Arbitration and Court Decisions Relevant to Psychological Impairments and the Worker’s Psychologist:

Presented to: Ontario Psychological Association
Prepared by: Rhona L. Waxman Law Offices


1. McMichael v. Belair Insurance Company [2006 O.R.F.S.C.D. No. 36, Appeal P05-00006].

This case is interesting for a lot of different reasons, but the one that I want to highlight is on the issue of causation in whether or not impairment was caused by the motor vehicle accident.

This case will be of particular interest to psychologists when dealing with the issue of whether or not impairment was caused by the motor vehicle accident.

This was a June 14, 1998 car accident.   In the accident, Mr. McMichael suffered several injuries including a skull fracture, closed head injury, open femoral fracture, broken ribs, fractured scapulae and pneumothorax, fractured bone in the left hand, TMJ and fracture of T9.

Mr. McMichael subsequently became addicted to crack cocaine following the crash.  The arbitration found that Mr. McMichael was catastrophically impaired as a result of the accident which therefore entitled him to ongoing income replacement benefits, attendant care and other benefits at the higher level.   Interestingly enough, it was Mr. McMichael’s crack cocaine addiction that was the primary basis for his catastrophic impairment designation, his inability to work and his need for attendant care.

The insurance company appealed and argued that the arbitrator was wrong in concluding that the accident caused Mr. McMichael’s cocaine addiction.  The insurer argued that there had to be a direct relationship between the cocaine addiction and the injuries sustained in the accident.  The insurer pointed out that Mr. McMichael had abused drugs before the crash.

At the hearing, Mr. McMichael testified that he first used crack cocaine in an attempt to self-medicate after he was unable to return to work following the accident.      There was also medical evidence produced at the hearing that concluded that his addiction to cocaine was as a result of the car crash.

The Arbitrator found that you do not have to prove direct causation.  You only needed to prove that there existed a chain of causation from impairments suffered in the accident to the cocaine addiction.

2. Another interesting case on causation from a psychological perspective is the case of K. v. Liberty Insurance Company of Canada.  This is a decision that came down on October 3, 2006; it was an appeal of an arbitration decision.     Again, the issue here was causation.    The insurance company was arguing that because of Mr. K’s pre-existing psychiatric condition, he was in legal terms a crumbling skull and not a thin skull and therefore the impairment was not caused by the motor vehicle accident.

The evidence was that in the 1990’s, Mr. K. had suffered periodic episodes for which he was required hospitalization and psychiatric treatment.     There was a decline in function following the motor vehicle accident.  The issue was whether his decline was caused by the motor vehicle accident.

The arbitrator noted that as a general principle, arbitrators have accepted that an underlying condition may be aggravated by an accident.   As long as the accident caused an aggravation or materially contributed to the condition or impairment, then there is causation and there is entitlement to compensation.    The arbitrator noted that although sometimes the motor vehicle accident may have aggravated a condition, eventually it may not be a factor in any residual disability.

In this case, the finding was that Mr. K’s psychiatric illness was episodic with periods of recovery in between.   The arbitrator found that notwithstanding the motor vehicle accident there was a pattern of psychiatric disability and recovery and that this pattern was not broken or interfered with by the accident notwithstanding the initial aggravation.

Two interesting cases with respect to causality.  I imagine you hate that in law we call this the thin skull and the crumbling skull principle.  What these cases are about is causation.   The things to remember about causation are firstly that the test is subjective.  That is, even though the accident may not have caused this impairment in 99% of other accident victims, if you can show that in this particular patient the accident caused the impairment then you have established causation.   This is your thin skulled client.   That is, although a particular patient was unusually vulnerable to develop this particular problem it doesn’t matter.  All that matters is that in this particular patient, the accident caused the particular outcome or impairment.   The next thing to understand about the crumbling and thin skulled Plaintiff and the issue of causation is that the accident does not have to be found to be the entire cause of the impairment.  The case law is clear the crash need only be a material contribution.

In the K. v. Liberty case, had the underlying condition continued to be aggravated by the accident, then the Plaintiff or the patient would have been entitled to ongoing benefits.  The finding here was that although there was an initial aggravation, the underlying impairment and problem did not continue to be affected by the accident.

In the McMichael case, it didn’t matter that Mr. McMichael had used drugs prior to the motor vehicle accident.  It was enough that he showed that there exists a chain of causation from impairments suffered in the accident to his cocaine addiction.  It was enough that he showed that he first used crack cocaine in an attempt to self medicate after his attempt to return to work.

3. Worthman v. AssessMed (2006) 80 O.R. 3rd 249].  In the past the general principle has been that a doctor retained by a third party such as an insurance company to examine and report on an injured person owed no legal duty to the person they are examining other than to avoid physically injuring him or her.  This is called the doctrine of absolute privilege.

There was some erosion of the doctrine in the Court of Appeal decision of Lowe v. Guaranteed Company of North America.  In that case, a Plaintiff was allowed to sue a DAC or Disability Assessment Centre.

The courts have gone one step further in this particular case, where the Plaintiff was permitted to sue a doctor who provided an insurance exam (IE) for an insurance company on the issue of entitlement to income replacement benefits.   The practitioner here provided an I.E. that said that Ms. Worthman did not meet the test for entitlement to income replacement benefits and as a result her benefits were terminated by her insurance company, Axa.  The matter proceeded to arbitration and the arbitrator determined that she was entitled to income replacement benefits.   Ms. Worthman then brought an action against the doctor and Assess Med alleging negligent assessment, bad faith, intentional interference with economic relations and other serious allegations of misconduct.  She was not alleging that any physical injury had been caused by the assessment but was claiming damages both for psychological and economic injuries.  The Defendants brought a motion for Summary Judgment which was dismissed.  The Defendants appealed to the Divisional Court. The court held that “although many of the authorities cited seemed to establish the principle that a doctor retained by a third party to examine and report on a person to a third person owes no legal duty to the person other than to avoid injuring her, it may well be that, on the facts of this case, the legal duty owed by the Defendants to the Plaintiff may have been broader in the context of the mechanism established for the resolution of contested claims for no-fault benefits by the Insurance Act.   As well, it may be that the duty to avoid injuring the Plaintiff extended to avoidance of both psychological and economic injuries.    The court held that this was an important and involving of law and therefore this action should not be determined on Summary Judgment particularly where there are disputes between the parties with respect to material facts.” 

So it may well be that the courts are now holding medical assessors to a higher standard or insurance exams they have in the past. 


There are just a few things that I want to add on this issue over and above the two cases that I discussed earlier.   

Firstly on the issue of causality,  in order to express an opinion, you do not have to be 100% certain or certain beyond a reasonable doubt.  You just have to believe that it is more likely than not.   So if you think that it was likely that the accident materially contributed to the person’s impairment or disability, then that is all that is required with respect to causality. 


The clinical psychological assessment can have a major impact on your client’s entitlement to other accident benefits.  It can impact on their right to income replacement benefits, housekeeping, caregiver benefits, attendant care and to catastrophic designation for impairment.  So if it is your opinion that your client can’t work or that his or her ability is impaired as a result of the psychological problems or impairments then you should say so in your report.

If the conditions for which you are treating or assessing the person, impacts on their ability to do housekeeping or to care for their children or to care for themselves, then this is also something that you should mention.  You should also be aware of the possibility that the person might be entitled to catastrophic designation and if you note a Glasgow Coma Scale of 9 or lower or a combination of multiple injuries, then you should put that in your report and suggest the possibility that the issue of catastrophic impairment should be examined.

Please bear with me as I refer to one more case on this issue and that is the Kieffer v. Economical Mutual Insurance Company [2006 O.F.S.C.D. No. 65, File No. FSCO A05-0000494].  Under Bill 198, accident victims who are diagnosed as having Wad I or Wad II injuries are subject to treatment with prescribed scope and duration.  Their access to other benefits such as income replacement benefits, housekeeping and attendant care is also circumscribed.  Their treatment under the path for a Wad I injury usually lasts up to 28 days and for a Wad II injury up to six weeks.

For accidents after April 14, 2006, income replacement benefits are not paid for longer than 12 weeks for a person who falls within Wad I or after sixteen weeks for a person who falls under Wad II.

The Kieffer case involved a motor vehicle accident that occurred on July 4, 2004.  Ms. Kieffer was diagnosed with Wad II and was processed under the Paf.  She had headaches, neck and low back pain, anxiety and loss of sleep.  She applied for and received income replacement benefits and medical and rehab treatment under the Paf. 

The treatment provided under the Paf was unsuccessful and her diagnosis was expanded to include psychological impairments.   Ms. Kieffer’s treating medical practitioners submitted another Treatment Plan outside of the Paf proposing further treatment, actually it was psychological treatment and Ms. Kieffer also applied for additional income replacement benefits.

The insurer took the position:  once a Paf always a Paf.

Ms. Kieffer argued that although she initially suffered a Wad II injury, her impairments now fell outside the Wad II Paf.  She argued that her chronic pain and psychological impairments were distinct from and brought her outside of the Wad II Paf and that she required separate and additional treatment than what was provided under the Path.

The arbitrator found that a person who suffers a Wad II injury can be excluded from the Paf if the person has developed other significant impairments distinct from the Wad II injuries arising from the same accident, and in this case, the arbitrator was satisfied on the balance of probability that Ms. Kieffer suffered a psychological impairment as a result of the crash.  Since the impairment no longer came under the Wad II Paf, the restrictions in the SABS did not apply and accordingly Ms. Kieffer could receive income replacement benefits for more than sixteen weeks and could receive treatment outside of the Paf.  In this particular case, Ms Kieffer’s psychological assessment put her outside the Paf and entitled to her to ongoing income replacement benefits and treatment.   


  1. First do your assessments and Treatment Plans in a timely fashion after the assessment has been approved. - For a great many reasons, Treatment Plans put in closer to the time of the accident are more likely to be approved than the ones later.
  2. Follow your best clinical practice.  That goes without saying.  Emphasize the testing that you have done and the test results. Adjusters are impressed by testing and test results.
  3. Make sure you have the complete medical file and insurance file prior to preparing your Treatment Plan.  As an absolute, you want the family doctor’s clinical notes and records pre-existing the accident up until the date you are seeing the person and as many other reports, IE’s and medical information as you can get your hands on.
  4. You will often find support for the treatment that you are recommending in other people’s reports.  You should point that out and emphasize it.  If for example the physiatrist notes that the patient is being affected by mood or is afraid to go back to work or is tearful when describing the accident; Or if he notes that the patient is complaining of problems with their spouse or children, or that the children don’t understand or are not supportive, you may want to put observations such as these in your treatment plan, assessment or report.
  5. Emphasize the possible benefits and what you think could be achieved by the proposed treatment.  However, do not guarantee or proclaim that you will provide a cure.  For example if it is your opinion that the clients depression will have to be dealt with prior to his being able to return to work, that is not a bad thing to say.  It will help you get your treatment approved.
  6. In your first Treatment Plan do not ask for a lot of sessions.  Adjusters often look at treatment in a cost benefit way.  They look at how much the treatment is going to cost, what the potential benefit would be and how much it would be to dispute it.  Also, some insurance adjusters only have limited authority and can only approve Treatment Plans up to a certain amount of money. After the initial treatment plan you are in a much better position to assess the needs of the client and your report and recommendations would carry more weight.
  7. Be very careful when quoting the clients in the report.
  8. Lastly, and most importantly, always do a rebuttal report when requested.  After you do your assessment and Treatment Plan, the insurer can obtain an insurer examination which it can use to deny the treatment that you are recommending.  You then have a certain period of time to do a rebuttal report.  If you don’t do the rebuttal report, you are guaranteeing that the Treatment Plan will not be approved.  The implication will be that you were swayed by the IE and you agreed with the IE assessor.  This puts the client in a difficult position at mediation and arbitration.