Financial Services Commission of Ontario
Neutral Citation: 1999 ONFSCDRS 216 Appeal: P99-00053
Office of the Director of Arbitrations
Non-Marine Underwriters, Members of Lloyd's, London, England Appellant
and
Ronald Henderson Respondent
Before: David R. Draper, Director's Delegate
Counsel: Maia L. Bent (for Lloyd's) Barbara L. Legate (for Ronald Henderson)
Appeal Order
Under section 283 of the Insurance Act, R.S.O. 1990, c.I.8, as amended, it is ordered that:
The appeal brought by Lloyd's from an interim arbitration order, dated October 12, 1999, is rejected under Rule 47.2(b) of the Dispute Resolution Practice Code—Third Edition.
No appeal expenses are payable.
November 9, 1999
David R. Draper Director's Delegate
Reasons for Decision
I. Nature of the Appeal
This is an appeal by The Non-Marine Underwriters, Members of Lloyd's, London, England ("Lloyd's") from an interim arbitration decision dated October 12, 1999. Lloyd's claims the arbitrator erred in law in refusing to order Ronald Henderson to produce his farm ledgers for 1997 and 1998.
Because the appeal is from an interim order, leave is required. Rule 46.2 of the Dispute Resolution Practice Code—Third Edition states: "A party may not appeal a preliminary or interim order of an arbitrator until all of the issues in dispute in the arbitration have finally been decided, unless the Director orders otherwise." The question addressed in this decision is whether the appeal should be allowed to proceed.
The appeal was decided on the record, without oral submissions. I received written submissions from Lloyd's, but did not ask for responding submissions from Mr. Henderson.
III. Background and Analysis
Mr. Henderson, was involved in an automobile accident on November 29, 1996. At the time, he was employed full-time as a truck driver and operated a farm. Lloyd's accepted Mr. Henderson's claim and paid accident benefits, including weekly income benefits. Over time, however, disagreements arose about various aspects of his entitlement. The parties participated in mediation, but not all the disputes were resolved.
In January 1999, Mr. Henderson applied for arbitration. At a pre-hearing held on April 27, 1999, the issues were identified for the arbitration hearing, including Mr. Henderson's entitlement to income replacement benefits ("IRBs") from November 30, 1998, the correct amount of his IRBs, and a claim for the cost of past and ongoing farm labour costs. The hearing was scheduled for August 30-September 2, 1999. According to the pre-hearing letter, the parties agreed on the production of documents.
The hearing started, but was not completed in the time allotted. During the adjournment, the parties asked the arbitrator deal with a number of interim issues. One of these issues was Lloyd's request that Mr. Henderson be ordered to produce his farm ledgers for 1997 and 1998. The arbitrator heard submissions by telephone on October 12, 1999, making his orders without written confirmation or reasons.
Lloyd's tried to convince the arbitrator that the farm ledgers were needed to resolve inconsistencies in the information provided before and at the hearing. In particular, Lloyd's claimed that its accountant could not provide an accurate opinion without these source documents. Lloyd's appeals from the arbitrator's refusal to order production.
As stated above, the general rule, established in Rule 46.2 of the Dispute Resolution Practice Code, is that appeals from preliminary or interim orders are not allowed. This restriction was introduced in 1995, so earlier decisions were made in a different context. Its purpose is to avoid delay and to minimize the complexity and cost of proceedings. However, the rule is not absolute. Lloyd's has pointed to examples of decisions where the appeals adjudicator has agreed to deal with a preliminary order in an ongoing arbitration hearing.1
In my view, the decisions reflect an appropriate reluctance to intrude in the arbitration process, but a willingness to do so in circumstances where it is likely that allowing the appeal to proceed will streamline the process in some way.2 This would include situations where there is a clear error in the decision, or the appeal presents a strong argument on a key issue, making it likely that time and resources would be wasted if the appeal was not decided first. As stated in Rule 1.1 of the Dispute Resolution Practice Code: "These rules will be broadly interpreted to produce the quickest, most just and least expensive resolution of the dispute."
In its appeal materials, Lloyd's explains in considerable detail why it feels the farm ledgers are needed for a fair hearing. While the submissions are thorough and well presented, I conclude that allowing the appeal would be an undue intrusion into the arbitration process. The record suggests this is a relatively complex claim, with ongoing disagreements between the parties. The arbitrator is in a far better position, particularly in the middle to the hearing, to evaluate the relative merits of their positions. I am not persuaded that he failed to do so in making his interim order.
The onus is on Mr. Henderson to prove his claims. Therefore, the lack of records certainly will not help him. Further, as I understand it, Lloyd's has not yet presented its case. If it chooses to do so, it can call the accountant to testify about the importance of the lack of records, either to challenge Mr. Henderson's claim or to convince the arbitrator that the 1997 and 1998 farm ledgers are essential to the proper disposition of the case.
November 9, 1999
David R. Draper Director's Delegate
Footnotes
- Ms. Z and Dominion of Canada General Insurance Company, (FSCO P98-00053, December 11, 1998); Arabpour and Allstate Insurance Company of Canada, (OIC P96-00078, March 13, 1997); Menard and Royal Insurance Company, (OIC P-001055, December 3, 1992).
- For example, see Tesfay and Allstate Insurance Company of Canada, (FSCO P99-00023, June 21, 1999); Bouassali and Zurich Insurance Company, (FSCO P98-00039, November 20, 1998); and Glynn and General Accident Assurance Company, (OIC P98-00085, March 17, 1997).