{"id":3011,"date":"2019-01-21T09:00:23","date_gmt":"2019-01-21T14:00:23","guid":{"rendered":"http:\/\/stage.tbkdev.com\/dev\/davismartindale.com\/src\/?p=3011"},"modified":"2020-06-15T12:26:55","modified_gmt":"2020-06-15T16:26:55","slug":"considering-big-picture-to-determine-dependency","status":"publish","type":"post","link":"https:\/\/stage.tbkdev.com\/dev\/davismartindale.com\/src\/considering-big-picture-to-determine-dependency\/","title":{"rendered":"Considering \u201cBig Picture\u201d to Determine Dependency"},"content":{"rendered":"

[vc_row][vc_column][basic_container container_size=”container container-narrow” bg_overlay=”overlay-light”][vc_column_text]In the recent decision released on December 21, 2018, between Pafco Insurance Company (Applicant) and Wawanesa Mutual Insurance Company and Western Assurance Company (Respondents), Arbitrator Novick concluded that Mr. Austin Henry Jr. was principally dependent for financial support on his father, Mr. Austin Henry Sr., at the time of the accident and was accordingly an insured under the Pafco policy.\u00a0 As a result, under Section 268(2)1 of the Insurance Act<\/em>, Pafco is the insurer with the highest priority to pay benefits.<\/p>\n

Background<\/h5>\n

Mr. Henry Jr. (the \u201cClaimant\u201d) was living with his mother and father at the time of the accident in Muncey, Ontario located in a community within the Munsee-Delaware Nation (Reserve).\u00a0 For six months in the year before the accident, the Claimant lived with his girlfriend in an apartment in London, Ontario.\u00a0 The Claimant had graduated from high school in London approximately one year before the accident.<\/p>\n

The Claimant was receiving $600 per month from Ontario Works at the time of the accident.\u00a0 In the year before the accident, it was calculated that Mr. Austin Henry Jr. received $2,304 cash for helping his father with his cleaning business and $913 from his summer job performing maintenance at a healing lodge.<\/p>\n

A few weeks before the accident, the Claimant enrolled in a program called Fostering Aboriginal Success in Trades and Technology (\u201cFASTT\u201d) where he participated in different trades at different locations each week.\u00a0 All costs were provided by the program and the Claimant received a $40 per diem stipend to cover the costs of meals.<\/p>\n

The Claimant\u2019s father provided the Claimant with $50 per week in spending money and stated he provided additional financial support to the Claimant from time to time.\u00a0 The Claimant testified that he paid rent of $200 per month to his parents and contributed $100 per month towards groceries.\u00a0 However, given the limited evidence supporting the Claimant\u2019s contributions to the household prior to the accident, Arbitrator Novick found it unlikely that the Claimant would receive spending money from his father and then pay a similar amount back to his parents in the form of rent.<\/p>\n

Determining Dependency<\/h5>\n

Two accounting expert reports were prepared, one on behalf of Pafco and the other on behalf of Wawanesa.\u00a0 Each report calculated the Claimant\u2019s financial dependency considering LICO statistics.\u00a0 The report prepared on behalf of Pafco also calculated the Claimant\u2019s financial dependency considering the financial information provided by the Claimant and his father.<\/p>\n

Arbitrator Novick states the basic principles to determine dependency require that the four following factors are considered \u2013 amount of dependency, duration of dependency, the financial needs of the individual in question and their ability to be self-supporting.<\/p>\n

If an individual provides for more than 50% of his or her expenses or needs, they are not principally dependent on anyone else.\u00a0 There are two ways to determine whether an individual provides for more than 50% of his or her needs \u2013 gather specific financial information to quantify the claimant\u2019s financial needs or living expenses or use statistics to estimate an individual\u2019s personal or household expenses considering the size of community in which they reside.\u00a0 Arbitrators and judges have determined that the financial information received by parties is likely \u201chighly artificial and necessarily inaccurate\u201d.\u00a0 This is concluded by Justice Myers in Allstate Insurance Company v. ING Insurance and Aviva Canada Inc.<\/em> (2015).<\/p>\n

Arbitrator Novick states, \u201cI find that using LICO data to estimate the Claimant\u2019s expenses in this case would ignore the reality of his circumstance for much of the period in question\u201d as the Claimant and his parents were \u201cstatus Indians under the Indian Act\u201d.<\/p>\n

Conclusion<\/h5>\n

Given the unique situations in this case, Arbitrator Novick argued that looking at the \u201cbig picture\u201d of the Claimant\u2019s life at the time of the accident is the most reliable approach to determine principal financial dependency rather than relying on figures and assumptions.<\/p>\n

Arbitrator Novick concluded that the Claimant had not achieved financial independence or developed a plan to do so, at the time of the accident.\u00a0 Specifically, the Claimant was living in his parents\u2019 home and did not contribute to any of the household expenses.\u00a0 The Claimant\u2019s father drove him where he needed to go and gave him $50 in spending money each week.\u00a0 The Claimant had no real work history and his earnings consisted mainly of cash paid from his father.\u00a0 As a result, Arbitrator Novick found the Claimant had not achieved any financial independence as he was principally dependent on his father for financial support at the time of the accident.<\/p>\n

Read the decision in full detail here:<\/h4>\n

Pafco Insurance Company v. Wawanesa Mutual Insurance Company & Western Assurance Company<\/em><\/a>[\/vc_column_text][\/basic_container][\/vc_column][\/vc_row][vc_row][vc_column][basic_container]

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A growing trend has emerged recently as it relates to individuals making a claim for income replacement benefits (\u201cIRBs\u201d). \u00a0More frequently than ever, insured\u2019s seem ...<\/p>\n\t\t\t\t<\/div>\r\n\t\t\t\t\t\t\t\t\tRead More<\/span>\r\n\t\t\t\t\t\t\t<\/a>\r\n\t\t\t\t\t\t\t\t\r\n\t\t\t\t

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For self-employed individuals seeking to claim an income replacement benefit (\u201cIRB\u201d), the calculation of their pre-accident gross weekly income is not always straightforward.\u00a0 Two recent ...<\/p>\n\t\t\t\t<\/div>\r\n\t\t\t\t\t\t\t\t\tRead More<\/span>\r\n\t\t\t\t\t\t\t<\/a>\r\n\t\t\t\t\t\t\t\t\r\n\t\t\t\t

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In the LAT decision released on January 13, 2020, T.A.K. v Aviva General Insurance Company (18-008232\/AABS), the Adjudicator provides interpretation for the Section 8(1) adjustment ...<\/p>\n\t\t\t\t<\/div>\r\n\t\t\t\t\t\t\t\t\tRead More<\/span>\r\n\t\t\t\t\t\t\t<\/a>\r\n\t\t\r\n\t\t\t\t\t

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Prior to the accident, both parties agreed the Applicant was employed earning $19,847.96 during [...]","protected":false},"author":2,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[11],"tags":[],"class_list":["post-3011","post","type-post","status-publish","format-standard","hentry","category-insurance-claim-and-litigation-updates"],"acf":[],"yoast_head":"\nConsidering \u201cBig Picture\u201d to Determine Dependency - Davis Martindale<\/title>\n<meta name=\"description\" content=\"Summary of LAT decision: claimant was principally dependent for financial support on his father at the time of the accident and insured under the policy.\" \/>\n<meta name=\"robots\" content=\"noindex, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Considering \u201cBig Picture\u201d to Determine Dependency - 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