Neutral Citation: 1996 ONICDRG 167

OIC A95-000349

BETWEEN:

ADRIANNA SACCO, CARMEN SACCO, GIANCARLO SACCO and STEFANIO SACCO

Applicants

and

WAWANESA MUTUAL INSURANCE COMPANY

Insurer

DECISION

Fernando Sacco, the husband of the Applicant, Adrianna Sacco, and the father of Carmen, Giancarlo and Stefanio Sacco died on or about November 14, 1994 in a motor vehicle. The Saccos applied for death benefits and funeral benefits from Wawanesa Mutual Insurance Company ("Wawanesa"), payable under the Schedule¹ The Insurer denied that Mr. Sacco died as a result of an "accident" as defined in section 1 of the Schedule. The parties were unable to resolve their dispute through mediation and the Saccos applied for arbitration under the Insurance Act, R.S.O. 1990, c.I.8, as amended.

At the commencement of the hearing on September 17, 1996, counsel for the Applicants moved to withdraw the Application for Arbitration. The Insurer did not consent. I heard submissions from both counsel with respect to the proper interpretation of section 66 of the Dispute Resolution Practice Code ("the Code ") which concerns withdrawals.

The issue in this hearing is:

Should the Applicants be permitted to withdraw from this arbitration, and, if so, on what terms?

The Applicants may withdraw their Application for Appointment of an Arbitrator within 40 days of the date of this decision, upon proof of payment to the Insurer of its assessment of $2,000.00.
In the event that paragraph one of this Order is not complied with, a pre-hearing conference will be scheduled by the Commission, and the hearing will proceed in the usual course.
If this Application is withdrawn, pursuant to the provisions of paragraph one of this Order, then these Applicants may not reapply for arbitration on the issues set out in this Application for Appointment of an Arbitrator.

Present at the Hearing:

Applicants:

Adrianna Sacco, Stefanio Sacco, Giancarlo Sacco

The Sacco's

Todd A. Reybroek

Representative:

Barrister and Solicitor

Wawanesa's

Brian Atherton

Representative:

Barrister and Solicitor

Before:

K. Julaine Palmer, Arbitrator

No witnesses testified and no exhibits were filed. The Report of Mediator, Application for Appointment of an Arbitrator, Response to an Application for Arbitration, and the pre-hearing letter of May 3, 1996 form the record in this matter.

Evidence and Findings:

The Saccos, on the advice of counsel, wish to withdraw their Application for Appointment of an Arbitrator, which was received by the Commission on October 2, 1995. The Applicants' counsel admits they intend to pursue the same claim before the courts. He submits by way of explanation that he perceives the Commission has adopted a more restrictive interpretation of the word "accident" than have the courts, since the release of the appeal decision in J.E. and Economical Mutual Insurance Company, OIC P96-000033 on June 25, 1996. In short, this lawyer hopes that by bringing a court action instead of an arbitration, he will improve his clients' chance of success.

The Insurer submits that this is blatant forum shopping and an abuse of the Commission process. He submits that section 66.3 of the Code is permissive, not mandatory, in language—the adjudicator need not permit the withdrawal. At the very least, the Insurer's counsel submits that the Applicants should reimburse the Insurer's assessment of $2,000.00, which it paid in order to participate in the arbitration. This action is sanctioned by section 66.3(b) of the Code. The Insurer's counsel did not submit that I should invoke the provisions of section 282 (11.2) of the Insurance Act which permit an arbitrator to award up to $2,000.00 if an insured person has commenced an arbitration that, in the opinion of the arbitrator is "frivolous, vexatious or an abuse of process."

The Law

Section 66 of the Dispute Resolution Practice Code—1995 Release, in force August 1, 1995 contains rules about withdrawal from arbitration:

WITHDRAWAL

66.1 An applicant may seek permission to withdraw all or part of an application:

(a) by serving on the parties a request to withdraw the application that is signed by the applicant or the applicant's representative; and

(b) by filing the request to withdraw the application together with a Statement of Service in FORM D; or

66.2 The adjudicator may permit an applicant to withdraw all or part of an application if the other parties agree.

66.3 Where a party does not agree to the withdrawal, the adjudicator may:

(a) permit the applicant to withdraw on such terms as the adjudicator considers appropriate;

(b) where the applicant is the insured person, require the applicant to pay the insurer an amount not more than the amount the insurer is required to pay the Commission to participate in the hearing, if the adjudicator decides that the withdrawal is an abuse of process.

Terms of Withdrawal

The Saccos wish to change their minds about the forum in which the issues in dispute between them and the Insurer will be considered. Their right to make the initial choice is set out in section 281(1) of the Insurance Act. Only an insured person has this option. An insurer cannot commence an arbitration; it can only bring a court action against an insured person.

I have considered the Insurer's submission that I need not allow the Saccos the opportunity to re-elect the forum for their dispute. However, although any tribunal dislikes having a process before it, then abandoned to proceed elsewhere, I find no precedent for demanding that reluctant parties proceed against their will. I am mindful, however, of the Director's comments in the Chapman² case that "The Commission tribunals have an inherent power to control their own processes, and as such, are not bound to accept a withdrawal as putting an end to a case without further orders or consequences."

An abuse of process before the Commission such as the case with this application is to be discouraged, in my view, to the fullest extent possible. In the present case, the Applicants' lawyer, for the moment, wishes to try the issues before the courts. In my view, the election to go to court should be a final one, and in no circumstance should the Applicants be permitted to return to the Commission for an arbitration on these issues.

Order:

The Applicants may withdraw their Application for Appointment of an Arbitrator, received at the Commission on October 2, 1995, within 40 days of the date of this decision, upon proof of payment to the Insurer of its assessment of $2,000.00.
In the event that paragraph one of this Order is not complied with, a pre-hearing conference will be scheduled by the Commission, and the hearing will proceed in the usual course.
If this Application is withdrawn, pursuant to the provisions of paragraph one of this Order, then these Applicants may not reapply for arbitration on the issues set out in this Application for Appointment of an Arbitrator.

October 1, 1996

K. Julaine Palmer

Arbitrator

Date

Footnotes

The Statutory Accident Benefits Schedule —Accidents on or after January 1, 1994, called "the Schedule" in this decision. The Schedule is Ontario Regulation 776/93, as amended by Ontario Regulation 635/94.
Chapman(s) and Allstate Insurance Company of Canada and Wellington Insurance Company (October 6, 1994), OIC P-001897

Sacco v. Wawanesa Mutual Insurance Company, 1996 ONICDRG 167

Case Summary