Another in the Ontario workers’ compensation series.

The Rule’s Genesis – 1901

Prior to the introduction of the workers’ compensation system in Ontario in 1915, a worker’s remedy for an injury suffered in his or her workplace was, of course, a law suit against the employer, claiming damages for negligence, and in the calculation of those damages the thin skull rule was well established. In its 1985 decision in Janiak v. Ippolito  the SCC identified the origin of the rule to be the 1901 decision of the English Kings Bench in Dulieu v. White & Sons.

Paragraph 10 of the Wilson J.’s judgment in Janiak reads as follows:

10.   It is, of course, well established that damages for aggravated injuries consequent on some pre‑existing infirmity of the plaintiff are recoverable even if the infirmity is of a psychological nature … [citations omitted] … As Geoffrey Lane J. said in Malcolm v. Broadhurst, [1970] 3 All E.R. 508, at p. 511, “there is no difference in principle between an egg‑shell skull and an egg‑shell personality”. Indeed, it would seem that the locus classicus of the “thin skull rule”, the decision of Kennedy J. in Dulieu v. White & Sons, [1901] 2 K.B. 669, was in fact a case of aggravated injuries which were triggered by the impact of the defendant’s tortious act on the plaintiff’s inchoate psychological hypersensitivity.  [Emphasis added.]

As will be seen from that passage, the general right in a civil-law negligence claim to compensation for physical injuries aggravated by a pre-existing but inchoate physical or psychological infirmity – that is, by the pre-accident existence of an asymptomatic thin skull or a frail spirit – was accepted by the Court to have been long settled, beginning in 1901.

The Rule’s Status in the System – 1915 to 2012

1915

For workers injured at work, the workers’ compensation system took the place of the common law tort system of personal injury litigation as it existed in 1914 and the thin-skull rule became a part of that new system.  The intent to include the rule in the new system may be seen from the Legislature choosing to grant injured workers compensation for injuries “arising out of and in the course of their employment” and for disabilities or impairments “resulting” from those injuries – all phrases at least as fully inclusive of consequences as the common law’s standard liability trigger: “caused by”.

1998 – Confirmed by the Board’s General Counsel to be a System Cornerstone 

Seventeen years ago, in 1998, the Board’s own General Counsel and Vice-President of Legal Services at the time – Mr. Paul Holyoke – had occasion to officially confirm that it was the modern Board’s strongly held view that the thin skull rule governed the determination of permanent impairment benefits.  In a formal, written submission that Mr. Holyoke made to WSIAT on behalf of the Board in one of the Tribunal’s proceedings in 1998, the General Counsel had this to say:

The ‘thin-skull’ principle, which holds that one takes a worker as one finds him or her, is a cornerstone of the workers’ compensation (and workplace safety and insurance) system.  …

If a worker has suffered a personal injury by accident arising out of and in the course of employment, the Act requires the Board to provide benefits for the consequences that ‘result from’ the injury.  If a consequence ‘results from’ the injury, nothing in the Act permits the Board to reduce the benefits to account for any non-work-related factors that may have combined to contribute to that consequence.  If the accident is found to be work-related, the worker is entitled to the full benefit provided by the statute for any consequence that results from the accident. …  (Emphasis added.)

Mr. Holyoke’s submission was quoted with approval in the Appeals Tribunal’s decision in the 1998 proceedings and accepted by the Tribunal as a correct statement of the law.  See WSIAT Decision No. 63/98R, at para. 10.

1987- Appeals Tribunal Confirms the Rule’s Status – Decision No. 915

There was also an earlier occasion when the Appeals Tribunal was itself required to revisit the reasons for according legal status to the thin skull rule in Ontario’s compensation system.  In 1987, in WCAT Decision No. 915, having found that chronic pain resulting from a work injury was compensable, the Tribunal had then to consider the legal relevance of the pre-existing conditions contributing to the chronic pain syndrome.

The passages from the 915 decision in which the applicability of the thin skull rule was affirmed are set out in the Appendix at the end of this post.

1950 – Royal Commission Affirms Rule’s Status

It is also pertinent to note that 65 years ago – in 1950 – the applicability of the thin skull rule to the determination of benefits for permanent impairments was explicitly confirmed by a Royal Commission.  See the account of the Roach Commission Report in the APPENDIX below.

Employers’ Challenges, and Board and Tribunal Confirmation of the Rule –  2000 to 2010

In Ontario, the applicability of the thin-skull rule in the determination of permanent impairment benefits did become something of an issue beginning in the new century.

At that time, some employers began to argue that, properly interpreted, the Board’s own published policies as they then existed could be read together as authorizing the discounting of permanent impairment benefits because of the impact of asymptomatic, pre-existing conditions.  The policies in question were Policy No.s 18-05-05 (The Effect of a Pre-existing Impairment) and 14-05-03 (Second Injury and Enhancement Fund) –

But, until the hijacking in 2012, the Board’s adjudicators consistently rejected those arguments, and when employers appealed those adjudicative decisions to the Appeals Tribunal, the Tribunal invariably agreed with the Board and dismissed the appeals.

See for example, WSIAT Decisions No. 257/96; 530/05; and 13/09.   

In Short

Thus, throughout these many decades – as we have seen, from the record, at the very least since the Royal Commission in 1950 – the Board adjudicators, and, since its inception, the Appeals Tribunal, had consistently interpreted the Ontario workers’ compensation legislation in all its iterations, including the current Workplace, Safety and Insurance Act, as requiring the thin-skull doctrine to  be applied both to the initial entitlement to benefits following work-related injuries (which, of course, the Board continues to approve) and to the determination of benefits for permanent impairments or disabilities resulting from such injuries (which the Board has stopped approving).

THE HIJACKING

When It Happened

I have not been able to discover  exactly when the new regime first directed Board adjudicators to reduce impairment assessments when pre-existing, asymptomatic conditions could be presumed to be exacerbating the impairment.  But, judging from the Board’s adjudicative records as described in WSIAT decisions, it appears the abrogation of the thin-skull rule by Board adjudicators in impairment assessments had begun in or about January 2012.

See, for example, the record of the Board’s adjudicative decisions described in WSIAT Decisions No. 204/14,  No. 1970/13, and No. 236/14.

In or about that month, Board adjudicators began to interpret the Boards existing, published policies as authorizing the reduction of permanent impairment assessments because of the presumed impact on those impairments of pre-existing asymptomatic conditions.  These decisions effectively adopted the interpretation arguments that employer counsel had previously put forward; arguments which, as we have seen, both the Board and its adjudicators and the Tribunal had previously always rejected.

Thirty Four Months Without the Law

Eventually – thirty four months later, in November, 2014 – the Board discontinued relying on the existing policies with their doubtful provenance and adopted new or revised written policies.  These policies converted the Board’s  de facto practice since January 2012 of displacing the thin-skull rule in the assessment of permanent impairments into its official policy.

(As far as one can determine, the new or revised policies that are pertinent to the new policy on pre-existing conditions are these: one new policy entitled “Pre-existing Conditions”, and revisions to policies entitled “Determining Permanent Impairment” and “Determining the Degree of Permanent Impairment”.  For the detailed references to these policies, see the APPENDIX, below.)

I will address the issue of the legality of these official policy changes in due course, but first, consider the Board’s conduct in the thirty four months in which it operated “without the law” – the period between the de facto rejection of the thin skull doctrine in the practice of permanent impairment assessments by Board adjudicators, beginning in or about January 2012, and the Board’s official policy change in November 2014.

The record of Board decision-making as described in published WSIAT decisions, show that, throughout the latter period, the Board’s adjudicators overturned decades of Board policy and legal precedent respecting the thin-skull doctrine.  They did so by reducing injured workers’ permanent impairment assessments whenever pre-existing, asymptomatic conditions could be presumed to be making an injured worker’s permanent impairment worse than it would have been in the absence of the pre-existing condition.

Why it is Fair to Characterize this as a ‘Hijacking’

My characterization of this radical, overnight abrogation of the thin skull rule in the assessment of permanent impairments as a “hijacking” of the rule is justified in my submission by the following circumstances.

During these thirty four months, the Board overturned at least 65 years of settled law without any change in the legislation or regulations, and without any change in the Board’s published policies, and in breach of the legislation and its own policies as previously interpreted by the Roach Commission (see above), and by its own General Counsel (see above), and by its own adjudicators (see above), and by the Appeals Tribunal (see above), and without prior consultation with its stakeholders or, as far as one can see, notice to injured workers or their representatives, and, it seems likely, without the approval of its own Board of Directors***.

(***In September 2011 – about 3 months before the January 2012, de facto operational abrogation of the established Board interpretation concerning the application of the thin skull doctrine in the assessment of  impairments – the new management regime had persuaded the WSIB’s Board of Directors to agree that all policies “developed to interpret the provisions of the WSIA” , including those previously requiring the approval of the Board of Directors because they were classified as “strategic” policies, would now be considered operational policies within the delegated approval authority of the President and CEO, and that this extension of the President and CEO’s approval authority would also include approval of changes to policies previously approved by the Board of Directors because they were classified as “strategic” policies.  –  WSIB 2011, Q2 Report to Stakeholders.)

And it persisted in this arbitrary abrogation of the thin skull rule after the Tribunal had repeatedly held it to be unauthorized and after their own independent consultant, Mr. Jim Thomas, had strongly advised against it.

And they did it for the money.

The Board has acknowledged (see below) that its sole reason for taking so radical a step was to reduce the cost of the benefits to which workers are entitled.  It was, it effectively says, an exercise in adjudicative financial responsibility; which is to say an exercise in biased adjudication or, as I have labelled it, cost-averse adjudication.

WHAT THE PUBLIC INTEREST REQUIRED:  THE THOMAS REPORT

Introduction

In 2012, after its adjudicators had already initiated the abrogation of the thin skull rule as a matter of practice, the Board proposed to consult with its stakeholders about formal changes it intended to make in benefit policies – policies generally, but, perhaps surprisingly, including its policy respecting those same pre-existing conditions.

And in preparation for that consultation, it retained Jim Thomas to advise the President and CEO of the WSIB concerning the Board’s “Benefits Policy Review Consultation Process”.

Jim Thomas, is a lawyer, former tribunal adjudicator, former Deputy Minister of Labour and also former Secretary of the Management Board of Cabinet in the Ontario Government, and, among other things, a highly respected consultant in the art of managing change.

The Thomas Process

Following extensive discussions with Board officials and stakeholder representatives – discussions facilitated by a Discussion Paper published by Mr. Thomas in July 2012, and public hearings he conducted in October/November 2012 – Thomas delivered his report.  The report was delivered on May 30, 2013 – 17 months before the Board officially amended its policies concerning the elimination of the thin skull rule ; which is to say half way through the “without the law” period of  ad hoc, rule abrogation.

The Context for the Thomas Report

It is apparent from his report that Jim Thomas was fully attuned to the new management regime’s preoccupation with the need to reduce benefit costs.  He would also have been aware that the Board had already adopted an ad hoc practice of reducing benefits because of pre-existing conditions.  From his discussions with all stakeholders, including advocates for injured workers, he may be taken to have known that appeals from the post-January 2012 decisions in which the thin-skull rule had been ignored were being filed with the Appeals Tribunal while he was preparing his report.

It is that context – and that timing – which makes his advice to the Board that cost considerations are not an appropriate or lawful reason for reducing injured workers’ entitlements especially telling.

The Thomas Advice

The Report’s relevant passages may be found at page seven.  (The formatting of the Report’s paragraphs have been changed for easier reading, and any emphasis has been added.)

THOMAS:

….

If the WSIB believes that the work-relatedness line is being drawn in the wrong place, the WSIB needs to make the case for moving the line.

And when the WSIB does make the case for re-drawing the line, the case should be made for work-related and not cost reasons.

Entitlement to benefits is established through causation provisions in the Act – through the application and interpretation of “arising out of and in the course of employment” and phrases such as “results in”.

None of those provisions includes the WSIB’s ability to pay as a factor in deciding where to draw the line.

Part of ensuring the integrity of the Workers’ Compensation system is to ask the work-relatedness question when a benefits policy is being reviewed. Another component of ensuring the integrity of the system is to focus on work-relatedness as the motivator and not the cost to the system.

One might then ask that if cost cannot or should not be the motivator for changes in benefits policies, how can the WSIB achieve its legislated goal of being a financially responsible and accountable organization?  …

If benefits costs go up, are the additional costs to be borne solely on the shoulders of employers? Much of the answer, I believe, lies not in narrowing entitlement for the purpose of saving money but in exploring the other levers that the WSIB has at its disposal. …

If the WSIB is convinced that the benefits entitlement regime is too expensive, what can it do about it?

If the WSIB were to reach this conclusion and was satisfied that the only remaining solution to a funding problem is by narrowing benefits entitlements, the time might have come for the WSIB to make its case to the government and ask for legislative change.

The legislative process is the appropriate vehicle for addressing changes in entitlement that would be substantial enough to impact the cost structure. …

THE LEGALITY ISSUE

The Board’s Argument

The authorization the Board relies on for its abrogation of the thin skull rule in assessing permanent impairment benefits is the mandate in section 1 of the Act that it “provide  benefits in a financially responsible and accountable manner”.   It argues that section 1 entitled it to change the decades-long interpretation of the Act’s coverage of the consequences of a work-related injury for the sole reason that the change reduced the system’s costs.

It may be noted that section 1’s  financially responsibility mandate was also in place when the Board’s previous General Counsel affirmed that the law required the thin-skull doctrine to be applied in the determination of benefits for permanent impairments; moreover, it is a mandate that has obviously been implicitly a part of the Board’s obligations from the inception of the system in 1915.

Tribunal-Denial – More of the Same

My own research (limited to the decisions published in CanLII) has turned up twenty-one WSIAT decisions in which Board adjudicative decisions from its thirty-four month “without the law” period of arbitrary abrogations of the thin-skull rule were overturned.  They were overturned  on the basis that the discounting of permanent impairment benefits because of the impact of pre-existing asymptomatic conditions was not authorized – not authorized by the law generally and not by the then current Board policies.  (See the APPENDIX below for the list of decisions.)

But, because of the long delays in the appeal processes, not all of the appeals from the Board’s decisions during this period of unauthorized departure from the thin skull rule have been completed.  There are likely to be another 20 or 30 of those decisions still moving through the pipeline, for an estimated total of about 50 appeals – all of them have found or will find the Board’s discounting of permanent impairments because of asymptomatic, pre-existing conditions to be, under the law and policies in place during the pre-November 2014 period, unauthorized.

(Oct 21 edit: I have now learned that less than 50% of WSIAT decisions are published in CanLII, which means that the number of appeals that have decided against the Board’s position on the thin skull rule or will so decide, may be closer to 100 than 50.)

(Appeals challenging the legality of the Board’s new, November 2014 published policies, are not likely to reach the Tribunal until 2016 or later.)

In line with the Board’s general policy of Tribunal-Denial, during the thirty four months of this unauthorized decision-making, these WSIAT decisions – and the decisions to the same effect prior to January 2012 (see above) – had no impact on the Board’s decision-making.

The Board’s adjudicators carried on regardless of the fact that, to their and the Board’s certain knowledge, the Tribunal was routinely holding that what they were doing was incorrect in law. Injured workers who were entitled under the long-standing law still recognized by the Appeals Tribunal went without their benefits or, if they had the wherewithal to appeal, had their benefits delayed for two or three years.

The Legal Challenge

The Class Action

On April 16, 2014, the law firm of Fink & Bornstein filed a class action suit in Ontario’s Superior Court against the Workplace Safety and Insurance Board.  The law suit challenged the legality of the Board’s de facto, operational reversal in the pre-November 2014 period of the long-settled law respecting the role of asymptomatic, pre-existing conditions on the assessment of permanent impairment benefits.

The Statement of Claim alleged that in reversing that law the Board must be seen to have acted in bad faith, and, because it had done so knowing (the Statement of Claim alleged) that it was illegal to do so, it had perpetrated a misfeasance in public office.

Extensive damages were claimed.

The representative plaintiff was injured worker, Pietro Castrillo.  Mr. Castrillo had suffered an accident at work which caused a rotator cuff tear in his shoulder.  Surgery was required to repair the shoulder and his shoulder was left with “less than a full range of motion” – a permanent impairment.

The surgery had disclosed a pre-existing osteoarthritis condition in the shoulder.  The effect of the osteoarthritis prior to the work-related injury could not be measured and there was no evidence that it had caused any problem for the worker or any disruption in the worker’s employment prior to the accident.

On the basis of the presumed impact of the pre-existing, asymptomatic osteoarthritis on the permanent, range-of-motion deficit, and disregarding the thin-skull rule, the Board reduced the Non Economic loss benefit to which the worker would have been entitled under the old regime by 50%.

The Board’s Motion to Strike

The Board’s response to the class action suit was to bring a Rule 21.01 motion to strike the statement of claim for, inter alia, not disclosing a reasonable cause of action.

The Court Grants the Motion

On June 25, 2015, the Superior Court (Belobaba J.) granted the Board’s motion.  The Court’s reasons are confined to a page and a half endorsement on the Motion Record.

The Court concluded that all the plaintiff was really saying was that the Board’s decision to reduce his benefit because of the pre-existing condition was “wrong”, and held that operating behind what the Court characterized as “the toughest privative clauses known to Ontario law”, the Board was, in effect, entitled to be wrong, and interference in the decision was beyond the Court’s jurisdiction.

In the Court’s view, the remedy for the plaintiff and for the class of injured workers he represented, if any, was to appeal their respective individual decisions to the Appeals Tribunal. …

In its endorsement, the Court also took notice of the section-1 direction to the Board to provide benefits in a “financially responsible and accountable manner” and commented, in passing as it were, that “as a general rule, there is nothing inherently wrong with the WSIB trying to reduce overall costs”.

The decision has, of course, been appealed.

The Implications for the Administrative Justice System

Justice Belobaba’s, with respect, casual condoning of the Board’s view that it is entitled – or even perhaps required – to tailor its interpretation of a worker’s entitlement in a way that will best fit its cost reduction goals is a dangerous precedent for the administrative justice system generally.

The WSIA contains an explicit mandate for the WSIB to “provide” benefits in a financially responsible manner, but every administrative tribunal mandated to administer statutory benefits may be seen to have, at least implicitly, a responsibility to do so in a financially responsible manner; moreover, the omission in any particular statute of such explicit instructions can be easily remedied.

Thus, if a responsibility to administer a benefit scheme in a financially responsible manner were to be generally accepted as justifying – or requiring – an administrative tribunal to embrace a cost-averse bias in the exercise of its responsibilities as the system’s claims adjudicator, we would have signed on to a court-mandated further impoverishment of benefit systems that are already shamefully rule-of-law deprived.

In my opinion, it is not a view of the law that is compatible with the rule of law and the argument I would offer in support of that opinion is as follows.

THE CASE AGAINST COST-AVERSE BIAS IN ADJUDICATING STATUTORY RIGHTS

Distinguishing a Board’s Manager Role from its Adjudicator Role

The starting point for the case against cost-averse bias in the adjudication of claims by administrative agencies like the WSIB is recognition that, in interpreting a statute’s definitions of the system benefits, the administrative agency – the corporate entity – is not functioning as the system’s MANAGER, but as its ADJUDICATOR.  It is not a party to disputes about entitlement but the adjudicator of those disputes.

The Board would have it that the question is not what the law requires, but what the Board thinks is best in its own interest. Whereas the rule of law’s question is what does the law require.

This is true for all front-line administrators of statutory benefits, but, in pursuing the argument, I will resume referencing the specific context of the WSIB  and its administration of Ontario’s workers’ compensation system.

The Rule of Law’s Baseline Position

A cost-averse bias in the Board’s exercise of its role as the system’s manager is perfectly understandable – indeed, a requirement; but the rule of law does not permit such a bias in its adjudicative role.  In defence of a cost-averse bias in the exercise of its duty to hear and decide benefit claims, the Board cannot say: “oh well, we are only doing our duty to reduce costs”.  That would be a viable defence if the Board were a party to the claims disputes, but unlike a private insurance company, it is not a party to that dispute; it is the administrator of a benefits system in the public interest and the court’s surrogate – the adjudicator of claims entitlement issues.

Any close review of the WSI Act provides innumerable examples of the distinction the Act draws between the “Board’s” administrative or management function, and its adjudicative function.

Part III of the Act – the part devoted to defining the benefits – is replete with entitlement language and full of issues that can only be resolved on the basis of findings of fact by an adjudicator hearing evidence, interpreting the statute, and applying that interpretation to those findings of fact.  The Act makes it perfectly clear that the Legislature intended that in deciding entitlement claims from injured workers the Board was to play the role previously assigned to the courts – that is, the role of an adjudicator.  See in particular, the following (emphasis added):

Section 13(1) – “A worker who sustains a personal injury by accident arising out of and in the course of his or her employment is entitled to benefits under the insurance plan”.  [This is only the most obvious example; see, as well, the repeated direction:  “the Board shall decide the claim”.]

Section 26(1): “No action lies to obtain benefits under the insurance plan, but all claims for benefits shall be heard and determined by the Board”;

Section 26(2): “Entitlement to benefits under the insurance plan is in lieu of all rights of action (statutory or otherwise) that a worker, a worker’s survivor or a worker’s spouse, child or dependent has or may have against the worker’s employer or an executive officer of the employer for or by reason of an accident happening to the worker or an occupational disease contracted by the worker while in the employment of the employer”.

See also s. 132 giving the Board the powers of a “court” – summoning witnesses, etc.

These provisions make it clear that in deciding disputed benefit claims – in interpreting benefit definitions in the course of deciding disputed benefit claims – the Board is exercising its adjudicator function not its manager function; it is, as sections 26(1) and (2) make especially clear, acting as the courts’ surrogate.

The rule of law – the principles of procedural fairness – requires an adjudicator of rights to be independent and impartial and, in the interpretation of statutory language, to adhere to the common law rules of statutory interpretation.  As we know, those rules require the words of an Act to be read impartially, in their entire context and in their grammatical and ordinary sense harmoniously with the scheme of the Act, the object of the Act, and the intention of Parliament.

The rule of law does not allow adjudicative interpretations to be influenced by any personal interest in the outcome of the exercise; on its own terms, the rule of law would not permit the Board’s corporate adjudicative decisions to be distorted by a declared bias in favour of minimizing the Board’s costs.

Is Section 1 Effective in Amending the Rule-of-Law Position?

But, as we know, as long as the Supreme Court of Canada remains content that the rule of law requirement for impartial adjudicators has no constitutional protection except for adjudicators actually labelled “judges”, that rule-of-law position is open to being amended by any statutory provision. And the Board is arguing, in essence, that that rule-of-law position has been amended in this instance by section 1 of the WSIA, the section which directs it to “provide benefits in a financially responsible and accountable manner”.

The Laws’ Requirement for Unequivocal Clarity

But we also know that for a statutory provision to be read as overriding a rule-of-law principle the legislative intent in that respect must be “unequivocally clear”.

In Unjust by Design, that principle and the authority for that principle and the reason for that principle are addressed in detail.  See the following passages (at pages 213-214 – citations have been omitted):

… Perhaps the most pertinent example [of the requirement that statutes be interpreted in a manner congruent with “the fundamental principles of the common law”] is the rule that legislatures must not be taken to have intended to override an established rule-of-law principle or an established right unless the statutory language makes such an intention unequivocally clear.

Consider, for example, the following passages from the Supreme Court’s 2003 decision in Canadian Union of Public Employees (C.U.P.E.) v. Ontario (Minister of Labour) … in which in a back-handed but very clear way the Court establishes that … rule-of-law principles cannot be abrogated by legislation except with language of unequivocal clarity:

… Affirming the rule of interpretation that “courts generally infer that Parliament or the legislature intended the tribunal’s process to comport with principles of natural justice” (para. 21), the [Supreme] Court [in Ocean Port] nevertheless concluded that “[i]t is not open to a court to apply a common law rule in the face of clear statutory direction” (para. 22) [emphasis added by the Court]. Further, “[w]here the intention of the legislature, as here, is unequivocal, there is no room to import common law doctrines of independence” (para. 27) [emphasis added by the Court].

The reason for placing this interpretive burden of unequivocal clarity on those who would argue that a legislature intended that the requirements of procedural fairness or other established rule-of-law rights be disregarded is to ensure that established norms such as these, are not swept away inferentially or consequentially as a result of the legislature’s not paying enough attention.

The point is made expressly in the following statement by the House of Lords in its 2000 decision in R. v. Secretary of State for the Home Department, ex p. Simms:

[T]he principle of legality means that Parliament must squarely confront what it is doing and accept the political cost. Fundamental rights cannot be overridden by general or ambiguous words. This is because there is too great a risk that the full implications of their unqualified meaning may have passed unnoticed in the democratic process. In the absence of express language or necessary implication to the contrary, the courts therefore presume that even the most general words were intended to be subject to the basic rights of the individual …

Is Section 1 Clear enough?

In Mr. Castillo’s case,  the requirement of impartiality in the interpretation of the Legislature’s intent is said – said by the Board – to have been abrogated by section 1.  Section 1, the Board says, effectively requires the Board to abandon its rule-of-law duty of impartiality in its adjudicator role and to adopt a cost-averse bias.

In my opinion, the wording of section 1 does not begin to provide the unequivocal degree of clarity that would be required for one to safely conclude that so dramatic a departure from rule-of-law principles  was what the Legislature in fact intended.

The Board is, of course, the administrator of benefits.  In this role, it does “provide” benefits – i.e., in the sense of delivering them; writing the cheques; finding the funds to pay for them; trying through various strategies to minimize them (by, for example, promoting safer workplaces, encouraging employers to co-operate in getting injured workers back to work, finding  replacement employment, etc.).  And it is the latter “provision” of benefits in the administrative/management sense that section 1 requires the Board to perform in a financially responsible and accountable manner.

But, before it can begin to administer – i.e., to provide – a particular worker’s benefits, the Board must first perform its function as the adjudicator of the worker’s “claim”.  It must decide – after, as we have seen, a statutorily mandated “hearing” – the benefits to which that worker is entitled.  And it must make that decision  in light of its findings of fact and its interpretation of the statutory language.

When it is adjudicating a worker’s claim, the Board cannot be said to be “providing” benefits, but only determining what benefits the Legislature requires it to provide.

Thus, the section-1 directive to “provide” in a “financially responsible manner” cannot reasonably be seen to apply to the Board’s exercise of its adjudicative function.  The meaning of the section is not clear enough to support so serious a departure from the rule of law.

The section did not authorize the Board’s change of practice in the “without the law” period, nor does it authorize the 2014 policy revisions.

In short, yes, there is something inherently illegal in the WSIB enlisting its adjudicative duties in aid of its cost reduction strategies.   And it is for that reason that it is necessary to challenge the Castillo court’s casual suggestion to the contrary, and why an appeal of the Belobaba J. decision was very much in the public interest.

A General Conclusion

If, as I am convinced, the system pursuant to which the WSIB adjudicates benefit entitlement issues is necessarily a system of justice, we have here another instance of the administration of justice placed in disrepute by that system’s administrative body confusing its administrative role with its adjudicative role.

If systems of benefit administration such as the WSIB’s are not seen to be justice systems – or to incorporate justice systems – but to be merely systems for the exercise of managerial discretion, then, in my opinion, the basic principles of the rule of law would require us to rethink and restructure those systems.

 

APPENDIX

Tribunal’s 1987 assessment of the thin-skull doctrine in Decision No. 915

In 1987, the legal status of the thin skull doctrine in Ontario’s compensation system was explicitly confirmed by a unanimous five-person, tripartite panel of the then new Workers’ Compensation Appeals Tribunal (WCAT, now WSIAT, operational as of October 1, 1985) in its decision in the Tribunal’s Pension Assessment Appeals Leading Case, Decision No. 915.

(In the interest of full disclosure: I was Chair of that Tribunal and the Chair of the 915 panel and principal author of that panel’s decision.)

In the context of considering the entitlement of an injured worker to compensation for the consequences of an industrial accident, notably in that case a disability caused by enigmatic chronic pain triggered by the accident, the Decision No. 915 Panel had this to say on the general question of the extent of the compensation the system provided for consequences (Chapter 6-B, section 3, 3rd and 4th paras.):

That argument [that the legislation’s adoption of the “results from” language rather than the common law’s traditional “caused by” language shows an intention to give workers an even broader protection for consequences than the common law] has been adopted by the English Court of Appeal, and the English Court of Appeal’s lead in this respect has been followed by the Manitoba Court of Appeal and the Supreme Court of British Columbia. …

Ontario courts have not yet had occasion to consider that issue in a compensation context, but the Panel is satisfied to conclude at this point that at least the Legislature cannot have intended to provide workers with less coverage for disabling consequences of an industrial injury than the common law provides for disabling consequences of negligent injuries.

Furthermore, that the plain-meaning of the words leads to that conclusion should come as no surprise. There is nothing in the historical record to suggest that in giving up the right to sue and the right to damages for pain and suffering in exchange for the no-fault protection, it was intended that workers would accept, as well, a reduced breadth of protection in respect of consequential damages.

In a later passage in which it addressed the thin-skull doctrine directly, the 915 Panel offered this (Chapter 6-B, section 6, The Effect of Predispositions – the Thin-Skull Doctrine, 3rd para.):

The thin-skull doctrine also applies in workers’ compensation cases and for two reasons.

One reason is that permitting compensation to be denied or adjusted because of pre-existing pre-disposing personal deficiencies would very substantially reduce the nature of the protection afforded by the compensation system as compared to the court system for reasons that would not be understandable in terms either of the historic bargain or of the wording of the Legislation.

The other reason is that in a compensation system injured persons become entitled to compensation because they have been engaged as workers.  They have functioned as workers with any pre-existing condition they may have had. It seems wrong in principle that conditions which did not affect their employment as workers should be relied upon to deny them compensation as injured workers.

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The Roach Royal Commission Report 

The Hon. Justice Roach, was the commissioner appointed to inquire into and report upon, and to make recommendations “regarding the Workmen’s Compensation Act upon subjects other than detailed administration”.  And in his 1950 report he addressed the thin skull issue.

It appears that at that time, the Board’s practice may have been to ignore the rule, and  Mr. Justice Roach rejected this practice as not authorized by the Act.  He gave the example of a diabetic worker who suffered a minor injury to his toe.  His diabetic condition aggravated the injury and the whole foot must be amputated.  The Board told Justice Roach that the worker would only receive half the award normally given for the loss of a foot because the loss of the foot was partly caused by his pre-existing diabetic condition.  Justice Roach said this:

… In my opinion, such a policy is not authorized by the Act… All workmen are entitled to the full protection of the Act without any discrimination based on their physical condition.  One or two illustrations will show why this must be so.

Two workmen are struck on the head by a falling object.  One suffers a fracture of the skull, the other does not.  The one who was injured was found to have a thin skull.  Obviously, he should not be penalized on that account. … **  [Emphasis added.]

** For this account, I am indebted to the Injured Workers’ Consultants’ submission to the Board during the Board’s consultation process in 2013.

~~~~~

WSIAT Decisions Finding the Board’s Displacement of the Thin-Skull Doctrine from January 2012, to November 1, 2014 to be Unauthorized, as so far Reported in CanLII.

204/14
1970/13
236/14
1167/14
1153/14
588/14
607/14
1562/14
1982/14
2127/14
1646/14
77/15
2153/14
73/15
89/15
137/15
471/15
465/15
497/15
562/15
1604/15

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Board’s November 2014 Policy Changes

• Board Policy No. 15-02-03, Pre-existing Conditions, published November 3, 2014, applicable to “all decisions made on or after November 1, 2014, for all accidents”, and categorized as a “new policy”;

• Board Policy No. 11-01-05, Determining Permanent Impairment, published November 3, 20114, applicable to “all decisions made on or after November 1, 2014, for all accidents”, and noted as replacing 11-01-05 dated July 18, 2008;

• Board Policy No. 18-05-03, Determining the Degree of Permanent Impairment, published November 3, 2014, applicable to “all decisions made on or after November 1, 2014 for accidents on or after January 2, 1990”, and noted as replacing 18-05-03 dated October 1, 2011 and 18-05-05 dated October 12, 2004;