A PRACTICAL GUIDE TO INSURANCE REFORM IN ALBERTA

I. Overview

If you were injured in an accident that occurred on or after October 1, 2004, you will be subject to the new regulations. If you were injured in an accident that occurred before October 1, 2004, these regulations will not affect you.

If your injury falls within the definition of a "minor injury", and if you cannot establish a serious impairment, you will be entitled to claim a maximum of $4,000.00 for non-pecuniary damages - also known as general damages - for pain and suffering and loss of enjoyment of life. It is important to note, however, that you can still claim compensation for any other provable losses that you sustained, including but not limited to loss of income, loss of housekeeping capacity, treatment expenses, and cost of future care.

If you sustained a "minor injury" and establish that you sustained "serious impairment" as a result of the injury, your claim for damages for pain and suffering will not be capped and you will be entitled to claim an award for pain and suffering and loss of enjoyment of life based on the facts of the case and the precedents established in the existing case law.

In every case, it is important to explore whether you have sustained any injury that is not subject to the cap on general damages. For example, WAD III injuries, which involves a neck complaint accompanied by a neurological sign such as decreased or absent deep tendon reflexes, weakness or sensory deficits, are not included in the definition of "minor injury" and accordingly not subject to the cap on general damages.

If you sustained an injury that is subject to the cap, such as a strain or sprain, but you also sustained an injury that is not subject to the cap that is itself worth more than $4,000.00 by way of general damages, you are entitled to claim general damages of up to $4,000.00 for the capped injury and, in addition, you are also entitled to claim the full, uncapped value of general damages for the non-capped injury. For example, if you became depressed as a result of the accident, you would be entitled to claim an award for general damages based on the nature and extent of your depressive illness. If you also sustained a WAD II injury in the accident without "serious impairment", you would also be entitled to claim additional capped general damages of up to $4,000.00. The same would apply if, as a result of an accident, you suffered from anxiety or post-traumatic stress disorder, pain disorder or other psychiatric condition in addition to the "minor injury" that you sustained.

Similarly, you may have sustained an injury to your temporomandibular joint ("TMJ"), located in your jaw, in addition to your "minor injury". If the joint itself was damaged, as opposed to the soft tissue connected to the joint, then your TMJ injury would not fall within the definition of "minor injury" and your claim for pain and suffering in connection with that injury will not be capped.

These examples illustrate that it is essential to conduct appropriate investigations of all your physical and emotional symptoms to identify the precise nature and cause of such symptoms to ensure that you are at least properly compensated for any injury you have sustained that is not subject to the cap. In that regard, it is also essential that you advise your health care providers about all the symptoms you are experiencing at your earliest opportunity, that you follow the prescribed treatment plan and that you continue to communicate your symptoms to your health care provider for so long as you continue to experience them.

The Treatment Protocols strictly limit the number of treatments that your own insurer is obligated to fund during the first 90 days post-accident and potentially longer. The Treatment Protocols require that both you and your health care provider consider the therapeutic approach outlined in the Treatment Protocols as an option for treating you. If the Treatment Protocols are not followed, you may be faced with some serious potential problems in the future should your "minor injury" result in a "serious impairment", as outlined below.

The AAIB Regulation deals with section B benefits that are payable by your own insurance company to cover certain treatment related expenses that you incur. The changes to the AAIB Regulation include an overall increase in the total amount payable for medical treatment pursuant to Section B from $10,000.00 to $50,000.00. There is a small increase in the amount that is payable for chiropractic treatment (from $500.00 to $750.00). Massage therapy treatment and acupuncture treatment, which under the old regulations was subject to the $10,000.00 limit, have each been reduced to a limit of $250.00.

Where any injury that you sustain falls outside the definition of "minor injury", the Treatment Protocols will not apply and your entitlement to section B benefits will be determined with reference to the AAIB Regulation. You will always have the right to claim any unpaid treatment costs, providing they were reasonable, from the insurer of the at fault driver at the time that your claim is finally resolved.

II. Minor Injury Regulation: What Is A "Minor Injury"

As outlined above, if you are injured in a motor vehicle accident and suffer a sprain, strain, WAD I or WAD II injury, the MIR and the Treatment Protocols will apply to your case, as will the cap of $4,000.00 on awards for pain and suffering and loss of enjoyment of life, unless it can be established that you sustained a "serious impairment" as defined in the MIR.

Pursuant to the MIR, your health care practitioner determines whether your injury is a strain, sprain, WAD I or WAD II injury by reference to the criteria outlined in the Treatment Protocols. It is apparent that in the case of strains and sprains, everything from a minor tearing of a few fibres of the involved muscle or ligament to a full thickness tear of the whole muscle or ligament will fall into the category of sprain or strain and accordingly will be subject to the Treatment Protocols and the cap on pain and suffering. This would even apply in cases where surgery is required to repair the damage.

While you do have the option of choosing to be being treated outside of the Treatment Protocols, there are serious consequences associated with so choosing. The MIR provides that if a victim sustains a sprain, strain or WAD injury and is not diagnosed and treated in accordance with the Treatment Protocols and does not have a "reasonable excuse" for treating outside the Treatment Protocols, and if the sprain, strain or WAD injury actually results in serious impairment, the sprain, strain or WAD injury shall be considered to be a minor injury, "unless the claimant establishes that the sprain, strain or WAD injury would have resulted in a serious impairment even if the claimant had been diagnosed and treated in accordance with the protocols".

It is essential that accident victims and health care providers alike are aware that the MIR creates a serious problem for accident victims who choose to exercise their own judgment as to the treatment they should receive, or whose health care providers choose to exercise their own judgment as to the treatment that should be administered, by choosing not to follow the treatment regime prescribed in the Treatment Protocols. It appears to us that it will generally be very difficult to prove that a different form of treatment would or would not have helped resolve injuries suffered some years earlier.

Given this onus on the accident victim, our advice at this time is to follow the Treatment Protocols for the first 90-day period post-accident in automobile accident cases where a strain, sprain, WAD I or WAD II injury has been diagnosed. After 90 days, we believe that the health care provider is free to prescribe the treatment that he or she feels is most appropriate in the circumstances, including the duration and frequency of such treatment. We are of the view that whatever treatment costs are not recovered from your own insurer will be recoverable from the insurer of the at fault driver at the time that the claim is resolved, providing that you can establish that the treatment rendered was reasonable in the circumstances.

III. Treatment Protocols - General Considerations

If you and your health care provider choose to follow the Treatment Protocols, you must comply with the AAIB Regulation in order to secure payment of your treatment costs from your insurer. First, either you or your health care provider must send a completed prescribed claim form to your insurer "within 10 business days of the date of an accident or, if that is not reasonable, as soon as practicable after that." The prescribed form includes a section to be completed by you and a section to be completed by your health care provider.

We have already heard of cases where an insurer has threatened claimants that if the completed, prescribed form is not sent within the 10-day period, the claim will be denied and no treatment costs will be paid. We anticipate some initial difficulties with some insurers, however, we hope that ultimately the Treatment Protocols will be interpreted so as to give some latitude to claimants and their health care providers in terms of timelines, however, only time will tell.

Within 5 days of receiving the completed prescribed claim form, the patient's insurer must send you a decision notice approving or refusing your claim. If your insurer does not send a decision notice, the insurer is deemed to have approved your claim and is liable to pay the claim unless and until a subsequent denial of liability is provided.

IV. Diagnosis of Degree of Strain, Sprain and WAD Injuries

The Treatment Protocols outline the criteria that must be employed to diagnose the severity of a sprain or strain (1st, 2nd or 3rd degree) or WAD I or WAD II injury. In the case of strains and sprains, the criteria are extracted from a book by David J. Magee entitled Orthopedic Physical Assessment (3rd) 1997. Essentially, the greater the number of muscle or ligament fibres torn, the higher the degree of the strain or sprain. A strain or sprain can range from tearing of a few of the muscle or ligament fibres to a full thickness tear requiring surgery to repair.

Table 1

V. Authorized Treatment Under the Treatment Protocols

The Treatment Protocols specifically outline the information that a health care practitioner must give to a patient and the number and kinds of treatment that are authorized in the initial 90 day post-accident period for strains, sprains, WAD I and WAD II injuries.

Where a sprain, strain, WAD I or WAD II injury has been diagnosed, a health care practitioner may authorize:

It is important to emphasize that the treatments permitted are the maximum, total combined number of visits that may be claimed, irrespective of the number of treatment providers.

A healthcare practitioner's authorization for any permitted treatment under the Treatment Protocols must be in writing and issued within 90 days of the date of the accident and expires 90 days after the date of the accident unless the insurer approves further treatment beyond that time period.

It should be noted that where you are not treated in accordance with the Treatment Protocols, the Section B time limits apply and, effective October 1, 2004, the prescribed form must be provided to the Chief Agency of the head office of the insurer in the province within 30 days of the accident or as soon as practicable thereafter.

VI. Increase in Section B Coverage to $50,000.00

Section B coverage has been increased from $10,000.00 to $50,000.00 per claimant. Coverage has been expanded from "reasonable expenses incurred within two years from the date of the accident for necessary medical, surgical, chiropractic, dental, hospital, professional nursing, and ambulance service and, in addition for such other services and supplies which are, in the opinion of the insured person's attending physician and that of the Insurer's medical advisor, essential for the treatment or rehabilitation of said person" to also specifically include psychological, physical therapy, occupational therapy, massage therapy and acupuncture services.

One welcome change is that the health care practitioner can bill the auto insurer directly for all treatment services authorized by the Treatment Protocols. The health care practitioner will need to obtain and submit to the insurer a signed statement from you verifying receipt of any service being billed to the insurer before payment will be made.

Whether or not you are being treated in accordance with the Treatment Protocols, coverage is limited to $750.00 in respect of chiropractic treatment, $250.00 in respect of massage therapy and $250.00 for acupuncture treatment. The treatment expense must have been incurred within 2 years of the date of the accident.

The increased section B limit for medical expenses will no doubt be of some assistance to accident victims sustaining very severe or catastrophic injuries. Certainly in the case of catastrophic injuries, the $50,000.00 limit will nevertheless be exhausted very quickly. It is disappointing that the section B limit remains woefully inadequate for grievously injured accident victims, particularly in light of the very substantial loss of compensation that the vast majority of accident victims will experience under the new regulations.

Moreover, the maximum amount claimable for total disability remains unchanged at $300.00 per week for a maximum of 102 weeks, which causes great hardship for accident victims sustaining long-term disabilities. The Alberta government has suggested that it would take steps to make it easier for accident victims to obtain advances on their settlements or judgments from the at fault driver's insurer, which would be a welcome development. Currently such advances are entirely within the discretion of the insurer and are frequently not provided no matter how justifiable such advances are in the circumstances.

In other jurisdictions where the right to sue has been restricted, there has been a trade-off in the sense that the loss of rights has been countered at least to some degree by meaningful increases in medical expense coverage and disability benefits for all accident victims, regardless of fault. We have not seen this happen in Alberta, where section B benefits remain among the lowest in the country.

Finally, under section B, insurers in Alberta are well positioned to limit payment for treatment to levels below the limits established because they retain the right to require claimants to attend for independent medical examinations with doctors of their choice. The only remedy for claimants whose benefits are terminated after such examinations is to sue the section B insurer, which in the vast majority of cases will not be practical given the cost of litigation, the low threshold of benefits and the fact that general damages will be capped in the overwhelming majority of cases.

VII. Injury Management Consultants

Pursuant the Treatment Protocols, if you are diagnosed with a WAD I or WAD II injury and have any "alerting factor" that may influence prognosis, your health care practitioner must seek to reassess you within 21 days of the accident and if your injury is not resolving, authorize you to attend upon an IMC for an assessment and report.

While there is no definition of the term "alerting factor" in the MIR or in the Treatment Protocols, there is reference to the term in the Alberta Government's Interpretive Bulletin of October 1, 2004. According to this bulletin, alerting factors for a WAD I or WAD II injury include:

• Age greater than 40
• Female
• More intense baseline neck or back pain
• More intense baseline headache
• The presence of baseline radicular symptoms
• The presence of depressive or other significant emotional distress symptoms within the early weeks

It appears to us that if the patient is experiencing any degree of resolution of his or her symptoms, or if the health care provider is able to note any degree of resolution, then it is not necessary for the health care provider to refer the WAD I or WAD II patient to the IMC.

It is interesting to note that for some reason, strains and sprains are treated differently than WAD I and WAD II injuries insofar as there is no mandatory requirement for a referral to an IMC where a strain or sprain has been diagnosed where the injury is not resolving and where "alerting factors" are present. It appears to us that the Treatment Protocols therefore create an incentive to diagnose a strain and/or a sprain as opposed to a WAD I or WAD II injury in cases where the patient and the health care practitioner do not feel that a referral to an IMC is warranted.

Certainly, great care must be taken in selecting any particular injury management consultant. Any recommendation for treatment, or recommendation not to treat, made by an IMC may well become part of the treatment prescribed pursuant to the Treatment Protocols and any failure on the part of the patient to follow the IMC's recommendation could result in a finding that the patient did not follow the Treatment Protocols. This in turn could invoke the reverse onus provisions of the MIR, which as we have seen requires that a "seriously impaired" accident victim prove that his or her injuries would have resulted in a "serious impairment" even if he or she followed the Treatment Protocols.

It should also be noted that an IMC may provide advice and a report concerning the diagnosis and/or recommended treatment, or recommend a further assessment or a multi-disciplinary assessment of the patient. However, no examination, further assessment, multi-disciplinary assessment or report concerning the diagnosis and/or recommended treatment is authorized by the Treatment Protocols unless the insurer approves it. There is nothing in the Treatment Protocols requiring such approval, accordingly, the approval can be reasonably or unreasonably withheld. This clearly takes away from the value of any referral to an IMC.

VIII. Certified Examiner

Pursuant to the MIR, if an automobile accident victim and the insurer for the at fault driver disagree as to whether an injury is or is not a "minor injury", either party may give notice in the prescribed form stating that the party giving notice desires to have a certified examiner assess the claimant for the purpose of giving an opinion as to whether the injury is or is not a "minor injury". The notice must name the certified examiner being proposed by the party giving such notice. Neither the claimant nor the insurer may give notice that they seek the opinion of a certified examiner until at least 90 days post-accident.

Certified examiners must meet the qualifications set out in the MIR. These qualifications include, but are not limited to, active practice as a physician pursuant to the Medical Profession Act, successful completion of an approved examination and demonstrated knowledge of the "biopsychosocial model".

Within 14 days of receiving notice that one of the parties is seeking an assessment by a certified examiner, the other side must either accept the proposed certified examiner or reject the proposed certified examiner and provide the name of an acceptable certified examiner.

If there is no agreement as to the certified examiner to be employed, then the parties apply to the Superintendent of Insurance, who must select a different certified examiner within 5 days. The certified examiner cannot be a treating doctor.

Once selected, the certified examiner must assess the claimant within 30 days. The certified examiner must give the claimant notice of the time, date and location of the assessment. The claimant must authorize release of relevant treatment information. If the claimant does not cooperate, the injury will be classified as a "minor injury by default".

The certified examiner must provide his or her opinion within 30 days of the assessment or request a further assessment within that time frame. If the certified examiner requests a further assessment of the claimant, it must be conducted within 6 months of the first assessment. The cost of the certified examiner's assessment is borne by the party requesting it.

Section 12 of the MIR provides that the opinion of the certified examiner constitutes prima facie evidence that the claimant's injury is or is not a" minor injury". What this means is that, absent other evidence, the certified examiner's opinion will be deemed to be correct. However, either side is still free to obtain evidence to contradict the certified examiner's opinion and to negotiate a settlement based on all the evidence obtained.

If a settlement is not possible, it will be necessary for a judge or jury to decide whether the injury is a "minor injury" or not. The opinion of the certified examiner will be important to the extent that it will determine which party has the onus of proof at trial. If the certified examiner is of the opinion that the injury is not a "minor injury", then the burden of proof will shift to the defendant to prove that the injury is in fact a "minor injury" on a balance of probabilities. If the certified examiner is of the view that the injury is a "minor injury", then the accident victim will have the onus of establishing that the injury is not a "minor injury" on a balance of probabilities. This onus of proof is consistent with the usual onus of proof that rests with the accident victim to prove his or her case on a balance of probabilities, accordingly, we are not overly concerned with rebutting the opinion of the certified examiner.

IX. Conclusions

A number of observations follow from the above analysis. Firstly, it is very clear that the regulations now governing automobile insurance in Alberta are very complex. There will no doubt be a fair amount of litigation required to clarify the meaning of many provisions.

It is also apparent that "minor injuries" include injuries that many of us would consider to be anything but minor. Calling an injury "minor" does not make it so. For example, we have difficulty with the notion that a shoulder or knee injury involving a full thickness ligament tear that required surgery will be classified as "minor" unless "serious impairment" results. Similarly, we believe that most Albertans would regard a lifetime of neck and back pain as something more than a minor injury, even absent "serious impairment" as defined in the MIR.

We certainly wonder what happened to moderate injuries? Notwithstanding the Alberta government's decision to legislate moderate strains, sprains, and WAD injuries out of existence, we doubt very much that accident victims will suddenly stop sustaining such injuries. They will only stop receiving fair compensation for their pain and suffering, as will many Albertan's sustaining what heretofore have been considered to be serious injuries. We feel strongly that the Alberta government's purported attempt to target minor injuries has widely missed the mark.

To make matters worse, the new regulations create numerous roadblocks, such as short time lines and limitations on available treatment, which we believe will interfere with the rehabilitation of many accident victims.

The new regulations provide insurance companies with a great deal of control over the process. With control comes power over the accident victim. The balance of power under these regulations strongly favours the insurer.

The new regulations are based upon the "biopsychosocial model". It remains to be seen how this model will work in terms of delivering appropriate treatment, rehabilitation and compensation to accident victims in the real world. We have numerous concerns and will be monitoring the situation closely and reporting our observations in the future.