Executive Summary: Key Legal and Evidentiary Issues

• Whether the 2000 settlement complied with s. 9.1 of Regulation 664 requiring disclosure of commuted values and their basis.

• If the absence of a commuted value for unclaimed Attendant Care Benefits invalidated the agreement.

• Relevance of Opoku v. Pal in assessing insurer disclosure duties under Regulation 664.

• Whether the Licence Appeal Tribunal reasonably concluded the disclosure was sufficient given no claim was made for Attendant Care Benefits.

• Analysis of whether any deficiencies could have reasonably influenced the insured’s decision to settle.

• Whether the Divisional Court should consider issues not raised before the Tribunal, such as commuted values for Income Replacement and Medical Benefits.

Facts and procedural background

Mickey Rooney was involved in two motor vehicle accidents in 1996, one in September and the other in December. She claimed statutory accident benefits from her insurer, Allstate Insurance Company, under the Statutory Accident Benefits Schedule (SABS) in place at the time. The applicable SABS changed between the two accidents. On December 19, 2000, Ms. Rooney and Allstate entered into a full and final settlement of all accident benefits except for medical and rehabilitation expenses incurred after December 5, 2000. The total settlement was $30,000.

Years later, Ms. Rooney sought to rescind the settlement, asserting that Allstate failed to comply with its obligations under section 9.1 of Ontario Regulation 664, specifically failing to provide a commuted value for Attendant Care Benefits (ACBs) and a proper explanation of how that value was calculated. She also raised new arguments concerning Income Replacement Benefits and Medical Benefits.

Initially, the Licence Appeal Tribunal (LAT) rejected her claim because she had not repaid the settlement funds. Once repayment was made, the LAT revisited the matter and ultimately upheld the validity of the settlement, finding that Allstate had not been required to provide commuted values for benefits that were not claimed.

LAT findings and rationale

The LAT concluded that because Ms. Rooney had not made a claim for Attendant Care Benefits at the time of settlement, and no funds were paid toward them, Allstate was not obligated to calculate or disclose a commuted value. The Tribunal noted that including only the policy maximum in the disclosure did not invalidate the agreement, as the benefit quantum was effectively zero. The LAT reasoned it was not reasonable to expect insurers to compute the commuted value of benefits that were not claimed and whose potential value was undefined.

Additionally, the LAT found that the information provided by Allstate was adequate for Ms. Rooney to make an informed decision. It also concluded that the failure to provide more detailed commuted values did not violate Regulation 664 in the absence of an actual claim for the benefits in question.

Divisional Court’s legal analysis

Ms. Rooney appealed and also applied for judicial review. She relied heavily on Opoku v. Pal, where the court allowed rescission of a settlement because the insurer failed to provide a proper commuted value calculation and the assumptions used. However, the Divisional Court found Opoku distinguishable: in that case, the insured was catastrophically injured and had clear ongoing needs for future benefits. In contrast, Ms. Rooney had not claimed ACBs, there was no expert evidence of a future need, and the benefits were not included in the settlement sum.

The Court found no legal error in the LAT’s interpretation of section 9.1. The obligation to disclose a commuted value and explanation only applies when the benefit forms part of the settlement. It affirmed that when a benefit is not claimed, not assessed, and not included in the settlement, no commuted value is required. It further held that the LAT’s reasoning was both correct in law and reasonable in outcome.

The Court noted that any issue concerning commuted values for Income Replacement or Medical Benefits was not properly raised before the LAT, and as such, the Court declined to address those arguments. It held that Allstate’s disclosure concerning Income Replacement was imperfect, but a commuted value had been included. Medical Benefits were excluded from the release, making s. 9.1 inapplicable to them.

Outcome and costs

The Divisional Court dismissed both the appeal and the application for judicial review. It held that the LAT made no legal error and that its decision was reasonable. The court did not need to address whether the matter was barred by res judicata. Costs of $3,000 were awarded to Allstate as the successful party.