Neutral Citation: 1997 ONICDRG 167
OIC A96-001273
ONTARIO INSURANCE COMMISSION
BETWEEN:
AMINE MAHMOUD
Applicant
and
GUARDIAN INSURANCE COMPANY OF CANADA
Insurer
SUPPLEMENTARY DECISION
On July 17, 1997, I heard the parties' oral submissions by teleconference concerning Guardian's request to setoff the overpayment of benefits (agreed as $7,060.70, inclusive of interest to July 17, 1997) against the two-thirds expenses ordered by Arbitrator Miller (agreed as $3,617.38). Upon consideration of oral and written submissions, I have decided that Guardian is not entitled to setoff the repayment against Mr. Mahmoud's arbitration expenses.
The Boodhai and Allstate Insurance Company (November 21, 1994), OIC A-004002 arbitration and appeal decisions cited by Guardian stand for the proposition that the arbitrator has implied discretion to decide whether the insurer must pay the applicant's arbitration expenses, notwithstanding its repayment order. Guardian argues that because Mr. Mahmoud's misrepresention of his residency caused the repayment order, Guardian should not be forced to pay any of his expenses.
In her June 1997 decision, Arbitrator Miller recognized Mr. Mahmoud's misrepresentation of his residency by not ordering Guardian to pay his expenses for the first day's evidence. Had Guardian called only the necessary evidence in response, Mr. Mahmoud would have received no reimbursement of his expenses.
However, Arbitrator Miller also found that Guardian's witnesses were unnecessary and prolonging the proceedings by two full days. She awarded Mr. Mahmoud only the portion of his expenses for those two days so that he would not be penalized by the Insurer's conduct. A setoff of the repayment against this portion of his expenses would undermine Arbitrator Miller's specific intention that Mr. Mahmoud not bear those costs.
In a long line of OIC cases since the McCormick1 decision, the expense provisions have been interpreted to facilitate insureds' easy access to the system, promote efficiency and expeditious adjudication of claims. In my view, an insurer must exercise discretion in presenting its evidence so that the process maintains efficiency.
In this case, Arbitrator Miller's specific findings lead me to conclude that Guardian wasted time and expense for two days, thereby hampering the speed and efficiency in resolving the preliminary issue. As a result, I find that Guardian is not entitled to setoff the repayment against Mr.Mahmoud's partial award of his expenses.
Order :
- Guardian is not entitled to setoff the repayment against Mr. Mahmoud's award of expenses.
September 11, 1997
Fred Sampliner
Arbitrator
Date