Ontario SABS Insurers Do Not Have To Justify EUO Reason

The Ontario Court of Appeal, in Aviva Insurance Company of Canada v. McKeown, 2017 ONCA 563 (CanLII) determined an insurer is not required to provide a "justification" to compel an applicant for benefits to attend an examination under oath pursuant to subsection 33(2) of the Statutory Accident Benefits Schedule.

The Court determined by requiring insurers to justify their exercise of conducting an EUO, the original judge drew "unsupported inferences, employed extraneous considerations, and failed to consider the entire legislative context of [the subsection]." The Court was also critical of the applications Judge for concluding (absent an evidentiary record) that EUOs would increase the cost of claims. The Court looked at the regime that the Legislature had set up for accident benefits and noted (paragraph 38):

...the legislature created the EUO as one mechanism in a major initiative to control the overall costs of the regime. The court must give effect to this object of the legislature and the evident legislative perspective that EUOs are a mechanism to reduce the overall cost of the system. Interpreting the provision on the supposition that EUOs increase costs, seems to me to run counter to the legislative objective for creating the provision to reduce costs.

The Court was also critical of the Judge's analogy of the EUO notice to civil litigation - that a litigant in a civil case would have reference to the pleadings to determine the issues which may be covered in the examination for discovery. The Court stated that the SABs process is intended to be non-adversarial and thus an analogy to civil litigation was "misplaced.":

[43] I regard the application judge's analogy to civil litigation to be misplaced. It does not matter that a claimant in a tort action would have advance notice of the insurer's position through a statement of defence before any examination for discovery would take place. Analogies to civil litigation are unhelpful in a statutory regime meant to replace tort law because the legislative object of the automobile insurance regime is to replace the tort resolution of disputes arising from automobile accidents with the process it prescribes. That an applicant "shall submit to...