Neutral Citation: 1994 ONICDRG 144
File No. A-006346
ONTARIO INSURANCE COMMISSION
BETWEEN:
LUCIEN COURAUD
Applicant
and
CO-OPERATORS GENERAL INSURANCE COMPANY
Insurer
DECISION ON A PRELIMINARY ISSUE
Issues:
The Applicant, Lucien Couraud, was injured in a motor vehicle accident on February 9, 1993. He applied for and received statutory accident benefits from the Insurer, payable under Ontario Regulation 6721. The Insurer terminated benefits effective May 10, 1993.
The Applicant applied for mediation, but the Report of Mediator indicates that the Applicant and his counsel did not participate in the mediation process. The Applicant subsequently applied for arbitration. The Insurer claims the Applicant cannot apply for arbitration because of his failure to participate in the mediation.
The preliminary issue to be determined is whether the Applicant is entitled to refer this matter to an arbitrator.
Result:
The Applicant is not entitled to proceed to arbitration.
Hearing:
The hearing was held at the offices of the Ontario Insurance Commission in North York, Ontario, on December 20, 1993, before me, Frederika Rotter, Senior Arbitrator.
Present at the Hearing:
Applicant:
Lucien Couraud
Applicant's Representative:
Altor Shields
Barrister and Solicitor
Insurer's Representative:
Stephen Malach
Barrister and Solicitor
Documents before the Arbitrator
Exhibits:
Exhibit 1
Letter from Ontario Insurance Commission to Mr. Shields dated September 1, 1993 regarding receipt of Application for Appointment of a Mediator
Exhibit 2
Letter from Ontario Insurance Commission to Mr. Shields dated September 28, 1993 confirming the closing date of the mediation
Exhibit 3
Letter from Ontario Insurance Commission to Ms. Douglas dated September 28, 1993 confirming the closing date of the mediation
Other Documents Before the Arbitrator
Report of Mediator, dated November 4, 1993
Application for Appointment of an Arbitrator, dated November 12, 1993
Response by Insurer, dated December 3, 1993
Evidence and Findings:
The facts in this case are not in dispute. Mr. Couraud's weekly accident benefits were terminated by the Insurer in May, 1993. He disputed the termination, and filed an application for the appointment of a mediator on August 30, 1993.
The Insurance Act governs the resolution of disputes over statutory accident benefits payable under the Schedule. It sets out a scheme which requires mandatory mediation of all disputes, prior to their adjudication either in court, or by an arbitrator.
The relevant sections of the Insurance Act provides as follows:
280.-(1) Either the insured person or the insurer may refer to a mediator any matter in dispute in respect of the insured person's entitlement to no-fault benefits or in respect of the amount of no-fault benefits to which the insured person is entitled.
(2) The party seeking mediation shall file an application for the appointment of a mediator with the Commission.
(3) The Director shall ensure that a mediator is appointed promptly.
(4) The mediator shall enquire into the issues in dispute and attempt to effect a settlement of as many of the issues as possible within the time prescribed in the regulations for the settlement of the type of dispute in question.
(5) The parties may by agreement extend the time for the completion of the mediation process, even if the time for completion has expired.
(6) If at any time before a settlement is effected the mediator is of the opinion that mediation will fail, he or she shall forthwith notify the parties.
(7) Mediation has failed when the mediator has given notice to the parties that in his or her opinion mediation will fail, or when the prescribed or agreed time for mediation has expired and no settlement has been reached.
(8) If mediation fails, the mediator, in addition to any notice required to be given, shall prepare and give to the parties a report setting out the insurer's last offer and the mediator's description of the issues that remain in dispute. 1990, c. 2, s. 65, part.
281 .-(1) If mediation fails, the insured person may bring a proceeding in a court of competent jurisdiction or may refer the matter to an arbitrator.
(2) No person may bring a proceeding in any court or refer a matter to arbitration unless mediation has first been sought and has failed.
A regulation made under the Insurance Act (R.S.O. 1990, Regulation 664 section. 10) provides that a mediator has sixty days in which to attempt to effect a settlement of a dispute.
In this case, the mediator who was appointed wrote to the Applicant and his counsel on September 1, 1993, (Exhibit 1) requesting that they telephone him as soon as possible. He indicated that the 60 day period for attempting to settle would expire on October 29, 1993.
Exhibits 2 and 3 indicate that both parties to the mediation agreed to extend the closing date for the mediation to Thursday November 4, 1993, as they are entitled to do under subsection 5 of the Act, cited above.
The Report of Mediator issued on November 4, 1993, states, under the heading Dates Mediation Conducted - "Mediation did not take place". Under the heading Issues Remaining in Dispute, the report states:
Face to face mediation was scheduled for Thursday, November 4, 1993 at 1:30 p.m. Within five minutes of the commencement of the meeting, the insured's representative and the insured person left, and indicated they would not participate in mediation. In my opinion, mediation did not take place.
Counsel for the Insurer submitted that in the present case, the Applicant is barred from proceeding to arbitration because the mediator's report indicates that no mediation took place. Accordingly, the condition precedent for proceeding - that "mediation has .. been sought and has failed" - has not been met.
The Insurer argued that mediation must be sought in good faith: parties cannot be allowed simply to "go through the motions" of filing for mediation without making a genuine and reasonable effort to settle the issues in dispute.
Counsel for the Applicant referred to the Dispute Resolution Practice Code, and submitted that at section 5, three scenarios are provided for determining if and when a mediation has failed. Section 5.1 states:
5.1 Mediation has failed with respect to an issue when no settlement has been reached and,
(a) the mediator, being of the opinion that mediation will fail, gives notice to the parties to that effect;
(b) the time limit set out in Section 4.1 or the agreed time as provided in Section 4.2 for the mediation has expired; or
(c) the insured person makes a request for a Report of Mediator indicating that mediation has failed.
Counsel submitted that in this case, the very act of walking out and refusing to participate in the mediation was tantamount to a request under subsection 5.1(c) for a Report of Mediator indicating that mediation has failed. Counsel further submitted that in any case, the agreed time for mediation had expired, and accordingly the mediation had failed pursuant to subsection 5.1(b) of the Practice Code, and section 280(7) of the Insurance Act.
However, I find that the agreed time for mediation had not yet expired when the Applicant withdrew from the mediation. The parties had agreed to extend the time, specifically in order to allow mediation to occur. Therefore, I find that the mediation did not fail as a result of the expired time limit.
Furthermore, I find that the withdrawal from the mediation was not and cannot be found to be tantamount to a request under section 5.1(c) of the Dispute Resolution Practice Code for a report indicating that mediation had failed. Such a request may well prompt the desired report - since it may lead a mediator to form the opinion that mediation will fail. However, I find that a mediator, before forming such an opinion, has a primary obligation, set out in the act at section 280(4) to "...enquire into the issues in dispute and attempt to effect a settlement of as many of the issues as possible... "
In my view, it would be premature for a mediator to form an opinion that mediation will fail merely at the request of a party. The parties must give the mediator the opportunity to fulfil his or her obligations, at least to the extent of making preliminary enquiries and efforts at settlement.
It is a well accepted principle of statutory interpretation that the provisions set out in a statute govern and transcend the provisions of subordinate legislation. Accordingly, I conclude that in determining when and under what conditions a mediation has failed, the provisions of the Insurance Act must prevail - in a case of conflict or ambiguity - over any provisions of the Dispute Resolution Practice Code.
The Act clearly specifies that it is the opinion of the mediator which is crucial in determining when and whether a mediation has failed. Such an opinion may be formed by a mediator in the course of his or her duties in connection with an attempt to effect a settlement, or after the expiry of the set time limit, if no settlement has been reached. However, in my view, nothing in the Act, regulations or Dispute Resolution Practice Code compels or requires a mediator to form an opinion or issue a report that mediation has failed, merely at the request of a party, and prior to making any legitimate attempt to effect a settlement.
The Act obliges a mediator to enquire into a case and attempt to settle as many of the disputed issues and possible. In my view, parties to a mediation have a concomitant obligation to participate in the process in good faith. I conclude that if a party frustrates and attempts to short-circuit the process, a mediator is free to form the opinion, not that mediation has failed, but that it did not take place. That is what has happened in this case.
When the Insurance Act was amended in 1990, the changes affected not only the substantive rights of injured people. The process for claiming benefits also changed. The dispute resolution system which was introduced features mediation as a mandatory first step. Mediation is a non-adversarial process where the parties are expected to participate - with the assistance of a neutral mediator - in an attempt to consensually settle their differences.
Parties must seek mediation before having their disputes adjudicated, as provided under section 281 (2) of the Act, above. I find that the parties' obligations under that requirement must include more than simply filing the designated application forms. I conclude that they are obliged to participate in the mediation process, at least to an extent sufficient to enable a mediator to form an opinion of the case. Otherwise, mediation is reduced to an empty and meaningless formality: a result which surely was not intended by the legislators.
In conclusion, I accept the opinion of the mediator that mediation did not take place. Accordingly, the Applicant is precluded from referring this matter to arbitration. If the Applicant wishes to pursue this matter, he must refer it to mediation and participate in mediation in a meaningful fashion.
Order:
- The Applicant is not entitled to proceed to arbitration.
Frederika Rotter
Senior Arbitrator
Date