raz:

Re:    Catastrophic Impairment Report I Consultation

The Personal Injury Group at Lerners LLP welcomes the opportunity to provide input and feedback on
the recommendations for changes to the definition of “catastrophic impairment” outlined in the Final
Report of the Catastrophic Impairment Expert Panel to the Superintendent dated April 8, 2011.


Lerners is a litigation firm, with offices in London and Toronto. Our lawyers have more than 75 years of
experience helping victims of automobile accidents. Lerners’ lawyers are on one side or the other of
many leading arbitral, trial, and appellate decisions involving automobile legislation. As lawyers
representing future accident victims, we are able to speak on behalf of those citizens who would
otherwise go unheard in this debate. We welcome the opportunity to share our perspective and insight.
Our submissions focus on the flaws in a general, broad approach sense, and do not relate to the
recommendations on a line-by-line and word-by-word basis, as we understand that the medical panel
was not asked to draft the text of new regulations, and that any changes will be the subject of further
review and consultation.


We have carefully read the recommendations in the Final Report and have a number of concerns.
While this submission is intended to be constructive, and it is our desire to be helpful and collaborative
in our approach, the flaws with the process are so significant, and the concerns are so numerous and
profound, we strongly urge that none of these recommendations gets implemented at this time.
                                                                                                      Page 2


Just over a year ago, on March 31, 2009, a comprehensive Five-Year Review was completed, with the
purpose of making recommendations to improve the effectiveness of the Accident Benefits Schedule
and its administration. Given the great deal of effort that went into the Five-Year Review process, any
subsequent change to the catastrophic impairment definition, or indeed to other aspects of the Accident
Benefits Schedule, should be undertaken with a view to building on the earlier recommendations. Of
the numerous recommendations that were made, several directly inform the catastrophic impairment
review, including:

1.		      It was recommended during the Five-Year Review that there be consultation with experts in the
          field to look at amendments to the definition of “catastrophic impairment”. The catastrophic
          impairment designation is not simply a medical issue, nor is it exclusively a legal issue. It
          involves a medical legal analysis, but also policy considerations that include the delivery of
          healthcare services to motor vehicle accident victims, the level of insurance policy premiums,
          and the overall desire for fairness, affordability, and predictability. Not lost on us is the
          statement that the catastrophic impairment category of benefits is “dependant on a clear and fair
          definition of ‘catastrophic impairment’”1

2.		      The Report on the Five-Year Review of Automobile Insurance dated March 31, 2009 noted that
          virtually every stakeholder commented on the complexity of the existing accident benefits
          system and the level of regulatory burden created by the Statutory Accident Benefits Schedule.2

3.		      Consequently, the number one recommendation in the Five-Year Review was:

                  When determining the merits of any future regulatory changes,
                  consideration should be given to whether a change would increase
                  complexity and regulatory burden. There should be a compelling
                  reason for making a change that would add complexity to the
                  accident benefits system. (emphasis added)

4.		      The desire for structural changes, in order to stabilize costs, was also identified. It is discussed
          in more detail below, but unless the raw data confirms that claims for catastrophic impairment
          are spiralling out of control, it is hard to suggest any structural changes are needed in order to
          stabilize costs with respect to the catastrophically impaired accident victim.


5.		      It would appear that the Expert Panel was given the task of making recommendations
          concerning the definition of “catastrophic impairment” with the instruction that it was to be
          considered a medical test rather than a legal test. The label “catastrophically impaired” must be
          considered a legal exercise because entitlement to benefits flows from the designation. Indeed,
          it was the opinion of the Panel itself that ‘“catastrophic impairment” is not a medical entity –

    Five-Year Review, pages 27-30
    See page 1 of the Report on the Five-Year Review of Automobile Insurance dated March 31, 2009
                                                                                                      Page 3

         rather, it is a legal entity which defines a point along the medical spectrum of impairment

6.		     There are still many medical problems, both physical and psychological, that elude the many
         advancements made in medical science. Attempts to catalogue impairments, with scientific
         precision, do a disservice and injustice to accident victims who are credible, but whose
         complaints fail to fit within the tight corners of a scientific medical model.

7.		     The surveys attached to the Final Report indicate that the eight-member Panel was unable to
         agree, in the baseline survey, that an individual who is injured in a traffic collision and becomes
         a paraplegic or quadriplegic is catastrophically impaired. A consensus of only six out of eight
         was reached on that question. A similar consensus of just 75% was reached with respect to
         whether the amputation of an arm or a leg resulted in catastrophic impairment, or the complete
         blindness in both eyes. We are concerned that the eight-person Panel is unrepresentative of
         the medical community at large and unrepresentative of treating physicians who are doing the
         work “in the trenches”. The track record and historical involvement of the Panel members
         indicates a weighting in favour of the small but vocal group of the medical community,
         predisposed to arbitrarily restrict benefits to accident victims and a culling of individuals who
         satisfy the test of “catastrophic impairment”.

8.		     The Panel was essentially asked to look at the definition of “catastrophic impairment” in a
         medical vacuum, without regard for either the level of benefits that would flow to a
         catastrophically impaired individual or the quantum of benefits available to someone who
         narrowly misses the threshold for catastrophic impairment. The label of “catastrophically
         impaired” can never be considered in a vacuum, as significant and important access to needed
         accident benefits hinges on whether an accident victim meets the test. Unless one considers
         the reality of a basic access to $50,000.00 of medical and rehabilitation benefits, one cannot
         consider the appropriate bright-line boundary to be set for individuals who are restricted to that
         $50,000.00 pool of medical and rehab dollars as opposed to those who are catastrophically
         impaired who have access to $1 million of medical and rehabilitation benefits.

9.		     According to the Bank of Canada Inflation Calculator, a basket of goods costing $100,000.00 in
         1996 would cost $134,915.00 in 2011, a percentage change of 34.92%. Cogent actuarial
         evidence suggests that, with respect to the provision of medical services, the rate of inflation
         has exceeded the general Consumer Price Index, but, even assuming that it has not, the value
         of the $100,000.00 benefit formerly available to a non-catastrophically impaired individual has
         been eroded due to inflation and has now been significantly diminished further with the
         reduction in medical and rehabilitation benefits from $100,000.00 to $50,000.00. The historical
         purchase of optional benefits has always been extremely low. Unless there is good evidence
         demonstrating that, since September 2010, Ontario auto policyholders have been purchasing
         optional medical and rehabilitation benefits, the only conclusion that can be drawn is that the
         gap between catastrophically impaired accident victims and near catastrophically impaired

    Final Report of the Catastrophic Impairment Expert Panel to the Superintendent dated April 8, 2011 (“Final
          Report”), page 13
                                                                                                    Page 4

          accident victims has widened significantly, due to the decreased medical and rehabilitation limits
          available and the erosion of benefits caused by inflationary forces.

10.		     With respect to the September 2010 changes to the Accident Benefit Schedule, there has not
          yet been enough time elapsed (indeed, many policies are still operating under the transitional
          provisions) to establish the amount of savings in the system. As such, it is premature at this
          time to embark on wholesale changes to the definition of “catastrophic impairment”.

11.		     The premise implicit in the Panel’s Final Report is that the bar for being designated as a
          catastrophically impaired individual needs to be raised. There has been no evidence produced
          by anyone, at any point in time, to indicate what the expenditures have been for catastrophically
          impaired individuals by the insurance industry, how this relates to premiums paid by
          policyholders, what the costs to the system are, what the insurance industry can bear, and
          whether the bar should be raised, lowered or remain the same. Without this type of analysis, it
          is premature to attempt to recalibrate the test for catastrophic impairment. In this respect, the
          exemplar given of paraplegia is inappropriate and unnecessary and contrary to the public

12.		     The Final Report seems to have lost sight of the fact that the label “catastrophic impairment”
          does not in and of itself result in any additional monies being paid to any auto accident victim.
          The label simply allows an individual who can demonstrate need and the reasonableness of the
          request to make application for benefits that would not otherwise be available. The real control
          in the system was and remains the needs-based aspect of the claim; this argues in favour of a
          reduced threshold rather than a more stringent threshold.

13.		     The tenor and tone of the Final Report diminishes the significance of chronic pain and
          psychological complaints, favouring instead purely physical complaints. This approach runs
          contrary to important statements made by the Supreme Court of Canada and by legal principles
          established by Ontario Human Rights legislation and indeed by consideration of the Charter.4


14.		     The current backlog for mediations at FSCO is an embarrassment and the single biggest
          impediment at the moment to access to timely benefits (of any kind). Changes to the
          catastrophic impairment designation must not be implemented or considered without the
          recognition that all new disputes of any kind currently face a mandatory minimum ten-month
          waiting period (which continues to lengthen), due to the FSCO mediation backlog. Unless and
          until that problem has been rectified, there should be no changes of any kind to the system,
          particularly not changes which add complexity, uncertainty, and which will spur a greater need
          for access to mediators and the dispute resolution process.

15.		     The changes to the Accident Benefits Schedule implemented effective September 1, 2010
          significantly diminished access to accident benefits for minor injuries, which presumably will be
          thrust back into the publicly-funded medical system. It is a short-sighted and wrong-headed
          approach to do the same thing with the most seriously injured accident victims. No analysis or

    See Martin v. Nova Scotia Workers’ Compensation, S.C.C., as an example
                                                                                                          Page 5

         consideration has been given to the issue of whether the current medical system is in a position
         to reabsorb the many victims of auto injury who currently receive their rehabilitation through the
         accident benefit model. This is an important preliminary consideration that must be analyzed if
         the bar to catastrophic impairment is to be raised.

16.		    To their credit, the Expert Panel has made numerous recommendations where future study is
         necessary or appropriate.5 Owing to the numerous recommendations for future study, the
         proposals are premature, akin to starting construction on a home with only half the building
         plans available. As a general statement, we feel that the status quo should remain while areas
         of further study are completed, rather than implement serious wholesale changes without
         knowing whether those changes are medically supported, needed by the industry, or suitable to
         the needs of accident victims.

17.		     The emphasis on attendance at a Level I treatment facility or participation in rehabilitation at a
          credited rehabilitation facility fails any accident victim who does not happen to be injured near a
          major medical centre or have access to such facilities. It fails to consider the implication with
          out-of-province accidents. It doesn’t address minors, the elderly, or others who are not taken for
          appropriate care in a timely way. While the goal of having automatic determination criteria is
          laudable, it is wrong to construct it in such a way so as to make a finding of catastrophic
          impairment contingent upon inpatient admission to a Level I trauma centre or publicly-funded
          rehabilitation centre.


18.		     The recommendations that have been made by the Expert Medical Panel - recognizing that they
          have been created by medical practitioners and not by legal practitioners or legislative drafters -
          significantly increases the complexity in the system. By incorporating in the Accident Benefits
          Schedule such outside measures as the Asia Impairment Scale, the Global Assessment of
          Functioning Scale, the Kings Outcome Scale for Childhood Head Injury, and the Extended
          Glasgow Outcome Scale, these proposed changes create additional uncertainty and the need
          for many years worth of litigation or arbitration, in order to resolve differences of interpretation.

19.		     The Expert Panel has not given consideration to the fact that, with 15 years of case law now in
          existence with respect to the current definitions for “catastrophic impairment”, the insurance
          industry and accident victims alike now have a system which they can understand and apply to
          the facts of their particular case. Not only is the system complicated by the proposed changes,
          it would create the need to review the definitions from scratch, discarding the benefit of 15 years
          of case law.

    See, for example, the recommendation that research be conducted to identify the most appropriate WPI
         threshold for various psychophysical combinations, found at page 20, the recommendation that the
         Superintendent assemble an independent panel of experts to develop a comprehensive list of disorders
         relating to psychiatric impairment, the recommendation that an inter-examiner reliability study be
         conducted with experienced pediatric neurologists and rehabilitation medicine specialists in Ontario with
         respect to the Kings Outcome Scale for Childhood Head Injury, the acknowledgement that a
                                                                                                   Page 6


To illustrate Lerners’ concerns, the following case studies are presented which show the huge
detrimental impact that these proposed changes would have on individuals who formerly met the test
for catastrophic impairment:

1.     M.C.

       M.C. was driving a Mazda Miata, when he was t-boned by a drunk driver, resulting in the
       following injuries:

       fracture of the left medial malleolus and distal left fibula

       fracture of the proximal tibia

       multiple left anterior rib fractures

       He required multiple surgeries. His physical impairments were rated at 40% of his whole
       person. He had psychological dysfunction that did not constitute a catastrophic impairment on
       its own, nor would it under the proposed changes to the “catastrophic impairment” definition, but
       which did constitute a catastrophic impairment when combined with his significant and
       undisputed physical injuries.

       M.C. required attendant care, housekeeping assistance, home modifications, significant
       medication costs, and other medical and rehabilitation expenses, well in excess of the policy
       limits available to him if he were not accepted as having a catastrophic impairment. Absent the
       ability to combine the mental and physical ratings, M.C. would not be successful in establishing
       his status as a catastrophically impaired individual under the proposed changes to the definition.

2.     J.S.

       J.S. suffered an incomplete spinal cord injury on April 26, 2008 and did require hospitalization
       as an inpatient at a spinal cord injury rehabilitation hospital. He ultimately recovered the ability
       to walk with the use of a single ankle foot orthosis to compensate for a foot drop, but did not
       need a bilateral ambulatory assistive device. His indoor ability to walk is greater than ten
       metres. He does not require intermittent or constant catheterization. Although the Asia
       Impairment Scale was not used to analyze his disability, an application of the test, after the fact,
       indicates that he would be scaled at Class D, and, given the ability to walk without assistance,
       would not be accepted as having a catastrophic impairment under the proposed definition.


Having regard for the numerous and legitimate concerns surrounding the issue of catastrophic
impairment, our Personal Injury Group recommends the following:

       comprehensive review of the literature was not conducted to determine whether valid and reliable
       methods of combining physical and psychological impairments exist, page 24
                                                                                                      Page 7

	          To the extent that expert evidence is required and has been recommended by the Panel to be
            conducted, those committees should be struck and detailed reports should be issued before a
            single change is made to the existing “catastrophic impairment” definition.

	          The consultation on changes to the catastrophic impairment designation needs to include the
            legal perspective, as well as the medical perspective. Any future panels struck to embark on
            the further study recommended by the Expert Panel should include representation from the
            legal community (both victim oriented and insurer oriented).

	          Before any changes to the “catastrophic impairment” definition are made, consideration needs
            to be given to whether a change would increase complexity and regulatory burden, and there
            should be an expression as to the compelling reason for making a change that would add such
            complexity. From our perspective, the compelling reason must include an analysis of the
            current cost to the system of catastrophic claims, and must also refer to the effect that the
            September 2010 changes to the Accident Benefits Schedule have had on the cost of accident
            benefit claims.

	          Any change that is made to the “catastrophic impairment” definition must accord with the
            prevailing Ontario Human Rights legislation, the Charter of Rights and Freedoms, and society’s
            recognition that psychiatric or psychological disabilities are no less important or disabling than
            physical injuries.

	          No change should be implemented unless and until the Ontario government is satisfied that the
            publicly-funded healthcare system can accommodate the gap between those who would be
            labelled “catastrophically impaired” and those who are not.

	          Any change implemented must consider the FSCO backlog and the reality of whether the
            system can manage, without breaking, the need for increased dispute resolution.

Yours truly,

Nigel G. Gilby
Personal Injury Practice Group Leader


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