Financial Services Commission

Commission des services financiers de l’Ontario

Neutral Citation: 2002 ONFSCDRS 117

Appeal: P01-00050

OFFICE OF THE DIRECTOR OF ARBITRATIONS

VADIM SVERDLIK Applicant

and

LOMBARD GENERAL INSURANCE COMPANY OF CANADA Respondent

Before: David R. Draper, Director of Arbitrations

Representatives: Roland Spiegel (for Vadim Sverdlik) Harry P. Brown (for Lombard General 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

Date

REASONS FOR DECISION

I. BACKGROUND AND ANALYSIS

Vadim Sverdlik applied to Lombard General Insurance Company (“Lombard”), claiming the cost of two treatment plans prepared by Human Health Clinic for massage, chiropractic and acupuncture therapy. In late February 2001, Lombard agreed to pay the cost of the first treatment plan ($3,100), but refused to pay the second ($2,000), which covered the period from February 22, 2001 to April 22, 2001.

Mr. Sverdlik challenged Lombard’s refusal by applying for mediation. He was represented by Mr. Roland Spiegel, a non-lawyer. When the dispute was not resolved, Mr. Sverdlik applied for arbitration, again represented by Mr. Spiegel. He claimed the cost of the treatment plan, interest, a special award and arbitration expenses.

In July 2001, the parties and their representatives were notified that a pre-hearing discussion would take place on October 24, 2001. In late September 2001, Mr. Spiegel sent a letter, stating as follows:

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’.

Lombard objected to any withdrawal that did not include full compensation for the $3,000 it was assessed as a result of the commencement of the arbitration.

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 this case, Mr. Spiegel asked that the arbitration proceeding be adjourned to allow him to apply to the Director of Arbitrations under s. 282(12) of the Insurance Act. The pre-hearing arbitrator ordered an adjournment, but only because there was a defect in the notice, and he wanted to ensure that Mr. Sverdlik had authorized the approach being taken by Mr. Spiegel.

In the meantime, Mr. Spiegel forwarded material to me, raising his bias arguments. 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, Lombard 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.