Neutral Citation: 2002 ONFSCDRS 57

FSCO A01-000936

BETWEEN:

YURI and LUDMILLA GUREVICH

Applicant

and

ROYAL & SUNALLIANCE INSURANCE COMPANY OF CANADA

Insurer

Before:

John Wilson

Heard:

By written submissions, to the Financial Services Commission of Ontario in Toronto.

Appearances:

Vadim Malyshev for Mr. and Mrs. Gurevich

Peter Kazdan for Royal & SunAlliance Insurance Company of Canada

Issues:

The Applicants, Yuri and Ludmilla Gurevich, filed a claim for injuries arising from a motor vehicle accident on September 10, 1999. They applied for statutory accident benefits from Royal & Sun Alliance Insurance Company of Canada ("Royal"), payable under the Schedule.¹ The parties were unable to resolve some of their disputes through mediation, and an application for arbitration was filed on behalf of Mr. and Mrs. Gurevich at the Financial Services Commission of Ontario pursuant to the Insurance Act, R.S.O. 1990, c.I.8, as amended.

The two applications were filed by Mr. Roman Volfson, who is listed as the manager of the Universal Injury Rehabilitation Centre. Mr. Volfson indicated that the relationship with the applicant was one of "patient". There is no Applicant signature on either of the two applications.

A report of a mediator, indicating that all issues in dispute have been resolved, is included with the application for Mr. Gurevich. Ms. Gurevich's application was accompanied by another mediator's report that indicated that the issue of physiotherapy and massage therapy remained in dispute.

The Commission accepted both applications, and, administratively, combined the two into one file. As a result, a single assessment of $3000 was made upon the Insurer.

The Insurer, in its response, pointed to the mediator's report and stated that there were no issues to arbitrate in Mr. Gurevich's case. In Ms. Gurevich's case, it challenged the authority of Mr. Volfson to bring the arbitration, and pointed to Ms. Gurevich's failure to present herself for assessment as a bar to arbitration. In both cases, it claimed an abuse of process, and claimed its expenses, as well as a return of its assessment.

In October of 2001, Mr. Vadim Malyshev, a paralegal, was, apparently, retained by both parties to pursue the claims.

On October 31, 2001, a pre-hearing in both matters took place. Mr. Gurevich, and Mr. Malyshev, as well as the Insurer's representative and counsel all took part. Ms. Gurevich was not present, and when telephoned, declined to participate in the procedure.

The hearing for both matters was set for February 27 and 28, 2002.

On January 18, 2002, Mr. Malyshev faxed a letter to the Commission seeking permission to withdraw Mr. Gurevich's application, without expenses. The Insurer objected, and reiterated its claim for expenses and a return of its assessment, since it viewed the application for arbitration as being without merit.

On January 31, 2002, Arbitrator Sampliner ordered that parties should make written submissions on the withdrawal motion by February 8, 2002, and that the matter was to be heard by a different arbitrator.

The Insurer filed written submissions in support of its contention that the payment of its expenses and assessment be a pre-condition to withdrawal. Although an arbitration brief was filed, Mr. Malyshev filed no further materials on the motion to withdraw.

As noted, however, the withdrawal motion only dealt with Mr. Gurevich's case. Both matters were still set down to be heard for February 27, 2002.

On February 21, 2002, I adjourned Mr. Gurevich's case to permit a decision on withdrawal. I also dealt with Ms.Gurevich's claim at the same time.

I noted the lack of an applicant's signature on the application for arbitration, the refusal of Ms. Gurevich to participate in the pre-hearing, the potential irregularities in the authorizations provided, and the Insurer's allegations that the application was brought without proper authority.

I ordered, pursuant to subrule 9.2 of the Code, that Mr. Malyshev obtain, within two weeks, an authorization, legibly signed, witnessed and dated, containing an acknowledgement that Mr. Malyshev is not a lawyer nor subject to any discipline and that Ms. Gurevich, as the named applicant, may be responsible paying any expense order made against her at the hearing.

I also noted that, failing receipt of the required authorization, her claim would be dismissed subject to the right of the Insurer to submit any claim for expenses against the party who brought the arbitration.

Mr. Malyshev was unable to obtain the required authorization. Rather, a letter, dated February 28, 2002 was received by the Commission from Mr. Yuri Gurevich, stating that "my wife, Ludmilla Gurevich, and I do not have interest in continuing this case, if we will not be exposed to any claims for expenses and other charges."

The issues before me in this matter are:

Should Mr. Gurevich be permitted to withdraw his claim without conditions allowing for the payment of the Insurer's expenses and assessment?
Should Ms.Gurevich's claim be dismissed for failure to produce the required authorization?

Result:

Mr. Gurevich shall be permitted to withdraw the application without personal liability for expenses, subject to the Insurer's option to claim its expenses from either or all of Mr. Volfson, Mr. Malyshev or Mr. Pignelosa.
Mr. Malyshev, having failed to produce the required authorization, the application for arbitration in the name of Ms. Gurevich is, therefore, dismissed subject to any claims for expenses against the party who brought the arbitration.

ANALYSIS:

As noted earlier, the Insurer has claimed for its expenses and an assessment pursuant to subsection 282 (11.2) of the Insurance Act against the applicants in this matter.

Subsection 282(11) of the Act permits the awarding of expenses or costs to an insured or an insurer, subject to the criteria set out in the regulations.

Subsection 12(2) of Regulation 664, R.R.O. 1990, as amended, sets out some of the criteria for an award of expenses in an arbitration:

An arbitrator may award expenses to an insurer or insured person under subsection 282(11) of the Act if the arbitrator is satisfied that the award is justified, having regard to the following criteria:

Each party's degree of success in the outcome of the proceeding
Conduct of the insurer or insured person that tended to shorten or facilitate the proceeding, or that tended to prolong, obstruct or hinder the proceeding, including failure to comply with undertakings or orders.
Whether the proceeding, or the position taken by the insurer or the insured person during the proceeding was manifestly unfounded, frivolous, vexatious, fraudulent or an abuse of process,
The degree of complexity, novelty or significance of the factual or legal issues raised in the proceeding.
If the insurer or the insured person requests, any written offers to settle made after the conclusion of mediation and before the conclusion of the arbitration in accordance with the rules of practice and procedure applicable to the proceeding, including the terms of the offers, the timing of the offers and the responses to the offers, having regard to the result of the proceeding.
Any other matter related to the proceeding that the arbitrator considers relevant to the issue of whether an award of expenses is justified.

As can be seen from both the statute and the regulations, an arbitrator may make an award of expenses to an insured or an insurer for a variety of reasons, including the conduct of a party, and whether a proceeding was initiated that was manifestly unfounded or an abuse of process, or any other matter related to the proceeding that is relevant to an award of expenses.

The Practice Code of the Commission, which is issued pursuant to both the Insurance Act and section 25.1 of the Statutory Powers Procedure Act, R.S.O. 1990, C. S.22, (S.P.P.A.) as amended, provides in Rule 75 that expenses may be awarded to a party, and reiterates the criteria included in the expense regulation.

While an expense award may only be payable to an insured or an insurer, neither the legislation, the regulations, nor the Practice Code limits the exposure of anyone else involved in a proceeding to cost sanctions due to their conduct within the proceeding .

As well, subsection 21(1) of the S.P.P.A. also provides that "a tribunal may make such orders or give such directions in proceedings before it as it considers proper to prevent abuse of its processes."

I accept that an arbitrator is entitled to make expense orders, sanctioning participants in an arbitration that are payable to an insured or an insurer as the case may be, as part of the complementary authority granted pursuant to the expense regulation, the Insurance Act, the Practice Code, and its power to make orders to sanction an abuse of process.

Abuse of Process:

As noted previously, the Insurer checked off "Abuse of Process, frivolous or vexatious proceedings" in its Reply form and raised issues about the propriety of the arbitration applications. As such, it invoked a broad jurisdiction, on the part of the tribunal, to sanction conduct that may be so characterized, a discretion that is founded upon the wide powers granted by both the Insurance Act and the S.P.P.A.

An abuse of process is not defined in the Schedule, the regulations or in the Act. The phrase, however, has a long history, especially in the context of vexatious proceedings.

Lord Blackburn observed in Metropolitan Bank Ltd. et al. V. Pooley (1885) 10 App. Cas. 210:

(T)he Court had inherently in its power the right to see that its process was not abused by a proceeding without reasonable grounds, so as to be vexatious and harassing.

Although the Commission, as an administrative tribunal and a creature of statute, has no inherent jurisdiction, subsection 21(1) of the S.P.P.A. specifically grants a power to control abuse.

The courts have also examined the meaning of "vexatious" in the same context. Vexatious litigation includes situations where the court has no power to grant the relief sought (see Dreyfus v. Peruvian Guano Co. (1889) 41 Ch.D. 151), if no reasonable person can possibly expect to obtain relief in it, ( see Lawrance v. Lord Norreys et al. (1888) 39 Ch. D. 213), or if the applicant has no proper authority to pursue the remedy (see R. ex rel. Tolfree v. Clark et al. [1943] O.R. 314).

In the present matter, Mr. Malyshev wishes to withdraw the application made by Mr. Gurevich without any cost penalty. In his application to withdraw, Mr. Malyshev stated that:

after a thorough examination of Mr. Yuri Gurevich's file, it has been concluded that his Application for Arbitration should be withdrawn since there are no issues in dispute present in this file. All of the issues have been previously mediated and resolved.

In its submissions, the Insurer stated:

The applicant, Mr. Gurevich, applied for Arbitration on issues that had previously been settled at Mediation. At the pre-hearing, Mr. Gurevich insisted on proceeding with Arbitration, regardless of the possibility of an award of expenses against him. At no time prior to January 18, 2002 did Mr. Gurevich offer to withdraw the claim. As a result Royal & Sun Alliance was required to retain counsel to: respond to the Application for Arbitration; review the file and prepare an opinion with respect to the Application; prepare and attend the pre-hearing; and prepare for the Arbitration Hearing.

Counsel for Mr. Gurevich has admitted in his withdrawal letter that all issues were previously mediated and resolved. In essence, he admits that the proceeding was, at the least in the words of subrule 75.2 (c), manifestly unfounded. Indeed the mediator's report, attached to the arbitration application clearly stated that there were no issues to bring to arbitration.

I find that the act of referring a patently groundless claim to arbitration constitutes an abuse of the process of this tribunal.

Given the admitted inability of the Applicant to succeed in this matter, and the obvious lack of foundation for the proceeding it is, in the absence of important mitigating factors, an obvious case for an award of expenses to the Insurer.

Who should pay?

This claim, as originally framed is about compensation for treatment undertaken by Universal Injury Rehab on behalf of Mr. and Mrs. Gurevich. Although brought in the name of the insured persons who underwent treatment, it was undertaken by the owner of the treating clinic. This practice has developed for a number of reasons.

Subsection 65(1) of the Schedule sets out the basic rule that "the assignment of a benefit under this Regulation is void."

If a treatment provider is to have standing before the Commission to claim from an Insurer, it must act through, and in the name of an Insured.

There has been some controversy over the years concerning the role of treatment providers in pursuing payment from Insurers before the Commission. Generally, it has been accepted that there is some justification for the involvement of treatment-providers in the accident benefit claims process.

Potentially, it is argued, an insured who has been unreasonably denied treatment from a insurance company, might obtain necessary treatment that he or she could not otherwise afford, if the treatment provider provides the services, on credit, with payment to be made once recovery has been made by an insurer.

Many treatment providers, however, have refined the process further. Instead of an insured including a claim for the cost of treatment in an arbitration application and paying over the proceeds, once recovered to the treatment provider, the reverse often takes place.

By virtue of "retainer" agreements, the treatment provider files for arbitration and proceeds with the claim, in the name of the insured. As long as the actions are still taken in the name of the insured, there appears to be a general belief that the rule outlined in subsection 65(1) of the Schedule is avoided.

The question of the identity of the actual litigants has some greater significance when, as in the present case, an award of expenses or costs is at issue.

The exact issue before me is who should bear the expense incurred in two separate arbitration applications, that are now, not to be pursued by the named applicants.

The Insurer maintains, in the context of the two applications, that it wants compensation for the $3,000 assessment it was obliged to pay and its costs to date in responding to the applications for arbitration.

Although the expense regulations and the Code set out some of the current criteria for an award of expenses, the history of cost awards at the Commission has created additional considerations in awarding expenses.

Originally, expense awards could be made payable only to an "insured person". Indeed, prior to the 1996 revisions of the Insurance Act, an applicant could reasonably expect to receive compensation for his or her expenses, regardless of the success or failure of the claim.

Since the revisions, jurisprudence at the Commission has generally expressed concerns about preserving access to the dispute resolution process. As Director's Delegate Draper observed in Gray and Zurich Insurance Company (FSCO P98-00047, June 11, 1999):

the criteria, specifically clause 6, leave room for concerns about the access to the dispute resolution system. One aspect of accessibility is that insured persons should have a reasonable opportunity to raise novel issues of interpretation, particularly those of general importance.

Consequently, it is not unusual for expense awards at the Commission to consider access issues, rather than slavishly adhere to the principle of costs following the cause, as outlined in subrule 75.2(a) of the Code. Generally in making an expense order, an arbitrator will balance the specific criteria contained in the expense regulations with subrules 75.2 (d) and (f) of the Code with the view of not unnecessarily discouraging parties from referring significant factual or legal issues to arbitration.

The Insurer has requested that its expenses be paid by Mr. Gurevich. That is certainly in accord with practice at the Commission. By virtue of the Insurance Act, Mr. Gurevich is a necessary party to any arbitration. Indeed, the application for arbitration, although not signed by him is made in his name.

I have concerns, however, about the justice of having Mr. Gurevich bear the burden of any expense order to the Insurer in this matter, given the background of this claim.

As I noted in my letter decision of February 21, 2002, staying both arbitration applications, "there are some significant irregularities in the arbitration file that bring into doubt the propriety of proceeding with the hearing at this time." Although these comments related to Ms. Gurevich's claim, they are equally applicable to Mr. Gurevich's.

The primary action here that triggers the cost sanction, is the bringing of a manifestly unfounded application for arbitration. I have difficulty accepting that Mr. Gurevich is the directing mind behind this abuse of process, or that he knowingly participated in an abuse of process.

As noted, previously, the application for arbitration was issued and signed by Mr. Volfson. Mr. Volfson indicates on the form that Mr. Gurevich's relationship is "patient" not agent/principal. Granted, Mr. Volfson did produce an illegibly signed, unwitnessed document that purports to be a retainer to "act on my behalf to protect my interest with respect to incurred expenses for PHYSICAL THERAPY." It goes on to authorize Mr. Volfson "to act on my behalf as my agent to make binding decisions on my behalf as well as to mediate/negotiate/arbitrate or litigate and settle the above noted matter."

Mr. Volfson was clearly in the driver's seat in this matter. From the record, he appears to have retained Mr. Jorge Pignalosa of Pignalosa/IMC Associates to act on his behalf by the date of the mediation in June of 2000. Mr. Pignalosa, indeed is listed as representative on the mediator's report issued June 29, 2000.

A letter to the Insurer, dated October 5 1999, (Insurer's brief) advised that Pigneloas/IMC was retained, and enclosed a copy of its direction and authorization, "directing you to make all cheques payable with respect to the above-captioned matter to Pignalosa and Associates." It further advised: "Due to the seriousness of my client's injuries you are to deal with this firm directly and not with our client."

The direction referred to, entitled "Notice of Change of Address and Direction and Authorization" authorized the Insurer to "make all cheques, drafts or money orders payable with respect to the above-noted matter to me, and are to be sent to the above-noted address only". The undated document is signed with an illegible signature.

A second, illegible, "authorization" dated October 22, 2001 was faxed to the Commission on October 23, 2001, just prior to the pre-hearing. It refers to Vadim Malyshev of Pignalosa/IMC Associates as the agent for Mr. Gurevich.

As can be seen, all contact was to be with the "agent", all cheques were to be paid to the treatment provider or the agent, and the arbitration application was launched by the treatment provider, without the signature of the insured. Indeed, the Insured, himself, seems to have been virtually superfluous to the process.

The appropriate remedy for an abuse of process is to sanction the person responsible. The application for arbitration which triggered the cost consequence is signed only by Mr. Volfson as treatment provider. I find that the application itself is uncontradicted prima facie evidence that Mr. Volfson instigated this improper application.

I am buttressed in my conclusion by the other documents submitted to the Commission in the context of this arbitration. The retainer documents, upon which Mr. Volfson and his agents appear to rely, contain serious flaws, both in execution and in content.

On one hand most of the documents lack legible and identifiable signatures, dates or witnesses. Even if these difficulties can be overcome, however, they appear to bestow upon Mr. Volfson something other than mere agency.

The Canadian Oxford Dictionary defines "agent" as:

A person who provides a specific service etc.(Travel agent; insurance agent)
A person who acts for another in business, politics etc. (talk to my agent)

An agent works in the interest of someone (his principal) to whom he is beholden. Black’s Law Dictionary cites the definition of "agency" given in s.1 of the Restatement:

Agency is the fiduciary relation which results from the manifestation of consent by one person to another that the other shall act on his behalf and subject to his control, and consent by the other so to act.

It appears that the control exercised in this matter by the named parties was limited at best. Indeed, most of the indicia of control appear to have been in the hands of the supposed "agents."

What, then, were the respective roles of Mr. Volfson and Pignelosa and Associates in this matter? If they acted as simple agents for Mr. Gurevich, then he ought to be responsible to the world for their actions on his behalf. This is the doctrine of respondeat superior, defined in Black’s Law Dictionary as:

Let the master answer. This doctrine or maxim means that a master liable in certain cases for the wrongful acts of his servant, and a principal for those of his agent.

Likewise, if the treatment provider, in this arbitration, is merely "piggy-backing" on a claim by an insured, and an insured is claiming treatment expenses which he, or she, will in turn pay to the treatment provider, then the action remains that of the insured, who will be responsible, both for its outcome, and for any consequences arising from his conduct.

If, however, "agents" are more akin to assignees of the right to claim treatment expenses, then the position of the insured is much less clear.

Neither the Insurance Act nor the Schedule define "assignment." Black's Law Dictionary provides the following explanation:

The act of transferring to another all or part of one’s property, interest or rights. A transfer or making over to another of the whole of any property, real or personal, in possession or in action, or of any estate or right therein. It includes transfers of all types of property.

I find, based on the "retainer letters" previously referred to, the "agents" were, in fact, assignees of Mr. Gurevich’s rights to claim compensation for treatment from his insurers. By reason of the various documents presented as "retainers" the "agents" were to receive any payments, in their own name, to be free to launch actions, compromise actions and to retain other counsel. In fact, Mr. Gurevich had transferred his rights to compensation for those specific treatments to Mr. Volfson and had no actual control of the matter beyond the assignment.

At Common Law, the right to bring an action, or to recover a debt or money, a chose in action was not assignable. The Courts of Equity, however, recognized and enforced assignments of choses in action with some significant exceptions. Among the exceptions were mere rights of action, contracts which expressly exclude assignment, assignments void by public policy, and assignments prohibited by statutory provisions. As noted previously, the assignment of benefits pursuant to the Schedule is specifically prohibited.

In the case of a legal chose in action, Equity could still be of assistance to an assignee. As Morden J. noted in DiGuilo v. Boland 1958 CanLII 92 (ON CA), [1958] O.R. 384:

Chancery would compel the assignor to collaborate with the assignee in asserting his claim in the Common Law Courts. If the assignment of an equitable chose was not absolute, then both the assignor and assignee were necessary parties to a suit in equity.

The purpose of including the assignor as a party was to ensure that all the relevant parties and their evidence were available to the tribunal. Their addition, however, did not change the fundamental characterisation of the transaction as an assignment.

These arbitrations, although commenced by the treatment provider, are in the names of the insured persons, presumably to avoid the prohibition of assignment. I find, however, that the mere addition of the names of the insured does not change the overall character of the transaction as an assignment of the right to claim from the Insurer.

Even if the assignment of the claim is not an assignment of a benefit pursuant to subsection 65(1) of the Schedule, and so void, further difficulties with the agreement are apparent.

Chapter 327 of the Revised Statutes of Ontario (1897) contains the following legislative enactment:

An Act respecting Champerty

HIS MAJESTY, by and with the advice and consent of the Legislative Assembly of the Province of Ontario, enacts as follows:

Champertors be they that move pleas and suits, or cause to be moved, either by their own procurement, or by others, and sue them at their proper costs, for to have part of the land in variance, or part of the gains. 33 Ed.1
All champertous agreements are forbidden and invalid.

Although not contained in the present statutory consolidation, the act has not been repealed, and remains in force. Both the courts and the legislature have, over time, carved out exceptions for, inter alia, lawyers (The Solicitor's Act ), trustees in bankruptcy (Pellegrini v. 854970 Ontario Ltd. [1999] O.J. No. 5027 ), and those with a genuine, pre-existing interest in the cause of action assigned (Frederickson v. Insurance Corp. of British Columbia 1986 CanLII 1066 (BC CA), [1986] B.C.J.No. 366 B.C.C.A.).

There are two other Ontario cases that are relevant to a modern view of champerty. Ellis-Don Ltd. v. Norton et al. (1982) 5 C.L.R. 281 (Ont. H.C.) was case involving an assignment of lien claims by subcontractors. Anderson J. struck down the assignment agreement as champertous, noting that there were alternative methods of protecting any legitimate commercial interest.

By contrast, in 453416 Ontario Inc. v. White, [1984] O.J. No. 221, in a commercial context, Smith J. adopted the approach of Lord Denning in Trendtex Trading Corporation v. Credit Suisse [1981] 3 All E.R. 721, and found that "almost every kind of genuine interest in the result would warrant a person giving his support for litigation."

Mr. Volfson’s involvement in this matter appears to fall clearly within the ambit of the 1897 Act and the Common Law rule. While, if Mr. Volfson is found to have had a valid, pre-existing, financial interest in the chose in action before it was assigned to him by the insured, (Trendtex Trading, supra) his "retainer agreement" may not be void due to champerty, the burden is on him to show that he is, somehow, exempt from the rule.

While the exceptions to the rule against champerty are still evolving, what is clear from the jurisprudence is that an agreement, if found champertous, may still be struck down as void.

I find that there is a serious issue as to whether the "retainer" agreements between Mr. Gurevich and Mr. Volfson and Pignelosa and Associates are void as offending both the rule against assignability of benefits, and the rule against champerty.

If Mr. Volfson's "retainer" were to be found void, then any argument in favour of attributing responsibility to an expense award to Mr. Gurevich would be fatally weakened.

In a recent case, Piotto & Kingsway General Insurance Co. (FSCO A00-001061, March 22, 2002), I found that an "agent" operating without valid legal authority, could be found personally liable for costs. As Lord Eldon in Wright v. Castle (3 Mer. 12) observed:

There can be no doubt as to the course of this court’s jurisdiction, that, if a solicitor files a bill in the name of his client without having authority from him for so doing, then, if the plaintiff wishes to have the bill dismissed it will be so ordered, and the solicitor will be made to reimburse him all the expenses occasioned by its having been filed.

Armour, CJ.C.P. in Scribner v. Parcells (1890) 20 O.R. 554, a similar case to Wright v. Castle, indicated that Lord Eldon’s view was accepted in Ontario.

If the above reasoning is applicable to this case, then, the law of agency would dictate that Mr. Volfson, Mr. Pignelosa or Mr. Malyshev should bear responsibility for any expense order in this matter.

In summary then, there are cogent reasons that Mr. Volfson, or his apparent agents, Pignelosa and Associates, may be found to be the appropriate parties to bear the sanction for the abuse of process.

These range from the authority of the Commission to control an abuse of process and to order expenses, to difficulties with the formalities, and the nature of the retainer as well as the relationship between the "agents" and the named parties.

While it is appropriate for a tribunal to look to its record for information, in the absence of other evidence, it is clear that if responsibility may be attributed to Mr. Volfson or his associates in this matter, they should have full notice, and an opportunity to respond to any claim. It is, therefore, inappropriate to make a final disposition of the Insurer’s claim for expenses without giving all potential parties a clear opportunity to respond and call relevant evidence if so advised.

Motion to withdraw

As noted earlier, I have made a finding that the arbitration proceeding itself was an abuse of process. I have found that the alleged "retainer" agreements appear to have been an assignment of the right to claim the costs of treatment. I have made a further finding that the information contained in the record points to Mr. Volfson as a probable author of this abuse, and that notwithstanding the fact that Mr. Gurevich’s name is attached to the proceeding, he is not the guiding mind in this process.

Gonthier J., in Smith v. Co-operators General Insurance Co. (2002 SCC 30), a recent decision of the Supreme Court, stated:

There is no dispute that one of the main objectives of insurance law is consumer protection, particularly in the field of automobile and home insurance.

No-one has claimed that Mr. Gurevich was not entitled to access treatment following an accident. What is in issue is the conduct of his treatment provider in bringing an unnecessary, and unwarranted action, as a consequence of the treatment.

It would be a particularly odd sort of consumer protection, if the consequence of an insured seeking legitimate treatment is to be penalized for subsequent actions of the treatment provider, vis-a-vis the insurer.

I find that Mr. Gurevich should be permitted to have his application withdrawn, without personal responsibility for the expenses incurred by the Insurer. To order otherwise would, in effect, make the Commission a party to a potential abuse of process by a treatment provider and require the insured to bear the full responsibility for the malfeasance of another. In this case, I do not find that to be the appropriate result.

I find, however, that the Insurer is free to file a motion requesting its expenses from either or all of Mr. Volfson, Mr. Malyshev or Mr. Pignelosa, as the case may be, as the active mind or minds behind the abuse of process that has occurred. I remain seised of this matter until the issue of expenses has been dealt with.

The Insurer should serve its bill of expenses and notice of motion and file them with the Commission within 30 days of the issuance of this decision, in conformance with Rule 67 of the Code, should it wish to proceed.

Responding parties shall have 10 days from date of service to serve and file a written response.

The Claim of Ms. Gurevich

As part of my order dated February 21, 2002, I required Mr. Malyshev to obtain a clear and legible direction from his nominal client, permitting him to proceed. He had 14 days to obtain the direction, and did not do so.

My order also provided that the failure to produce the required authorization from Ms. Gurevich within the specified time, would result in the dismissal of the claim, subject to the right of the Insurer to submit any claim for expenses against the party who brought the arbitration.

As noted, the two claims were filed together and have proceeded together. I will not repeat my comments concerning the application made in Mr. Gurevich’s name, other than to say that they apply equally to Ms. Gurevich. In fact, given her refusal to participate in either assessments or the pre-hearing of this matter, it is even less likely that she is the person responsible for the bringing of this matter and its subsequent conduct. She has also clearly expressed her intention that this matter not proceed in her name.

In accordance with my order dated February 21, 2002, I dismiss the application for arbitration filed in the name of Ms. Gurevich, subject, as noted, to the Insurer’s claim for expenses against the party who brought the arbitration.

If the Insurer decides to proceed on the expense claim it should be joined with any motion filed in the matter of Mr. Gurevich, and shall be subject to the same time-lines and compliance with Rule 67.

April 29, 2002

John Wilson Arbitrator

Date