Neutral Citation: 2001 ONFSCDRS 55

FSCO A99-000711

BETWEEN:

BARBARA TANZOS

Applicant

and

STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY

Insurer

REASONS FOR DECISION

Before:

Shari Novick

Heard:

July 12, 13 and November 3, 2000, at the Offices of the Financial Services Commission of Ontario in Toronto

Appearances:

Roland Spiegel for Ms. Tanzos

Ian D. Kirby for State Farm Mutual Automobile Insurance Company

The Applicant, Barbara Tanzos, was injured in a motor vehicle accident on May 23, 1998. She applied for and received statutory accident benefits from State Farm Mutual Automobile Insurance Company ("State Farm"), payable under the Schedule.¹ The Applicant was referred by her family doctor to DEAHY Medical Assessments Inc. ("DEAHY") for a three-part multidisciplinary assessment that took place in December 1998. State Farm declined to pay for two of the three assessments conducted, namely a medical assessment and a Functional Abilities Evaluation ("FAE"). The parties were unable to resolve their disputes through mediation, and Ms. Tanzos applied for arbitration at the Financial Services Commission of Ontario under the Insurance Act, R.S.O. 1990, c.I.8, as amended.

The issues in this hearing are:

Is State Farm required to pay for the medical assessment and FAE conducted by DEAHY on Ms. Tanzos in December 1998, pursuant to subsection 24(1) of the Schedule?
Is State Farm liable to pay a special award pursuant to subsection 282(10) of the Insurance Act on the basis that it unreasonably withheld or delayed benefits owing to Ms. Tanzos?
Is State Farm liable to pay expenses incurred by Ms. Tanzos in respect of the arbitration pursuant to subsection 282(11) of the Insurance Act?
Is Ms. Tanzos liable to pay the expenses incurred by State Farm in respect of the arbitration pursuant to subsection 282(11) of the Insurance Act?

State Farm shall pay $1,250, plus applicable interest, for the medical assessment conducted at DEAHY. State Farm is not required to pay the account for the FAE.
State Farm is not liable to pay a special award.
I make no award with respect to expenses.

Background:

On May 23, 1998 the vehicle Ms. Tanzos was driving was hit from behind by a pickup truck while she was stopped in a line of traffic. Ms. Tanzos had been heading up to Canada's Wonderland with her three children at the time of the accident. She continued on to the amusement park, but left within a few hours when she began to feel pain on the right side of her neck. She attended the emergency department at the Royal Victoria Hospital in Barrie later that day, where she was told to take pain medication and to see her family doctor. She rested for the remainder of that day, a Saturday, as well as the following day, and returned to her job as an assembler at a plant making car parts on Monday.

Ms. Tanzos consulted Dr. Adrian Woodrow, her family doctor, on the day following her return to work. He referred her to a physiotherapy clinic, where she received treatment for approximately five weeks. Ms. Tanzos continued to work at the plant while taking large doses of pain medication until July 1, 1998, when the plant shut down for one week. After the plant reopened she worked for two days, but decided that she could no longer perform her job due to the pain she was experiencing.

The Applicant sought further funding from the Insurer for treatment to address her symptoms of neck pain, pain in her shoulders, headaches and numbness in her right arm, but the Insurer declined to pay. Ms. Tanzos attended a medical/rehabilitation Designated Assessment Centre ("DAC") assessment at Work Able in Barrie, in late September 1998. The assessors recommended that Ms. Tanzos pursue a home exercise program, and that she attend one session with a physiotherapist to review the exercises that she could do at home on her own. They did not recommend any further physiotherapy treatment. Ms. Tanzos disagrees with the conclusions reached by the DAC assessors.

Dr. Woodrow subsequently referred Ms. Tanzos to the DEAHY clinic for the multidisciplinary assessment referred to, which took place on December 1, 1998. The assessment consisted of a medical assessment with Dr. Brian Alpert, a psychological assessment by Dr. Howard Waiser and an ARCON Functional Abilities Evaluation ("FAE") conducted by Nancy Haldane, a kinesiologist. When the assessors' reports and accounts were forwarded to the Insurer, the adjuster assigned to the matter, Helen Green, indicated that she would pay for the psychological assessment but advised that she would not pay for the medical assessment or the FAE. The reason provided by Ms. Green for declining to pay was that "...both a functional abilities evaluation and assessment had been completed prior to your assessment and are available on file," referring to the DAC assessments that were conducted in September 1998.

The DAC assessment at Work Able (September 24, 1998):

As stated above, Ms. Tanzos attended for five weeks of physiotherapy at Custom Rehabilitation and Sports from late May to mid-July 1998. In his discharge report dated July 10, 1998, William Ball, the treating physiotherapist, reports that Ms. Tanzos continued to complain of constant pain and an increase of symptoms with activity. He states that she is suffering from "mechanical neck pain with an irritated nerve root," and that she requires further physiotherapy to offset the symptoms that she is experiencing. Despite Mr. Ball's comments and support for the recommendation for further therapy by an occupational therapist/kinesiologist who was later retained by State Farm to conduct an in-home assessment, the Insurer refused to fund further treatment.

The evidence suggested that the procedural requirements set out in the Schedule for arranging the subsequent medical/rehabilitation DAC were not complied with, but I find that this issue has no bearing on the matters in dispute.

Ms. Tanzos attended at Work Able on September 24, 1998 and was assessed by Colleen Parr, a physiotherapist, Dr. James Delaney, an orthopaedic surgeon and Erik Stone, a kinesiologist who conducted a FAE. Ms. Parr noted certain physical findings in her report and stated that Ms. Tanzos exhibited "adaptive postures which have aggravated her problem." She recommended that Ms. Tanzos continue with home exercises twice daily for three months, and that a physiotherapist review her home exercise program with her for encouragement and educational purposes. Ms. Parr noted, however, that Ms. Tanzos reported a fear of performing the prescribed exercises due to increased pain, and that she was therefore unlikely to comply with the home exercise program recommendation.

Dr. Delaney noted that Ms. Tanzos exhibited limited range of motion in her neck and that she experienced "marked pain with palpation of her trapezius and palpation of her paraspinal musculature along the medial border of both scapulae" on examination. He stated, however, that he saw "no objective signs that correlate with her ongoing complaints of discomfort and I do not feel that she has any significant impairments since she is now approximately 4 months post accident." Dr. Delaney opined that no further treatment other than a home exercise program would be reasonable.

Mr. Stone commented that Ms. Tanzos appeared pain focussed during his assessment, but concluded that based on the testing performed, she either met or exceeded all levels for the relevant tasks of her job as a "Production Assembly Line Worker." He reported that no further treatment was required to facilitate Ms. Tanzos' return to work.

The DEAHY assessments (December 1, 1998):

As set out above, Ms. Tanzos underwent three assessments at DEAHY — a medical assessment that led to a report titled "Orthopaedic Independent Medical Evaluation" by Dr. Brian Alpert, who describes himself as a "pain management specialist and consulting orthopaedic surgeon," an ARCON FAE, and a psychological assessment. The Insurer paid for the latter assessment, but disputes its obligation to pay for the first two. The amounts at issue are $1,250 for the medical assessment and $1,150 for the FAE (exclusive of GST). The Insurer does not quarrel with the amounts charged for the assessments; it simply contends that the assessments themselves were not required in light of the information that had been provided by the DAC report.

Dr. Alpert found that Ms. Tanzos had residual impairment affecting her cervical spine, trapezii and thoracic spine, with related post-traumatic cervicogenic headaches, as a result of the accident. He reported that his examination revealed tenderness in various areas and restricted range of motion in her cervical spine. He commented that she is unable to resume her pre-accident employment and is limited to light tasks in terms of her activities of daily living. Dr. Alpert opined that Ms. Tanzos required "provision for further medical care, which should include multidisciplinary chronic pain management." He recommended that she take muscle relaxant and anti-depressant medication if required for pain management in view of her allergy to anti-inflammatory medication, and that "further courses of physical therapy should be provided for flare ups as needed." Finally, Dr. Alpert stated that Ms. Tanzos may also benefit from paravertebral nerve block injections.

The FAE assessor reported that while Ms. Tanzos demonstrated the required strengths for her pre-accident job, "her subjective complaints of numbness in her left arm and hand need to be further addressed and rectified before engaging in her previous position." She recommended that Ms. Tanzos receive further treatment in order to address her decreased cervical range of motion and reported numbness in her upper arms and left hand, and specified that a six-week work conditioning program with accompanying physiotherapy treatments would be appropriate, followed by a home exercise program.

I heard the evidence of Ms. Tanzos, Helen Green, Dr. Adrian Woodrow and Erik Stone, the kinesiologist from Work Able, regarding whether the assessments conducted were "reasonable" within the meaning of section 24. I find Dr. Woodrow's evidence on this point to be the most relevant, as he was the one who made the referral.

Dr. Woodrow explained that he has been Ms. Tanzos' family doctor for the last eleven years. He testified that she consulted him a few days after the accident and complained of severe neck pain and stiffness in her trapezius muscles. He referred her to physiotherapy, which she attended three times per week. It was his understanding that these treatments did not help to reduce her pain level. He recalled referring Ms. Tanzos to a neurologist after an episode of severe pain that she experienced while at work, and subsequently being advised that there were no abnormal findings.

Dr. Woodrow was critical of the conclusions reached by the DAC assessors at Work Able. He stated that the reports generated by DAC assessors often do not take into account any of the subjective complaints of his patients. He explained that when he sees someone like Ms. Tanzos sitting in his office and crying to him, complaining that she is in pain, he feels that he needs a more global assessment of her condition. He suggested that assessments by medical experts who focus only on bone and muscle are often not useful in treating cases of chronic pain resulting from soft tissue injury.

Dr. Woodrow advised that he had decided to refer Ms. Tanzos to the DEAHY clinic, because he knew that Dr. Howard Jacobs, the clinic director, was familiar with chronic pain issues and he had hoped that a proper assessment would be conducted that would give him "something to work with." He referred to a pre-printed referral form from DEAHY entitled "Request for Multi-Disciplinary Assessment" that he had completed on Ms. Tanzos' behalf. The form contains a list of several possible assessments from which the referring doctor can choose. Dr. Woodrow checked off three — "ARCON (functional assessment)", "medical pain assessment" and "psychological." He explained that he had requested the medical pain assessment and the psychological assessment because he felt that these issues had not been addressed by the DAC assessment at Work Able, and that he had hoped that these assessments would assist him in addressing the persistent problems that Ms. Tanzos was experiencing in these areas.

Dr. Woodrow also explained that he requested the functional assessment "to see how she was doing overall." He testified that he often does not find the FAEs that are conducted by DAC assessors to be useful, and that patients often come in to see him the following day and are barely able to walk. He stated that he did not feel that Ms. Tanzos was functioning well, and that he felt that a second assessment of this sort was reasonable. Dr. Woodrow stated that he felt "100% sure" that the referral to DEAHY for the above assessments was reasonable.

Finally, Dr. Woodrow explained that Dr. Alpert's recommendations that Ms. Tanzos take anti-depressant medication for her cervicogenic headaches, pursue additional physiotherapy and nerve block treatments for her neck pain were useful, and that he followed up on these recommendations by referring her to a neck pain clinic where she received nerve blocks. He also stated that he was frustrated by the fact that Ms. Tanzos clearly needed treatment but the Insurer refused to fund it.

Under cross-examination Dr. Woodrow revealed that he had decided to make the referral to DEAHY before he received the DAC report from Work Able. He explained, however, that he was aware at that point that the DAC assessors had not focussed on the treatment of Ms. Tanzos' pain symptoms nor on her psychological status, stating that he had probably discussed this with her when she came in to see him shortly after the assessment had been conducted. He added that he has had prior experience with the Work Able facility, and was familiar with their assessments, implying that he assumed before receiving the report that it would not be of use. Dr. Woodrow did not change his view after receiving and reviewing the DAC report.

When questioned specifically about why he had requested that a FAE be performed at DEAHY, Dr. Woodrow stated that the methodology used at the DEAHY clinic was different than the one conducted at Work Able. He allowed, however, that the assessments would have been similar. When asked to explain how the two FAEs would have differed, Dr. Woodrow indicated that he was not aware that the ARCON assessment is performed using a special machine, and could only state that he felt that it would have been beneficial to compare the two reports.

Ms. Tanzos testified that she continues to receive injections in her neck and forehead to relieve her symptoms, as recommended by Dr. Alpert. She also stated that she attended thirteen physiotherapy sessions at an OHIP clinic as a result of the recommendations made by Dr. Alpert, before the clinic closed down.

Ms. Green, the claims adjuster at State Farm, testified that she had declined to pay for the medical assessment and FAE conducted at the DEAHY clinic because she did not feel that they were "reasonable" assessments within the meaning of section 24 of the Schedule, in view of the fact that Ms. Tanzos had been similarly assessed seven weeks prior as part of the DAC assessment at Work Able. She stated that after receiving the reports from DEAHY, she reviewed them and then sent the two reports that she was not prepared to pay for back to Dr. Jacobs. When asked why she had returned the reports, Ms. Green stated that she had done so because she considered the assessments conducted to have been a duplication of what had already been done, although she acknowledged that Dr. Alpert's report contained "significant findings."

Erik Stone was called to testify by the Insurer. Mr. Stone is a certified kinesiologist and was a member of the DAC team that assessed Ms. Tanzos at Work Able in September 1998. He testified that he has performed approximately forty to fifty FAEs each year since 1993. He is not certified to conduct assessments using the ARCON system. After being cross-examined on his credentials and experience, I was satisfied that Mr. Stone was qualified to provide opinion evidence on FAEs, although not those conducted with the ARCON system.

Mr. Stone was asked to comment on the results obtained on the FAE at the DEAHY clinic. He noted that there were no clear differences between the objective measurements taken on that evaluation and those obtained on the FAE that he had conducted as part of the DAC assessment, and stated that it was "most unusual" to subject someone to a second FAE two months after having been similarly assessed. Mr. Stone went as far as saying that it would not be appropriate to assess someone in this manner, if the objective of the testing was to determine whether or not further treatment is required. He stated that in his opinion, the DEAHY assessment was accordingly not reasonable.

When asked to comment on the report prepared by the DEAHY assessor, Mr. Stone noted that despite the fact that the objective results achieved did not indicate any deficits, the assessor concluded that Ms. Tanzos was unable to perform her duties as an assembler in a factory and recommended that she receive further treatment. He questioned the basis for this recommendation, and stated that it was not in keeping with the data recorded during the assessment.

Findings:

The issue to be determined is whether the costs being claimed for the two outstanding assessments conducted on Ms. Tanzos at the DEAHY clinic on December 1, 1998 are "reasonable expenses incurred...on behalf of an insured person for the purpose of this Regulation", as provided for in section 24 of the Schedule. There have been a few recent arbitration decisions addressing the reasonableness of assessments under section 24. While some general comments have been made regarding how this issue should be approached, the nature of the "reasonableness" test requires that the specific circumstances of each situation must be considered when determining whether an insurer is obliged to pay.

Unfortunately, this type of approach was not taken by the parties in this case. Dr. Woodrow made the referral to DEAHY before receiving the DAC report on the basis that he "has had past experiences with Work Able and was familiar with their assessments." This reveals a general view that the usefulness of DAC assessments in all cases is questionable. I am more troubled, however, by the approach taken by the Insurer in this matter. Ms. Green appears to have refused the claim reflexively and implied, by returning the reports forwarded, that they were of no use because assessments of a similar type had been performed some ten weeks earlier.

At a minimum, an insurer's ongoing duty to adjust a claim requires that all relevant medical information forwarded be kept on file. While I appreciate that the parties in the no-fault system often see themselves as being adversaries and that workload issues may sometimes make a less than fully considered response attractive, the Schedule mandates that an individualised approach be taken in assessing whether a claim under section 24 is reasonable.

Turning to the specific circumstances of this case, I find that the evidence discloses the following relevant facts. Ms. Tanzos suffered soft tissue injuries as a result of the accident and continued to experience symptoms after completing a five-week course of physiotherapy. After requests for further treatment were denied by the Insurer, a DAC was arranged. The assessors concluded that no further treatment, other than a home exercise program, was necessary. Dr. Woodrow referred Ms. Tanzos to the DEAHY clinic, for a "more global assessment" and "something to work with" that he hoped would assist him in addressing Ms. Tanzos' continuing symptoms of significant pain. He specifically requested that a pain assessment be conducted by an orthopaedic surgeon with a background in pain management. He also requested that a psychological assessment and an ARCON functional abilities evaluation be conducted.

The Insurer has not challenged the amounts being claimed, nor disputed that the expenses were incurred "for the purpose of this Regulation". The question ultimately comes down to whether or not it was reasonable for Dr. Woodrow to have made the above referrals at the time they were made. The Insurer claims it was not, given that an orthopaedic assessment and FAE had been conducted as part of the DAC assessment some ten weeks earlier.

Director's Delegate McMahon made the following statements in Tsimidis and Liberty Mutual Insurance Company (P99-00013, August 28, 2000):

In a case such as this one where the report was prepared at the request of a family doctor to assist him in the management of his patient, the question of its reasonableness does not turn on whether or not it is useful or even comprehensible to the insurer. Provided that it was appropriate for the family doctor to order the report, and the expenses associated with the report are reasonable, the insurer is bound to pay the fee irrespective of its usefulness to the insurer.

I find that these comments are applicable to this case. It was clear from Dr. Woodrow's evidence, which I accept, that the reason for making the referral to DEAHY for the assessments in question was to help him decide on a further course of treatment for Ms. Tanzos. As he described, he had a patient sitting in his office crying to him and complaining about her continuing symptoms. While he had not yet seen the DAC report, he gathered from Ms. Tanzos at that point that the DAC assessment had not been helpful in terms of suggesting further treatment. In my view, it was reasonable in these circumstances for him seek more information in order to assist him in determining how to treat his patient.

While Ms. Tanzos had undergone a medical assessment by an orthopaedic surgeon as part of the DAC process, the focus of that assessment was clearly different than the one carried out by Dr. Alpert at DEAHY. Aside from the fact that a patient's condition can materially change within ten weeks, the two reports are quite different. Dr. Delaney's examination of Ms. Tanzos revealed that she reported pain when rotating her neck and when the muscles around her shoulder blades were palpated. He found no objective evidence that "correlate with her perceived symptoms" and determined that ongoing physiotherapy was not required, as four months had passed since the accident and he did not believe that she should be experiencing any significant impairments.

Ten weeks later, Dr. Alpert reported that Ms. Tanzos demonstrated "a number of objective abnormalities." He noted her complaints of "worsening pain in her neck, back and shoulder blades radiating into her arms." He then recommended further treatment options, including multidisciplinary chronic pain management. Dr. Woodrow indicated that he pursued these recommendations for treatment, and Ms. Tanzos testified that she found them helpful in reducing her symptoms. Dr. Delaney's report had not provided any recommendations for treating Ms. Tanzos' ongoing pain symptoms. In the circumstances, I find the Applicant's claim for the expenses associated with Dr. Alpert's assessment to be reasonable, within the meaning of section 24.

I am not persuaded, however, that the expense associated with the FAE conducted at DEAHY is reasonable. I found Dr. Woodrow's evidence regarding the reasons for requesting such an assessment to be unpersuasive. While the Applicant's representative stressed that an ARCON assessment differs from the type of FAE conducted at Work Able, that distinction was clearly lost on Dr. Woodrow, who was not even aware that an ARCON assessment uses a computerized testing station to evaluate strength, endurance and different capacities. No evidence was led regarding this type of assessment or how it differs from the standard FAE. The report generated by the kinesiologist at DEAHY appears to measure the Applicant's strength, endurance and capacity to lift, grip and reach, as did the assessment conducted at Work Able. In view of this, and the fact that Dr. Woodrow requested that a FAE be conducted at DEAHY before even receiving or reviewing the DAC report containing the results from the FAE performed there, I find that the expense associated with this evaluation is not reasonable.

Further, Mr. Stone advised that given that there was no evidence to suggest that Ms. Tanzos had not put forth a genuine effort during the FAE conducted at Work Able, it was unusual to subject her to another assessment of this type ten weeks later. He also stated that it was inappropriate to conduct a second FAE when the objective of the assessment was to determine whether further treatment is required. This is an important point. The reasonableness of this assessment was not raised in the context of a dispute over Ms. Tanzos' entitlement to continuing weekly benefits, in which a determination must be made regarding whether or not she is able to perform the essential tasks of her pre-accident employment, but rather in the context of whether further treatment was reasonable.

The Applicant claimed that the multidisciplinary assessment carried out at DEAHY was more than the sum of its parts, and was not the same as simply conducting three assessments. Having reviewed each of the three reports in detail, I see no evidence of this. Aside from reaching a different conclusion regarding the Applicant's ability to perform her work tasks than was reached by the FAE assessor at Work Able, which I note was based exclusively on subjective reports, the FAE conducted at DEAHY does not provide any additional information regarding Ms. Tanzos' condition.

Finally, State Farm submitted that the expenses claimed for the DEAHY assessments are recoverable from OHIP, and consequently are not "reasonable expenses" that should be paid by the Insurer. Counsel contended that since Dr. Woodrow requested an opinion regarding treatment options from another medical specialist, the cost of the assessment and report would be covered under the Schedule of Benefits for Physician Services issued by the Ministry of Health.

This argument has been pursued by insurers in other cases. In Tesfai and Allstate Insurance Company of Canada (FSCO A99-000321, July 26, 2000), the insurer made the same contention. That case also involved a claim for payment for assessments conducted at the DEAHY clinic. The applicant's representative filed a letter that Dr. Jacobs, the medical director of the clinic, had received from a service manager with the Ministry of Health, stating that a referral for a multi-disciplinary assessment that includes a medical assessment to "obtain information for insurance purposes is considered third party billing and is not payable by OHIP." The arbitrator accepted that the letter "puts this matter to rest" (at p. 12).

This argument surfaced again in Glinka and Dufferin Mutual Insurance Company (FSCO A99-000849, November 21, 2000). Once again, the liability of the insurer to pay the cost of assessments conducted at the DEAHY clinic was in issue. The applicant's representative filed the same letter from a manager at the Ministry of Health referred to above in response to the insurer's argument that the expenses claimed were covered by OHIP. This time, two additional letters from Dr. G.L. Ollson, Manager, Monitoring & Control, Health Insurance & Related Program, at the Ministry of Health were filed. The first one was sent to Dufferin Mutual and references a charge for "services rendered by Dr. Brian Alpert," the orthopaedic surgeon who conducted the medical assessment in this case. The letter advises that neither the medical service provided nor the report to the referring physician can be charged to the patient "either directly or through you as his insurer." Dr. Ollson also indicates in the letter that "both services are benefits under the Ontario Health Insurance Plan".

However, Dr. Ollson appears to make a contradictory statement in a subsequent letter he wrote to Dr. Alpert regarding the same issue. He states:

While it is not clear to me who initiated the request for the medical evaluation and treatment plan, you explained that the service was rendered for the purpose of determining entitlement to rehabilitation services for injuries suffered as a result of a motor vehicle accident. Under those circumstances, the service would not be a benefit under OHIP.

I was not provided with either of the letters that triggered the above responses from Dr. Ollson, and it is not clear to me if the services he was addressing are the same as the ones in issue in this case. Arbitrator Joachim determined in the Glinka case that the letters referred to did not lead to the conclusion that any part of the DEAHY assessment could be recovered from OHIP. I am inclined to agree with this view. The assessments in issue fall squarely within the language of section 24 of the Schedule. I have already determined that the assessment conducted by Dr. Alpert at DEAHY was a "reasonable expense" within the meaning of this provision. There is no doubt that it was "incurred...on behalf of an insured person for the purpose of this Regulation." I am satisfied that the drafters of the Schedule were aware of what the Schedule of Benefits for Physician Services under OHIP provides, and that their decision to include the cost of assessments such as these within the ambit of the language of section 24, reflects an intent that insurers be responsible to pay expenses in this regard, subject to a determination that they are reasonable.

Allegation of bias:

Finally, I will outline for the record the events pertaining to the submission by the Applicant's representative, Mr. Spiegel, that I demonstrated a bias against his client and should remove myself from the hearing.

At the commencement of the third day of hearing, counsel for the Insurer called Erik Stone, the kinesiologist, to testify. Mr. Spiegel had been advised by letter from counsel two weeks prior to the commencement of the hearing, some four months earlier, that the Insurer intended to call Mr. Stone as a witness. I also note that Arbitrator Blackman confirmed by letter one week prior to the start of the hearing the witnesses who would be called. Mr. Stone's name appeared on that list. At the hearing, Mr. Spiegel objected to Mr. Stone testifying on the grounds that his evidence was not relevant. He asserted that the Insurer should not be permitted to rely on any evidence it accumulates after making the initial decision to deny the claim for payment. I dismissed Mr. Spiegel's objection and ruled that Mr. Stone would be permitted to testify.

At that point, Mr. Spiegel advised that he was "declaring" me to be biased. He explained that he had asserted this same position, namely that an insurer should be restricted to relying on evidence that was available to it at the time it made the decision to deny the claim, at a pre-hearing discussion I had conducted in another case a few months previously, and that I had not accepted his argument and had ordered him to produce documents that he had declined to produce. Mr. Spiegel advised that he had appealed my pre-hearing order in that case, and that in view of our differing opinions on this point, he felt that I should not be ruling on the issue until the appeal was resolved.²

The Insurer submitted that it was not aware of any bias in this case, and had no knowledge of the other matter to which Mr. Spiegel had referred. After considering the parties' submissions, I dismissed the Applicant's motion that I remove myself from the hearing. Mr. Spiegel then referred to subsection 282(12) of the Insurance Act which states:

A party may apply to the Director for the appointment of a new arbitrator if the party believes that the arbitrator is biased and the Director shall determine the issue.

Mr. Spiegel advised that he wanted to adjourn the hearing to file such an application. The Insurer objected to the request for an adjournment, and advised that it had not received any advance notice of Mr. Spiegel's intention to raise this issue. I denied the request for an adjournment, and ruled that the matter would proceed. I advised, however, that I would await a ruling from the Director on this matter before issuing my decision. The basis for my refusal of the adjournment request was the Applicant's failure to notify the Insurer of its intention both to object to Mr. Stone giving evidence and to bring this motion, as well as the fact that the parties had agreed prior to the commencement of the hearing that the matter would be completed in no more than two days, which at that point had been exceeded. In my view, proceeding with the hearing would avoid unnecessary expense and delay should the motion not proceed or be unsuccessful.

The hearing was completed at the end of the third day, in early November 2000. I advised Mr. Spiegel that I would wait approximately two months before commencing to write this decision and that he should apply to the Director before that date. In mid-January 2001, I determined that no such application had been filed with the Director. I wrote to Mr. Spiegel stating that if I did not receive notice within seven days that he had applied to have a new arbitrator appointed to hear the matter, I would begin to write my decision. I was never advised of any such application having been made.

SPECIAL AWARD:

The Applicant's representative contended that a special award was warranted in this case, although his submissions in support of this were restricted to the statement that the Insurer had acted in bad faith and had breached its fiduciary duty to the insured. An arbitrator is mandated under subsection 282(10) of the Insurance Act to make a special award upon finding that an insurer has unreasonably withheld or delayed payments. While I certainly do not endorse the approach taken by the adjuster in this case, I find that it falls short of the required standard.

While the evidence on this point was somewhat confusing, I note that Ms. Green had a conversation with the clinic co-ordinator at DEAHY prior to the assessments being conducted. She testified that the co-ordinator insisted that while DEAHY was not a DAC assessment facility, their assessments could be viewed as DAC assessments. Ms. Green, knowing this was incorrect, advised that she would not authorize payment for any resulting charges that were incurred. I was left with the impression that the conversation was confrontational and adversarial, and ended with the clinic co-ordinator stating that Ms. Green would be required to pay for the assessments in any event under section 24. Considering the Insurer's conduct against this backdrop, I do not find that a special award is warranted.

EXPENSES:

Both the Applicant and the Insurer seek their respective expenses of the hearing. Counsel for the Insurer urged me to award expenses against the Applicant to send a message that abusive behaviour of the type demonstrated by Mr. Spiegel during this hearing would not be sanctioned. He referred to the criteria set out for awarding expenses found in subsection 12(2) of Ontario Reg. 464/96 and submitted that Mr. Spiegel's conduct prolonged and obstructed the proceeding. He specifically referred to the prolonged cross-examination of witnesses and "theatrics" displayed by Mr. Spiegel, including an allegation he made that the adjuster was guilty of a criminal act when she returned the reports she had received from DEAHY that she declined to pay for. Insurer’s counsel reacted to that statement by putting Mr. Spiegel on notice for slander on behalf of his client.

I agree that Mr. Spiegel’s conduct prolonged the hearing. I also find that his position both that Mr. Stone should not be permitted to testify and that I was biased was "manifestly unfounded" as set out in paragraph 3 of subsection 12(2) of the above regulation.

The quality of Mr. Spiegel’s representation has been the subject of discussion in several other arbitration decisions.³ I note that in Glinka, the arbitrator determined that Mr. Spiegel was not competent to represent clients before the Commission. She found that his conduct tended to prolong the hearing far in excess of what was required. The arbitrator denied the applicant her expenses of the hearing, despite finding in her favour on a few of the issues in dispute. She also awarded expenses to the insurer in respect of the half day that a medical expert was required to return in order to permit Mr. Spiegel to complete a cross-examination that she described as being incompetent and irrelevant. She also commented on his lack of preparation and failure to comply with the notice requirements in the Dispute Resolution Practice Code regarding documents he intended to rely on at the hearing as well as witnesses he intended to call.

Mr. Spiegel demonstrated the same lack of competence and respect for the arbitration process in this hearing. However, he went one step further. Alleging that a decision maker is biased is a serious accusation. It should not be made lightly, or without solid foundation. I found Mr. Spiegel's bias allegation unsupportable. While some of his other contraventions may result from his lack of legal training, most lay people understand the distinction between an adjudicator not accepting a party's argument on an issue and demonstrating bias. I also note that Mr. Spiegel ultimately chose not to apply to the Director to have another arbitrator appointed, after seeking an adjournment for that purpose.

The Applicant was partially successful in this application. Were it not for Mr. Spiegel's conduct as outlined above, I would have awarded Ms. Tanzos her expenses. However, when his conduct is considered, I find that it is appropriate to decline to make an award for expenses in her favour.

Having given the Insurer's request for its expenses much thought, I have ultimately decided that given the financial imbalance between the parties' abilities to bear the costs of the hearing, it would not be appropriate to award the Insurer its expenses in this case. In the result, I make no award for expenses.

April 10, 2001

Shari L. Novick Arbitrator

Date