Financial Services Commission of Ontario

Commission des services financiers de l’Ontario

Neutral Citation: 2001 ONFSCDRS 170

Appeal P01-00017

OFFICE OF THE DIRECTOR OF ARBITRATIONS

BARBARA TANZOS Appellant

and

STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY Respondent

Before: David R. Draper, Director of Arbitrations

Representatives: Roland Spiegel (for Barbara Tanzos) R. Shawn Stringer (for State Farm)

APPEAL ORDER - MOTION

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

Barbara Tanzos' motion that I appoint an arbitrator under the Arbitration Act, 1991 to decide her claim of institutional bias is denied.
The expenses of this motion will be decided in the appeal.

November 21, 2001

David R. Draper Director of Arbitrations

Date

REASONS FOR DECISION

I. SUMMARY

This is a motion by Barbara Tanzos for the appointment of an arbitrator under the Arbitrations Act, 1991 to decide her contention that proceedings at the Financial Services Commission of Ontario ("FSCO") are tainted by institutional bias.

II. BACKGROUND

Barbara Tanzos was injured on May 23, 1998, when her stationary automobile was rear-ended by a pick-up truck. After completing her errand, she went to a hospital emergency room where she was told to take pain medication and see her family doctor. Ms. Tanzos rested for the remainder of that day, a Saturday, and the following day, and then returned to her job as an assembler at a car parts plant on Monday. She saw her family doctor, Dr. Woodrow, the next day.

Ms. Tanzos continued working for just over a month. During that period, she took large doses of pain medication and received physiotherapy treatment on referral from Dr. Woodrow. On July 1, 1998, her plant shut down for one week. After the plant reopened, Ms. Tanzos worked for two days, but decided that she could not continue due to pain.

After stopping work, Ms. Tanzos asked State Farm Mutual Automobile Insurance Company ("State Farm") to fund treatment for her neck and shoulder pain, headaches and numbness in her right arm. State Farm refused. As a result, she was assessed at Work Able Centres Inc., a Designated Assessment Centre ("DAC"), in late September 1998. The assessors recommended that Ms. Tanzos follow a home exercise program and attend one session with a physiotherapist to review her exercises. They did not recommend any further physiotherapy treatment.

Before the DAC assessment, Dr. Woodrow decided to refer Ms. Tanzos to DEAHY Medical Assessments Inc. ("DEAHY") because he wanted a proper assessment to give him "something to work with." As a result of this referral, Ms. Tanzos underwent three assessments at DEAHY — a medical assessment by Dr. Brian Alpert, a "pain management and consulting orthopaedic surgeon," an ARCON functional abilities evaluation ( "FAE") and a psychological assessment. State Farm paid for the psychological assessment, but refused to pay for the medical assessment ($1,250) and the FAE ($1,150). It did not quarrel with the amounts charged for these assessments, but maintained that they were unnecessary due to the information provided by the DAC.

These claims went to arbitration. In a decision dated April 10, 2001, the arbitrator allowed Ms. Tanzos' claim for the medical assessment, but concluded that the FAE was not a reasonable expense. Ms. Tanzos appealed from this order, claiming the arbitrator made serious errors by ignoring material evidence, considering irrelevant information, making findings unsupported by the evidence and misinterpreting the law. State Farm did not appeal.

In late May 2001, Ms. Tanzos' representative, Mr. Spiegel, filed written submissions in support of the appeal. Following receipt of State Farm's written submissions, the appeal hearing was scheduled for November 8, 2001. On November 1, 2001, one week before the hearing, Mr. Spiegel sent a 21-page document entitled "Motion/Application Before the Director." Stated broadly, it claims that FSCO arbitrators, the Director of Arbitrations and Director's Delegates cannot hear any issues dealing with entitlement to accident benefits due to institutional bias and, at least in some cases, personal bias.

Although State Farm had short notice of the issues raised in the motion, they did not come as a surprise to me, as Mr. Spiegel had raised similar arguments in other cases. He also had applied for intervenor status in his personal capacity in Persofsky and Liberty Mutual Insurance Company, (FSCO P00-00041), an appeal by Liberty Mutual that includes an allegation of institutional bias. For reasons set out in a decision released with this one, his application has been denied.

III. ANALYSIS

Mr. Spiegel's submissions are difficult to follow. The request for relief is set out in the following paragraphs of his submissions (uncorrected):

The Applicant formally declares the presiding Arbitrators, Director of Arbitration/Director's Delegates (at the FSCO) 'bias' on the grounds of 'institutional bias or reasonable apprehension of bias' (and personal bias), and requests a formal hearing before "a proper body" (supra), in accordance with s.282(12) of the Insurance Act.
The Applicant requests to have any and all Applicant's hearings and proceedings at the FSCO inclusive of this Motion on 'institutional bias or reasonable apprehension of bias' be heard before/by "a proper body" (in accordance with the Arbitration Act, 1990).
The Applicant further requests that any and all other hearings and proceeding at the FSACO inclusive of Applications, Motions, Arbitrations and/or Appeal will be held before "a proper body" (in accordance with the Arbitration Act, 1991), inclusive of the hearing scheduled to be conducted at the FSCO on Friday November 23, 2001, commencing at 10 a.m.¹
In the alternative, the Applicant requests that the hearing scheduled to be conducted at the FSCO on Friday November 23, 2001, be adjourned until such time that the Applicant's request with regard to any and all hearing and proceedings will be held before/by "a proper body" (in accordance with the Arbitration Act. 1991), and/or as shall be otherwise determined by the appropriate authorities (the Courts) subsequent to upcoming hearings.
The Applicant requests a stay/adjournment of all hearings and/or proceedings, (inclusive of Motions, Applications, Arbitrations and Appeal hearings/proceedings) pending the completion and outcome of the above Applications and other relevant hearings and proceedings with reference to the issue of FSCO's 'institutional bias or reasonable apprehension of bias' (Courts decisions), inclusive of the November 23, 2001 hearing, as well as a 'stay' of Arbitrator Leitch's order of October 26, 2001, pending the completion and outcome of the above Applications and other relevant hearings with reference to the issue of FSCO's 'institutional bias or reasonable apprehension of bias'.
The Applicant requests that any and all Motions, Applications orders, Arbitration and/or Appeal decisions, orders and directions, and any and all such orders and/or directions by any and all Arbitrators and the Director and/or Director's will be 'stayed' pending the resolution and determination (by the Courts) of FSCO's (Arbitrators and Director/Director 's Delegates) authority and jurisdiction arising out of 'institutional bias or reasonable apprehension of bias'.

After hearing Mr. Spiegel's oral submissions, it is my understanding that he objects to anyone at FSCO, including me, making any decisions about accident benefits until the issue of institutional bias is decided by an arbitrator under the Arbitrations Act, 1991 or the courts, apparently anticipating judicial review of my eventual decision in Persofsky. He made it clear in his submissions that he does not want to argue the institutional bias issue before me or anyone else at FSCO. Instead, his primary request is that I refer all his cases to an arbitrator under the Arbitrations Act, 1991. Alternatively, he asks that his cases be adjourned or stayed pending a determination of the institutional bias issue by the courts.

Mr. Spiegel made similar submissions in the Docoute appeal. By letter dated November 2, 2001, I declined to change the appointments, or to stay his cases pending the outcome of the Persofsky appeal and any subsequent court proceedings. His submissions in this case have not altered my view.

Under s.283(1) of the Insurance Act, appeals are made to the Director of Arbitrations. I currently hold that position. However, the legislation allows me to appoint "employees of the Commission or other persons" to hold hearings, including appeal hearings.² Mr. Spiegel's cases currently are assigned as follows, with some of the assignments being made before he raised the issue of institutional bias:³

Tesfai and Allstate Insurance Company of Canada, (FSCO P00-00048) Director's Delegate Makepeace appointed

Glinka and Dufferin Mutual Insurance Company, (FSCO P01-00004) Director's Delegate McMahon appointed

Tanzos and State Farm Mutual Automobile Insurance Company, (FSCO P01-00017) Retained by Director of Arbitrations

Dhawan and State Farm Mutual Automobile Insurance Company, (FSCO P01-00025) Director's Delegate Makepeace appointed

Docoute and Zurich Insurance Company, (FSCO P01-00036) Retained by Director of Arbitrations

Fenech and State Farm Mutual Automobile Insurance Company, (FSCO P01-00040) Director's Delegate McMahon appointed

Bersteyn and Allstate Insurance Company of Canada, (FSCO P01-00049) Retained by Director of Arbitrations

Sverdlick and Lombard General Insurance Company of Canada, (FSCO P01-00050) Retained by Director of Arbitrations

Effectively, Mr. Spiegel is asking me to review these appointment decisions. He is not asking me to decide the issue of institutional bias. Instead, on the basis of his submissions, he is asking that I refer all these cases to an arbitrator under the Arbitrations Act, 1991. While I have a broad authority to appoint a FSCO employee or "other persons" to hear appeals, that appointment is under the Insurance Act, not the Arbitrations Act, 1991. According to s.281 of the Insurance Act, a dispute about accident benefits can go to an arbitrator under the Arbitrations Act, 1991, following mediation, but only on the consent of the parties. The application of this section to appeals is not obvious, nor is my authority to refer a dispute to an arbitrator under the Arbitrations Act, 1991 where, as here, there is no consent.

I also am not persuaded that these cases should be adjourned or stayed pending the outcome in Persofsky. As discussed in my intervention decision in that case, Mr. Spiegel is advancing substantially different arguments. Most significantly, his clients are insured persons who can choose their forum. In addition, he is alleging both institutional and actual bias, he is challenging the role of DACs and the internal appeal process, and he intends to raise Charter arguments. In my opinion, therefore, Mr. Spiegel's cases can proceed independently of Persofsky and need not await the outcome in that case.

If Mr. Spiegel wants to challenge my refusal to appoint someone outside of FSCO, or my refusal to grant a stay, he will need to do so elsewhere, presumably through the Ontario Superior Court of Justice (Divisional Court) on judicial review. Alternatively, if he intends to present his institutional bias arguments to me in the cases I have retained, as is being done in the Persofsky appeal, or to the Director's Delegates appointed in the other cases, he can do so. If this is the course he chooses, it may be possible to streamline the process to avoid the need for separate hearings and decisions in each case. His other option is simply to proceed with the cases on their merits, including going back to arbitration on the Bersteyn and Sverdlick cases.