Part 2: How to Draft Defensible SABS Denial Notices
In Part 1, we discussed how the Court of Appeal’s decision in Varriano changed the discussion surrounding “medical and other reasons” under the SABS and clarified that the obligation depends on the actual basis for the insurer’s determination.
The practical challenge for adjusters is applying those principles in a high volume claims environment where timelines, templates, and operational pressures are constant realities. The question is no longer whether every notice contains medical language. The question is whether the notice meaningfully explains the determination being made on that particular file.
A Practical Framework for Drafting SABS Denial Notices
Adjusters work in an environment driven by timelines, high volume claims handling, and constant correspondence obligations. Templates, standardized wording, and automated processes are part of modern accident benefits practice. Problems usually arise when the notice stops reflecting the claim and starts reading like a form letter that could apply to anyone.
The SABS does not require perfect drafting. However, notices that rely on generic or conclusory language remain vulnerable to challenge where the explanation does not connect the insurer’s reasoning to the facts of the file.
The starting point is identifying the actual issue.
Sometimes the determination is described too broadly. Sometimes the notice defaults to generalized medical wording even though the real issue is procedural or eligibility based. In other cases, the notice simply announces a conclusion without explaining the reasoning behind it.
A treatment denial should not read the same way as a return to work stoppage. A causation dispute should not read the same way as a missing documentation issue. The notice should reflect the determination being made and the basis for the insurer’s position.
Once the issue is identified, the notice should explain the information relied upon in reaching the determination. That does not require lengthy summaries of every medical record or assessment in the file. The notice simply needs to identify the information that matters to the insurer’s position.
For example, if the issue involves a return to work, the notice should identify the return to work information being relied upon. If the issue involves treatment entitlement, the notice should identify the clinical findings, treatment history, or assessment information supporting the insurer’s position.
Several earlier LAT decisions criticized notices that relied on generalized statements untethered to the dispute. References to “medical documentation,” “clinical notes,” or “lack of support” may not adequately explain the insurer’s reasoning where the claimant cannot reasonably determine what issue the insurer is relying upon.
In some cases, the issue is not that the insurer has reached a final conclusion on entitlement, but that there is not enough information to properly assess the claim. In those situations, the notice should explain what information is missing and why it matters. Depending on the circumstances, the insurer may request additional information or an examination under oath in accordance with section 33, request an insurer examination under section 44, or seek other information necessary to assess entitlement. A notice explaining that the insurer cannot determine whether proposed treatment is reasonable and necessary because certain records or clinical information have not yet been provided will generally be more defensible than a premature denial unsupported by the existing file.
Practice Point
- Where the issue is insufficient information, rather than a final entitlement determination, the notice should clearly identify what information is missing, why it is required, and what procedural step the insurer is taking to obtain it.
The final step is explaining the reasoning itself. The notice does not need to sound sophisticated or medically technical. It simply needs to allow the insured person to understand what determination was made and why.
A notice stating, “The treatment plan is not reasonable and necessary,” may say very little about why the insurer reached that conclusion.
Conversely, explaining that the physiotherapy records document improved function and reduced pain complaints, and that further passive therapy is therefore not considered reasonable and necessary at this time, more clearly identifies the basis for the determination and the information being relied upon. “Based on the physiotherapy records provided, including reports noting improved function and reduced pain complaints, further passive therapy is not considered reasonable and necessary at this time.”
The strongest notices reflect genuine engagement with the file and the claimant’s circumstances.
Practice Point
- Before sending the notice, ask a simple question: if this dispute proceeded to a hearing tomorrow, would the explanation in the notice accurately reflect the insurer’s actual reasoning on the file today?
Why SABS Denial Reasons Must Match the File Evidence
One recurring theme throughout the caselaw is that the explanation in the notice should reflect the insurer’s position at the time the determination is made.
LAT adjudicators frequently examine whether:
- the notice matches the evidence in the file;
- the insurer’s hearing position differs from the original explanation;
- or the insurer is attempting to supplement inadequate reasoning after the fact.
Not every imperfect notice will be deficient. However, notices that appear conclusory, inconsistent, post hoc, or disconnected from the actual claim may become more difficult to defend during litigation.
The strongest notices are rarely the longest. They are usually the notices that clearly explain the insurer’s position to the insured person.
Practice Point
- The best notices are usually written by adjusters who understand the file well enough to explain the determination in plain language without relying entirely on templates or stock wording.
Common Mistakes in SABS Denial Notices
Several recurring problems appear throughout the caselaw. Notices that rely on generalized references to “medical documentation,” “clinical notes,” or “lack of support” may fail to explain the insurer’s position where the claimant cannot reasonably determine what issue is actually being disputed. Similarly, simply stating that treatment is “not reasonable and necessary” without explaining why may create compliance concerns.
The caselaw also demonstrates that adjudicators frequently scrutinize whether the insurer’s hearing position matches the explanation contained in the original notice. Explanations that evolve significantly once litigation begins may become more difficult to defend, particularly where the notice itself did not clearly identify the basis for the determination.
Practice Point
- A notice should explain the insurer’s reasoning in a way that reflects the file and the determination being made, not simply announce the insurer’s conclusion.
LAT Scrutiny and SABS Notice Compliance
The recent caselaw shows that compliance with the SABS notice requirements is not purely mechanical. Simply inserting medical terminology or referencing “clinical notes and records” will not necessarily protect a notice from scrutiny.
The distinction between mechanical compliance and substantial compliance matters. Mechanical compliance focuses on wording and standardized formats. Substantial compliance focuses on whether the communication explains the insurer’s position in a way that allows the claimant to understand the determination and decide whether to dispute it.
That is often how these issues are assessed at the LAT. A technically detailed notice may still attract scrutiny if it appears disconnected from the evidence or the claimant’s circumstances.
Knowing the file matters. That does not mean every notice needs to be lengthy or highly customized. However, the strongest notices are individualized enough that the claimant can understand why the insurer reached the determination.
This is particularly important in the accident benefits context, where communications are often directed to individuals who may be injured, unfamiliar with the claims process, or dependent on treatment and benefits. In many cases, disputes escalate because the claimant never understood the insurer’s reasoning in the first place.
Modern claims handling increasingly relies on templates, automation, and AI assisted processes. Those tools are useful and unavoidable in high volume claims environments. However, the recent caselaw demonstrates that standardized language should not replace file specific reasoning.
In practice, the strongest notices are usually the product of file knowledge rather than standardized drafting alone.
Practice Point
- Strong notices do not necessarily require more words. They require clearer reasoning that reflects the actual file and the actual dispute.
Key Takeaways for Drafting SABS Denial Notices
The earlier LAT cases increased scrutiny on generic denial wording and unsupported conclusions. Varriano clarified that the issue is not whether every notice contains medical language, but whether the insurer has explained the basis for the determination being made.
In practice, the strongest notices are not necessarily the longest notices. A short explanation that identifies the issue in dispute and connects it to the claimant’s circumstances will often be far more effective than a lengthy notice filled with generalized language that could apply to almost any claim.
A notice explaining that benefits are being stopped because the insured has returned to full time employment will usually be far more useful than several paragraphs of generalized language that never identifies the real issue. Similarly, a notice explaining that further treatment is not being approved because the treating physiotherapist’s clinical notes indicate improvement and reduced need for ongoing therapy will generally be more meaningful than broad references to “medical documentation” or “lack of support.”
That does not mean every notice must be lengthy or highly customized. Adjusters work in high volume environments where templates, automation, and standardized processes are unavoidable realities of modern claims handling. However, the caselaw increasingly demonstrates that substance matters more than length and that communication matters more than mechanical drafting.
This will become increasingly important as the upcoming SABS changes introduce more individualized coverage and optional benefits. Going forward, effective notice drafting will require not only an understanding of the caselaw, but also a careful understanding of the insured’s policy, available coverage, and the specific basis for the determination being communicated.
Ultimately, the strongest notices are the ones that reflect a genuine understanding of the file and communicate the insurer’s reasoning in a way the claimant can actually understand.
These issues continue to evolve, particularly with the upcoming SABS changes and increased scrutiny on claims communication. Our office regularly works with insurers and adjusting teams on accident benefits compliance and would be happy to discuss these topics further through practical seminars, workshops, or lunch and learn sessions. We are also happy to speak one on one with claims professionals who have questions about notice drafting, “medical and other reasons,” or current LAT trends.
