Financial Services Commission

Commission des services financiers de l’Ontario

Neutral Citation: 2000 ONFSCDRS 91

Appeal P99-00033

OFFICE OF THE DIRECTOR OF ARBITRATIONS

DHARAM PAUL

Appellant

and

ALLSTATE INSURANCE COMPANY OF CANADA

Respondent

Before:

David R. Draper, Director's Delegate

Representatives:

Marvin Litvack (for Dharam Paul)

Stuart Aird (for Allstate)

APPEAL ORDER

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

1. The appeal is dismissed and the arbitration decision dated May 28, 1999 is confirmed.

2. No appeal expenses are payable.

May 18, 2000

David R. Draper Director’s Delegate

Date

REASONS FOR DECISION

I. NATURE OF THE APPEAL

This is an appeal by Dharam Paul from an arbitration order dated May 28, 1999. He contends that the arbitrator erred in concluding that his claim for accident benefits is out-of-time.

II. BACKGROUND AND ANALYSIS

Mr. Paul was involved in an automobile accident on September 19, 1994. Two days later, he reported the accident to Allstate Insurance Company of Canada (“Allstate”). On September 28, 1994, Allstate mailed three standard, approved forms to Mr. Paul, entitled “Application for Accident Benefits,” “Employer’s Confirmation of Income,” and “Health Practitioner’s Certificate.” Allstate also sent a covering letter advising Mr. Paul as follows:

Please read the instructions carefully and answer all the questions on the enclosed form.

Please make sure the application and authorization forms are returned soon, so we can begin payments. If it is convenient, please have your employer complete the form entitled “Employer’s Confirmation of Income”, if your claim involves weekly benefit payments.

Payment of medical bills that are not covered by any other medical plan may also be available. Please submit these bills for consideration.

I understand how complicated these forms can appear if you are seeing them for the first time, so please call me if you need help with any of them.

According to s.59(3) of the SABS-1994¹, the insured person’s application for accident benefits must be submitted to the insurer within 90 days of receiving it.² Although Mr. Paul acknowledges receiving the covering letter and forms shortly after they were mailed, he did not submit his application until October 1995, more than a year later. At that point, he claimed weekly income benefits, but only for the eight-month period from the accident until June 5, 1995, and roughly $300 in medical expenses.

More than two years later, during which Mr. Paul claims Allstate never responded to his application, he applied for mediation, acting on his own behalf. The mediation failed, with Allstate taking the position that the claim was out-of-time. Allstate did not argue that the mediation was out-of-time, but that Mr. Paul’s original application was submitted more than 90 days after he received the forms.

Mr. Paul applied for arbitration, again representing himself. At the pre-hearing, two dates were set. A preliminary hearing was scheduled for March 1999 to deal with the out-of-time issue. A two-day hearing was scheduled for June 1999 to deal with Mr. Paul’s claim for accident benefits if he was successful on the preliminary issue.

At the preliminary issue hearing, Mr. Paul represented himself. He gave evidence, cross-examined Allstate’s witness and made submissions. He relied on the fact that the time limit in s.59(1) is not absolute. Subsection 59(4) of the SABS-1994 provides that the failure to comply with the 90-day time limit does not disentitle the insured person if he or she has “a reasonable excuse.” Consequently, the specific issue before the arbitrator was whether Mr. Paul had a reasonable excuse for submitting his application more than 90 days after receiving the application form.

Mr. Paul’s excuse was that he was unaware of the 90-day time limit because Allstate failed to alert him to it. In response, Allstate called its claims representative. According to the arbitrator, the claims representative acknowledged that she had no specific memory of this file, but relied on a computer diary where she recorded relevant activity on the file. She testified that following her initial telephone conversation with Mr. Paul, she sent a standard application “package” — a pre-printed booklet containing a number of forms bound together by perforated edges, with the first two pages providing an explanation of the forms, including the following:³

The Application for Accident Benefits form must be returned within 90 days or you may lose your right to benefits. If you are unable to return it within 90 days, submit it to your insurance company anyway and explain why you were not able to complete it within 90 days. Return the original form to the insurance company and make a copy for your records. [emphasis in original]

Mr. Paul maintained that the package he received did not include this explanation. He argued that the claims representative, or someone else at Allstate, must have ripped it out before it was sent.

The arbitrator had to weigh the conflicting evidence and make findings of fact. This is what she did. She looked at Allstate’s actions, finding that its claims representative responded promptly and professionally to Mr. Paul’s initial contact. In her view, this made it implausible that the claims representative or anyone else at Allstate would have attempted to thwart Mr. Paul’s claiming by removing the explanation from the application package.

The arbitrator also found evidence to support Allstate’s contention that Mr. Paul sustained few, if any, losses in this accident. She found that he initially reported only a laceration on his chin and forehead, and did not require therapies or referrals for medical treatment. Although he told his family doctor about the accident five days after it happened, the arbitrator found that he did not mention it again until June 1995, despite 28 visits for other matters. The arbitrator also found that Mr. Paul initially advised Allstate that he had not been employed in the past three years. Consequently, she rejected Mr. Paul’s contention that he failed to apply for benefits because he was unaware of the time limit. Instead, she found it more likely that he simply neglected or declined to apply despite being properly advised of the time period.

With the assistance of a paralegal company, Mr. Paul appealed the arbitrator’s decision. The Notice of Appeal raises a number of specific grounds. Although these grounds were never abandoned, they were not pursued in either Mr. Paul’s written or oral submissions. Instead, he simply argued that it is unfair to prevent him from claiming benefits for which he paid premiums.⁴ In Mr. Paul’s submission, he should be given the benefit of the doubt in light of Allstate’s inability to prove conclusively that he received the full application package. He also points out that the covering letter from Allstate simply says that the claim should be made “soon,” without setting out the time limit. Further, the application forms themselves do not include the time limit which, in his submission, should be set out in bold.

I am unable to accept Mr. Paul’s arguments. The main problem is that his written and oral submissions do not raise any question of law. The arbitrator asked the right question — does Mr. Paul have a reasonable excuse for failing to apply for accident benefits within the 90-day period? She evaluated the conflicting evidence, rejecting Mr. Paul’s contention that he did not receive a complete application package. Although Mr. Paul does not agree with this finding, it was within the arbitrator’s authority and will not be disturbed on appeal. As this was the basis of Mr. Paul’s excuse, the arbitrator concluded that his claim was out-of-time.

Arbitrators have an obligation to apply the legislation, including the time limits. If the 90-day time period were not enforced in this case, it is difficult to imagine when it would be. This is not a situation where the onset of the disability was delayed. Mr. Paul’s claim starts from the date of the accident. As I understand it, he claims that he had a job offer that he was unable to pursue from the date of the accident until June 1995.⁵ Despite this alleged impact on his life, he did not apply for any type of benefits until October 1995, more than a year after he received the forms and more than 90 days after his claim for income replacement benefits ended.

The time limit in s.59(1) is intended to ensure that claims are made in a timely fashion. This serves at least two purposes. First, the insurer will be able to evaluate the claim while the information is still fresh. In this case, there would be questions about the job offer and Mr. Paul’s condition that likely became more difficult to evaluate as time passed. Second, the time limit reflects the underlying purpose of accident benefits — ensuring that injured persons receive benefits when they need them regardless of fault.

Both parties are to act quickly. The insured person is to notify the insurer of the claim within 30 days and submit his or her application within 90 of receiving the application forms. For its part, the insurer is to provide the forms promptly and respond to the claim within 30 days of receiving an application or face significant interest payments. In this case, Mr. Paul did not meet his obligations and, as a result, is not entitled to proceed with his claim.

With respect to the more specific errors alleged in Mr. Paul’s Notice of Appeal, I find them without merit. I have summarized the arguments, followed by my reasons for dismissing them:

• The arbitrator erred in law in failing to swear or affirm Mr. Paul, while receiving sworn testimony from Allstate’s claims representative.

While the Dispute Resolution Practice Code and the Statutory Powers Procedure Act give arbitrators the authority to require that testimony be given under oath or affirmation, it is not required. Testimony that is not given under oath or affirmation can also be accepted. Even if it might have been preferable to have him testify under oath or affirmation, I am not persuaded that it had any impact on the outcome. The arbitrator considered the testimony of both Mr. Paul and Allstate’s claims representative without any reference to whether it was given under oath or affirmation.

• The arbitrator erred in law in failing to allow Mr. Paul to present documentary evidence.

There is no evidence that Mr. Paul’s ability to present evidence was restricted in any way.

• The arbitrator erred in law in failing to record the hearing.

The Dispute Resolution Practice Code makes the recording of arbitrations permissible, not mandatory. This was confirmed in the pre-hearing letter, dated January 29, 1999, sent to Mr. Paul:

It is not the usual practice of the Financial Services Commission of Ontario to arrange for a court reporter to the record the arbitration proceedings. If a party wishes to have a court reporter present at the hearing, that party must inform the other parties and the adjudicator, make the necessary arrangements and pay the cost directly to the person or agency providing the reporting service. Please refer to Section 72 of the Code.

• The arbitrator erred in law in failing to take into account the “mysterious and convenient” loss of Allstate’s file.

There is no evidence that Allstate lost Mr. Paul’s file.

• The arbitrator erred in failing to take into account Allstate’s inability to prove that it sent the full application package to Mr. Paul.

As set out above, the arbitrator weighed the conflicting evidence and found that Mr. Paul received a complete application package, including the explanation pages.

• The arbitrator erred in law in cross-examining Mr. Paul and, in effect, acting as prosecutor.

Arbitrators are entitled to ask questions. While they should not intrude unduly into the proceeding or usurp the functions of the parties and their counsel, there is no evidence that the arbitrator did so in this case.

• Even if the arbitrator did not accept Mr. Paul’s evidence, she erred in law in failing to accept that his lack of knowledge of the claims period was sufficient to establish a reasonable excuse.

Mr. Paul advanced an explanation that he claimed amounted to a reasonable excuse. The arbitrator rejected it, finding that he received the appropriate forms, including an explanation of the 90-day time limit. There was evidence to support her findings and, in my view, her findings support her conclusion.

For these reasons, the appeal is dismissed.

May 18, 2000

David R. Draper Director’s Delegate

Date

Footnotes

1. 1Ontario Regulation 776/93, as amended, the Statutory Accident Benefits Schedule — Accidents after December 31, 1993 and before November 1, 1996.
2. 2While nothing turns on it, I note that the arbitrator incorrectly states that the 90-day time period runs from the insured person providing notice of the accident to the insurer.
3. 3Arbitration Exhibit 1.
4. 4Although Mr. Paul’s submissions suggest that he made the payments on the Allstate policy, the record suggests that the named insured was Jai Paul and that Mr. Paul did not have his own automobile insurance.
5. 5His expense claims are also from early 1995.