When the “future contract” provisions were eliminated from the Statutory Accident Benefits Schedule effective April 15, 2004, the industry breathed a sigh of relief that yet another category of “questionable” claims for Income Replacement Benefits were being eliminated.

Recall prior to this date, the Bill 59 Schedule permitted qualification for an Income Replacement Benefit if:

4(1)3 the insured person,

  1. was entitled at the time of the accident to start work within one year under a legitimate contract of employment that was made before the accident and is evidenced in writing, and
  2. as a result of and within 104 weeks of the accident, suffers a substantial inability to perform the essential tasks of the employment he or she was entitled to start under the contract.

Before Bill 59, the version of this section contained in Bill 164 read:

7(1)3 the insured person,

  1. was entitled at the time of the accident to start work within one year under a contract of employment that was made before the accident and was evidenced in writing, and
  2. as a result of and within 104 weeks of the accident, suffers a substantial inability to perform the essential tasks of the employment he or she was entitled to start under the contract.

The amount of the Income Replacement Benefit for these future employees was, pursuant to s. 8(5) of the Bill 59 Schedule, “the gross” income payable under the contract of employment, extrapolated to reflect an annual income. With remarkable frequency, adjusters found themselves addressing claims for Income Replacement Benefits arising out of all manner of “future contracts”, some making their appearance months after the accident. Claims adjustment required a thorough assessment of the claimant and circumstances of the alleged offer.

The transition in wording from Bill 164 to Bill 59 is telling. The latter version added the words “legitimate contract” to the future contract. Clearly, the “legitimacy” of the contract as a prelude to entitlement to an Income Replacement Benefit was a material concern.

It now appears that we are “back to the future” (contract) under the “incurred” economic loss provisions of the current Schedule applicable to the non-professional Attendant Care service provider.

Recall with respect to the non-professional service provider, the Attendant Care expense must be incurred. Section 3(7)(e)(iii) requires the person who provided the goods or services:

(B) sustained an economic loss as a result of providing the goods or services to the insured person.

Economic loss is not defined in the Schedule. The Court of Appeal in Gore v. Henry remarked the legislature had failed to include a definition or formula for calculating economic loss and took this to mean (prior to pre-February 2014 amendments) economic loss was simply a threshold issue and not one which required a calculation methodology. Despite an invitation to do so, the court declined to provide a definition of economic loss. In Simser v. Aviva, the Director’s Delegate concluded economic loss as applied to the Schedule must relate to some form of financial or monetary loss.

With this guidance, most in the industry would be prepared to accept that giving up one’s employment (as Mrs. Henry did) or losing time from work to provide Attendant Care services would constitute an economic loss triggering compensable Attendant Care expenses. Proof of cessation of employment and/or reduction of hours/missed shifts/declining offered overtime could be supported with documentation (preferably from the “service provider’s” employer).

Documentary support to substantiate an incurred economic loss becomes much more critical with the post-February 2014 amendments which limit the compensable Attendant Care Benefit to the actual economic loss sustained by the Attendant Care provider as a direct result of the provision of Attendant Care. Specifically, s. 19(3)4 of the Schedule provides that:

…if a person who provided attendant care services…to or for the insured person did not do so in the course of the employment, occupation or profession in which the attendant care provider would ordinarily have been engaged for remuneration, but for the accident, the amount of the attendant care benefit payable in respect of that attendant care shall not exceed the amount of economic loss sustained by the attendant care provider during the period while, and as a direct result of providing the attendant care.

Under this scenario, the insurer, prior to paying and quantifying the Attendant Care Benefit, would require information, pursuant to ss. 46.1, 2 and 3 of the Schedule to quantify the economic loss and confirm that the service provider was actually providing Attendant Care services during the period of declined overtime or missed shifts. In the complex world of adjusting benefits, these cases are the “easy” cases.

What about those cases where the alleged Attendant Care provider was not employed at the time of the accident but alleges an economic loss due to an inability to accept a job offer post-accident or to pursue a career path as a direct result of providing Attendant Care services to their injured friend or relative? These cases are strikingly similar to the “future contract” cases and bring us back to the future (contract).

One of the first decisions to touch on this set of circumstances was Aidoo v. Security National (FSCO 813-001238, September 26, 2014). The evidence in this case was that the service provider/sister of Ms. Aidoo had completed a community college course as a dental assistant. She alleged having been “promised” a job in a dental office when she completed her co-op placement. She did not take the job as she felt obligated to provide assistance to her injured sister. She also had part-time employment at a youth centre and would occasionally lose a shift in order to assist her sister. The service provider/sister did not produce any evidence to support her actual economic loss nor did she call evidence to show a job offer or any reduction in her part-time hours. Despite the lack of evidence, the Arbitrator found her to be credible and agreed she had sustained an economic loss, thus entitling Ms. Aidoo to payment of Attendant Care Benefits (at the Form 1 rates). This accident occurred pre-February, 2014, and accordingly did not require specifics in terms of the economic loss sustained.

It is somewhat remarkable that an Arbitrator would allow an economic loss claim to proceed on the basis of an offer of employment without any evidence as to proof of same. If the offer of employment is to be used as a threshold for an economic loss (and post-February, 2014 as the yardstick by which to quantify the amounts payable), surely a higher standard of proof should be required.

Contrast this approach with the approach in Simser. In Simser, the Arbitrator did not accept mere allegations of loss of work hours or foregone overtime absent documented evidence from the employer.

This brings us back to the future contract provisions. The caselaw as it evolved on future contracts applied a standard of proof that was variable and subject to backfilling. For instance, the claimant would not have to show a job offer made in writing dated prior to the accident so long as the “offer” was reduced to writing post-accident. In Atikian v. Certas (FSCO A00-000777, September 12, 2001) for instance, Arbitrator Palmer confirmed that the contract of employment must be “legitimate” and “evidenced in writing”. The phrase “evidenced in writing”, however, did not mean that a written contract must have been created before the accident rather, the oral contract or agreement must have existed before the accident. Prophetically, she noted that:

“letters confirming offers of employment written after an accident, for the purpose of supporting a claim for Income Replacement Benefits, and not in the normal course of business, may be given little weight.”

Similarly, offers of employment alleged to have been made to an Attendant Care provider pre or post-accident should be subject to strict scrutiny and a high standard of proof. It is that offer which will be used as the threshold for economic loss sustained by the Attendant Care provider and quantification of the Attendant Care Benefit. Considerations would involve an examination and exploration of written documentation provided in support of the job offer. Issues concerning the alleged service provider’s qualifications for the job offered, evidence of job applications, evidence of whether the offer was made in the ordinary course of business, whether the parties are at arm’s length and the credibility of the parties to the contract will require strict scrutiny.

Unfortunately, within the parameters of the Schedule, the insurer’s ability to obtain this information is limited prior to a hearing on the merits. For instance, it is only the injured insured who can be compelled to attend an Examination Under Oath. The insured can certainly give evidence under oath as to their information, knowledge and belief of the alleged employment offer made by a third party to their service provider. They may even undertake to request information from the alleged service provider. Their ability to request information from the alleged employer, however, is more limited. Further, s. 46.1 and 2 can be utilized to elicit information. However, this may not elicit satisfactory information required to quantify the claim. Section 33 requests may have limited application given there are limits to what the injured insured can compel by way of evidence about an offer they were not party to. The insurer can attempt to procure a statement from an alleged employer. This may or may not meet with cooperation. Even if the employer agrees to provide a statement or participate in an interview, it is by no means clear that sufficient information would be obtained.

We are now starting to see cases where the alleged service provider receives a “job offer” after having provided Attendant Care services for a period of time (and then presumably realizing that no compensation will flow unless they demonstrate an economic loss). These post-accident offers raise significant evidentiary concerns, moreso than alleged pre-accident offers. The first question to be asked is how the offer would come about in the first place. If the alleged service provider is busy providing Attendant Care, how is it that they received an offer of employment out of the blue from a third party? If the service provider was otherwise engaged in provision of Attendant Care, how is it that they would make application for or come to be offered a job at 30 to 40 hours per week? Similar investigation is required into the “legitimacy” of this offer. Once again, the same concerns arise with regard to establishing an evidentiary foundation. Nonetheless, an insurer is obliged to be diligent in their inquiry given the potential application of the “deemed incurred” provisions in s. 3(8) of the Schedule. In some instances, if the offer is from a “reputable” employer and the alleged service provider consents to contact with the employer, then concerns may be allayed and sufficient information obtained.

Given the post-February 1, 2014 amendments, it is not just cursory or superfluous information which needs to be obtained. For instance, an insurer would need to be satisfied as to hours of work and whether or not those hours of work would be coincident with the time during which Attendant Care would be provided. For instance, if Attendant Care is required for overnight supervision and the job is 9 to 5, there may not be an actual loss sustained. This will be a consideration if shift work is a part of the contract.

More vexing perhaps is the issue of how the actual economic loss is quantified with respect to a job which has yet to be commenced. An employer can provide a salary range for the position offered. The actual amount is subject to negotiation between the parties. The job may also be subject to a probationary period. To what extent does this factor into the quantification? Just because an individual is offered a job and turns it down due to provision of Attendant Care services does not mean that the individual would have been successful in the job. Does this open the evidentiary floodgates to application of negative contingencies such as inability to do the job, maternity leaves, seasonal layoffs, plant closure and business failure? On the other hand, what about positive contingencies? Economic loss positive contingencies can include salary and productivity increases. In this regard, the inquiry becomes akin to proof of economic loss in a tort claim with the same contingencies.

How are these factors to be measured and how is evidence to be gathered to support actual economic loss and benefit quantification, particularly if this shifts over a period of time and is subject to both positive and negative contingencies of a job offered but not accepted?

In quantifying actual economic loss, the inquiry should also consider whether the actual economic loss is the loss of “gross income” or net income. Individuals above a certain income threshold are required to pay taxes and have statutory source deductions from their income. What about union dues, mandatory benefit plans and pension considerations? Actual economic loss is certainly less than the theoretical gross income loss.

While on the surface the post-February 2014 economic loss amendments for non-professional service providers appear simple and necessary to avoid windfalls to non-professional Attendant Care providers, when coupled with post-accident job offers and future contract scenarios, these may take on a life of their own and bring us back to the future (contract).