Neutral Citation: 1994 ONICDRG 20
A-004404
ONTARIO INSURANCE COMMISSION
BETWEEN:
JOHN ADUSEI
Applicant
and
ROYAL INSURANCE COMPANY OF CANADA
Insurer
DECISION
Issues
John Adusei was injured in a motor vehicle accident on June 19, 1992. His family doctor diagnosed soft tissue injuries to his chest, neck and back, and referred him to Premier Treatment & Health Management Centre Inc. ("Premier"). Premier directly billed the insurer, Royal Insurance Company of Canada ("Royal") for activities which were identified as case management services. Royal refused to pay. The matter was not resolved through mediation, and this arbitration was commenced under the Insurance Act to determine whether Royal must pay Premier for these services under the statutory accident benefits scheme set out in Ontario Regulation 672.1
Premier contends that the activities at issue were rehabilitation services provided to Mr. Adusei under section 6 of the Schedule. Premier contends that it has the right to commence the arbitration by virtue of the authorization signed by Mr. Adusei (Exhibit 1). The authorization includes the following statement:
This authorization includes the right, in my name and on my behalf, to institute mediation proceedings, compromise the said proceedings, and in my name and on my behalf, to institute, prosecute and compromise any arbitration proceedings in connection with such medical and rehabilitation benefits provided by you in connection with such injuries arising out of such motor vehicle collision.
Royal contends that Premier's case management activities were undertaken on its behalf and were not rehabilitation services covered under section 6. Royal also contends that the arbitration was commenced by Premier and that Premier is not entitled to commence the arbitration.
The issue in this hearing is:
- Is Royal required to pay Premier $260, plus interest, for case management services provided to Mr. Adusei between August 18 and August 26, 1992?
In order to decide this issue, I must decide:
(a) Does Premier have the right to commence the arbitration?
(b) Were the services rendered rehabilitation services to which Mr. Adusei is entitled under the Schedule?
Premier also seeks its expenses in the proceeding.
Result
1.(a) Premier is not entitled to commence an arbitration.
(b) Because of my finding on the first issue, it is not necessary for me to decide whether the case management services provided by Premier were rehabilitation services to which Mr. Adusei was entitled under section 6 of the Schedule. However, in case I am wrong in my finding on the first issue, I find that these services were not rehabilitation services required as a result of the accident under section 6.
Premier is not entitled to its expenses in the proceeding.
Hearing
The hearing was held in North York, Ontario, on February 2, 1994, before me, Nancy Makepeace, arbitrator. Written submissions were received from both parties dated February 9, 1994.
Present at the hearing were Mr. James Orr, Barrister and Solicitor, who represented Premier, and Mr. Wayne Edwards, Barrister and Solicitor, who represented Royal.
Witnesses were Mr. Adusei, the insured person, and Ms. Vittoria Levi (Metelli), rehabilitation consultant.
Proceedings were recorded by Mr. Brad Van Allstyne of Legal Transcript Services.
Exhibits introduced into evidence and other documents on the record are listed in Appendix A to the decision. Authorities referred to by the parties in their submissions are listed in Appendix B.
Right to commence the arbitration
Premier relies on the authorization signed by Mr. Adusei in commencing the arbitration. Premier is not acting as Mr. Adusei's representative in this matter. Mr. Adusei testified that he has no dispute with the insurer, is not seeking ongoing benefits, and neither the insurer nor Premier is seeking payment from him. When asked why he started the arbitration proceeding, he replied that he did not start it, and that the first he had heard of it was when he received a letter from Premier telling him that he had to attend as a witness. He took no position on the issues in dispute at the hearing. Mr. Adusei agreed with counsel for the insurer that the authorization on which Premier relies was one of many forms he signed on his first day at Premier, and was not signed in contemplation of this proceeding.
In his oral submissions, Mr. Orr likened the authorization to a subrogation agreement in a contract of insurance. However, section 278 of the Insurance Act, which provides for subrogation under Part VI of the Act (automobile insurance), does not give treatment-providers any rights of subrogation. The section reads as follows:
An insurer who makes any payment or assumes liability therefor under a contract is subrogated to all rights of recovery of the insured against any person and may bring action in the name of the insured to enforce those rights. [emphasis added]
In his written submissions, Mr. Orr submitted that the authorization signed by Mr. Adusei was a valid assignment of his right to commence an arbitration respecting services provided by Premier.
Subsection 279(1) of the Act provides that disputes about an insured person's entitlement to statutory accident benefits shall be resolved in accordance with sections 280-283 of the Act and the Schedule. Either the insured person or the insurer may refer a dispute to a mediator: subsection 280(1). However, if mediation fails to resolve the dispute, only the insured person may commence an arbitration proceeding, under subsection 281(1) of the Act, which provides as follows:
If mediation fails, the insured person may bring a proceeding in a court of competent jurisdiction or may refer the matter to an arbitrator. [emphasis added]
If mediation fails, the insurer's only recourse is to commence a proceeding in a court of competent jurisdiction.
On behalf of Premier, Mr. Orr took the position that the language of subsection 281(1) is not sufficient to remove the insured person's common law right to assign a right of action, as Mr. Adusei purported to do in Exhibit 1. He argued: "given that the [insured person's] rights to arbitrate and litigate arise from the same section, acceptance of Royal's position would preclude any party in the position of Premier from accessing either the Courts or the arbitration system to recover from the insurer."
In my view, the purpose of the words, "the insured person may bring a proceeding in a court of competent jurisdiction," is to clarify that subsection 281(1) does not purport to restrict the jurisdiction of the federally appointed courts over disputes arising out of statutory accident benefits. Subsection 281(1) does not extinguish any rights of action of the insured person, the insurer or a treatment-provider. It confers an additional right on the insured person — the right to commence an arbitration proceeding if mediation fails. This is a right created by statute, not common law. The arbitration process was intended to provide relatively speedy, informal, user-friendly and inexpensive dispute resolution for insured persons. The same policy considerations may not apply to treatment-providers.
Mr. Orr submitted that policy considerations support the interpretation he would place on the statute. If treatment-providers could not commence arbitration proceedings, the insured person would be required to pay in advance and if necessary commence arbitration proceedings against the insurer. Alternatively, treatment-providers would have to provide treatment without any assurance of being paid, and then sue the insured person if he or she failed to pay. The insured person would then have to join the insurer as a third party in the action.
In my view, stronger policy considerations support the insurer's interpretation of subsection 281(1). If treatment-providers could commence arbitration proceedings, an insurer could be required to respond to any number of applications from any number of treatment-providers, at a cost of $1,000 per application. If, on the other hand, the proceedings must be initiated by the insured person, it is more likely that all disputes between the insured person and the insurer will be determined in a single proceeding, thus avoiding a multiplicity of proceedings. It is also more likely that in such a proceeding, sufficient evidence will be brought forward to enable the arbitrator to determine whether the claimed medical or rehabilitation expense was a reasonable expense required as a result of the accident within section 6 of the Schedule. Finally, I cannot ignore the pressure of the volume of cases on the arbitration system.
In the absence of a statutory provision giving treatment-providers the right to commence arbitration proceedings, and given the language of subsection 281(1), I find that the authorization signed by Mr. Adusei for Premier is not effective to give Premier the right to commence this proceeding.
Were Premier's case management activities covered under section 6?
Given my finding that Premier has no right to commence an arbitration, it is not necessary for me to decide whether its case management activities were rehabilitation services under section 6 of the Schedule. However, I find it appropriate to set out my findings on this issue in case I am wrong in my findings on the first issue.
Premier's standard-form medical certificate, dated July 3, 1992, and signed by Dr. Kitakufe, states that Mr. Adusei requires rehabilitation exercise, physiotherapy, psychotherapy assessment/treatment and "vocational rehabilitation — case management" (Exhibit 8). Mr. Adusei attended at Premier for passive physiotherapy for about 12 months after the accident. There is no dispute about his entitlement to physiotherapy treatment, for which Premier has been reimbursed. Royal also paid $300 for Premier's Initial Report, dated August 18, 1992 (Exhibit 3), and $275 for the Discharge Summary, dated August 26, 1992 (Exhibit 4), both of which were prepared by Audrey R. Sohn, a Vocational Rehabilitation Counsellor with Premier.
However, Royal refused to pay Premier's invoice for $260 for 3.25 hours of services identified by Premier as "case management" (invoice of September 2, 1992, Exhibits 5 and 7). Premier's case management activities are itemized on an annotated copy of the invoice (Exhibit 7) and in Ms. Sohn's interview notes (Exhibit 2), as follows. On August 18, 0.50 hours was billed for preparation of the file, the doctor's certificate (Exhibit 8) and the letter to Dr. Kitakufe. On August 24, a message was left for the adjuster at State Farm, which insured Mr. Adusei's vehicle. On the same day, a message was left at the office of Mr. Adusei's counsel. Someone from that office called back and advised that Mr. Adusei was uninsured. Ms. Sohn then telephoned Mr. Adusei and left a message. Premier billed 0.25 hours for each of these four telephone calls. On August 25, Ms. Sohn met with Mr. Adusei, who explained that State Farm had cancelled his coverage for non-payment of the premium; 0.50 hours was billed for this meeting. Ms. Sohn then called the office of Mr. Adusei's counsel; 0.25 hours was billed. She consulted with the clinic administrator, who advised that Mr. Adusei could receive no further treatment unless he obtained an insurance certificate (0.25 hours). She telephoned Mr. Adusei and left a message (0.25 hours), met with her supervisor (0.25 hours) and prepared the initial and discharge reports for Mr. Adusei's counsel and family doctor. On August 26, Mr. Adusei returned her call, and she explained the situation; 0.25 hours was billed. No further services were provided to Mr. Adusei.
On behalf of Premier, Mr. Orr submitted that these activities were rehabilitation services provided to Mr. Adusei. Vittoria Levi, a consultant who acts as Director of the Vocational Rehabilitation Department at Premier, reviewed in her testimony the Initial Report, Discharge Summary and notes prepared by Ms. Sohn. Ms. Sohn's notes and reports indicated that Mr. Adusei was receiving no benefits while he attended at Premier, and was unable to pay for therapy or medication. Mr. Adusei confirmed in his testimony that he had advised Premier about his financial situation. Ms. Levi testified that the purpose of the contacts made by Ms. Sohn, for which Royal was billed, was to obtain benefits for Mr. Adusei. She denied that the purpose of Ms. Sohn's activities was to ensure that Premier would be paid. She testified that bill collection is handled by other Premier staff, not by vocational rehabilitation counsellors.
Subsection 6(1) of the Schedule provides that the insurer will pay "all reasonable expenses resulting from the accident," including expenses for "other goods and services, whether medical or non-medical in nature, which the insured person requires because of the accident" (paragraph 6(1) (f)).
In the circumstances of this case, I am not persuaded that Ms. Sohn's case management activities were rehabilitation services required because of the accident. Mr. Adusei was represented by counsel during the time he attended Premier, and was in direct contact with the insurer himself. I am not persuaded that Mr. Adusei needed the additional advocacy or liaison services provided by Ms. Sohn. Mr. Adusei talked to Ms. Sohn about his financial and vocational circumstances during the initial interview on August 18, 1992, for which Premier was reimbursed. I heard no evidence that any vocational rehabilitation services were provided to Mr. Adusei. I am not satisfied that Ms. Sohn's activities were of any assistance to Mr. Adusei in obtaining rehabilitation or other benefits.
Expenses
Mr. Orr submitted that Premier should be awarded its expenses in the arbitration. An award for expenses may be made under section 282(11) of the Insurance Act, which provides as follows:
The arbitrator may award to the insured person such expenses incurred in respect of an arbitration proceeding as may be prescribed in the regulations to the maximum set out in the regulations.
The prescribed expenses and maximum amounts are set out in Schedule 1 of the Dispute Resolution Practice Code and in Ontario Regulation 664 (R.R.O. 1990), Dispute Resolution Expenses.
Premier is not an insured person under the Schedule and the Act. For the reasons already given, I find that Premier is not subrogated to, or the assignee of, Mr. Adusei's right to commence an arbitration proceeding. Accordingly, subsection 282(11) does not govern Premier's request for expenses. I make no order as to expenses.
Order
Premier is not entitled to be reimbursed for the claimed case management services.
Premier is not entitled to its expenses in the proceeding.
March 3, 1994
Nancy Makepeace
Arbitrator
Date
APPENDIX A – THE RECORD
The following documents were introduced into evidence:
Exhibit 1 Authorization signed by John Adusei, dated June 30, 1992
Exhibit 2 "Records of Contacts" between Audrey R. Sohn and John Adusei, handwritten notes of Audrey Sohn
Exhibit 3 Vocational Rehabilitation Initial Report, dated August 18, 1992, prepared by Audrey Sohn
Exhibit 4 Discharge Summary, dated August 26, 1992, prepared by Audrey Sohn
Exhibit 5 Invoice #16903, dated September 2, 1992, for vocational rehabilitation services
Exhibit 6 Standard form (Form 4) report of Dr. J.C. Kitakufe, dated June 26, 1992
Exhibit 7 Annotated copy of invoice #16903, dated September 2, 1992 (Exhibit 5)
Exhibit 8 Medical certificate (form provided by Premier) signed by Dr. Kitakufe, dated July 3, 1992
Exhibit 9 Report of Dr. J. Zeldin, dated November 17, 1993
Exhibit 10 Résumé of Vittoria Levi (Metelli)
Other documents on the record were:
Report of mediator, dated May 4, 1993
Application for appointment of an arbitrator, dated May 10, 1993
Response by insurer, dated May 31, 1993
Pre-hearing letter, dated September 7, 1993
APPENDIX B – AUTHORITIES
Mr. Orr relied on the following cases in his written submissions:
Di Guilo v. Boland (1958), 1958 CanLII 92 (ON CA), 13 D.L.R. (2d) 510 (Ont. Ct. of appeal), at p. 513
Re Ontario Medical Association and Workers' Compensation Board (1985), 1985 CanLII 3165 (ON HCJ), 22 D.L.R. (4th) 321 (Ont. H.C.J.), at pp. 327, 328
CPR v. Department of Public Works of Ontario (1919), 1919 CanLII 57 (SCC), 58 S.C.R. 189, at p. 192
Canada Trustco v. London and Lancashire Guarantee and Accident Co. of Canada (1931), 40 O.W.N. 320, at p. 321
Salmon and TTC, OIC File No. A-000235, at p. 21
McCormack and Economical Mutual Insurance company, OIC File No. A-000139, pp. 23-24
Mr. Orr relied on the following statutory authority in his written submissions:
Conveyancing and Law of Property Act, section 53
Courts of Justice Act, section 138
Insurance Act, sections 279(2) and 242(d)(11) [now 282(11)]