The Ontario Court of Appeal Grants Amputee up to $1M of Benefit: Kusnierz v Economical Mutual Insurance Company

On Christmas Eve in 2001, a car crash left Robert Kusnierz with numerous injuries, the most serious of which required the amputation of his left leg below the knee. Kusnierz sues his insurer, Economical Mutual Insurance Company, for a declaration that he sustained a “catastrophic impairment” under clause 2(1.1)(f) of the Statutory Accident Benefits Schedule – Accidents on or after November 1, 1996, O.Reg. 403/96 (“SABS”). The legal threshold of “catastrophic impairment” under cl. 2(1.1)(f) of the SABS is to have at least 55% impairment of the whole body. If Kusnierz establishes “catastrophic impairment”, Economical Mutual must pay for medical and rehabilitation benefits up to $1 million; otherwise, he is entitled to a maximum of $100,000.

Judicial History

The two issues at trial were:

(1) Does the SABS permit an assessor to combine both psychological and physical impairments in order to determine whether they result in a 55% whole person impairment (“WPI”) constituting a catastrophic impairment under cl. 2(1.1)(f)?

(2) Has Mr. Kusnierz sustained a catastrophic impairment on the basis of cl. 2(1.1)(f) of the SABS alone?

At first instance, Lauwers J. of the the Ontario Superior Court of Justice (2010 ONSC 5749), concluded that the SABS does not allow one to combine mental and behavioural disorders to physical injuries when calculating WPI. Lauwers J. stated that the structure of the SABS reinforces the demarcation between psychological disorders and other impairments.

According to Lauwers J., assigning psychological impairments for the purpose of calculating WPI would undermine the purpose of Bill 59 (Automobile Insurance Rate Stability Act), which “aimed at reducing no-fault benefits to most people with the savings going to stabilize insurance premiums, while creating a narrow exception for people who were catastrophically impaired.” Lauwers J. further held that introducing subjective psychological factors would weaken the objective approach to the calculation of WPI intended by the SABS.

Using the American Medical Association’s Guides to the Evaluation of Permanent Impairment (“the Guides”), Lauwers J. reaches a total of 50% physical impairment to Kusnierz’s body, which is 5% short of a declaration of catastrophic impairment. Had psychological impairments been allowed in assessing WPI, Kusnierz would have passed the 55% impairment threshold.

The OCA Decision

On appeal, MacPherson J.A., writing for a unanimous court (2011 ONCA 823), overturned the trial judge’s decision and ruled that it is permissible to add psychological impairments to a person’s physical injuries when calculating WPI under cl. 2(1.1)(f) of the SABS. MacPherson J.A. endorsed the reasons of H. Spiegel J. in Desbiens v Mordini, [2004] OJ No 4735, where the court found that psychological injuries could be assigned for the calculation of WPI. Furthermore, MacPherson J.A. gave five reasons for his conclusion. First, MacPherson J.A. stated:

The trial judge noted that the SABS legislator could have, but did not, expressly provide for the combination of physical and psychiatric injuries. With respect, the opposite is also true. The legislator could have, but did not, expressly forbid the combination of physical and psychiatric injuries. Without qualification either way, the plain language of cl. 2(1.1)(f) seems to suggest that combination of both kinds of impairment is possible.

Second, while the purpose of the Guides is to provide a standardized system for evaluating impairments, disregarding the mental and behavioural injuries simply because they are difficult to quantify would ignore the Guides’ aim of assessing the total effect of impairments on a person’s daily activities. Third, the Guides contain different examples that include mental and behavioural impairments when evaluating WPI. Thus, combining both types of injuries would not be inconsistent with the Guides. Fourth, merging both psychiatric and physical impairments will not significantly expand the number of persons entitled to catastrophic impairment benefits and thus catastrophic impairment will remain as an exceptional category.

Fifth, allowing the assessor to combine both psychological and physical injuries will promote fairness and achieve the objectives of the SABS. This is because there are victims who would qualify entirely because of physical impairments under cl. 2(1.1)(f) and others who would qualify entirely in respect of psychological impairments under cl. 2(1.1)(g).  Therefore, not permitting one to combine psychological impairments with physical injuries would create a gap in eligibility for catastrophic impairment benefits.

It is important to note that the amputation of a single leg is sufficient to constitute a catastrophic impairment if the accident had occurred after September 30, 2003 (see cl. 2(1.2)(c) of the SABS). This decision is significant as it concludes that psychological distress that results from physical injuries can be included in the assessment of catastrophic impairment. Only time will tell if this decision will give insurers reasons to increase the cost of automobile insurance.

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