Neutral Citation: 1995 ONICDRG 10
File No. A-006434
ONTARIO INSURANCE COMMISSION
BETWEEN:
ANA OLIVEIRA
Applicant
and
MARKEL INSURANCE COMPANY OF CANADA
Insurer
DECISION ON PRELIMINARY ISSUE
Background:
The Applicant, Ana Oliveira, was injured in a motor vehicle accident on May 5, 1993. She applied for and received statutory accident benefits from the Insurer, payable under Ontario Regulation 6721. Weekly income benefits were terminated by the Insurer on July 7, 1993. The parties were unable to resolve their disputes through mediation and on August 19, 1994, Ms. Oliveira applied for arbitration under the Insurance Act, R.S.O. 1990, c.I.8, as amended.
A pre-hearing discussion in this case was held on December 6, 1994, before me, Asfaw Seife, arbitrator. Ms. Oliveira attended, represented by Ms. Salina Chagpar. Mr. Boyd Cristoph represented the Insurer.
At the outset of the pre-hearing discussion, Ms. Oliveira's counsel confirmed that the issues in dispute in the present application for arbitration are Ms. Oliveira's entitlement to weekly income benefits, primary caregiver benefits, and certain supplementary medical and rehabilitation expenses (housekeeping, prescription, and travel expenses). The parties agreed that all of these issues were the subject of a failed mediation which took place between September 3 and October 27, 1993.
As a preliminary issue, counsel for the Insurer argued that the Applicant cannot proceed in this arbitration because, prior to filing for arbitration, she commenced a court action in respect of certain other disputes arising from the same accident.
The parties agreed that the court action relates to the recovery of expenses for medical and rehabilitation services allegedly provided to Ms. Oliveira by International Managed Health Care Inc. ("International", formerly known as Premier Treatment and Health Management Centre Inc.), from June 11, 1993 to June 9, 1994. This dispute was the subject of a separate, failed mediation that took place between April 21 and June 9, 1994. The action was commenced by Ms. Oliveira and International, as co-plaintiffs, on August 17, 1994, two days before the application for arbitration was filed. It is agreed that the court action, which is still pending, does not deal with any of the disputes which Ms. Oliveira is now seeking to refer to arbitration.
Therefore, the preliminary issue I must decide is:
Is the Applicant precluded from referring to an arbitrator the issues in dispute specified in her Application for Appointment of an Arbitrator because she has a pending court action against the Insurer in respect of another dispute arising from the same accident?
Result:
The Applicant may refer to arbitration the issues in dispute specified in her Application for the Appointment of an Arbitrator.
Hearing:
The parties agreed that this preliminary issue be decided by way of written submissions. The exchange and filing of submissions was completed on January 16, 1995.
Submissions:
In his submissions, counsel for the Insurer argues:
In our submission, once an Insured has elected a particular forum, as a matter of policy, the Insured ought to be compelled to bring all of their outstanding issues from time to time in that forum, be it arbitration or the courts. In our submission, that is the underlying intention of the legislation, in particular sections 280 through 283 and that is also the common law.
In the case at hand, given the significant extent of treatment and the amounts involved, the court action and the arbitration will canvass and involve the same or "similar" evidence and involve the same or similar types of findings, including credibility. There is a reasonable prospect that the issues, the findings, and the evidence will "significantly overlap". The Insured has chosen to proceed in court and now should be compelled to stay there. If a separate action is started, an order for trial together could be obtained. Alternatively the existing Statement of Claim could be amended. In our submission, this is the appropriate disposition.
Counsel for the Insurer also submitted that "the duplicity of proceedings is being used by treatment and rehabilitation clinics as a tactic to lever a settlement of their claims." He stated that in this case, the Applicant has deliberately "chosen not to engage in the most expeditious and economic manner to resolve the dispute, but rather has for tactical reasons started a separate action in court which will necessitate the usual Statement of Defence, discoveries, pre-trial conferences and ultimately a trial". He submitted that this practice should not be condoned because it increases the insurer's expense of defending "even the most outrageous claims to the exorbitant level, if not the prohibitive level".
The Insurer's position in this case is that Ms. Oliveira should either be precluded from referring her disputes to arbitration, or alternatively, the arbitration proceeding must be stayed, pending the outcome of the court case.
Ms. Oliveira's counsel submits:
There is simply no statutory basis to deny an insured their right to arbitration on issues which they have placed in dispute when those issues have not already been referred for determination in another forum. In this case none of the issues which Ms. Oliveira has placed before you in the arbitration have been referred to in any other forum. [The Insurer's counsel] essentially objects to the arbitration on the basis that some of the evidence given at the arbitration may be similar to evidence which is given at a possible trial in the International action. From this he concludes that there is a significant overlap of issues. The Insurance Act does not equate "issues" with "evidence".
There is no overlap of "heads of damage" being sought, and the issues involved are distinct. There may be some overlap of evidence which is given in support of the hearings at arbitration and in court, but this does not in any way support the allegation that the issues in the two forums "significantly overlap". The fact that different proceedings may involve similar evidence being given does not amount to a duplicity of proceedings.
In support of her position, Ms. Oliveira's counsel cited the following arbitration decisions: Rosa DeCicco and State Farm Mutual Automobile Insurance Company, December 18, 1991, OIC File No. A-000277, appeal decision dated February 21, 1992, OIC File No. P-000277; and Comfort Ayertey and the Toronto Transit Commission (Markel Insurance Company of Canada), April 5, 1994, OIC File No. A-004077.
Analysis and Conclusion:
Section 280(1) of the Insurance Act ("the Act") states that 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 statutory accident benefits or in respect of the amount of statutory accident benefits to which the insured person is entitled.
Section 281(1) of the Act provides that if mediation fails, the insured person may bring a proceeding in a court of competent jurisdiction or may refer the matter to an arbitrator. Section 281(2) states that no person may bring a proceeding in a court or refer a matter to arbitration unless mediation has first been sought and failed.
The jurisdiction of the arbitrator is governed by the provisions of section 282(3) of the Act which state that the arbitrator "shall determine all issues in dispute and such other issues as the parties may agree." (emphasis added)
In order to decide whether Ms. Oliveira is entitled to proceed in this arbitration, I must first determine what is the "matter" she is seeking to refer to arbitration under section 281(1) of the Act.
The word "matter" is not defined in the Act or the Schedule; however, it was considered in several arbitration decisions (Rosa DeCicco and State Farm Mutual Automobile Insurance Company, December 18, 1991, OIC File No. A-000277, appeal decision dated February 21, 1992, OIC File No. P-000277; Comfort Ayertey and the Toronto Transit Commission (Markel Insurance Company of Canada), April 5, 1994, OIC File No. A-004077; Peter Kotsiakos and State Farm Mutual Automobile Insurance Company, July 26, 1994, OIC File No. A-002354 (under appeal); and Lorenzo Rescigno and State Farm Mutual Automobile Insurance Company, September 26, 1994, OIC File No. A-008268 (under appeal).
In DeCicco (Appeal), the Director of Arbitrations rejected the view that the word "matter", in section 281(2) of the Act, encompasses all issues raised in mediation by the parties. The Director did not define "matter", but stated that it was up to the arbitrator called upon to determine "the matter", to define that matter, and, in each case, determine the scope of an arbitration.
In Ayertey, Arbitrator David Draper was presented with an argument that the arbitration hearing must deal with all of the outstanding disputes between the parties, despite the fact that some of the disputes were not listed in the application for arbitration, and the applicant did not want them arbitrated. The insurer in that case argued that it would be unfair and uneconomical for the insurer to deal with the various issues in separate proceedings, and that separate proceedings could lead to inconsistent results. These are essentially the same arguments the Insurer is making in this case.
In the Ayertey case, Arbitrator Draper expressed considerable sympathy for the position of the insurer, stating that the "goal of providing a speedy and inexpensive dispute resolution process is unlikely to be served by allowing, or requiring, disputes to proceed in a piecemeal fashion". In the end, however, Arbitrator Draper adopted the approach taken in the DeCicco appeal, and concluded that the "matter" referred to arbitration consisted of only those issues listed by the applicant in her Application for the Appointment of an Arbitrator. He decided that the insurer was precluded from raising in the arbitration a matter that was not included in the application, but may apply to court for a remedy. The applicant was allowed to proceed to arbitration on only some of the matters dealt with in the mediation.
In Kotsiakos, Arbitrator Shemin Manji followed the reasoning in the DeCicco appeal. She stated that she did not believe it was open to an arbitrator, where the matter or thing in dispute that an applicant has referred to arbitration is restricted, to expand the scope of the arbitration to include an unrelated question or concern raised by an insurer. I expressed a similar view in Rescigno.
I agree with the definition of "matter" as enunciated in the above-mentioned arbitration decisions, and adopt it for the purposes of this case. Although in this case the Insurer is not seeking to add an issue to the arbitration, in my view, the definition is equally applicable where the issue is the applicant's entitlement to refer a matter to arbitration.
Accordingly, I find that the "matter" which Ms. Oliveira seeks to refer to arbitration are those disputes which she has identified in her application for arbitration. They do not include the dispute which is the subject of her court action.
Counsel for the Insurer has cited arbitration decisions and a court decision which he felt would support his position (Errol C. Barrow and Guardian Insurance Company of Canada, December 23, 1993, OIC File No. A-006082; Abdul Bapoo and Co-operators General Insurance Company, October 3, 1994, OIC File No. A-006212; and Citadel General Assurance Co. v. Gogna, [1992] O.J. No. 1996 (O.CJ.(Gen.Div.)).
While the cases cited by the Insurer's counsel may have instructive value, the facts are distinguishable from those arising in this case.
In Bapoo, Arbitrator Fred Sampliner found that he had no jurisdiction to entertain the applicant's claim for a special award and interest because the applicant's substantive dispute about his accident benefits had been referred to court already, and the applicant had not applied for arbitration of these items.
In Barrow, Arbitrator David Draper found that the issues which the applicant sought to refer to arbitration were not distinct from those which were the subject of the court proceeding. Therefore, allowing the arbitration to proceed would unduly duplicate the proceedings.
In the Gogna matter, E. Macdonald J. acknowledged that court was the only forum where the insurer could apply to adjudicate its claim for repayment, since the applicant refused to consent to the inclusion of the issue in the arbitration. The court decided that the insurer was entitled to proceed with its court action for repayment of benefits, and stayed the arbitration proceedings. In granting the stay, the court was guided by the criteria set out in Victoria Property & Investment Co.(Canada) et al., v. Vitznau Management Ltd. et al. (1978), 1978 CanLII 1286 (ON HCJ), 8 C.P.C. 38 (Ont. S.C. (H.C.J.)), i.e. which action began first, who has the chief burden of proof, and which action is the most comprehensive in scope. The court also stated that multiplicity of proceedings must be avoided, wherever possible.
The dispute resolution scheme of the Act was designed to provide insured persons with easy access to relatively inexpensive, speedy and informal adjudication of disputes. However, arbitration is not the exclusive mechanism for adjudicating disputes between an insured person and an insurer.
I find no support, either in legislation or in case law, for the Insurer's position that an insured person ought to be compelled to refer all of her or his disputes with the insurer, present or future, to one forum only. In my view, had the Legislature intended to limit an insured person's choice of forum in the manner proposed by the Insurer, it would have worded section 281(1) of the Act quite differently. Given the wording of this section and the general scheme of the Act, to interpret the word "matter" as meaning "all existing and future disputes between an insured person and an insurer arising from the same accident" would be, in my view, a clear misconstruction of the intent of the legislation.
It seems clear to me that the only limitations imposed by the Act on the insured person's right to refer a matter in dispute to a court or an arbitrator are: 1) the matter must first have been referred to mediation, 2) mediation must have failed, and 3) by necessary implication, the insured person must not have commenced a proceeding in the other forum with respect to the same matter. In the circumstances of this case, I find that the requirements of section 281(1) and 281(2) have been satisfied, and the issues in the application for arbitration are properly in the arbitrator's jurisdiction.
In DeCicco, addressing the concerns regarding multiplicity of proceedings, the Director of Arbitration stated:
Whether or not it may be more expeditious for the parties to deal with all of these items in one hearing is not a relevant consideration given the structure and scheme of the Act as a whole and given the necessity of having each section, general or specific, carry with it a coherent and logical meaning.
The above comments were made in the context of arbitration proceedings; however, I find that they are equally applicable to the circumstances of this case. It may be less expensive and more expeditious for the parties to deal with all of their disputes, together and in one forum; and in this regard, I share the concerns Arbitrator Draper expressed in Ayertey. However, where the matters in the two forums are distinct, this concern is not a relevant consideration in deciding whether the applicant may proceed in the forum of her or his choice.
In this case, Ms. Oliveira is seeking arbitration of certain specific matters. Their adjudication is not dependent on the outcome of the court matter; and the issues in arbitration are wholly capable of being resolved on their own. While there may be duplication of evidence in the two forums, and perhaps a potential for inconsistent findings of fact, in my view, this is not sufficient grounds to stay or dismiss the arbitration.
Accordingly, this arbitration will proceed as scheduled.
Order:
The Applicant is not precluded from proceeding in the arbitration.
The arbitration hearing will proceed as scheduled.
February 9, 1995
Asfaw Seife
Arbitrator
Date