Allstate Insurance Company of Canada v. Sanbetu Chidi Tesfay, 1999 ONFSCDRS 113

Financial Services Commission

Commission des services financiers de l’Ontario

Neutral Citation: 1999 ONFSCDRS 113

Appeal P99-00023A

OFFICE OF THE DIRECTOR OF ARBITRATIONS

ALLSTATE INSURANCE COMPANY OF CANADA

Appellant

and

SANBETU CHIDI TESFAY

Respondent

Before:

Nancy Makepeace

Counsel:

Todd J. McCarthy (for Allstate)

Reynold Kim (for Ms. Tesfay)

APPEAL ORDER

Under section 283 of the Insurance Act, R.S.O. 1990, c.I.8, as amended, it is ordered that:

1. Allstate’s appeal from the preliminary order of the arbitrator dated April 7, 1999 is rejected.

2. Ms. Tesfay is entitled to her reasonable appeal expenses.

June 21, 1999

Nancy Makepeace Director’s Delegate

Date

REASONS FOR DECISION

I. NATURE OF THE APPEAL

Allstate Insurance Company of Canada (“Allstate”) appeals the arbitrator’s preliminary order dated April 7, 1999. The arbitrator dismissed Allstate’s motion to bar Ms. Tesfay’s application for arbitration on the ground that Ms. Tesfay failed to comply with sections 33, 42 and 43 of the Statutory Accident Benefits Schedule – Accidents on or after November 1, 1996 (“SABS - 1996”).

This is an order to which Rule 46.2 of the Dispute Resolution Practice Code (3rd edition) (“the Code”) applies:

A party may not appeal a preliminary or interim order of an arbitrator until all of the issues in dispute in the arbitration have been finally decided, unless the Director orders otherwise.

Rule 47.2(b) states that an appeal may be rejected if it is from a preliminary or interim order that does not finally decide the issues in dispute.

The decision whether to hear an appeal of a preliminary order is discretionary. The criteria to be considered include the apparent strength of the appeal, the importance or novelty of the issue raised, and whether rejecting the appeal or hearing it will provide the quickest, most just, and most expeditious way of disposing of the issues between the parties.¹

Allstate submits that the appeal should be permitted to proceed because it raises important and novel questions of law that affect many claims. It submits that the arbitrator erred in her interpretation of section 33 of the SABS - 1996, and that her interpretation was inconsistent with the approach taken in previous arbitration and appeal decisions.² Allstate submits that the appeal can be disposed of quickly, and if it is dismissed the arbitration hearing scheduled for November 1999 will not be delayed.

Ms. Tesfay strongly objects to the appeal being heard.

II. ANALYSIS AND FINDINGS

Allstate submits that Ms. Tesfay is precluded from proceeding to mediation, and hence arbitration, as a consequence of failing to provide requested information. Alternatively, Allstate submits that Ms. Tesfay has forfeited benefits during the period of non-compliance.

Section 33 of the SABS - 1996 is as follows:

33.(1) A person applying for a benefit under this Regulation shall, within 14 days after receiving a request from the insurer, provide the insurer with the following:

1. Any information reasonably required to assist the insurer in determining the person’s entitlement to a benefit.

2. A statutory declaration as to the circumstances that gave rise to the application for a benefit.

3. The number, street and municipality where the person ordinarily resides.

4. Proof of the person’s identity.

(2) The benefit is not payable for any period before the person complies with subsection (1).

Allstate disputes the arbitrator’s finding that Ms. Tesfay complied with her duty to “provide” her family doctor’s medical records by requesting the records through her counsel and providing the adjuster with a signed OCF 5 form authorizing their release. The doctor did not respond to repeated requests from the adjuster or Ms. Tesfay’s counsel until the spring of 1998. Ms. Tesfay’s counsel also made a written request for an OHIP summary from five-years pre-accident in June 1997. It was produced almost a year later. Allstate submits that the consequences of this delay, too, must be borne by Ms. Tesfay.³

The arbitrator noted that Ms. Tesfay had no power to compel production in the absence of an arbitrator’s production order. In fact, neither party raised the issue at the pre-hearing in February 1998. The arbitrator rejected Allstate’s position that s. 33 makes the insured person responsible for delays caused by third parties. She said: “It would take explicit statutory wording to reach such an extraordinary conclusion, and I find nothing in section 33 which compels this unjust result.” She held that “section 33 should be interpreted in a purposive, rather than a punitive, manner,” and that its purpose is to “facilitate the insurer’s ability to obtain sufficient information to assess a claim for benefits.” The arbitrator concluded that Ms. Tesfay satisfied her obligations under s. 33 by authorizing release of the requested records and requesting them herself through her counsel.

Based on the submissions filed, the appeal does not have obvious merit. Subsection 33(1) expressly requires “a person applying for benefits” to provide the information.⁴ Allstate does not suggest that Ms. Tesfay could have compelled the third parties to comply with the requests in a timely way in the absence of an arbitrator’s order, and there is no suggestion she was in any way complicit in their failure to do so.

Allstate relied on Lopez and Allstate Insurance Company of Canada⁵ in which the applicant, having requested a disability DAC, refused to attend it, apparently on the advice of her counsel. In a preliminary issue decision, the arbitrator criticized “what seems to have been a total disregard for the DAC system by counsel for the Applicant.” He found that the applicant was barred from proceeding to arbitration pursuant to subsection 50(c) of the SABS-1996. Director’s Delegate Draper dismissed Ms. Lopez’ appeal of the decision. In my view, Lopez and Allstate is distinguishable from the instant case in that Ms. Tesfay’s own conduct is not impugned and she has no power to compel third parties to make timely productions – unlike her counsel, they are not her agents.

In reaching her conclusion, the arbitrator acknowledged the obligations the SABS - 1996 places on both insured persons and insurers to cooperate in the expeditious assessment of benefit claims, and the consequences of non-compliance for the parties. I find that the arbitrator’s balancing of the parties’ interests was consistent with the principles set out in Belair and F.S. and other arbitration and appeal decisions.

Allstate’s motion was heard over three days, and the arbitrator gave detailed reasons for dismissing it. On appeal, Allstate does not submit that any particular medical information is required in order for an adequate arbitration hearing to be held. In fact, much of the medical information sought by Allstate had been provided by the time of the hearing of the preliminary issue. I see no reason why any outstanding production requests cannot be dealt with by an arbitrator in the five months remaining before the arbitration hearing. Accordingly, it is not necessary for me to hear this appeal in order that an adequate hearing be held.

The dispute resolution system is intended to provide quick and inexpensive justice. Rule 46.2 reflects the legislative intent that disputes be justly resolved on their real merits without undue expenditure of the parties’ or the Commission’s resources on preliminary issues. I find that the fairest and most expeditious way of proceeding is for the remaining entitlement issues to be heard by the arbitrator in November, as scheduled. Allstate’s submissions with respect to the preliminary issue can be dealt with at a later date if the arbitrator’s final order is ultimately appealed.

For these reasons, this appeal is rejected under Rule 47.2(b) on the basis that it is an appeal from a preliminary or interim order that does not finally decide the issues in dispute.

IV. EXPENSES

Ms. Tesfay is entitled to her reasonable appeal expenses. I may be spoken to if the parties cannot resolve the amount payable.

June 21, 1999

Nancy Makepeace Director’s Delegate

Date

Footnotes

1. 1Rule 1.1 of the Code states: “These Rules will be broadly interpreted to produce the quickest, most just and least expensive resolution of the dispute.” For application of these criteria, see, for example, Glynn and General Accident Assurance Company (OIC P98-00085, March 17, 1997) and Belair Insurance Company Inc. and F.S. (OIC P96-00039, June 11, 1996).
2. 2Allstate’s Notice of Appeal also refers to sections 42 and 43, but its submissions address only the consequences of failure to provide information pursuant to section 33. Nor do Allstate’s submissions take issue with the arbitrator’s findings as to what information was “reasonably required” pursuant to paragraph 33(1)(a).
3. 3Allstate also submitted before the arbitrator that Ms. Tesfay was precluded from proceeding because certain medical records had not been provided to a Medical-Rehabilitation DAC contrary to paragraph 43(2)(a), which requires both parties to provide “reasonably necessary” information to the DAC. The DAC ultimately closed its file when the information was not forthcoming. The arbitrator applied the same analysis as she did with respect to section 33. Allstate did not deal with this issue in its appeal submissions. In any event, my comments apply equally to this aspect of the arbitrator’s reasoning.
4. 4Paragraph 43(2)(a) puts the obligation on “the insured person and the insurer.”
5. 5(FSCO A98-000161, November 6, 1998) aff’d on appeal, (FSCO P98-00058, April 30, 1999)