Liberty Mutual Insurance Company v. Molly R. Persofsky, 2001 ONFSCDRS 169

Financial Services Commission

Commission des services financiers de l’Ontario

Neutral Citation: 2001 ONFSCDRS 169

Appeal P00-00041

Appellant

and

Respondent

and

INSURANCE BUREAU OF CANADA and ONTARIO TRIAL LAWYERS ASSOCIATION and THE MINISTRY OF FINANCE

Intervenors

Before:

David R. Draper, Director of Arbitrations

Representatives:

Roland Spiegel, representing himself

Eric T. Sigurdson (for Liberty Mutual)

Jeremy R. Solomon (for Molly R. Persofsky)

S. Gordon McKee (for IBC)

Stewart C.E. Gillis (for OTLA)

Leslie McIntosh (for Ministry of Finance)

INTERIM APPEAL ORDER Application for Intervention

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

The application for intervention by Roland Spiegel is denied.

November 21, 2001

David R. Draper Director of Arbitrations

Date

This is an application by Roland Spiegel for intervenor status in this appeal. Both parties oppose the application, which proceeded based on written submissions filed by Mr. Spiegel, Liberty Mutual and Ms. Persofsky. The intervenors did not take any position. For reasons that follow, I find no compelling argument for involving another intervenor at this stage of the proceedings, particularly an individual who does not represent the interests of any recognized group.

A. Background

On June 23, 2000, Arbitrator Palmer ordered Liberty Mutual Insurance Company (“Liberty Mutual”) to pay various benefits under the SABS-1990.¹ In addition, she ordered a special award on the basis that Liberty Mutual unreasonably withheld benefits. Liberty Mutual appealed, raising two major issues. First, it challenges the amount of the special award. Second, it claims the entire arbitration is compromised by institutional bias. Liberty Mutual contends that in a system where only insured persons can choose arbitration instead of court, there will be a reasonable apprehension of bias if arbitrators do not have security of tenure and, as a result, have an interest in encouraging insured persons to choose arbitration, and an ability to do so through their decisions.

Since July 2000, when the appeal was filed, a number of procedural issues have been resolved. On December 20, 2000, I granted intervenor status to two groups on the issue of institutional bias — the Insurance Bureau of Canada (“IBC”), a national organization representing property and casualty insurers in Canada, and the Ontario Trial Lawyers Association (“OTLA”:), an organization comprised of lawyers who represent plaintiffs that focuses on issues of civil justice. These groups were given status to “present arguments based on their unique knowledge and perspective, not simply to support the position of one party or the other.” Certain conditions were imposed, including that the intervenors would not be allowed to complicate or delay the proceedings to any significant extent.

The proceedings were delayed, on consent, while Liberty Mutual pursued evidence through an application under the Freedom of Information and Protection of Privacy Act. In April 2001, I heard a motion by Liberty Mutual to accept additional evidence. The motion was contested, raising fundamental questions about the appeal. In a decision dated July 3, 2001, I allowed the motion in part, admitting some of the material as extrinsic evidence.

At about the same time the motion was heard, the Ministry of Finance applied for intervenor status on the institutional bias issue. Neither party actively resisted the application, although Liberty Mutual argued that I should not allow “stacking” of intervenors opposing its position. By letter dated August 31, 2001, I granted the Ministry intervenor status, concluding that its unique perspective would be helpful and would not significantly overlap with OTLA’s role.

At some point following the release of my decision on Liberty Mutual’s motion to admit evidence, Mr. Spiegel began raising allegations of institutional bias in cases where he represents the insured person. He refers to these other cases in his written submissions, although I am also aware of the situation hrough my role as Director of Arbitrations. His argument was rejected in one arbitration decision, which is now under appeal.² Besides this case, Mr. Spiegel is claiming institutional bias in at least six other appeals and two bias applications under s.282(12) of the Insurance Act.³

B. Intervention

The Insurance Act gives the Director of Arbitrations a discretionary authority to allow intervenors in appropriate cases:

(8) The Director may permit persons who are not parties to the appeal to make submissions on issues arising in an appeal.

In Vo and Maplex General Insurance Company, (OIC P-002777, March 11, 1994), the previous Director of Arbitrations set out the following factors for consideration in exercising this discretion:

(1) the arguments or submissions to be made by the intervenor relate directly to an issue of law which has a broader implication than the immediate one affecting the parties to the appeal;

(2) the nature of the intervenor, whether an individual, organization or corporation, including their special expertise, giving a wider perspective on the issue;

(3) the intervenor's ability to put forward or advance a point of view distinct or different from those of the parties; and

(4) the Director believes the ultimate outcome of the case may have an implication beyond the immediate interests of the parties.

I accept these criteria as reasonable guidelines for exercising my discretion in this case. While this appeal clearly raises an issue of broad importance, I am not persuaded that Mr. Spiegel’s involvement would assist the process. The parties are represented by experienced counsel and the current intervenors provide important perspectives on the question of institutional bias. In contrast, Mr. Spiegel, who is applying in his personal capacity, does not represent the interests of any recognized group. Further, he is likely to complicate the proceedings by raising substantially different issues and arguments. Some examples follow:

Liberty Mutual’s fundamental objection is being forced into a process that only the insured person can choose. That is not the situation for Mr. Spiegel’s clients.
Liberty Mutual’s appeal, including the issue of institutional bias, is being argued before me. As I understand Mr. Spiegel’s submissions, he intends to argue that I cannot hear and decide this issue.
Unlike Liberty Mutual, Mr. Spiegel intends to argue both institutional bias and actual bias.
Unlike Liberty Mutual, Mr. Spiegel intends to raise Charter issues.
Mr. Spiegel intends to raise other institutional bias issues, including the role of Designated Assessment Centres and the internal appeal process.
Mr. Spiegel can advance his institutional bias arguments on behalf of his clients in their cases.

Beyond complicating the appeal, it is far from obvious that Mr. Spiegel would be able to make a useful contribution to the appeal. As Liberty Mutual submits, his 24-page submission is difficult to follow. It includes many assertions, but no references to court decisions addressing the issue of institutional bias. Given the sophisticated legal representation already involved, I am not persuaded that Mr. Spiegel’s participation would be helpful.

For these reasons, the application for intervention is rejected.

November 21, 2001

David R. Draper Director of Arbitrations

Date

Footnotes

R.R.O. 1990, Reg. 672, as amended, the Statutory Accident Benefits Schedule—Accidents on or between June 22, 1990 and December 31, 1993.
Docoute and Zurich Insurance Company, (FSCO A00-000027, September 19, 2001), under appeal (FSCO P01-00036).
Appeals: Tesfai and Allstate Insurance Company of Canada, (FSCO P00-00048); Glinka and Dufferin Mutual Insurance Company, (FSCO P01-00004); Tanzos and State Farm Mutual Automobile Insurance Company, (FSCO P01-00017); Dhawan and State Farm Mutual Automobile Insurance Company, (FSCO P01-00025); and Fenech and State Farm Mutual Automobile Insurance Company, (FSCO P01-00040). Bias applications: Bersteyn and Allstate Insurance Company of Canada, (FSCO P01-00049); and Sverdlick and Lombard General Insurance Company of Canada, (FSCO P01-00050).