Financial Services Commission of Ontario
Commission des services financiers de l’Ontario
Neutral Citation: 1998 ONICDRG 7, 1998 ONFSCDRS 7
Appeal P97-00020
OFFICE OF THE DIRECTOR OF ARBITRATIONS
LOREDANNA CARUSO
Appellant
and
GENERAL ACCIDENT ASSURANCE CO. OF CANADA
Respondent
Before:
Susan Naylor, Director's Delegate
Counsel:
Louie L. Reznick (for Loredanna Caruso)
Erin M. A. Farrell (for General Accident)
APPEAL ORDER
Under section 283 of the Insurance Act, R.S.O. 1990, c.I.8, as amended, it is ordered that:
The appeal is dismissed and the arbitrator's order dated March 27, 1997 is confirmed.
No appeal expenses are payable.
July 17, 1998
Susan Naylor Director’s Delegate
Date
REASONS FOR DECISION
I. NATURE OF THE APPEAL
This appeal is restricted to the arbitrator's refusal to award Loredanna Caruso her arbitration expenses following a two-day hearing in November 1996. The arbitration concerned Ms. Caruso's claim for payment of the cost of a "Kenko Sleep System". The arbitrator dismissed Ms. Caruso's claim. This order was not appealed.
II. FINDINGS
Ms. Caruso suffered soft tissue injuries in an accident on February 26, 1995. In September 1995, she asked her insurance company, General Accident Assurance Co. of Canada ("General Accident"), to pay for a "Kenko Sleep System", described by the arbitrator as essentially an orthopaedic mattress and pillow in which a number of magnets are embedded. When General Accident refused to pay the cost of the system of $1,607.70, Ms. Caruso applied for arbitration.
The arbitrator concluded that, on balance, the Kenko mattress and pillow were medical devices under paragraph 36(1)(f) of the Statutory Accident Benefits Schedule - Accidents after December 31, 1993 and before November 1, 1996, O. Reg. 776/93, ("the Schedule")1, and, based on the information before her, were not exempt. As such, the claim was subject to the pay-pending-dispute requirement in subsection 36(4). However, the arbitrator did not order General Accident to pay the claim because she found that Ms. Caruso's level of impairment was much less than claimed and she, the arbitrator, was not satisfied the product would be of benefit. She refused to award Ms. Caruso her arbitration expenses, explaining her reasoning at page 24 of the decision:
I find that the Applicant's claim for a Kenko Sleep System has little merit. It was supported only by Dr. Castiglione, her family doctor, and Mr. Peschmann, a sales representative, who had promoted the product to Dr. Castiglione. There was no credible evidence as to the therapeutic value of the Kenko Sleep System, and none of the medical experts supported it. I do not find this an appropriate case for the exercise of my discretion to award the Applicant her expenses incurred in the arbitration proceeding.
In Allison and Markel Insurance Company of Canada (August 21, 1996, OIC P-001231), I commented on the discretion to award expenses, and the appeal function in relation to it:
An award of expenses is a matter within the discretion of the arbitrator, although the discretion must be exercised reasonably. Because the discretion is given to the arbitrator, it should not be interfered with lightly on appeal. The arbitrator is able to consider the evidence in totality, including observing and hearing any witnesses, and usually is in the best position to assess the merits of the case and the way it was handled by the parties. Generally, his or her determination should not be disturbed unless the party appealing the order can point to a serious error in the exercise of the discretion: for example, the arbitrator adopted a wrong approach, based the decision on irrelevant considerations or inadequate evidence, or failed to look at the merits of the individual case by inappropriately fettering his or her discretion
While consistency of approach is important to the integrity and fairness of the dispute resolution system, there are bound to be shades of difference in individual arbitrators' perspectives of the cases before them. Provided that the arbitrator has approached the discretion on a proper basis, his or her judgement should not be second-guessed merely on the basis that another arbitrator might have reached a different conclusion.
In this case, the arbitrator reviewed the evidence fully in her 25 page decision. After the two-day hearing, she concluded that the claim had little validity. She was in a far better position than I am to judge the merits of Ms. Caruso's case and the way it was handled by the parties. I have carefully reviewed the record and the parties' submissions on appeal. I find no error in the exercise of the arbitrator's discretion to not award expenses. Therefore the appeal is dismissed.
The parties will bear their own appeal expenses.
July 17, 1998
Susan Naylor Director’s Delegate
Date
Footnotes
- As amended by O. Reg. 635/94 and O. Reg. 781/94. The Schedule was renamed by O. Reg 463/96.