Financial Services Commission of Ontario
Neutral Citation: 2000 ONFSCDRS 80 FSCO A99-000656
Between: Concetta Nigro, Applicant and State Farm Mutual Automobile Insurance Company, Insurer
Decision on a Motion
Before: John Wilson Heard: By telephone conference call on April 14, 2000.
Appearances: Sam Pitaro for Mrs. Nigro Dana Bruce Hanson for State Farm Mutual Automobile Insurance Company
Issues:
The Applicant, Concetta Nigro, was injured in a motor vehicle accident on September 3, 1995. She applied for and received statutory accident benefits from State Farm Mutual Automobile Insurance Company ("State Farm"), payable under the Schedule.1 The parties were unable to resolve their disputes concerning the payment of income replacement benefits through mediation, and Mrs. Nigro applied for arbitration at the Financial Services Commission of Ontario under the Insurance Act, R.S.O. 1990, c.I.8, as amended (The Insurance Act). The arbitration hearing is scheduled for May 8, 9, 10, 11, 15 and 16, 2000.
A pre-hearing was held on October 20, 1999 at the offices of the Financial Services Commission of Ontario. At that pre-hearing, I made, inter alia, the following order:
The Insurer is ordered to produce to the Applicant copies of all adjuster's notes relating to the adjustment of this file, whether written or electronic, from the date of the accident to the date of the application for mediation. If the Insurer withholds a note or document on the basis that a note or document is privileged, counsel shall provide a description and summary of that note or document, together with an explanation of the claim for privilege. Counsel shall produce these notes within 60 days of the date of the pre-hearing.
The Insurer provided the Applicant with copies of the handwritten notes of the adjuster on December 17, 1999, subject to certain deletions.
On March 3, 2000, Mr. Sam Pitaro, the solicitor for the Applicant, wrote to counsel for the Insurer, reiterating his request for the balance of the notes, and objecting to the deletion of parts of the handwritten notes. He also requested particulars of any claim for privilege being claimed.
On April 6, 2000, Mr. Pitaro wrote to the Commission, requesting a resumption of the pre-hearing to deal with "outstanding production issues." The issues in question related to non-delivery of the complete adjuster's notes referred to in my order, including any reference to reserves.
Accordingly, a resumption of the pre-hearing was arranged which took place on Friday, April 14, 2000 by teleconference.
During the resumption of the pre-hearing conference, Mr. Pitaro argued that no privilege could attach to the deleted portions, since the entries were made well before mediation, and well before counsel was retained. The Applicant has submitted that it was not at all clear that the parties would necessarily be adverse in interest.
State Farm conceded that it was not advancing a claim for either litigation privilege, or for solicitor-client privilege, but was objecting to the production of the deleted portions on the grounds that they were irrelevant to any of the issues in this matter.
The courts, especially since the decision of the Supreme Court in Stinchcombe, (Stinchcombe v. the Queen (1991), 1991 CanLII 45 (SCC), 68 C.C.C. (3d) 1) have been inclined to widen disclosure requirements. This liberal approach was summed up by Cory J.A. in Cook v. Ip et al. (1985), 1985 CanLII 163 (ON CA), 52 O.R. (2nd) 289 at page 292.
There can be no doubt that it is in the public interest to ensure that all relevant evidence is available to the court. This is essential if justice is to be done between the parties.
In an arbitration hearing which has no provision for formal discoveries, the exchange of documents provides one of the principal means of gathering relevant information.
Subsection 22(1) of the Insurance Act provides:
For the purpose of exercising the powers and performing their duties under this Act, the Director, and every arbitrator has the same power to summon and enforce the attendance of witnesses, and compel them to give evidence on oath or otherwise, and to produce documents, records and things, as is vested in the Ontario Court (General Division) for the trial of civil actions. [my emphasis]
Arbitrators have routinely ordered the production of otherwise confidential, but non-privileged, material such as extensive clinical notes and records of treating physicians, where a reasonable argument was made by one of the parties that the documents would be relevant to the matters in issue at the arbitration.
Section 32.4 of the Dispute Resolution Practice Code provides that:
An arbitrator may at any time order the production of any document or the giving of information that he or she considers relevant to the determination of the issues in the arbitration, on such terms as he or she considers appropriate.
Section 15 of the Statutory Powers Procedure Act (the "S.P.P.A.") outlines evidence that is not admissible at hearings. Subsection 15(2) provides:
Nothing is admissible in evidence at a hearing,
(a) that would be inadmissible in a court of law by reason of any privilege under the laws of evidence; or
(b) that is inadmissible by the statute under which the proceeding arises or any other statute.
As previously noted, privilege is not an issue in this matter. As well, I have had no statutory provision brought to my attention that would specifically restrict the disclosure of file references to reserves, as provided for by subsection 15(2)(b) of the S.P.P.A.
I am asked to decide instead on the relevance of the excised portions of the adjuster's notes. I have been provided with copies of the notes, including the excised portions.
The notes in question deal with aspects of the reserve that insurers are required to maintain to reflect their potential liability in any matter. References are also made in the excised portions of State Farm's notes to the "authorization" amount for the adjuster on the file, and requests to vary this authorized amount.
At issue in this arbitration are Ms. Nigro's entitlement to income replacement benefits, and her claim for a special award pursuant to subsection 282(10) of the Insurance Act on the grounds that the Insurer unreasonably withheld or delayed payment of the income replacement benefits.
Ms. Nigro argues that the adjuster's notes, prior to mediation, should be produced in their entirety because of the first-party relationship between her and the Insurer. In essence, until it is clear that the parties are adverse in interest, access to the files should be her right.
I find that to allow an absolute right to inspect and receive production of each and every document in a file, without exception, is to cast a net that is too wide, and too inflexible. It would not permit any claim for confidentiality, however unlikely, or for privilege relating to any part of the file. Instead, I find Ms. Nigro's alternative argument to be more appropriate to the production process.
Ms. Nigro argues, in the alternative, that the deleted portions of the notes are relevant to the issue of her income replacement benefits, and may reasonably shed some light on how the Insurer's adjustment of her claim proceeded. If they can reasonably be expected to contain information that might prompt an arbitrator to find that the failure to pay benefits to Ms. Nigro was unreasonable, then that information should be available to the hearing arbitrator.
I accept Ms. Nigro's submissions and find that the deleted references should be produced. The Applicant has raised a reasonable argument for their relevance to the issues in this arbitration.
A decision to pay or not to pay benefits involves an analysis by the Insurer of whether an applicant meets the statutory criteria for benefits. Necessarily such an evaluation will contain both objective and subjective elements.
Usually, the objective elements of a claim can be ascertained from documents such as the reports of physicians, or the claims documents themselves. Evidence of the subjective aspects of the adjustment of a claim is, however, more elusive.
When the internal decision-making of the Insurer is being impugned by an applicant, as in the case of a special award, it is next to impossible to present a case without access to the internal documents of the Insurer.
Even when all documentary records are produced, there would likely be no record of conversations or verbal instructions, unless confirmed by a letter or memo. As a result, a relatively innocuous piece of information can be critically important, if it provides the key to a puzzle.
Ms. Nigro states that the adjuster's suggestion of a reserve number may provide an indication of his evaluation of the claim.
If an adjuster suggested, for example, through the reserve numbers, that there was a potential for significant exposure for the Insurer, then an argument might be made that a refusal to pay benefits may not have been reasonable, since it did not reflect even the adjuster's own appreciation of the claim.
Without access to the entire document, however, Ms. Nigro is forced to argue the relevance of the excised portions in a vacuum. It may well be unfair and counter-productive to the fairness of the hearing process to oblige a party to prove that a document is relevant, to the same degree that would be required for admissibility of the document at the ultimate hearing of the matter.
McMahon J. of the Alberta Court of Queen's Bench in Allied Signal Inc. v. Dome Petroleum ([1995] A.J. No. 1100) held that an applicant was only required to show the possibility of relevance to justify an order for production of documents on matters which might possibly be relevant to the issues in a proceeding.
Such an approach is consistent with the practice of the Commission in routinely ordering full production of the medical records of applicants, up to one year prior to the motor vehicle accident, without the necessity to demonstrate the relevance of each and every document contained in the record.
I find that, if an applicant demonstrates a reasonable possibility that a document in an insurer's file is relevant to the issues at arbitration, that is sufficient to allow an arbitrator to order production of the document, subject to any claim for privilege.
The courts have consistently held that relevant documents should be produced, even if they might otherwise be confidential. Hall J.A. of the British Columbia Court of Appeal, held in Agala v. Agala (1998 CanLII 6428 (BC CA), [1998] B.C.J. No. 2827), that documents can be ordered to be produced prior to the trial, subject to the ultimate relevance being decided by the trial judge. This approach is in accordance with section 36.1 of the Code which provides for the hearing arbitrator to determine "...the relevance, materiality and admissibility of the evidence."
I find that the Applicant has raised a reasonable case for the relevance of the references to both reserves and authorizations contained in the blacked out portions of the adjuster's notes as produced, and order that they be produced in accordance with my order of October 20, 1999. I leave it to the hearing arbitrator to determine whether the documents in question are admissible at the hearing.
April 28, 2000
John Wilson Arbitrator
Footnotes
- The 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, 463/96 and 304/98.