Neutral Citation: 2000 ONFSCDRS 37

FSCO A99-000182

BETWEEN:

INDERJIT MANGAT

Applicant

and

NON-MARINE UNDERWRITERS, MBRS. OF LLOYD'S

Insurer

DECISION ON A PRELIMINARY ISSUE

Before:

Joyce Miller

Heard:

By telephone conference on January 27, 2000.

Appearances:

Adam Wagman for Mr. Mangat

Todd McCarthy for Non-Marine Underwriters, Mbrs. of Lloyd's

Issues:

The preliminary issue in this hearing is:

Is Mr. Mangat precluded from referring his dispute with Lloyd's to arbitration in respect of his entitlement to supplementary medical and rehabilitation benefits?

Result:

Mr. Mangat may proceed with the arbitration in respect of his entitlement to supplementary medical and rehabilitation benefits.

BACKGROUND:

The Applicant, Inderjit Mangat, was injured in a motor vehicle accident on December 3, 1992. He applied for and received statutory accident benefits from Non-Marine Underwriters, Mbrs. of Lloyd's ("Lloyd's"), payable under the Schedule.¹ Lloyd's terminated weekly income benefits on May 7, 1993. The parties were unable to resolve their disputes through mediation, and Mr. Mangat applied for arbitration at the Financial Services Commission of Ontario under the Insurance Act, R.S.O. 1990, c.I.8, as amended. An arbitration was scheduled for April 25, 1994 to deal with the outstanding issues of weekly income benefits and supplementary medical benefits. On April 24, 1994 the parties settled the issues for arbitration.

Subsequent to the settlement of the arbitration, Mr. Mangat applied for mediation on August 15, 1996 regarding additional supplementary medical benefits. The mediation failed. On September 19, 1996 Mr. Mangat applied for arbitration. The issue for this particular arbitration was settled on July 15, 1997.

On September 20, 1996 Mr. Mangat issued a Statement of Claim in the General Court (Ontario Division) against Lloyd's claiming post-156 weekly income benefits, as well as asking the court to enforce the settlement agreement of April 24, 1994 regarding medical rehabilitation benefits. At paragraph nine of the Statement of Claim, Mr. Mangat stated that in the settlement agreement for the April 25, 1994 arbitration the parties agreed, along with reinstating pre-156 weekly income benefits, that:

... the total amount of benefits owing up to May 7, 1994, with interest and costs and also for medical rehabilitation expenses to date for a total sum of $33,860.41.

At paragraph ten Mr. Mangat claimed that:

The Defendant has only forwarded the sum of $26,600.76 of said agreed upon sum. Despite repeated attempts by the Plaintiff's solicitor to obtain the balance of the agreed amount [for medical rehabilitation benefits] there has been no reply. To date there is still an outstanding balance owing to Mr. Mangat of $7,259.65, which the Defendant has refused or neglected to pay.

By a court order, dated June 15, 1998, the accident benefit claim of September 20, 1996 was joined with a previous tort claim. Subsequently a trial date was set for May 1, 1999. The trial did not proceed. The tort claim was settled. The September 20, 1996 accident benefit claim still remains outstanding and no trial date has been set.

In March 1998 Mr. Mangat underwent surgery to repair two discs, which he claims was needed as a result of his car accident. In July 1998 he had a further surgery to remove scar tissue that had resulted from the March surgery. Subsequent to the surgeries Mr. Mangat applied to Lloyd's for medical and rehabilitation benefits for treatment he required as a consequence of the surgeries. Lloyd's denied his claim and Mr. Mangat applied for mediation. A mediation was held on November 18, 1998. Mediation failed. On February 15, 1999 Mr. Mangat applied for arbitration. A pre-hearing was held on September 4, 1999. An arbitration date was set for April 10 and 11, 2000.

The issue for this arbitration proceeding deals with supplementary medical and rehabilitation benefits claimed pursuant to section 6 of the Schedule. Specifically, Mr. Mangat claims $792 for a knee brace, $25,400 for Trauma Services, approximately $6,000 for chiropractic services, $1,657 for BDH Rehabilitation and $271 for taxi fare.

The Law:

Subsection 281(1) of the Act provides that if mediation fails, the insured person may bring a proceeding in a court of competent jurisdiction or may refer the issues in dispute to an arbitrator.

Subsection 282(3) of the Act provides that the arbitrator shall determine all issues in dispute, whether the issues are raised by the insured person or the insurer.

Submissions:

Lloyd's submits that the arbitration set to start on April 10, 2000 should be dismissed. Lloyd's argues that pursuant to subsection 281(1) an applicant must choose between going to arbitration or to court and that once an applicant has made his or her choice of forum then pursuant to subsection 282(3), the applicant is bound from that time on to that forum and cannot split his or her case.

Lloyd's submits that pursuant to subsection 282(3) Mr. Mangat is barred from proceeding to arbitration on a claim for medical and rehabilitation benefits because he has previously instituted a court action for the same category of medical and rehabilitation benefits. Lloyd's argued that if both proceedings are allowed to proceed there is a clear risk that different decisions will be made on the issue of causality. Lloyd's argues it would be an abuse of process and a duplicity of proceedings to allow two different forums to decide the same issue. Lloyd's submits that the proper course of action is for Mr. Mangat to add his present medical rehabilitation claim to the court case.

Mr. Mangat submits that the medical and rehabilitation issue set for arbitration is separate and distinct from the issues in his court case and that the arbitration issue is capable of being considered on its own. The issue in the court case focuses on the enforcement of a settlement agreement on May 7, 1994 regarding medical rehabilitation expenses in respect of the April 25, 1994 arbitration. His present arbitration claim deals with medical and rehabilitation expenses that arose from his surgeries in March and July 1998 and are not related to any previous medical rehabilitation expense claim.

Mr. Mangat submits that the arbitration process was designed to provide an insured person with easy access to relatively inexpensive, speedy and informal adjudication of disputes. His court claim has still to be set down for trial. Discoveries have not been completed.

Mr. Mangat submits that when the issue to be resolved is new and distinct, he should be allowed to take advantage of the faster and more expeditious arbitration route than the longer litigation route.

ANALYSIS AND FINDINGS:

For the following reasons I find that Mr. Mangat may proceed with the arbitration in respect of his entitlement to supplementary medical and rehabilitation benefits.

I am not persuaded by Lloyd's submission that pursuant to subsection 282(3) once an applicant has chosen a forum to resolve any dispute under the Schedule he or she is bound to that forum and cannot proceed in a different forum on a distinct issue. Subsection 282(3) is a recent amendment to the Act. In my view, the purpose of the amendment was to deal with the problem under the previous legislation which effectively barred an insurer from adding to the arbitration proceeding a new issue once an applicant had applied for arbitration, thus forcing an insurer to take that issue to court. In my view, by allowing an insurer to add new issues to an arbitration, the Legislature was giving effect to the underlying policy for statutory benefits, namely, providing inexpensive, speedy and effective dispute resolution. I agree with Mr. Mangat's submission that if the Legislature had intended to restrict an applicant to one form for all issues, it would have clearly stated so.

In the recent case of Reid and Royal & SunAlliance,² Arbitrator Blackman allowed the applicant to proceed in both arbitration and court because the issues in the two proceedings were distinct. In coming to his conclusion, which I agree with, he relied on the reasoning in the cases of Andreeski and Pilot³ and Oliveira and Markel.⁴

In Andreeski and Pilot Arbitrator Manji stated that "an insured person may not proceed before a court and an arbitrator in respect of the same matter or issues in dispute. However, he or she may proceed before a court and an arbitrator in respect of a different matter or unrelated issues in dispute."

In Oliveira and Markel Arbitrator Seife provided an in-depth analysis regarding the choice of forums. In this decision he stated:

The dispute resolution scheme of the Act was designed to provide insured persons with easy access to relatively inexpensive, speedy and informal adjudication of disputes. However, arbitration is not the exclusive mechanism for adjudicating disputes between an insured person and an insurer.

I find no support, either in legislation or in case law, for the Insurer's position that an insured person ought to be compelled to refer all of her or his disputes with the insurer, present or future, to one forum only. In my view, had the Legislaure intended to limit an insured person's choice of forum in the manner proposed by the Insurer, it would have worded section 282(1) of the Act, quite differently.

[Ms. Oliveira's] adjudication is not dependent on the outcome of the court matter, and the issues in arbitration are wholly capable of being resolved on their own. While there may be duplication of evidence in the two forums, and perhaps a potential for inconsistent findings of fact, in my view, this is not sufficient grounds to stay or dismiss the arbitration.

Although Arbitrator Seife was commenting on the previous legislation I find his reasoning is applicable to the present case.

In this particular case I find that the issue which Mr. Mangat has chosen to arbitrate is distinct from his court claim. I am not persuaded by Lloyd's submission that the arbitration issue is merely updating the amounts raised in the court action. The issue in Mr. Mangat's court claim deals with whether medical rehabilitation expenses in respect of the April 25, 1994 arbitration was settled on April 24, 1994. The issue for this arbitration is whether Mr. Mangat is entitled to medical and rehabilitation expenses arising out of the surgeries he underwent in March and July 1998. I accept Mr. Mangat's submission that he has chosen the arbitration route in order to have a speedy and inexpensive resolution of this new and distinct expense.

Accordingly, for the above reasons I find that Mr. Mangat may proceed with the arbitration in respect of his entitlement to supplementary medical and rehabilitation benefits.

EXPENSES:

I heard no submissions as to the expenses for this proceeding. I leave that issue for the Arbitrator who ultimately hears this matter.

February 15, 2000

Joyce Miller Arbitrator

Date