Unnecessary for Counsel to Directly Instruct Accountant’s Interpretation of the SABS

The recent Denise Schuknecht and Economical Insurance Company (19-013098/AABS) decision comments on an Accountant deducting net collateral benefits from income replacement benefits (IRBs) as opposed to gross collateral benefits, at the request of the Applicant’s counsel.

In this claim, the Applicant was involved in a motor vehicle accident on September 25, 2014 and a dispute arose regarding the quantum of IRBs payable.

Specifically, the Applicant’s Accountant initially deducted the total net collateral benefits from IRBs before revising their calculation under a second scenario that deducted total gross collateral benefits.  The Applicant’s Accountant also deducted post-accident income up to October 8, 2015.

The Respondent’s Accountant, Davis Martindale (DM), provided alternative calculations deducting the Applicant’s gross collateral benefits per week as they varied based on the Applicant’s return to work and deducting post-accident income up to October 30, 2015 per the Statement of Earnings provided.

When considering a deduction for net or gross collateral benefits, the Vice-Chair stated that, “I am surprised that the issue of gross versus net deduction of “other income replacement assistance (including STD, LTD and CPP-D benefits)…continues to be disputed when calculating IRB…”

The Applicant’s Accountant advised that he was instructed by the Plaintiff’s counsel to interpret the SABS as a net deduction for collateral benefits as opposed to gross.

In response, the Vice-Chair asserted, “I found it unnecessary that counsel would directly intervene to instruct the applicant’s expert to interpret the Schedule in this manner.”

The Vice-Chair relied on Section 4(1) of the Statutory Accident Benefits Schedule (SABS) and a prior decision, G.K. c. Unifund Assurance Company 2017 CanLII 85688 to conclude that, “Thus, given the totality of evidence and the case law presented, I am satisfied that an IRB is based on gross income, or payments, and the respondent is permitted to make deductions to the applicant’s IRB payable based on the STD, LTD, and CPP-D payments received by the applicant…”

Accordingly, the Vice-Chair considered the Applicant’s Accountant’s calculations to be overstated concluding, “In my mind, DM provided a more accurate calculation, breaking each period of entitlement down into four discrete periods where STD, STD and income, LTD and income, and solely LTD were calculated during this period…I accept the applicant ceased work on October 30, 2015, as laid out in the Statement of Earning and as per the DM report…Thus, for these reasons, I find the accounting reports provided by DM more persuasive relating to the calculation of the applicant’s IRB.”

The Vice-Chair goes on to comment that the Applicant’s IRBs beyond age 65 should be adjusted before any deduction for collateral benefits (i.e., $400 rather than $Nil).  We have been advised that this was not an issue in dispute and, as such, the Respondent will seek reconsideration regarding this interpretation.

Read the decision in full detail here: Denise Schuknecht and Economical Insurance Company (19-013098/AABS)