Brian Gordon v. Allstate Insurance Company of Canada, 1996 ONICDRG 82

Neutral Citation: 1996 ONICDRG 82

File No.: A-951950

Between:

Brian Gordon Applicant

and

Allstate Insurance Company of Canada Insurer

Decision on Preliminary Issue

Issues:

The Applicant, Brian Gordon, was injured in a motor vehicle accident on April 6, 1993. He applied for and received statutory accident benefits from the Insurer, Allstate Insurance Company of Canada ("Allstate"), payable under Ontario Regulation 672.¹

In this arbitration, Mr. Gordon sought a declaration or pronouncement on whether he is entitled to payment of expenses incurred by his rehabilitation case manager, Progressive Rehabilitation Consultants Inc. ("Progressive Rehabilitation"), for time spent by it in communicating with his solicitors, despite all accounts from Progressive Rehabilitation having been paid in full in accordance with a previous agreement negotiated between it and Allstate.

Allstate objected to the determination of this issue in an arbitration hearing. It submitted that there was no dispute between the parties because all accounts submitted by Progressive Rehabilitation had been paid in full. Allstate submitted that in the absence of a substantive dispute or lis between the parties, an arbitrator had no authority under the Insurance Act, R.S.O. 1990, c. I.8, as amended ("the Act") and its regulations to make any order or pronouncement.

The issue in this hearing is:

Does an arbitrator have authority to determine the matter that Mr. Gordon has referred to arbitration?

Result:

An arbitrator has no authority to determine the matter that Mr. Gordon has referred to arbitration at this time. Mr. Gordon's application for arbitration is dismissed.

Hearing:

The preliminary issue was dealt with by way of written and oral submissions following the pre-hearing conference. Mr. Gordon was represented by Mr. Joseph Fera. Allstate was represented by Mr. George S. Gage.

The documents filed by the parties and marked as exhibits are listed in Appendix A. Other documents on the record are also listed in Appendix A.

Reasons for Decision:

I issued a brief decision on May 6, 1996, with reasons to follow. These are my reasons:

1. Background Facts:

Mr. Gordon was involved in an accident on April 6, 1993. At the time of the accident, he was insured by Allstate. Mr. Gordon sustained injuries in the accident, and Progressive Rehabilitation became involved in his case in May 1994. After Progressive Rehabilitation was retained, Allstate sent the company its "Criteria for Rehabilitation Case Management of Allstate Cases in Ontario" ("Criteria for Case Management"). This document sets out, inter alia, the billing practices that Allstate requires rehabilitation consultants providing services to Allstate's insureds to observe.²

After reviewing Allstate's criteria for rehabilitation case management, Progressive Rehabilitation wrote to Allstate on June 27, 1994 and advised that it would attempt to meet Allstate's needs whenever possible, in keeping with professional rehabilitation practice. Progressive Rehabilitation was concerned that Allstate had indicated that it would not pay for any reports, including status reports provided to a client's solicitor, any telephone calls made to the solicitor, or any meetings with the solicitor. Progressive Rehabilitation advised however that its policy was to provide rehabilitation information to its clients' solicitors. Progressive Rehabilitation was of the view that this was in direct conflict with the Criteria for Rehabilitation Case Management and placed the rehabilitation consultant and insurer in a difficult position.³

On July 4, 1994, Allstate advised Progressive Rehabilitation that its policy was not intended to prevent a rehabilitation case manager from sharing information with a client's solicitor(s). Allstate stated that Progressive Rehabilitation was free to disclose any relevant information at the request of the client. However, it suggested that Progressive Rehabilitation advise the solicitor in advance that the solicitor would be responsible for the extra expenses that were incurred, and that Progressive Rehabilitation make the necessary arrangements to bill the solicitor. Allstate advised that based on its interpretation of the relevant provisions of the Schedule and the Statutory Accident Benefits Schedule - Accidents On or After January 1, 1994, it was not responsible for expenses incurred by rehabilitation case managers for time spent communicating with an insured person's solicitor(s).⁴

There was further dialogue on this issue between Progressive Rehabilitation and Allstate, after July 4, 1994. In June 1995, Progressive Rehabilitation and Allstate reached an agreement, as confirmed in letters dated May 25, 1995 and June 14, 1995 from Progressive Rehabilitation to Allstate.⁵ The letters indicate that Progressive Rehabilitation and Allstate agreed that Progressive Rehabilitation's billing rate on Allstate Files would be increased to $85.00 per hour (from $75.00 per hour) effective January 1, 1995. Progressive Rehabilitation and Allstate also agreed to limit the number of hours that could be billed by Progressive Rehabilitation at the agreed rate.⁶ The letters do not state that Allstate agreed to be responsible for expenses incurred by Progressive Rehabilitation for time spent communicating with an insured person's solicitor. However, further to the agreement, all accounts submitted by Progressive on behalf of Mr. Gordon were paid in full by Allstate. Both Mr. Gordon and Allstate agreed that at the time of the hearing of this preliminary issue, no accounts of Progressive Rehabilitation, submitted on behalf of Mr. Gordon, had been denied by Allstate.

2. Issue and Position of the parties:

Notwithstanding, Mr. Gordon sought to have the issue regarding his entitlement to compensation for expenses incurred by Progressive Rehabilitation for time spent communicating with his solicitors determined, under section 6(1) of the Schedule. Mr. Gordon submitted that although the agreement reached by Progressive Rehabilitation and Allstate might be satisfactory to Allstate, it was not satisfactory to himself or to Progressive Rehabilitation. Mr. Gordon submitted that Progressive Rehabilitation agreed to the arrangements with Allstate as an interim measure, and accepted less than full compensation for its services. Further, Mr. Gordon submitted that Allstate's current agreement with Progressive Rehabilitation does not take into account the fact that circumstances may change. Mr. Gordon submitted that he was entitled to resolution of this issue for his future rehabilitation management. He advised that he was seeking an order that required Allstate to pay Progressive Rehabilitation or any other rehabilitation case manager, now and in the future, 100% remuneration for all reasonable communications with solicitors.

Allstate objected to the arbitration of this issue and moved for an order dismissing the application. Allstate submitted that there was nothing to arbitrate in this case because all accounts submitted by Progressive Rehabilitation, on Mr. Gordon's behalf, had been paid in full. Allstate submitted that Mr. Gordon was asking that the arbitration process be utilized for the purpose of having an arbitrator propound a policy for rehabilitation case managers, and that this was inappropriate in the absence of a substantive dispute. Allstate submitted that the dispute resolution process established under the Act contemplates a substantive 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 person was entitled. In the absence of such a dispute between the parties, an arbitrator has no jurisdiction to make any order or pronouncement for the future.

3. Finding:

I agree with Allstate that, in the absence of a dispute between Mr. Gordon and Allstate, an arbitrator does not have the authority to determine the matter that Mr. Gordon has referred to arbitration, i.e., whether Mr. Gordon is entitled to be compensated for expenses incurred by Progressive Rehabilitation for time spent communicating with Mr. Gordon's solicitors, under section 6(1) of the Schedule.

The jurisdiction of an arbitrator is restricted under the Act. An arbitrator is given authority to decide a dispute between an insured person and an insurer in respect of the insured person's entitlement to statutory accident benefits or in respect of the amount of such benefits to which the insured person is entitled, if this dispute is not resolved through mediation.⁷ In the absence of a dispute, an arbitrator does not have the authority to make pronouncements or issue guidelines on the interpretation and operation of the Schedule or any provision of the Schedule. This authority has been specifically and expressly granted to the Commissioner of the Ontario Insurance Commission under section 268.3 of the Act. Section 268.3 of the Act states:

(1) The Commissioner may issue guidelines on the interpretation and operation of the Statutory Accident Benefits Schedule or any provision of that Schedule.

(2) a guideline shall be considered in any determination involving the interpretation of the Statutory Accident Benefits Schedule.

In my view, an arbitrator can only determine how a provision in the Schedule should be interpreted and applied based on an appropriate set of facts in the context of a specific dispute.

In this case, I find that the application for arbitration is premature. Mr. Gordon's concerns appear to relate to a dispute that could arise in the future in his case and in other cases. Despite Allstate's policy, Allstate has not disputed or refused to pay any claim submitted by or on behalf of Mr. Gordon for expenses incurred by Progressive Rehabilitation, under section 6(1) of the Schedule. In these circumstances, I am dismissing Mr. Gordon's application for arbitration.

Order:

Mr. Gordon's application for arbitration is dismissed.

May 23, 1996

Shemin Manji Arbitrator

APPENDIX A

Exhibits:

Exhibit 1 Criteria For Rehabilitation Case Management Of Allstate Cases In Ontario

Exhibit 2 Letter from Progressive to Allstate dated June 27, 1994

Exhibit 3 Letter from Allstate to Progressive dated July 4, 1994

Exhibit 4 Letter from Progressive to Allstate dated May 25, 1995

Exhibit 5 Letter from Progressive to Allstate dated June 14, 1995

Footnotes

Prior to January 1, 1994, Ontario Regulation 672 was called the No-Fault Benefits Schedule. After that date it became the Statutory Accident Benefits Schedule — Accidents Before January 1, 1994. In this decision, the term '"Schedule' will be used to refer to Regulation 672.
Exhibit 1
Exhibit 2, Letter dated June 27, 1994 from Progressive Rehabilitation to Allstate
Exhibit 3, Letter dated July 4, 1994 from Allstate to Progressive Rehabilitation
Exhibits 4 and 5
Letters dated May 25, 1995 and June 14, 1995 from Progressive Rehabilitation to Allstate
Sections 279, 281 and 282