Barrie-area litigator Steve Rastin says he is hopeful the Supreme Court of Canada (SCC) will agree to weigh in on a recent court of appeal decision that he believes could have a detrimental effect on insurance claimants if it is not reversed.
In Varriano v. Allstate Insurance Company of Canada, the Ontario Court of Appeal (ONCA) ruled that an insurer is not required to provide a medical reason for terminating income replacement benefits (IRB).
However, Rastin, senior counsel at Rastin Gluckstein, says the decision will only make it more difficult to dispute a termination of benefits. He says he would like to see the SCC provide some guidance.
“My understanding is that the plaintiff in Varriano has sought leave to appeal to the Supreme Court of Canada,” Rastin tells LegalMattersCanada.ca. “It is unlikely it will happen because leave is rarely granted. But I believe insurance companies, claimants, the License Appeal Tribunal (LAT) and plaintiff lawyers would benefit from our highest court providing some clarity on what appears to me to be a fundamental incongruence in the law.”
Received Accident Benefits After 2015 Injury.
The ONCA was told Nunzio Varriano was injured in a 2015 motor vehicle accident and received income replacement benefits from Allstate. When he went back to work a few months later, Varriano received a notice from the insurer informing him that since he had returned to his full-time job, his benefits would cease.
In July 2018, he was no longer able to continue working so he filed an application with the Licence Appeal Tribunal (LAT) disputing the termination of IRBs. The LAT adjudicator accepted Allstate’s argument that the application was time-barred since Varriano had not contested the termination in the required two-year period.
Divisional Court overturned that ruling stating that provisions of the Statutory Accident Benefits Schedule (SABS) required the insurance company to provide medical reasons to justify the stoppage of benefits.
The OCNA disagreed, stating that since Allstate relied on a non-medical reason to justify the termination of benefits – Varriano’s return to work – they were not required to provide a medical reason in its notice.
Rastin, who is part of a team that hopes to be granted leave to intervene on behalf of the Ontario Trial Lawyers Association (OTLA) if the Supreme Court decides to hear the case, says he takes issue with the application being time-barred.
“When someone returns to work everyone can agree that person is not going to be entitled to money from the insurance company,” he says. “However, while he was working, Varriano had no reason to dispute the termination of benefits. But more than two years later, he could no longer handle doing the job. He is either getting worse or he is not getting the accommodation needed from his employer. He is forced to stop working.
“So, when he leaves the workforce and applies for income replacement benefits, the insurance company basically tells him he was given a termination notice more than two years ago, there’s a two-year limitation period, so you snooze, you lose.”
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