Volume. 9 Issue. 24 – July 30, 2025
25% Award Due to Late (Unexplained) Reinstatement
In this edition, the Tribunal considered a stand-alone application for a special award, after the Respondent reinstated IRB just five days before the hearing, 686 days after the initial denial. Despite the late reversal, the Tribunal emphasized that timing matters, and so does accountability.
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25% Award Despite (Unexplained) Denial Reversal – Following a July 2020 MVA, the Applicant Driscoll received Income Replacement Benefits (IRB) through to March 2023, at which time they were stopped by Allstate based upon the results of a series of IEs (five in total) directed at ongoing entitlement. The collective opinion was that Driscoll did not suffer a complete inability to engage in any employment for which she is reasonably suited for by education, training or experience. However, in January 2025, Allstate, in 24-001272 v Allstate, decided to reinstate IRB, although the explanation of benefits (EOB) did not provide a reason for the reversal for same, being 686 days after the initial denial and 5 days before the hearing in this dispute was scheduled to proceed. Despite the reinstatement, Driscoll opted to pursue the one remaining issue, that of an Award, at the scheduled hearing.
Driscoll sought an award of 40% of the delayed IRB, contending that Allstate’s conduct demonstrates it unreasonably withheld and delayed payment of IRB and agreed to pay the benefit 5 days before the hearing. She further submitted that Allstate “did not consider additional medical evidence outlined in s. 25 reports and subsequent rebuttal reports and did not meet its obligation to adjust the file as new information became available. Finally, the applicant highlights that the explanation of benefits which re-instated the IRB did not provide a reason for the reversal of the original denial.”
For their part, Allstate took the position that “its actions were reasonable and within the prescribed limits of the Schedule. The decision to re-instate the IRB was not an attempt to rectify an error, but a consideration of new information from a Canada Pension Plan Disability (“CPP-D”) decision summary and CPP-Ds reliance on the s. 25 assessor’s reports.”
The Tribunal found for a fact that, “considering that the s. 25 assessment reports were prepared in 2023, I find that the respondent did not adjust the file as new information became available and this conduct lead to a significant delay in the payment of IRB.” Noting that the dates when s. 25 reports and rebuttal letters (nine in total, dated 3/2023 through to 11/2023) were shared with Allstate were not part of the evidentiary record, the Tribunal found “it more likely than not that the respondent had access to the s. 25 reports within a few weeks of the last report date and in any event, in advance of when it reinstated benefits.” Further, reference to the adjuster’s log notes did not reflect any references to any s. 25 assessments or rebuttals received from the applicant.
Noting that both s. 44 and s. 25 reports were released at approximately the same time in March 2023, a review of the documentation provided to s. 44 assessors was conducted and s. 25 assessments did not appear in the IRB s. 44 report dated March 3, 2023. This resulted in the Tribunal concluding that “s. 44 assessors did not have access to the opinions and conclusions of s. 25 assessors when they prepared their report. Section 44 addendum reports were not part of the evidentiary record, and I conclude that the respondent did not arrange subsequent paper s. 44 reviews once concerns were identified in the applicant’s rebuttal reports.”
It was further noted that the CPP-D decision summary was not included in initial document exchange and was shared with Allstate in an update sent January 8, 2025. Although both parties agree that the respondent received the CPP-D decision summary on January 8, 2025, the Tribunal found that “ this decision summary was not an essential component to determine whether the applicant is eligible to receive IRB nor a legitimate reason why IRB benefits would suddenly be re-instated.”
The Tribunal concluded that “withholding benefits until another adjudicative body issues a decision regarding a separate benefit with its own entitlement criteria is behaviour that attracts an award. I am not persuaded that the reasons for approval of CPP-D benefits, specifically CPP-D’s reliance on conclusions reached by s. 25 assessors were new information for the respondent in January 2025 because I find it more likely than not, that the respondent received s. 25 assessment reports before January 2025. I find that the applicant is entitled to an award in this matter because the respondent’s conduct was inflexible and unyielding and there was a significant and unexplained delay in reinstating the applicant’s IRB shortly the hearing.”
As for the appropriate quantum of the award, “of specific relevance to this case are the applicant’s vulnerability, the harm or potential harm directed at the applicant, the need for deterrence, and the overall length of the delay.” It was noted that prior to the MVA, Driscoll “was a single woman who lived alone in a rented apartment, utilized public transit, and earned a modest income. She was vulnerable financially to any disruptions to her income and delayed payments increased her vulnerability.” The Tribunal was however “not able to assess the blameworthiness of the respondent’s conduct, the advantage gained from the delayed resumption of IRB, nor take into account any other penalties that were or may be imposed. In these circumstances, I find that a 25 per cent award is a reasonable deterrent to discourage similar conduct in the future.”
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