Ontario Insurance Commission
Neutral Citation: 1993 ONICDRG 24 File No. A-002705
Between: Fahimeh Abedi, Applicant and Pilot Insurance Company, Insurer
Decision on Preliminary Issue
Preliminary Issue:
The Applicant, Fahimeh Abedi, was injured in a motor vehicle accident on March 3, 1992. She applied for and received no-fault accident benefits from Pilot Insurance. These benefits were paid under the No-Fault Benefits Schedule (Ontario Regulation 672, enacted under the Insurance Act, R.S.O. 1990, c. I.8.)
Mrs. Abedi's weekly benefits were terminated on September 2, 1992. She applied to the Ontario Insurance Commission to have this issue mediated, along with disputes about housekeeping expenses, expenses for medical treatment, and interest on any benefits that were owing, but had not been paid. Mediation was unsuccessful in resolving all of the issues and, therefore, Mrs. Abedi applied for arbitration.
On April 5, 1993, Mrs. Abedi signed a release. Pilot Insurance takes the position that all issues arising out the accident on March 3, 1992 have been settled and, therefore, the arbitration should not proceed.
The preliminary issue is:
Should the arbitration proceed notwithstanding the release signed by Mrs. Abedi on April 5, 1993?
Result:
The release, dated April 5, 1993, represents a final settlement of the issues in this arbitration and, therefore, the arbitration should not proceed.
Mrs. Abedi is entitled to receive her expenses, if any, that relate to the arbitration and were incurred after April 5, 1993, according to the Ontario Regulation 664, Dispute Resolution Expenses.
Hearing:
The hearing was held in North York, Ontario, on April 21, 1993, before me, David R. Draper, arbitrator.
Present at the Hearing:
Applicant: Fahimeh Abedi
Insurer's Representatives: Rudolph Lobl, Barrister & Solicitor Brenda McKillen, Supervisor of Accident Benefits, Pilot Insurance
Interpreter: Jalleh Kermanshahi, Global Translations (Farsi)
Witnesses: Fahimeh Abedi, applicant Ghamar Moshiri, interpreter, Global Translations
Exhibits:
Pilot Insurance submitted ten exhibits which are listed in Appendix A. In addition to the exhibits, the following documents were before the arbitrator:
- Report of Mediator, dated December 10, 1992.
- Application for Appointment of an Arbitrator, dated December 20, 1992.
- Response by Insurer, dated January 19, 1993.
Reasons for Decision:
1. The Facts
The facts in this case are mostly uncontested. Mrs. Abedi was involved in an automobile accident on March 3, 1992. She applied for benefits under the No-Fault Benefits Schedule from her insurer, Pilot Insurance. Mrs. Abedi was paid weekly benefits of $185 a week as an unemployed person. She also received benefits for medical, rehabilitation and transportation expenses.
Under the No-Fault Benefits Schedule, an insurance company can reasonably require an applicant to be examined by a doctor of its choosing. Mrs. Abedi was examined by Dr. Indech, who prepared a report, dated June 5, 1992. Based on this report, Pilot concluded that by September 3, 1992, Mrs. Abedi no longer suffered a "substantial inability to perform the essential tasks" in which she normally engaged prior to the accident and, therefore, was no longer eligible for weekly benefits.
I was not given much evidence about Mrs. Abedi's medical condition, but she acknowledged that she was involved in a previous motor vehicle accident in 1987. She agreed that her doctor has stated his opinion that she suffers from chronic pain as a result of this accident. Prior to the second accident on March 3, 1992, Mrs. Abedi also had been diagnosed as having "right-sided sympathetic muscular dystrophy". My understanding is that Pilot concluded that by September 3, 1992, she had substantially recovered from her injuries from the second accident. If she had any ongoing medical problems, it was believed that they resulted from the first accident.
Mrs. Abedi's weekly benefits were discontinued effective September 3, 1992. It appears that she was given advance notice of Pilot's decision because by September 1, 1992, she had applied for mediation (Report of Mediator).
The mediation did not successfully resolve the issues in dispute. Pilot was not convinced that Mrs. Abedi was eligible for any weekly benefits after September 2, 1992. During the mediation, Mrs. Abedi also asked for payment of weekly housekeeping expenses of $70 a week. Pilot agreed to pay housekeeping expenses of $60 a week for the 17 week period from September 3, 1992 to the end of 1992.
The mediator issued his report on December 10, 1992. On December 20, 1992, Mrs. Abedi applied for arbitration. A pre-hearing discussion was scheduled to take place at the Ontario Insurance Commission on March 24, 1993. The notice that was sent to Mrs. Abedi states (Exhibit 1):
The purpose of the pre-hearing discussion is to:
- identify and narrow the issues in dispute
- obtain agreement as to the facts
- ensure all relevant documents are exchanged before the hearing
- resolve preliminary objections and procedural problems
- attempt to settle the dispute
- set a date for the hearing
Ms. Nancy Makepeace was the pre-hearing arbitrator on March 24, 1993.
Mr. Lobl was present representing Pilot Insurance. Mrs. Abedi attended on her own. The Ontario Insurance Commission arranged for Ms. Jalleh Kermanshahi to act as an interpreter to assist Mrs. Abedi.
At the pre-hearing discussion, a surveillance videotape and some pictures of Mrs. Abedi, obtained by Pilot, were shown. Based on Mrs. Abedi's oral evidence, I find that she expressed an interest in settling the case for some amount of money. Mr. Lobl indicated that he would be prepared to recommend that Pilot make an additional payment of $2,160 in order to settle the matter. Mrs. Abedi was not satisfied with this settlement offer and indicated that she had ongoing medical problems. I find that Ms. Makepeace suggested that she might want to see her doctor again before finalizing any settlement. It was agreed that another pre-hearing discussion would be arranged to continue the settlement discussions after Mrs. Abedi had a chance to speak with her doctor. Ms. Makepeace also advised her that she could retain a lawyer to represent her. Mrs. Abedi indicated that she was considering doing so (Exhibit 2).
On March 25, 1993, Ms. Makepeace wrote to Mrs. Abedi and Mr. Lobl confirming their pre-hearing discussions of the previous day. The letter advised the parties that the arbitration hearing was scheduled for April 20 and 21, 1993, but that a further pre-hearing discussion was also scheduled to take place by conference call on April 1, 1993. In the letter, Mrs. Abedi was advised again about the possibility of involving a lawyer on her behalf.
Based on her oral evidence, I find that Mrs. Abedi called Mr. Lobl and said that she wanted to settle the matter for $5,000. Mr. Lobl advised her that he did not agree with that figure, but would discuss settlement with her during the conference call with Ms. Makepeace on April 1, 1993.
The pre-hearing discussion scheduled for April 1, 1993 did not take place because Mrs. Abedi was ill. It was re-scheduled for April 5, 1993 at the Ontario Insurance Commission.
On April 5, 1993, Mrs. Abedi and Mr. Lobl met with Ms. Makepeace. Ms. Ghamar Moshiri, a professional interpreter, was present to interpret for Mrs. Abedi. After an initial discussion, Mr. Lobl left the room. Mrs. Abedi acknowledged that she told Ms. Makepeace that she wanted to settle the matter. Ms. Makepeace advised her that she could not give legal advice and, once again, advised her of her option to retain a lawyer.
Mrs. Abedi decided to proceed with settlement discussions. Mr. Lobl offered to settle the matter for $2,160. I find that Mrs. Abedi proposed that the matter be settled for $2,640 and Mr. Lobl agreed on behalf of Pilot. Mr. Lobl had already prepared a release based on a payment by Pilot of $2,160 and, therefore, he changed the amount to $2,640.
The body of the release, as amended, states (Exhibit 6):
KNOW ALL MEN BY THESE PRESENTS that the UNDERSIGNED in consideration of the payment of an additional TWO THOUSAND, SIX HUNDRED AND FORTY DOLLARS ($2640.00), all inclusive of medical reports and costs, does hereby release and forever discharge PILOT INSURANCE COMPANY, their heirs, administrators, executors, personal representatives and successors and assigns, of and from all manner of actions, causes of action, suits, debts, accounts, bonds, covenants, contracts, claims and demands whatsoever up to the date hereof, AND IN PARTICULAR ANY AND ALL CLAIMS UNDER THE STATUTORY ACCIDENT BENEFITS CHEDULE INCLUDING WEEKLY INCOME BENEFITS AND SUPPLE-MENTARY MEDICAL CARE, AND REHABILITATION BENEFITS, arising out of a motor vehicle accident which occurred on March 3, 1992.
THE UNDERSIGNED HEREBY authorizes and directs the said PILOT INSURANCE COMPANY to pay the said funds, payable to myself, and for so doing this shall be your good and irrevocable authority.
Mrs. Abedi initialled the changes and signed the release. Ms. Moshiri also initialled the changes and signed the release as a witness and interpreter. Mrs. Abedi acknowledged that before signing the document, she was told by Mr. Lobl and Ms. Makepeace that if she signed the release, the matter "would be finished". She stated that she understood that it was a final settlement and "accepted it at the time".
I find that, after Mrs. Abedi signed the release, she tried to show Mr. Lobl a recent report from her doctor. He said that he did not need to see it because the matter had been settled.
After the meeting concluded, but before she went home, Mrs. Abedi had second thoughts and decided that she had made a mistake by signing the release. Her evidence about precisely what she did was difficult to follow. I accept, however, that she attempted to contact both Mr. Lobl and Ms. Makepeace, but neither was available.
On April 5, 1993, the same day as the pre-hearing discussion, Ms. Makepeace wrote to Mrs. Abedi and Mr. Lobl confirming their discussions (Exhibit 4). The letter states:
At the pre-hearing discussion of April 5, 1993, a settlement of all the issues in dispute between the parties was achieved. A photocopy of the release, signed by Mrs. Abedi and witnessed by Mrs. Moshiri, has been kept for our files. It is not necessary for the parties to give confirmation of settlement.
The arbitration hearing scheduled for April 20 and 21, 1993 will be cancelled, and the Commission's file in this matter will be closed.
The Dispute Resolution Practice Code provides that the arbitrator will prepare a settlement order at the request of the parties. In this case, no request was made for a settlement order. This is not surprising given the fact that a release was signed.
On April 6, 1993, Mr. Lobl wrote to Mrs. Abedi, as follows:
Further to our attendance at the office of the Ontario Insurance Commission, on April 5, 1993, I confirm settlement of all claims arising out of the motor vehicle accident of March 3, 1992, for the additional sum of $2,640.00. Enclosed is my principal's cheque in this amount payable to your order. I also enclose a copy of the Release executed by you.
I accept Mrs. Abedi's testimony that a copy of the release was not enclosed with this letter, but I find that she received a copy in the letter from Ms. Makepeace.
2. Conclusion
As stated above, the issue is whether this arbitration should proceed notwithstanding the release signed by Mrs. Abedi on April 5, 1993. For the following reasons, I conclude that the release represents a valid, final settlement and, therefore, the arbitration should not proceed.
I agree with the statement of Arbitrator Palmer in Mehmet Tuzin and Allstate Insurance Company of Canada (OIC File No. A-000596, dated May 28, 1992) that as a general rule:
It is not the role of an arbitrator to go behind a settlement which has been achieved between competent parties, in cases where there has been no fraud, mistake, misrepresentation, undue influence, or other vitiating factor.
The procedures under the Insurance Act and the Dispute Resolution Practice Code encourage the settlement of claims for no-fault benefits. Mediation is mandatory. The Act also specifically recognizes the role of settlement:
279(2) Any restriction on a party's right to mediate, litigate, arbitrate, appeal or apply to vary an order as provided in section 280 to 284 is void except where the restriction forms part of a settlement.
The desire to respect settlements, however, must be tempered by the legitimate interest of the Ontario Insurance Commission in ensuring that people involved in the dispute resolution process are treated fairly.
In my view, this case raises some potential concerns. First, Mrs. Abedi's first language is not English. In order to deal with this concern, the Commission arranged for an interpreter to assist her at the pre-hearing discussions. Mrs. Abedi did not suggest that there was any difficulty with the interpreter or that she did not understand the discussions. In fact, she acknowledged that she understood the settlement agreement.
I note that the release is not drafted in simple language. Based on Mrs. Abedi's oral evidence, however, I am satisfied that she understood that if she signed the release, she would not be able to claim any further benefits from Pilot related to her accident on March 3, 1992.
Second, Mrs. Abedi was unrepresented during the discussions, while Pilot was represented by an experienced lawyer. Although unequal bargaining power is a concern, an applicant cannot be required to retain a lawyer. I find that Mrs. Abedi was given every reasonable opportunity to retain a lawyer, but chose to proceed on her own. In my view, the involvement of Ms. Makepeace helped to ensure that the settlement discussions proceeded fairly. Although she made it clear that she could not provide legal advice, she acted as an intermediary between Mrs. Abedi and Mr. Lobl.
I do not find any evidence of coercion in this case. Mrs. Abedi acknowledged that she was never told that she had to sign the release, or that she could not have the matter determined by an arbitrator after a hearing. She specifically stated that, "nobody forced me to sign the document". This is not to suggest that Mrs. Abedi was not faced with a difficult decision. She thought that she should receive more than $2,640. She had to decide whether to accept less money, or go through the time, effort and uncertainty of a hearing. The need to make this kind of decision creates pressure, but the pressure to make a difficult decision is different from coercion.
There is also no evidence that the release was signed based on any mistaken understanding of the situation. This is not even a situation in which the settlement was reconsidered due to a change in the situation. This case simply involves one party having second thoughts.
After the release was signed, Mrs. Abedi reconsidered her decision and was upset that she did not get everything that she thought she deserved. As she stated, "I signed it, but I wasn't satisfied." At the hearing, she said repeatedly that if Pilot would pay her $5,000, she would be satisfied. When she was asked why a settlement for $5,000 would be more final than the release that she signed, she said, "Because that is what I had in mind from the beginning."
Mrs. Abedi seems to have difficulty accepting that Pilot had a different view of the case than she did. Pilot did not accept that she was entitled to any more benefits. Negotiation involves compromise. Settlement is usually the result of both sides accepting less than what they were after. In my view, that is precisely what happened in this case. Pilot agreed to pay additional benefits that it did not believe were owing and Mrs. Abedi agreed to accept less than $5,000. In my opinion, there is nothing to suggest that the settlement was unconscionable.
I conclude that an agreement was reached in this case. There was a "meeting of the minds". The release was Mrs. Abedi's acknowledgement of the agreement. If Pilot had decided not to pay her the $2,640, it is my view that she could have insisted that she be paid based on the release. It represented a binding agreement. Conversely, Mrs. Abedi was also bound by it.
In my opinion, Mrs. Abedi is asking for the benefit of a cooling-off period. Although the concept might be worth considering, I do not believe that it would be appropriate to create a cooling-off period in the face of a valid agreement between the parties which is to take effect as soon as it is signed. If a cooling-off period is to be created, the appropriate mechanism, in my view, is an amendment to the legislation or the Dispute Resolution Practice Code. I conclude that the release should be respected as a final settlement of the issues in this case and, therefore, the arbitration should not proceed.
3. Expenses
Under section 282(11) of the Insurance Act, an insured person may be awarded expenses incurred in respect of an arbitration proceeding. Although Mrs. Abedi did not specifically request expenses, I feel that I should deal with this issue.
Because she was not represented, it appears that her only expenses are the $50 filing fee and perhaps some travel expenses. I have found that the release, dated April 5, 1993, was a final release of all claims against Pilot relating to the accident on March 3, 1992. It specifically states that it is "all inclusive of medical reports and costs". In my opinion, the settlement figure of $2,640 must be viewed as including any expenses that Mrs. Abedi had incurred up to that point of the arbitration process, including the filing fee.
Mrs. Abedi asked for a hearing to determine if the release prevented her from proceeding with the arbitration hearing. I am satisfied that she genuinely believed that the matter could be re-opened. Arbitrators have consistently held that expenses should be awarded to the insured person unless the claim was manifestly frivolous and vexatious, or the person's conduct unreasonably prolonged the proceedings. I accept this approach and conclude that Mrs. Abedi should receive her expenses, if any, related to the arbitration, but only those that she incurred after April 5, 1993.
Order:
The issues in dispute have been settled and, therefore, this arbitration shall not proceed.
Pilot Insurance shall pay Mrs. Abedi her expenses, if any, that relate to the arbitration and were incurred after April 5, 1993, according to the Ontario Regulation 664, Dispute Resolution Expenses.
May 3, 1993
David R. Draper Arbitrator
APPENDIX A
EXHIBITS
Exhibit 1 Notice of Pre-Hearing Discussion, dated March 2, 1993, scheduling a pre-hearing discussion for March 24, 1993 at the Ontario Insurance Commission.
Exhibit 2 A letter, dated March 25, 1993, from Nancy Makepeace, arbitrator, to Mrs. Abedi and Mr. Lobl, confirming the pre-hearing discussion that took place at the Ontario Insurance Commission on March 24, 1993.
Exhibit 3 Rescheduled Notice of Pre-Hearing Discussion, dated March 25, 1993, scheduling a pre-hearing discussion by conference call on April 1, 1993.
Exhibit 4 A letter, dated April 5, 1993, from Nancy Makepeace, arbitrator, to Mrs. Abedi and Mr. Lobl, confirming the pre-hearing discussion that took place at the Ontario Insurance Commission on April 5, 1993.
Exhibit 5 A letter, dated April 6, 1993, from Mr. Lobl to Mrs. Abedi, confirming settlement and enclosing a cheque for $2,640.
Exhibit 6 Release, dated April 5, 1993.
Exhibit 7 Notice of Hearing, dated March 29, 1993, scheduling an arbitration hearing for April 20 and 21, 1993.
Exhibit 8 A letter, dated April 13, 1993, from Nancy Makepeace, arbitrator, to Mrs. Abedi and Mr. Lobl, confirming the pre-hearing discussions that took place by conference call on April 7 and 8, 1993.
Exhibit 9 Notice of Preliminary Hearing, dated April 14, 1993, scheduling a hearing to deal with the preliminary issue on April 13, 1993.
Exhibit 10 Amended Notice of Preliminary Hearing, dated April 16, 1993, re-scheduling the hearing to deal with the preliminary issue to April 21, 1993.