Louis Branchaud v. Co-operators General Insurance Company, 1997 ONICDRG 198

Ontario Insurance Commission

Neutral Citation: 1997 ONICDRG 198

OIC A-007944

BETWEEN:

LOUIS BRANCHAUD Applicant

and

CO-OPERATORS GENERAL INSURANCE COMPANY Insurer

DECISION

Issues:

The Applicant, Louis Branchaud, was injured in a motor vehicle accident on May 4, 1991. He applied for and received statutory accident benefits from Co-operators General Insurance Company ("Co-operators"), payable under Ontario Regulation 672.¹ After accepting a lump sum payment and executing a release, Mr. Branchaud requested further benefits, which the Insurer denied. The parties were unable to resolve their disputes through mediation, and Mr. Branchaud applied for arbitration under the Insurance Act, R.S.O. 1990, c.I.8, as amended.

History of These Proceedings:

In the spring of 1996, a preliminary hearing was convened before of me. The parties sought a determination as to whether or not Mr. Branchaud's claim for further benefits ought to be dismissed on the ground that he had entered into a binding agreement with the Insurer, whereby in exchange for a lump sum payment he relinquished entitlement to all future claims for accident benefits. In the alternative, the Insurer argued that Mr. Branchaud's claim was barred as the Application for Arbitration was filed beyond the statutory time limit.

During the course of the preliminary hearing, the Applicant's counsel conceded, and I found that all of the constituent elements of an agreement were in place. The core of Mr. Branchaud's argument was a request that the agreement be set aside on equitable grounds. In a decision released on April 26, 1996, I concluded that the authority provided me by the Insurance Act, was not sufficiently broad to allow me to set aside an agreement on purely equitable grounds.

The Applicant appealed my order. The Insurer did not resist the Appeal. On May 2, 1997, Director's Delegate Susan Naylor released her reasons, in which she concluded that I had read the extent of my powers too narrowly. The matter was returned to me for a determination on the merits of the preliminary motions.

Hearing:

After the release of Director's Delegate Naylor's ruling, I received one piece of additional evidence and further submissions, by way of a telephone conference call and written submissions.

Present at the Hearing:

Applicant: Louis Branchaud

Mr. Branchaud's Representative: Linda A. Hanson, Barrister and Solicitor

Co-operators' Representative: Ivan Luxenberg, Barrister and Solicitor

Co-operators' Officer: Karen Lock

Witnesses:

The Applicant

Mr. Paul Gagnon

Mr. Jim Orr

Exhibits:

The exhibits are listed in Appendix A to these reasons.

Issues:

1. Is the agreement entered into by the parties on March 17, 1993, binding on Mr. Branchaud, such that he is precluded from seeking further statutory accident benefits?

2. In the event that the agreement is not binding, is Mr. Branchaud precluded from proceeding to Arbitration, on the basis that his Application for Arbitration was filed in excess of two years from the date of the Insurer's refusal to pay further benefits, contrary to section 281(5) of the Insurance Act?

The Applicant also seeks his expenses.

Result:

The agreement entered into by the parties on March 17, 1993 is binding on the Applicant, and he is thereby precluded from seeking further statutory accident benefits.

The Applicant is entitled to his reasonable expenses of the arbitration.

Evidence and Findings:

Background

Mr. Branchaud was involved in a motor vehicle accident on May 4, 1991. At the time of the accident Mr. Branchaud was 48 years old. He held a Bachelor of Education degree and had partially completed a Masters of Education degree. He had been actively teaching for twenty years. In May 1991, Mr. Branchaud was in the latter stages of a one-year contract with the Prescott Russell School Board, located east of Ottawa.

The medical evidence presented at the hearing established that Mr. Branchaud suffered soft tissue injuries in the accident. He managed to finish the balance of the school year by taking a few days off every week or so.

Mr. Branchaud did not return to teaching in the fall of 1991, and he applied for, and received weekly income benefits.

The Insurer retained a rehabilitation coordinator and paid for a number of different types of treatment, both physical and psychological. A "sign back letter" prepared by the coordinator and signed by Dr. Chow on December 2, 1992, records that although Mr. Branchaud had suffered a lumbar strain there was no "structural problem preventing him from resuming his former occupation." The letter also states that he suffered from a chronic pain syndrome, and that his ability to return to work was dependent upon his ability to manage the pain. He was enrolled in a pain management program at the Ottawa General Hospital.

The "Closure Report" prepared by the coordinator shortly after the settlement meeting, notes that some time prior to the meeting, the Insurer had arranged for an Insurer's Medical Examination (IME). The doctor conducting the exam suggested a psychological and vocational assessment. Based upon this recommendation, Mr. Branchaud was referred for physiotherapy, and to a psychologist. Prior to the settlement meeting, the coordinator had obtained a release to work from the pain clinic, and the psychologist had approved a gradual reintegration into the teaching profession. In addition, shortly before the settlement meeting, Mr. Branchaud was scheduled to receive a series of three steroid injections into the left sacroiliac joint. The first of these sessions was scheduled for the day of the settlement meeting.

The Settlement Meeting

Mr. Branchaud was due to receive his regular weekly income benefit check on March 18, 1993. On the morning of March 17, 1993, Mr. Paul Gagnon, the adjuster responsible for Mr. Branchaud's file, called and invited him to attend at the Insurer's offices that morning. When Mr. Branchaud asked why, he was told that another representative of the Insurer wanted to meet with him. That individual was Mr. Jim Orr, who at the time was a manager in the corporate claims office, responsible for accident benefits across Canada. He was in the Ottawa office conducting a routine file audit. Upon a review of Mr. Branchaud's file, Mr. Orr proposed a settlement meeting with a view to trying to close the file upon payment of a lump sum.

Mr. Branchaud, Mr. Gagnon and Mr. Orr participated in the meeting. All three testified as to what occurred during the meeting. Mr. Branchaud and Mr. Gagnon professed to having an actual memory of the meeting. Mr. Orr confessed that his memory of the event was "not very specific." While testifying, he relied upon a handwritten file note prepared at the conclusion of the meeting.

The testimony of the witnesses was consistent on the following significant points:

• the Insurer's representatives were aware of Mr. Branchaud's appointment for a steroid injection that afternoon.

• Mr. Orr initiated the settlement discussions.

• Mr. Orr offered something slightly in excess of $30,000

• Mr. Branchaud rejected the offer, but in turn suggested a figure of $50,000.

• The Insurer agreed to pay $50,000 in exchange for a full and final release.

• Mr. Branchaud was given an opportunity to speak privately with someone before signing the release, but did not in fact do so.

• Mr. Branchaud received a cheque that day for $50,000, in addition to his regular weekly income benefit cheque.

• Mr. Branchaud signed a "full and final release."

• Mr. Branchaud was aware that in exchange for the lump sum payment, he agreed to forego any future benefits.

• The accident happened in Quebec, but the possibility of benefits being paid in accordance with the schedule of benefits normally payable to Quebec residents, was not discussed.

There was some minor discrepancy in the evidence concerning the offer of an outside call. At the time, Mr. Branchaud had retained counsel to represent him in relation to the related tort action. Mr. Branchaud testified that Mr. Orr asked if he wanted to phone his lawyer, and gave him an opportunity to place a call in private, but that when he called, his lawyer was busy and could not speak with him. Mr. Gagnon initially testified that Mr. Orr suggested he call his lawyer and that they gave him an opportunity to call in private, but that he did not think that Mr. Branchaud had reached the lawyer. On cross-examination, he indicated that when Mr. Orr made the offer, Mr. Branchaud replied that he did not need to speak to his lawyer and that he knew what he wanted to do.

He also stated that at some point Mr. Branchaud asked him if he thought it was a good deal, but that he replied that he could not comment. In addition, Mr. Gagnon stated that at least once, Mr. Branchaud asked to speak with the previous adjuster. Mr. Gagnon gave him the adjuster's new telephone number, but did not think that Mr. Branchaud actually spoke to the previous adjuster.

Mr. Orr's file note indicates that Mr. Branchaud was asked if he wanted to talk to a lawyer or anyone else, but that he did not wish to do so.

Mr. Gagnon's initial comments on examination in chief are consistent with Mr. Branchaud's memory of trying to place a call to his lawyer, and I find that he did place such a call, but that he was unable to speak to counsel.

Mr. Gagnon's recollection of a request to speak with the prior adjuster was specific, and there would be no reason for Mr. Gagnon to create such an event if it did not in fact occur. I find that Mr. Branchaud asked to speak with the prior adjuster, but that again he was unable to do so.

In addition to these minor discrepancies, the witnesses' testimony differed on two far more important points. The first concerned Mr. Orr's explanation of the extent of potential benefits. The second concerned whether or not Mr. Branchaud was pressured to make a decision that same day.

Mr. Branchaud testified that Mr. Orr told him Co-Operators had no responsibility for weekly benefits beyond 52 weeks,² but that thereafter he could look to the tortfeasor. He admitted that Mr. Orr told him that he did not know what position the tortfeasor's insurer would take.

Mr. Gagnon testified that at the time, he was a relatively inexperienced adjuster, and that he was in attendance to learn how to present an offer. He indicated that he had a clear recollection of the discussion. He testified that Mr. Orr carefully explained the change in the test at 156 weeks, from a test based upon the person's own occupation, to a test based upon any suitable occupation. He also stated that Mr. Orr explained that it was something of a risk for both parties because they could not know with certainty what the future would hold. He recalled that Mr. Orr asked if there was a third party claim and was told there was.

Mr. Orr testified that his presentation would have followed the usual course, including a review of the change in the test at the 156-week mark. He stated that it was unlikely that he would have discussed the role of the tortfeasor's insurer.

Mr. Orr was testifying as to his usual pattern, rather than from a specific memory. In light of Mr. Branchaud's evidence that the role of the tortfeasor's insurer was discussed, and Mr. Gagnon's recollection of Mr. Orr asking about the existence of a third party action, I am satisfied that the role of the tortfeasor's insurer was discussed.

I have no hesitation in finding that Mr. Orr emphasised the difficulties in establishing entitlement to benefits in the post-156 week period, and he likely alluded to the potential for further recovery from the tortfeasor, but I do not accept Mr. Branchaud's assertion that he was told that his own Insurer had no potential responsibility beyond 156 weeks. Mr. Orr offered Mr. Branchaud an opportunity to speak with counsel before signing the release. Had he intentionally deceived Mr. Branchaud on such a key point, it is highly unlikely that he would have immediately thereafter afforded him an opportunity to uncover the deceit.

Mr. Branchaud testified that he felt pressured to settle because Mr. Orr told him he was "expensive." He stated that he concluded from this phrase that if he did not settle, the Insurer would make him fight for any further benefits. Mr. Orr testified that he would never have said any such thing, and emphatically denied that he had any intention of cutting off Mr. Branchaud's benefits if an agreement for a lump sum could not be reached. Mr. Branchaud did not suggest that any explicit threat was made to withhold further benefits if he did not settle.

Mr. Branchaud also testified that when he asked for an opportunity to consider the matter overnight, he was told that he could call his lawyer, but that they needed an answer that same day, because Mr. Orr was leaving the next day.

Mr. Orr refuted the suggestion put to him on cross-examination that he would have placed a time limit on the offer to pay $50,000. He stated there was no reason to set a time limit on the offer. In addition, he did not recall having to leave the next day.

Mr. Orr no longer works for Co-Operators and he did not have any travel records. It is not surprising that years later, Mr. Orr would have no recollection of his schedule. He was attending at a branch office in the normal course of his duties, and this settlement meeting was one of many such meetings Mr. Orr has conducted. On the other hand, Mr. Branchaud's memory was clear on this point and I accept it.

Mr. Orr's suggestion that he had no reason to put a time limit on the offer, is counterintuitive. Parties to a negotiation often put a time limit on offers in an effort to bring matters to a head and allow for the completion of the deal. I accept Mr. Branchaud's evidence that he was told that the Insurer wanted a decision that day.

It is noteworthy that I heard no suggestion that Mr. Branchaud tried to delay making a decision until later in the day, after his visit to the hospital, or that when he could not reach his lawyer in the morning, he asked for an opportunity to try again that afternoon. Rather the evidence indicates that after being told that a decision had to be made that day, Mr. Branchaud concluded the agreement and then cashed the settlement cheque on the way to the hospital.

Subsequent Events

After the meeting, Mr. Branchaud attended at the hospital for the steroid injection. Mr. Branchaud testified that initially the treatment was remarkably successful, and he thought that the doctors had found the cause of his suffering and had devised a solution. He spoke with the rehabilitation coordinator and told her that he planned to return to work in the fall, and that he did not plan to continue with psychotherapy; which I note in light of the settlement, would be at his own expense.

Mr. Branchaud also discussed the matter with his counsel. Although I heard no direct evidence concerning that meeting, Mr. Branchaud's counsel wrote to the Insurer, and a number of things can be inferred from the letter.

The letter referred to the lump sum settlement, and advised that a statement of claim as against the tortfeasor, would be issued shortly. The letter then goes on in part "I would also ask for your confirmation that but for the settlement your company would probably have not paid benefits beyond 156 weeks. Based on this information I can calculate the appropriate benefit credit that the defendant, is entitled to." Nowhere in the letter is there any suggestion that Mr. Branchaud had any complaint about the conduct of the settlement meeting or the explanations provided by the Insurer's representatives. Nor is there any suggestion that the agreed upon amount was unconscionable.

First in the absence of any mention of complaint in the letter and in the absence of any testimony from Mr. Branchaud suggesting that he complained to his counsel, I infer that Mr. Branchaud did not complain to his counsel, on this occasion, about either the Insurer's conduct, or the terms of the settlement. The first suggestion that Mr. Branchaud complained about the settlement, was in the fall, when he called the Insurer seeking further benefits.

Second, given the explicit reference in the letter to the 156 week mark, and the bearing the characterization of benefits would have on the tort claim, I conclude that Mr. Branchaud and his counsel discussed, at least in general terms, the change in the test at the 156-week mark, and the differing claims as against Mr. Branchaud's own insurer and the tortfeasor's insurer. Had Mr. Orr suggested to Mr. Branchaud that his own insurer could in no event have any responsibility beyond 156 weeks, one would have expected that to have come out in the conversation between Mr. Branchaud and his counsel. The absence of any comment in the letter, suggesting that Mr. Branchaud had been mislead, further supports my conclusion that Mr. Orr did not misrepresent the Insurer's potential liability beyond 156 weeks.

Argument And Analysis:

The Applicant's counsel asked that I set the agreement aside on three distinct grounds. First, that the Insurer had misrepresented the nature of the benefits available to her client. Second, that the Insurer had secured the agreement by means of undue influence. Third, that the agreement was unconscionable. I shall deal with each of the submissions in turn.

Misrepresentation

The Applicant's counsel raised two separate arguments with regard to misrepresentations by the Insurer's representatives.

First, Mr. Orr misrepresented the potential responsibility of the Insurer for weekly benefits beyond 156 weeks.

The second complaint amounts to a misrepresentation by omission. Counsel argues that in light of the fact the accident happened in Quebec, the Insurer's representatives had a duty to explain to Mr. Branchaud that section 18 of the Schedule afforded him an opportunity to elect benefits in the same amount and subject to the same conditions as allowed by Quebec law. In brief, section 18 provides that Ontario residents, insured pursuant to a standard Ontario policy, who are injured in an accident in Quebec, may elect to receive benefits according to the Ontario schedule of benefits, or alternatively, in accordance with the schedule of benefits ordinarily available to Quebec residents.

Regarding the responsibility of the Insurer in the post-156 week period, in light of my findings as set out in the earlier part of these reasons, it is sufficient to say that this argument cannot succeed.

With respect to the Quebec issue, a few comments are necessary. The sweeping changes brought about by the Ontario Motorist Protection Plan resulted in a dramatic shift in emphasis away from compensation from third party insurers, in favour of compensation by first party insurers. In my view, that shift, when combined with the dramatic increase in the scope and complexity of the Schedule has significantly expanded the responsibility of the adjuster when it comes to explaining to the insured person the range of available benefits.

In my view, in circumstances where section 18 applies, an adjuster negotiating with an unrepresented insured for a full and final release, cannot restrict his explanation of available benefits to the Ontario schedule. Rather, I suggest that the adjuster has a positive obligation to point out the possibility of the election. It would then be the insured persons responsibility to ascertain which benefit scheme would be more advantageous.

It follows from this that if an adjuster secured a full and final release from an unrepresented individual, without first advising them of the potential for an election, the agreement is at risk of being set aside.

In my view, it is critical to the disposition of this case to underline that the insured must demonstrate that he acted upon the misrepresentation to his detriment. In Prosser v. Progressive Casualty Insurance Company (May 28, 1997), OIC A96-000358, Arbitrator Sampliner considered the effect of a misrepresentation by an adjuster in the context of the insured's right to re-elect the category of weekly benefits under a Bill 164 claim. Arbitrator Sampliner concluded that in circumstances where the insured relied to her detriment upon a misrepresentation made by the adjuster, the insurer could not rely upon the prima facia prohibition against a re-election found in the legislation.³

In the case before me, no evidence was lead to establish what benefits would have been available to Mr. Branchaud under the Quebec scheme. In the absence of such evidence, it is impossible to state that Mr. Branchaud acted to his detriment when he entered into the settlement.

Undue Influence

Counsel for the Applicant pointed to a number of facts which she submitted when taken as a whole, amount to the exercise of undue influence on the part of the Insurer. Those facts included: the position of dominance enjoyed by the Insurer, the absence of counsel on behalf of the Applicant, the lack of prior warning of the meeting, the meeting taking place immediately before a medical procedure, the suggestion that the Applicant was expensive leading to the Applicant's belief that if he did not settle he would have to fight for future benefits, and the demand for an answer that same day.

The equitable concept of undue influence grew out of the common law doctrine of duress. Originally, duress was concerned only with threats of physical violence designed to coerce an individual into consenting to an agreement they would not freely enter into. From these beginnings, the concept expanded to encompass threats to property and later to economic duress. The courts of equity further expanded upon the notion and developed the concept of undue influence. Professor Fridman in "The Law of Contract" 3rd Ed. At p. 320 states that:

Equity was concerned with the more subtle effects of non-physical pressure upon the mind and the ultimate consent of the party being influenced.

He goes on to state:

the use by one contracting party of any form of oppression, coercion, compulsion or abuse of power or authority for the purpose of obtaining the consent of the other party may result in avoidance of the resulting contract on the grounds of undue influence.

In any negotiation, each party will attempt to exercise influence over the other in an effort to conclude an advantageous settlement. It is only when the exercise of that influence takes on an improper character, marked by an effort on the part of the dominant party to take advantage of their position to coerce the weaker into an agreement, that equity will step in to protect the weaker party from abuse. The coercion can take a number of forms, but generally it is characterized by the dominant party attempting to usurp or seriously erode the weaker party's free will and thereby extract an agreement a free individual would not enter into.

In almost every case where an insured is unrepresented, the insurer will be in a position of some dominance. The relative strengths will vary in every case, but the adjuster will always have to guard against taking improper advantage of his superior position. In this case, it is worth noting that Mr. Branchaud was a well-educated man, who demonstrated an ability to comprehend the nature of the bargain being proposed and, in fact, rejected the Insurer's initial offer and countered with one of his own.

I am concerned that the Insurer sought to enter into settlement negotiations knowing that Mr. Branchaud was attending an important medical appointment that afternoon. This concern is heightened by the fact the Insurer's representatives pushed for a decision that day. However, I heard no evidence that Mr. Branchaud expressed any reservation about meeting with Mr. Orr, or that he ever suggested during the meeting that he did not want to discuss a settlement because of the pending appointment. Nor, as noted earlier, was there any suggestion that Mr. Branchaud attempted to delay making a final decision until later in the day, so that he could discuss his condition with his doctor, or try again to reach his counsel.

In this case, a number of important factors militate against a finding that the Insurer exercised undue influence.

First, Mr. Orr offered to allow Mr. Branchaud to speak privately with counsel or the previous adjuster. This offer is inconsistent with the notion that the Insurer's representatives were attempting to force Mr. Branchaud into an agreement he would not freely enter into.

Second, Mr. Branchaud did not complain to his lawyer when he spoke with him after the settlement was effected. As stated above, this suggests to me that Mr. Branchaud did not have any complaint about the conduct of the Insurer's representatives. More particularly, it suggests that Mr. Branchaud did not feel that Mr. Orr coerced him into an agreement.

The failure to complain is also fatal to the Applicant's argument in another sense. A contract secured by the exercise of undue influence is voidable, not void ab initio. By failing to complain about the conduct of the Insurer's representatives, within a reasonable time, and instead cashing the cheque and thereafter spending the money, Mr. Branchaud effectively affirmed the contract, and he can not now seek to have it set aside on the grounds of undue influence. In that regard I am more concerned with the ongoing affirmation reflected in the spending of a sizable amount of money, than with the one time act of cashing the cheque.

Unconscionability

The most oft cited expression of the modern concept of unconscionability is Lord Denning's passage from Lloyds Bank v. Bundy, [1974] 3 All E.R. 757 at 765(C.A.).

Gathering all together, I would suggest that through all these instances there runs a single thread. They rest on 'inequality of bargaining power.' By virtue of it, the English law gives relief to one who, without independent advice, enters into a contract on terms which are very unfair or transfers property for a consideration which is grossly inadequate, when his bargaining power is grievously impaired by reason of his own needs or desires, or by his own ignorance or infirmity, coupled with undue influence or pressures brought to bear on him by or for the benefit of the other. When I use the word 'undue' I do not mean to suggest that the principle depends on proof of any wrongdoing. The one who stipulates for an unfair advantage may be moved solely by his own self-interest, unconscious of the distress he is bringing to the other. One who is in extreme need may knowingly consent to a most improvident bargain, solely to relieve the straits in which he finds himself. Again, I do not mean to suggest that every transaction is saved by independent advice. But the absence of it may be fatal...

Lord Denning used the phrase "undue influence" in a lesser sense than is encompassed in the traditional concept of Undue Influence, but it is clear that his notion of inequality of bargaining power combines an element of pressure or persuasion exerted by a party with some significant advantage, together with an element of a grossly unfair deal.

The doctrine is often associated with attempts by the courts to assist a party who negotiated a contract from a position of significant disadvantage whether by reason of physical or mental challenge, impairment or dire need. Professor Fridman in the aforementioned "The Law of Contract," at p. 329 states that before the court will intervene it:

requires that the bargain that was made was somehow unfair, that advantage was being taken, knowingly, of a gullible ignorant, or particularly vulnerable or susceptible party, that there was some dire need on the part of the victim which rendered him incapable of making a sound decision, that his emotional state was such that he could not appreciate and weigh the advantages and disadvantages of the contract, and that he was not allowed or encouraged to seek independent advice.

Mr. Branchaud is most certainly not a feeble or gullible individual, nor was he under financial duress. Mr. Branchaud testified that he felt pressured to make a deal out of fear that his benefits would be cut off if he did not, and that in that sense he was vulnerable. However, as noted above nothing in his conduct suggests that he was improperly pressured into making the deal.

In this case, the Applicant argues that the Insurer's efforts to secure a deal when it was obvious that his condition was both serious and uncertain, was improper, and that it must have been apparent to Mr. Orr that $50,000 was far short of the sum necessary to properly compensate Mr. Branchaud. Specifically, the Applicant argued that in light of Dr. Chow's diagnosis of chronic pain syndrome, it should have been obvious that it would be many years before Mr. Branchaud could return to work. Counsel argued further that the Insurer's primary interest was to secure an agreement before the full extent of Mr. Branchaud's condition, and hence, the Insurer's liability was ascertained.

The Insurer undoubtedly treated Mr. Branchaud's condition as serious. It hired a rehabilitation coordinator, funded several different treatment regimes, and was continuing to explore his condition. The agreement to pay $50,000 in and of itself attests to the seriousness the Insurer attached to the case. The chronic pain diagnosis is significant but it does not ensure Mr. Branchaud's ongoing entitlement to a weekly benefit. As always, the test is not whether he continues to be symptomatic, but whether he is incapable of engaging in suitable employment. In that regard, I note that while Mr. Branchaud was continuing to receive treatment, Dr. Brown at the pain clinic had released Mr. Branchaud to return to work, and the psychologist had released him to a gradual reintegration into the teaching profession.

Fifty thousand dollars would provide Mr. Branchaud with another full year of income replacement benefits, plus approximately $20,000 for medical and rehabilitation treatments. On this latter point, it is also noteworthy that the pain clinic program was funded by OHIP.

The fact that the end of the weekly income payments coincided with the 156-week mark is also noteworthy. As mentioned above, at the 156-week mark, the test for entitlement to ongoing weekly benefits changes from a test based upon an individual's inability to carry on with his or her own job, to one based upon a continuous inability to carry on with any suitable employment. At the time this agreement was being negotiated, no post-156 week cases had yet come before the Commission or the Courts, and insurance adjusters and counsel were unsure as to how the change in the test would be interpreted. There is no doubt that the settlement was based upon a significant amount of speculation, but I am not satisfied on the evidence presented, that it is inordinately low. By the terms of the agreement, Mr. Branchaud obtained a sizeable lump sum that he was free to use as he saw fit, without any further need to satisfy the Insurer that he continued to be entitled to benefits. He would not be subjected to the upcoming functional capacity evaluation, which may have supported his entitlement to ongoing benefits, but may very well have had the opposite effect.

On both aspects of the test, I conclude that Mr. Branchaud's claim to set aside the agreement on the grounds that it was unconscionable, must fail.

Expenses

I am satisfied that Mr. Branchaud had an honest belief that the agreement was unfair and ought to be set aside. The arguments advanced by counsel for Mr. Branchaud were not unmeritorious, and I exercise my discretion to award him his reasonable expenses of the Arbitration.

Order:

1. Mr. Branchaud's Application is dismissed.

2. Mr. Branchaud is entitled to his reasonable expenses incurred in respect of the arbitration.

November 6, 1997

Stewart McMahon Arbitrator

Date

APPENDIX A

Exhibit:

1. Copy of Letter from J.B. Watson, Ottawa General Hospital to Dr. C. Besner dated March 17, 1993.

2. Copy of Letter from Paul Gagnon to the Applicant dated December 21, 1993.

3. Copy of Application for Mediation dated December 6, 1993.

4. Copy of Letter (with Report of Mediator attached) from the OIC to the Applicant dated January 19, 1994.

5. Copy of Letter from Paul Gagnon to Hughes & Hughes dated May 7, 1993.

6. Sheet with photocopy of three cheques issued to Louis Branchaud, the Applicant from the Co-Operators.

7. Copy of Letter from Hughes & Hughes, Barristers and Solicitors to the Co-operators dated February 22, 1993.

8. Copy of Final Release dated March 17, 1993.

9. Closure Report from the Rehabilitation Services of Canada dated 4/5/93.

10. Copy of letter from Rehabilitation Services of Canada to the Applicant dated March 18, 1993.

11. Copy of cheque # 948717 in the amount of $1200 from the Co-Operators to the Applicant dated March 17, 1993.

12. Copy of cheque #293058 in the amount of $50,000 dated March 17, 1993.

13. File notes prepared by J. Orr dated March 17, 1993.

14. Letter from D.J. Hughes to Paul Gagnon dated April 20, 1993.

15. Rehabilitation Services of Canada Report dated November 23, 1992.

Footnotes

1. 1Prior 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 On or Between June 22, 1990 and December 31, 1993. In this decision, the term "Schedule" will be used to refer to Regulation 672.
2. 2The settlement discussion took place approximately two years after the accident, and it would appear that Mr. Branchaud's reference to 52 weeks, is a reference to the 156-week mark set out in section 12(5) of the Schedule.
3. 3Bill 164 pertaining to accidents occurring after December 31, 1993, and before November 1, 1996, section 61.