Financial Services Commission
Commission des services financiers de l’Ontario
Neutral Citation: 2002 ONFSCDRS 115
Appeal P01-00049
OFFICE OF THE DIRECTOR OF ARBITRATIONS
MARINA BERSTEYN
Applicant
and
ALLSTATE INSURANCE COMPANY OF CANADA
Respondent
Before:
David R. Draper, Director of Arbitrations
Representatives:
Roland Spiegel (for Marina Bersteyn)
Richard F.L. Rose (for Allstate Insurance)
ORDER - BIAS APPLICATION
Under section 282(12) of the Insurance Act, R.S.O. 1990, c.I.8, as amended, it is ordered that:
The application is dismissed.
July 29, 2002
David R. Draper
Director of Arbitrations
REASONS FOR DECISION
I. BACKGROUND AND ANALYSIS
Marina Bersteyn applied for arbitration in June 2001, represented by Mr. Roland Spiegel, a non-lawyer. The only issue in dispute is the cost of a disability certificate ($83.87), although the application also includes related claims for interest, a special award and arbitration expenses. Allstate Insurance Company of Canada ("Allstate") denied this claim, taking the position that it was not requested or of any value.
On September 25, 2001, Mr. Spiegel sent a letter to me as Director of Arbitrations, stating:
This is a formal notice, that we are hereby withdrawing our client's Application for Arbitration (without any penalty) due to our client's concerns arising as a result of the unresolved issue of FSCO's Arbitrators' 'institutional bias and/or reasonable apprehension of bias', [emphasis in the original]
The letter concludes as follows:
The Applicant respectfully reserves his/her right/perogative [sic] to have a change of heart/mind (under the prevailing circumstances) and prefer/favor to proceed with actions in pursuit of his/her Accident Benefits via Court proceedings (particularly, when the withdrawal occurs prior to the commencement of any of the Pre-Arbitration proceedings).
Allstate objected to a withdrawal without penalty. In its submission, the arbitration was frivolous, vexatious or an abuse of process, and, therefore, it should recover its $3,000 assessment and arbitration expenses.
To put this matter in context, Mr. Spiegel has represented many insured persons in the dispute resolution process. Starting in July 2001, with the release of my interim decision in Persofsky and Liberty Mutual Insurance Company, (FSCO P00-00041, July 3, 2001), he began arguing that his clients should not have to proceed before adjudicators at the Financial Services Commission of Ontario due to a reasonable apprehension of bias or actual bias.
In November 2001, I concluded that the most just, least expensive approach was to hear this application along with three of his other cases — two appeals and another bias application.1 The history of these cases is set out in my decision in Docoute, released together with this decision, and will not be repeated here. Nor do I intend to repeat my analysis. For reasons set out in the Docoute decision, I conclude that Mr. Spiegel has fallen far short of establishing bias.
The applications under s. 282(12) are particularly weak. This section allows me to appoint a new arbitrator. However, as I stated in Persofsky, a case upon which Mr. Spiegel relied heavily, I am only authorized to appoint arbitrators from the roster maintained by the Superintendent. This does not allow me to appoint a private arbitrator, as he requests.
Therefore, the application is dismissed.
II. EXPENSES
Not surprisingly, Allstate seeks its expenses. If I had authority to award them, I would do so. However, as I held in Castaneda and CGU Insurance Company of Canada, (FSCO P01-00053, December 18, 2001), the Insurance Act does not provide for expenses in respect of bias applications under s. 282(12). That does not mean the bias application must be ignored. It was a step taken in the arbitration process that prolonged the proceeding, within the meaning of the expenses regulation.2 In my opinion, therefore, it is a factor that can be considered when arbitration expenses are eventually determined.
July 29, 2002
David R. Draper
Director of Arbitrations