Appeals: Unconfirmed Referee Decisions : #167 - December 2, 2004

D E C I S I O N

Background

1. The Claimant has been approved for compensation at Level 3 pursuant to the Transfused HCV Plan.

2. The Claimant subsequently applied for compensation at Level 4.

3. The Claimant’s request for compensation at Level 4 was supported by his physician, Dr. K. Peltekian, MD, FRCPC, Hepatologist.

4. On July 29, 2004, the Administrator denied the Claimant’s application for Level 4 compensation on the ground that he had not provided a pathology report of a liver biopsy as required by the “Court Approved Protocol for Medical Evidence for Section 4.01(1) and 4.01(2) of Article 4 of the Transfused HCV Plan”.

5. The Claimant requested that the Administrator’s denial of Level 4 compensation be reviewed by a Referee.

6. An oral hearing was held on October 13, 2004. Written submissions were received from Fund Counsel on October 5, 2004 and October 29, 2004. A brief reply was received from the Claimant on November 9, 2004.

Findings

7. It is clear from the record that the Claimant suffers from medical disorders (“cardiac arrythymias” and “anticoagulation”) which make it unduly risky for him to have a liver biopsy.

8. It is the opinion of Dr. Peltekian, who has treated the Claimant for over five years, that if the Claimant “were to undergo a liver biopsy, such biopsy would more likely than not demonstrate that he...has developed fibrous tissue in the portal areas of the liver with fibrous bands bridging to other portal areas or to central veins but without nodular formation or nodular regeneration (i.e., bridging fibrosis)”. Indeed, Dr. Peltekian put the range of probability at between 80% and 90%.

9. The Administrator does not dispute the foregoing; however, it is the Administrator’s position that the Court Approved Protocol only permits entitlement to Level 4 compensation under the Transfused HCV Plan on the basis of a liver biopsy. Unfortunately for the Claimant, I am compelled to agree with the Administrator even though I am satisfied that the Claimant probably has stage 3 liver disease which corresponds with compensation Level 4.

10. The Court Approved Protocol under the Transfused HCV Plan is very clear on this point. It states:

“COURT APPROVED PROTOCOL FOR MEDICAL EVIDENCE FOR SECTION 4.01(1) AND 4.01(2) OF ARTICLE 4 OF THE TRANSFUSED HCV PLAN AND THE HEMOPHILIAC HCV PLAN

This Protocol sets out the acceptable medical evidence for Section 4.01(1) and 4.01(2) of Article 4 of the applicable Plan. Acceptable medical evidence for Section 4.01(3) of the applicable Plan and/or Section 4.01(5) of the Hemophiliac HCV Plan will be dealt with by further court approved protocol(s), if required.

...

DISEASE LEVEL 4

To satisfy the medical evidence requirement at Section 4.01(2) of the applicable Plan, the Approved HCV Infected Person must deliver to the Administrator a satisfactorily completed TRAN2/HEMO2 Treating Physician Form which indicates that the HCV Infected Person has developed fibrous tissue in the portal areas of the liver with fibrous bands bridging to other portal areas or to central veins but without nodular formation or nodular regeneration (‘bridging fibrosis’) as confirmed by a copy of a pathology report of a liver biopsy.”

[emphasis added]

11. The Court Approved Protocol is binding on the Administrator, arbitrators and referees alike. The relevant articles of the Settlement Agreement provide as follows:

“ 9.01 Appointment of Joint Committee

The Courts will appoint a Joint Committee with such powers, rights, duties and responsibilities as the Courts direct.

9.02 Joint Committee’s Duties

Without limiting the generality of the foregoing, the duties and responsibilities of the Joint Committee will include:

... (b) establishing protocols, which must be approved by the Courts, for the Administrator, Trustee, Referees and Arbitrators for the administration of this Agreement and for the processing and payment of Claims, and rescinding or amending any of such protocols with the approval of the courts; ... [emphasis added]

10.01 Supervising Role of the Courts

(1) The Courts will issue judgments or orders in such form as is necessary to implement and enforce the provisions of this Agreement and will supervise the ongoing performance of this Agreement including the Plans and the Funding Agreement. Without limiting the generality of the foregoing, the Courts will:

... (h) approve, rescind or amend the protocols submitted by the Joint Committee ...”

12. Finally, Article 4.01(5) of the Transfused HCV Plan itself states:

“The medical evidence to be delivered pursuant to this Article Four is such medical evidence as is generally accepted by the medical profession and approved by the Courts.”

13. Referee Shapiro had occasion to consider the status of the “Court Approved Protocol for Medical Evidence for Section 4.01(1) and 4.01(2) of Article 4 under the Hemophiliac HCV Plan” in a decision dated March 10, 2003. In that case, referee Shapiro was concerned with the status of standard operating procedures (“SOPs”) rather than court approved protocols and he contrasted them as follows:

“It must be observed that ‘protocols’, such as the Court Approved Protocol for Medical Evidence for Sections 4.01(1) and 40.1(2) [sic] of Article 4 (which involve claims for fixed payments and loss of income) are, unlike SOPs, court approved. That is, if the SOP in question had instead risen to the status of a court approved protocol, there could be (subject to a determination as to the timing of its applicability) no question as to its vires, applicability and binding authority on Referees.

However, a careful analysis of the interaction of the foregoing provisions of the Settlement Agreement leads to the conclusion that the SOP must be characterized as subordinate to the Settlement Agreement. Therefore, I find that to the extent that the SOP purports to place a more onerous burden on Claimants than the already onerous hurdles set out in the Settlement Agreement and Plan, these more onerous burdens are ultra vires the authority of the Administrator under the Settlement Agreement and Plan and therefore not binding on a Referee.”

[emphasis added]

14. I agree with referee Shapiro that court approved protocols are binding in nature and it follows, therefore, that I would be exceeding my jurisdiction if I were to overrule the Administrator and direct that the Claimant receive Level 4 compensation in the absence of a liver biopsy.

15. I hasten to add, however, that I consider this result to be unjust and I suspect that the Administrator is of the same view.

16. The “Court Approved Protocol for Medical Evidence for Section 4.01(1) and 4.01(2) of the Hemophiliac HCV Plan” has been amended to allow for alternative forms of proof where liver biopsies are too risky. Based on Dr. Peltekian’s evidence, the Claimant would meet the test under the amended Hemophiliac Protocol. I understand from Fund Counsel that the Joint Committee will be proposing a similar amendment to the Protocol under the Transfused HCV Plan next June. I would urge the Joint Committee to put the proposed amendment forward at the earliest opportunity in order to rectify the injustice to the present Claimant and to avoid any similar injustice in the future.

17. When the Transfused Protocol is amended, as seems probable, the Claimant should automatically qualify for Level 4 compensation, based on the findings herein, retroactive to the date the TRAN2 Form completed by Dr. Peltekian was filed with the Administrator.

DATED at Halifax, Nova Scotia, this 2nd day of December, 2004.

S. BRUCE OUTHOUSE, Q.C.
Referee