Withheld IRB Payments and Special Damages

If you’re injured in an auto accident and you cannot work as a result, you may be eligible for an income replacement benefit (IRB) of up to 70% of your weekly income, to a maximum of $400.

IRB’s are an accident benefit, which are intended to provide a minimum amount of compensation to injured motorists for things like medical bills and lost income. Those benefits are available to all parties involved in an accident regardless of who was at fault, but that doesn’t stop insurers from trying to deny them for various reasons.

K.K. vs. Aviva General Insurance demonstrates the limitations of what is considered reasonable for an insurer when withholding IRB payments. The missteps of the insurer in this case resulted in the payment of IRBs, with interest as well as special damages.

The Case

The Applicant was diagnosed with concussion as well as physical and psychological impairments as a direct result of a motor vehicle accident. As such, he sought accident benefits from the Insurer, Aviva.

The Applicant was a self-employed taxi driver and also rented out his taxi to other drivers. He returned to work and continued to rent out his taxi following the accident, but he reduced his working hours. Two months following the accident, the Applicant had to stop working and his family physician stated in an OCF-3 that he was unable to perform the essential duties of employment and carry on his normal life.

For approximately 10 months, Aviva paid the Applicant IRBs, but then terminated the benefit. Their decision was based on a multidisciplinary assessment report performed on behalf of Aviva. The report determined that the Applicant was not incapable of performing the essential duties of his employment.

5 months after this initial denial, another OCF-3 was submitted, this time by the Applicant’s psychologist. Aviva approved the IRB benefit based on the Applicant’s diagnosis of a major depressive episode but then denied the IRB and a Treatment Plan for physiotherapy 3 months later. Again, Aviva based their decision on their own multidisciplinary assessment.

LAT Considerations

Following the second termination, the Applicant looked to the LAT to consider the case. The LAT would not only consider whether or not there was an entitlement to the IRB and a treatment plan for physiotherapy, but also whether he was entitled to special damages and interest. The latter of these could be awarded if it was found that that insurer denied the payment of benefits unreasonably.

The Tribunal relied on the evidence provided in the OCF-3’s rather than the multidisciplinary assessment reports provided by Aviva. They found that the OCF-3’s provided sufficient evidence of the physical and psychological injuries of the Applicant and, as such, he was entitled to IRBs.

The issue that Vice Chair Susan Mather took with the denial of the benefits based on the multidisciplinary assessment reports is that those reports focused on the physical abilities of the Applicant rather than his psychological injuries.

For example, the first report focused only on his physical ability to drive a taxi and run a business in the determination of whether or not he was capable of performing the essential tasks of his job while downplaying the psychological impairments that hinder him from working. The second multidisciplinary report had similar problems. In fact, this report did not make mention of any psychological impairment, contrary to the first report provided by Aviva as well as the diagnosis in the second OCF-3. Vice Chair Mather also found that the evaluation contained a number of errors.


Vice Chair Mather stated that Aviva ignored the diagnoses of their own assessors and failed to recognize how severe psychological problems could impact the Applicant’s ability to perform his job. She determined that the Applicant suffered a complete inability to perform the tasks of his employment based on his psychological injuries.

Because Aviva ignored the psychological component of his injuries, their termination and denial of benefits was found to be unreasonable. Meaning that the Applicant was also entitled to special damages. The Applicant was entitled to IRBs, the interest on the IRB amounts payable, as well as a lump sum award of approximately 50% of the IRB entitlement, also with interest.

The one item that the Applicant was not awarded was the Treatment Plan for physiotherapy. The LAT found the Plan to be unreasonable and unnecessary simply because there was no Treatment Plan provided. The LAT was not provided with a copy of the Treatment Plan and was not given any evidence of physiotherapy treatment prior to the Plan that was disputed in this case.

What to do When You’re Denied

Being denied IRBs can cause financial strain and, in turn, your ability to recover.  But, like any benefit, it’s not unlike insurers to attempt to deny or withhold IRBs.

If an insurer does so unreasonably, you may be entitled to more than just those payments with interest. As this case demonstrates, the LAT is willing to provide special damages to Applicant’s that have been unreasonably denied. If you’ve been denied an accident benefit, don’t accept your insurers decision as the final one. You may have a case against them if you can demonstrate that your claim has been denied unreasonably. And how do you know if their reasoning falls into this category? Contact Sharma Law and find out.

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