Neutral Citation: 1999 ONFSCDRS 6

FSCO A97-001227

FINANCIAL SERVICES COMMISSION OF ONTARIO

BETWEEN:

KEVIN RENNIE

Applicant

and

STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY

Insurer

DECISION

Issues:

The Applicant, Kevin Rennie, was injured in a motor vehicle accident on October 31, 1996. His insurer, State Farm Mutual Automobile Insurance Company (State Farm), refused to fund various rehabilitation services provided by Trauma Services on the basis that they were not reasonable and necessary within the meaning of the Schedule¹ At the commencement of the arbitration hearing, Mr. Rennie brought a motion requesting that I disqualify myself on the basis that the Financial Services Commission (the Commission) has demonstrated a systemic bias towards Trauma Services.

The issues in this hearing are:

1. Should I disqualify myself from hearing this case on the basis that the Commission has shown bias towards Trauma Services?

2. Is Mr. Rennie entitled to recover the cost of services provided by Trauma Services?

Both parties claimed their expenses incurred in the hearing.

Result:

1. The Commission has not shown bias against Trauma Services, and I therefore decline to disqualify myself.

2. Mr. Rennie's claim for the cost of services provided by Trauma Services is dismissed.

3. State Farm is entitled to its expenses of the hearing.

Evidence and Findings:

Issue #1. Should I disqualify myself from hearing this case on the basis that the Commission has shown bias towards Trauma Services?

a) Evidence of Janice Mackintosh

In support of his motion on bias, counsel for Mr. Rennie, Mr. Lou Ferro, subpoenaed Ms. Janice Mackintosh, an arbitrator with the Dispute Resolution Group of the Commission. Since October 1, 1998, Ms. Mackintosh has also held the position of Executive Co-Ordinator/Registrar (Acting) with the Dispute Resolution Group.

Ms. Mackintosh appeared at the hearing, represented by Mr. Joe Nemet, counsel in the Legal Services Branch of the Commission, who moved to quash the subpoena. Mr. Nemet argued that Ms. Mackintosh was not compellable by virtue of the provisions of the Financial Services Commission of Ontario Act, 1997 S.O. 1997, c.28 and the Insurance Act R.S.O. 1990 c. I.8., as amended. I will deal with each statute in turn.

Section 10 of the Financial Services Commission of Ontario Act provides:

(1) No action or other proceeding for damages shall be instituted against the Superintendent, the Director, any member of the Commission or the Tribunal, any employee of the Commission or any person engaged by the Superintendent or the Tribunal for any act done in good faith in the execution or intended execution of the person's powers or duties or for any neglect or default in the execution, in good faith, of the person's powers or duties.

Testimony in civil proceedings

(2) Neither the Superintendent, the Director, nor any member of the Tribunal shall be required to testify in a civil proceeding, in a proceeding before the Superintendent or the Tribunal or in a proceeding before any other tribunal respecting information obtained in the discharge of the person's duties under this Act or any other Act.

Same, employees

(3) Except with the consent of the Superintendent, no employee of the Commission or any person engaged by the Superintendent or the Tribunal shall be required to testify in a civil proceeding, in a proceeding before the Superintendent or the Tribunal or in a proceeding before any other tribunal respecting information obtained in the discharge of the person's duties under this Act or any other Act. [emphasis added]

Subsection 10(3) suggests that Ms. Mackintosh, who is an employee of the Commission, cannot be compelled to testify in this proceeding. The only exception is where the Superintendent consents to the proposed testimony, which has not occurred here. However, Mr. Ferro argues that section 10 only applies to acts done in good faith; he suggests that subsection 10(1), in its reference to "any act done in good faith" establishes a threshold of good faith conduct before any of the provisions in section 10 can apply. He further argues that attitudinal bias is, by definition, an act of bad faith, and therefore falls outside of the protection of section 10.

I do not agree with Mr. Ferro's submission. First, I note the legislators omitted the proviso of "good faith" from subsections (2) and (3), both of which deal with testimony in civil proceedings, unlike subsection (1), which is restricted to actions against members of the Commission. This suggests that the drafters intended a different standard to apply in each case. Second, parties should not be able to compel Commission members to testify on speculative bias motions. Bias motions should not, to begin with, be brought merely on the basis of suspicion. A sound basis for apprehension of bias is required before such an application is brought, and therefore, by implication, before anyone should be compelled to testify on the matter. Simply labelling something "bias," and therefore a case of "bad faith," does not make it so. Otherwise any conduct, no matter how innocent, could be the subject of prosecution or testimony, a result the legislators clearly intended to avoid. Therefore, even if Mr. Ferro is correct, and employees are not immune from testifying in cases of bad faith, he must first establish some basis for such an allegation. For reasons which I outline below,² he has failed to do so.

I therefore conclude that Ms. Mackintosh is exempted from testifying under section 10.

In the alternative, I find she is also exempted by subsection 11(7) of the Insurance Act, which states:

Arbitrators

(7) A person who is appointed as an arbitrator for the purposes of an arbitration under this Act shall not be required to testify in a civil proceeding or in a proceeding before any tribunal respecting any arbitration performed under this Act or respecting information obtained in the discharge of the person's duties under this Act. [emphasis added]

Mr. Ferro argues that this provision does not apply because Ms. Mackintosh was subpoenaed in her capacity as Acting Registrar, rather than as an arbitrator. Nonetheless, it is undisputed that she continues to hold the position of an arbitrator, and it was not shown that her proposed testimony would exclude "information obtained in the discharge of [her] duties" as an arbitrator. If anything, as such testimony promised to deal with the training and education of arbitrators, it would undoubtedly involve information obtained in her former role of Senior Arbitrator (Acting).³

I also note that subsection 11(7) contains no saving provision regarding "good faith" conduct. Moreover, this provision is not subject to an exception where the Superintendent consents to the proposed testimony, unlike subsection 10(3). I find, therefore, that subsection 11(7) imposes tighter restrictions on the compellability of arbitrators and, in the circumstances of this case, further suggests that Ms. Mackintosh should not be required to testify.

For all these reasons I allowed Mr. Nemet's motion to quash the subpoena served on Ms. Mackintosh, and excused her from the hearing.

b) Stay pending appeal

Mr. Ferro requested an adjournment of this arbitration pending his appeal of my decision to quash the subpoena served on Ms. Mackintosh. He relied on section 25(1) of the Statutory Powers Procedure Act, R.S.O.1990, c. S.22, which provides:

Unless it is expressly provided to the contrary in the Act under which the proceeding arises, an appeal from a decision of a tribunal to a court or other appellate tribunal operates as a stay in the matter except where the tribunal or the court or other body to which the appeal is taken otherwise orders.

However, as the opening words of this section contemplate, section 283(6) of the Insurance Act (under which this proceeding arises) provides otherwise:

An appeal does not stay the order of the arbitrator unless the Director decides otherwise.

Mr. Ferro suggests that it is impractical to appeal to the Director in the midst of a hearing, and therefore an adjournment is warranted. However, section 283(6) contemplates that hearings will proceed expeditiously, uninterrupted by interlocutory proceedings. Otherwise hearings would grind to a halt every time a party disagreed with an arbitrator's ruling. For these reasons, I denied Mr. Ferro's request for an adjournment.

c) Existence of bias

Mr. Ferro argues that the Commission should be disqualified from adjudicating this case because it has demonstrated bias against the method of care provided by Trauma Services. He relies, exclusively, on the following comments made by Arbitrator Allen in Pereira and State Farm:⁴

For reasons outlined below, I am not persuaded that the treatment Trauma Services provided to Mrs. Pereira meets the requirements of the type of service contemplated by the statutory scheme.

I do not find that Trauma Services' program constituted reasonable measures designed to meet the objectives of the scheme. The statutory accident benefits scheme requires insurers to pay for reasonable measures for rehabilitation treatment for the injuries sustained by insured persons in automobile accidents.

That is, insurers are only required to fund reasonable rehabilitation initiatives directed at treating accident-related injuries. I find this runs counter to a basic tenet of Trauma Services' treatment methodology - the desirability of treating the whole person. What this has meant for Mrs. Pereira's case is that Trauma Services has purported to address all of her conditions, whether accident-related or not, which has contributed to the excessive and unreasonable nature of the treatment and associated expenses. [emphasis in original]

In Pereira, the applicant was claiming over $100,000 for rehabilitation benefits provided by Trauma Services. Arbitrator Allen denied the claim, concluding that the services were neither necessary nor reasonable. Mr. Ferro contends that her comments in the excerpt above show that the Commission has rejected Trauma Services' approach, thereby "restricting the marketplace for health care services unreasonably." He suggests that her denial was based on a preference for a "managed health care model driven by the insurer" over a "holistic, problem-based method that treats the whole person." Mr. Ferro submits that Arbitrator Allen "has clearly outlined the Commission's policy" on this issue, leaving Mr. Rennie with a serious apprehension of bias.

I see no merit in this submission. First, I do not agree that Arbitrator Allen's comments regarding Trauma Services can be taken to represent the views of the entire Commission. Nothing suggests that her decision was not reached independently, or that it was intended to express the views of any other arbitrator. Second, Arbitrator Allen did not dismiss the claim because she disagreed with the method of care provided by Trauma Services, but rather because its approach to Mrs. Pereira did not satisfy the criteria under the Schedule - that is, it was neither reasonable nor necessary, or was not shown to be related to the accident. It was entirely proper, and in fact required, for her to approach the case in this manner.

Mrs. Pereira appealed the decision in her case, arguing that the arbitrator displayed "an unusual attitudinal bias." Shortly after this hearing took place, but before I could release this decision, Director's Delegate Draper dismissed Ms. Pereira's appeal, and made the following comments regarding the complaint of bias:

Section 40 of the SABS-1994 clearly contemplates rehabilitation that broadly considers the injured person's particular circumstances. A rehabilitation program that is so standardized that it fails to meet the person's needs would not be a reasonable expense. However, the insurer's obligations are limited. It must respond to impairments resulting from an accident. Consequently, a service provider that makes little or no effort to separate accident and non-accident related conditions is bound to have trouble communicating with insurers.

Mr. Ferro suggests that the arbitrator refused to recognize the services provided by Trauma Services because they challenge the mainstream, cost-control model. I do not agree. At page 37 of her decision, the arbitrator specifically says that "unconventionality in itself ought not to be fatal to a program being considered for funding." However, in this case, she found that the services were not reasonable measures because Mrs. Pereira's needs were adequately met through other services up to March 1996 and after that date, no further services were needed. In the alternative, the arbitrator found that even if Mrs. Pereira needed additional rehabilitation, the services provided by Trauma Services were not reasonable because they promoted dependency instead of facilitating her return to her pre-accident activities and, in addition, the billings were excessive. The record shows that there was ample evidence to support the arbitrator's findings...

I agree with these remarks. Mr. Rennie did not persuade me that the arbitrator's comments in the Pereira case show bias towards Trauma Services, either on her part or by the Commission as a whole, and I therefore dismissed his request that I disqualify myself.

Issue # 2: Is Mr. Rennie entitled to recover the cost of services provided by Trauma Services?

After I dismissed Mr. Rennie's motion regarding bias, Mr. Ferro advised that he was calling no evidence in support of the claim against Trauma Services. As the onus rests on Mr. Rennie to establish this claim, and there was no evidence before me, I dismissed the claim against Trauma Services.

Expenses:

Each party requested that its expenses be paid by the other.

Mr. Ferro submitted that even though Mr. Remiie's claim was dismissed, he raised a "real and serious concern" regarding restricted access to health care services. He argued that to deny Mr. Rennie's expenses would be a "further assault" on such access. Moreover, requiring him to pay State Farm's expenses would penalize him for challenging the Commission's policies.

State Farm asserted that Mr. Rennie should pay its expenses, because he put the Insurer to needless expense. It noted that although the hearing was scheduled eight months ago, Mr. Rennie waited until the week before the hearing to raise a frivolous allegation of bias. The Insurer therefore wasted considerable resources preparing to defend the claim on its merits. It suggests that if Mr. Rennie had concerns about the Commission's fairness he should have elected to bring his claim in court.

I find significant merit in State Farm's position. Where warranted, a bias application is an important safeguard to insure fairness and impartiality. However, as the Director of Arbitrations has noted previously,⁵ an allegation of bias is a very serious matter. It should be made only where there is evidence which could lead a reasonable person to apprehend bias. For reasons stated above, I find no such evidence here. Instead, it deserves the sort of comment made by the British Columbia Court of Appeal⁶ when it dismissed an application for judicial review on the grounds of bias:

This case is an exemplification of what appears to have become general and common practice, that of accusing persons vested with the authority to decide rights of parties of bias or reasonable apprehension of it without any extrinsic evidence to support the allegation. It is a practice which, in my opinion, is to be discouraged. An accusation of that nature is an adverse imputation on the integrity of the person against whom it is made...It ought not to be made unless supported by sufficient evidence to demonstrate that, to a reasonable person, there is a sound basis for apprehending that the person against whom it is made will not bring an impartial mind to bear upon the cause. As I have said earlier, and on other occasions, suspicion is not enough...

I find that Mr. Rennie failed to raise any legitimate concerns about access to health services or bias in favour of one health care model over another. Moreover, his counsel conducted this case in a wasteful and counter-productive manner. If, after reading the decision in Pereira, Mr. Ferro was as indignant as he claims, he could have immediately brought a motion in this case to determine the issue of bias. Instead he did nothing until one week before the hearing, causing State Farm to spend considerable time and resources preparing to defend the substantive issues regarding Trauma Services.

Mr. Ferro claims that he wanted to wait for the outcome of the appeal on Pereira, hoping that it would affirm his contention that the arbitrator showed bias. I see little wisdom in this approach. The filing of a dubious appeal on another case involving Trauma Services is no excuse for dragging State Farm along on this matter until the eleventh hour.

For all these reasons, I find that State Farm is entitled to its expenses of the hearing. Regrettably, I have no jurisdiction under the legislation to require Mr. Rennie's counsel, whom I find primarily responsible for this ill-guided effort, to pay those expenses personally. However, given my comments, one can only hope that this burden is not allowed to rest on Mr. Rennie personally.

Order:

1. Mr. Rennie's motion that I disqualify myself on the basis of institutional bias is dismissed.

2. Mr. Rennie's claim for the cost of services provided by Trauma Services is dismissed.

3. Mr. Rennie's claim for his expenses of the arbitration is dismissed.

4. State Farm is entitled to its expenses of the arbitration.

January 7, 1999

Deena Baltman Arbitrator

Date

Hearing:

The hearing was held in Hamilton, Ontario, on October 26, 1998, before me, Deena Baltman, Arbitrator.

Present at the Hearing:

Mr. Rennie's Representative: Lou Ferro Barrister and Solicitor

State Farm's Representative: Joseph J. Sullivan Barrister and Solicitor

State Farm's Officer: David Dim

Ms. Mackintosh's Representative: Joe Nemet

Footnotes

1. 1The Statutory Accident Benefits Schedule —Accidents after December 31, 1993 and before November 1, 1996, Ontario Regulation 776/93, as amended by Ontario Regulations 635/94, 781/94 and 463/96.
2. 2Pages 6-8
3. 3Ms. Mackintosh held the position of Acting Senior Arbitrator from July 1995 until September 1998.
4. 4Pereira and State Farm Mutual Automobile Insurance Company, (OIC A96-000996, April 24, 1998)
5. 5Kahkesh and Lloyd's Non Marine Underwriters, (OIC P-000378, August 19, 1992)
6. 6Adams v. Workers' Compensation Board (1989), 42 B.C.L.R. (2d) 228 (C.A.) These comments were recently quoted with approval by Madame Justice Chapnik in Muscillo Transport Ltd. v. Ontario License Suspension Appeal Board) 1997 CanLII 12317 (ON CTGD), [1997] O.J. No. 3062