FINANCIAL SERVICES COMMISSION OF ONTARIO
Neutral Citation: 2002 ONFSCDRS 70
FSCO A01-000749
BETWEEN:
PATRICIA LYGHT
Applicant
and
ALLSTATE INSURANCE COMPANY OF CANADA
Insurer
PRE-HEARING DECISION
Before:
Lawrence Blackman
Heard:
By telephone conference call on May 3, 2002. Oral decision rendered May 3, 2002.
Appearances:
Brian Sherman for Ms. Lyght Ian D. Kirby for Allstate Insurance Company of Canada
Issues:
The Applicant, Patricia Lyght, was injured in a motor vehicle accident on October 24, 2000. She applied for statutory accident benefits from Allstate Insurance Company of Canada ("Allstate"), payable under the Schedule.1 Allstate denied payment of certain expenses submitted by Ms. Lyght. The parties were unable to resolve their disputes through mediation and Ms. Lyght applied for arbitration at the Financial Services Commission of Ontario under the Insurance Act, R.S.O. 1990, c.I.8, as amended. This decision deals with pre-hearing production exchange.
The issue is:
- What, if any, remedy is Allstate entitled to for the Applicant's failure to comply with undertakings and orders?
Result:
Ms. Lyght is denied her expenses of the pre-hearing arbitration process to the date of this second resumption of pre-hearing discussion, being May 3, 2002.
Ms. Lyght shall pay Allstate its expenses of the pre-hearing arbitration process fixed at $500, inclusive of G.S.T., payable in any event of the cause, but payable only as an offset to any award to her in respect of her claim for payment of the accounts of Target Rehab Centre and/or Sheppard-Leslie Chiropractic Clinic and/or legal expenses of this arbitration proceeding.
EVIDENCE AND ANALYSIS:
Background Chronology
The pertinent history of this matter subsequent to the Commission receiving the Application for Arbitration herein on June 4, 2001, is as follows:
June 6, 2001
- letter from the case administrator to Ms. Lyght's representative, including copies of Practice Note 7 (what occurs at a pre-hearing discussion) and Practice Note 4 (the exchange of documents). Practice Note 4 states, in part, that:
The exchange of documents should be worked out between parties and their representatives as soon as possible, and in any event, well before the pre-hearing discussion.
and further notes possible adverse consequences should a party fail to produce documents well in advance of a hearing.
August 14, 2001
letter from Allstate's counsel requesting that the Applicant produce:
- the records of Ms. Lyght's hospital attendance the day of the accident;
- the clinical notes and records of Ms. Lyght's family physician, Dr. Gabor, from one-year pre-accident;
- copies of the records of Target Rehab Centre and Sheppard-Leslie Chiropractic; and,
- a decoded OHIP summary from one-year pre-accident;
November 7, 2001
the Applicant's representative, by letter, agreed to:
- have his client execute authorizations regarding requests #1, 2 and 4; and,
- produce request #3 within two weeks.
November 7, 2001
Pre-Hearing Discussion before me. The only substantive issues in dispute were the accounts of Sheppard-Leslie Chiropractic Clinic ($2,569.99) and Target Rehab Centre (an ongoing account, then in the amount of $11,660.85). The Applicant also claimed interest on any overdue accounts. The Insurer sought payment of its assessment. Both parties sought their expenses of the arbitration;
Allstate agreed to include the issue of continuing treatment at Target Rehab Centre on the condition treatment plans and full particulars be provided to them and that they maintain their rights under the Schedule, particularly regarding insurer medical examinations.
November 8, 2001
- Allstate's counsel confirmed Ms. Lyght's undertakings and enclosed authorizations for signature. He further requested the timely return of the signed authorizations;
November 16, 2001
date of my Pre-Hearing letter, in which I noted the Applicant's undertaking to:
- provide the Insurer, within 60 days of the pre-hearing discussion, with confirmation of the particulars of the Target account; and,
- to confirm, at least 60 days prior to the start of the hearing, the amount of the Target account and provide full particulars;
I also noted that the parties undertook, in part, to:
Within 60 days of this pre-hearing discussion date either have complied with the undertakings given or, in the case of documents not in a party's possession, control, or power, have provided proof of best efforts to comply with the undertakings.
- the Pre-Hearing letter further noted the possible adverse consequences to a party should it fail to comply with an order or an agreement, as set out in Rule 34.1 of the Dispute Resolution Practice Code (Fourth Edition, May 31, 2001).
November 19, 2001
- Allstate's counsel wrote Ms. Lyght's representative, requesting her signed authorizations;
December 5, 2001
- Allstate's counsel further wrote Ms. Lyght's representative, again requesting the Applicant's signed authorizations;
December 7, 2001
- Ms. N. Mendaglio, Coordinator of Arbitration Support Services, wrote the Applicant's representative regarding the outstanding productions, indicating that arbitration is predicated on parties cooperatively exchanging information. She noted the consequences of failing to honour undertakings and/or orders as set out in Rule 34.1 (and specifically stating that if a further pre-hearing was needed to resolve production issues, expenses "will be considered at that time"). Ms. Mendaglio requested, in part, a detailed list of all outstanding productions, an outline of their current status and an explanation as to why productions had not been completed.
December 14, 2001
- a two-and-a-half-line letter sent by Ms. Lyght's representative to Ms. Mendaglio:
I refer to your letter of December 7th. We are preparing the case. Production matters are being dealt with. This is not a default situation. I will be in touch with you on the 21st as directed.
December 20, 2001
- letter from Allstate's counsel to Ms. Mendaglio indicating that the Applicant's four undertakings remained outstanding. He further indicated that Allstate could not obtain production from third parties of certain medical documentation it undertook to request and produce, because the Applicant had not returned further authorizations sent by the Insurer on November 28, 2001.
January 11, 2002
- Resumption of pre-hearing discussion before me. My subsequent January 14, 2002 letter included the following order:
On the consent of both parties, the Applicant is hereby ordered to produce to the Insurer, within seven (7) days of this pre-hearing resumption of January 11, 2002 (that is, by January 18, 2002), the four categories of documents listed in Mr. Kirby's letter of December 20, 2001, or within that same time period, provide proof of the utmost best efforts made in endeavouring to obtain same.
- No order regarding expenses was requested, nor given. I again noted Rule 34.1, which provides that where a party is in default of producing documents pursuant to an order or agreement, an arbitrator may award or deny expenses, exclude a document filed, impose a new timetable for compliance, draw an adverse inference and/or make such other order as is considered just, which I indicated could include not allowing the party in default to call the authors of the documents to give oral evidence.
April 22, 2002
- Allstate's counsel wrote the Applicant's representative, stating that all four undertakings, noted in the above letter of August 14, 2001, remained outstanding and that the authorizations sent November 8, 2001 had not yet been returned.
May 2, 2002
- Notice of Resumption of Pre-Hearing Discussion, which includes notice that the Discussion may include requests for interim relief and interim expenses.
May 3, 2002
- date of second resumption of Pre-Hearing Discussion before me.
Findings
At the May 3, 2002 resumption, Ms. Lyght's representative either conceded or did not contest the following, for all of which I make findings of fact:
regarding his November 7, 2001 letter, he had not produced the records of the treatment providers within two weeks of his letter as undertaken, but rather had only produced them on May 3, 2002, being more than five months later (and only ten days prior to the start of the hearing). He further had only on this resumption date delivered the signed authorizations also undertaken in his November 7, 2001 letter;
he had not complied with his undertaking, documented in my November 16, 2001 Pre-Hearing letter, to either have complied with his undertakings or have provided proof of best efforts within 60 days of the November 7, 2001 Pre-Hearing Discussion;
he had not complied with his undertaking, documented in that same letter, to provide Allstate, within 60 days of the pre-hearing discussion, with confirmation of the particulars of the Target account and to further confirm, at least 60 days prior to the start of the hearing, the amount of the Target account at that time and provide full particulars (upon which undertaking, Allstate agreed to allow as an issue in this proceeding, Target's ongoing claim);
he had not complied with the consent order, documented in my January 14, 2002 letter, that by January 18, 2002, he would provide Allstate with the agreed productions, or within that same time period, provide proof of the utmost best efforts made in endeavouring to obtain same. I note, however, in a filed brief from Allstate that records of Dr. Gabor were forwarded by Ms. Lyght's representative on January 17, 2002 to the Insurer. Ms. Lyght's representative did not dispute that the Insurer was required to serve a summons to witness on Dr. Gabor in order to obtain such records;
the May 3, 2002 delivery to Allstate of the necessary OHIP authorization makes it highly unlikely that the parties will now be able to obtain a decoded OHIP summary prior to the start of the hearing.
Allstate sought an order that this Application be dismissed, or in the alternative, that I order that interest potentially payable under section 46 of the Schedule stop running. Allstate's counsel sought to give submissions regarding what he viewed as a general pattern of conduct on the part of the treatment providers herein. I indicated that any such submissions (for which no evidence was provided) would be disregarded and my decision herein would be based solely on the facts of this case.
Significant efforts over the course of nearly a year, as set out above, have been made to encourage the early exchange of documents. Undertakings, time lines, proof of best efforts, orders, etc., are all intended to avoid trial by surprise and encourage the early and fair resolution or hearing of a matter. In this case, no evidence has been provided to show compliance with the undertakings or orders given, specifically of complying with time lines and providing proof of best efforts (other than, possibly, eventually providing Dr. Gabor's notes on January 17, 2002, but only after a resumption of pre-hearing discussion was required).
The Applicant's representative argued that the concern regarding late production in this case would be minimized because the documents when produced would not harm her case. I do not find such a rationale to be an acceptable excuse for a party to fail to comply with undertakings and orders. If a party is of the view that a production request is not relevant or is not producible for some other reason, the time to make that argument is prior to the undertaking being given or the order being rendered.
After hearing submissions from the parties, I considered the various possible remedies set out in Rule 34.1 of the Code. I held that excluding documents or witnesses, drawing adverse inferences or making an order regarding interest was best left to the hearing arbitrator. For the record, Allstate maintains its position that interest on any overdue accounts should be restricted due to the failure of the Applicant to comply with undertakings and orders. Neither party indicated that it wished to have the proceeding delayed.
I declined to dismiss this proceeding. The specific notice prerequisites required by Rule 68 of the Code for such a drastic remedy had not been met. In any event, I heard no evidence that this claim had been commenced in bad faith or that the proceeding was frivolous or vexatious, as also required by Rule 68.
However, I was of the view, based on my findings of the Applicant's repeated failures to comply with undertakings and orders, that she should be denied her expenses of the pre-hearing process to date and further have expenses awarded against her, as contemplated by Rule 34.1 of the Code.
I asked the parties for submissions on the quantum of such expenses. Allstate requested $500. The Applicant did not oppose that amount.
Accordingly, Ms. Lyght shall pay Allstate its expenses of the pre-hearing arbitration process fixed at $500, inclusive of G.S.T. This amount is payable in any event of the cause, but is payable only as an offset to any award to her in respect of her claim for payment of the accounts of Target Rehab Centre and/or Sheppard-Leslie Chiropractic Clinic and/or as against any future award she may be granted for legal expenses of this arbitration proceeding.
May 14, 2002
Lawrence Blackman Arbitrator
Date
Neutral Citation: 2002 ONFSCDRS 70
FSCO A01-000749
FINANCIAL SERVICES COMMISSION OF ONTARIO
BETWEEN:
PATRICIA LYGHT
Applicant
and
ALLSTATE INSURANCE COMPANY OF CANADA
Insurer
ARBITRATION ORDER
Under section 282 of the Insurance Act, R.S.O. 1990, c.I.8, as amended, it is ordered that:
Ms. Lyght is denied her expenses of the pre-hearing arbitration process to the date of this second resumption of pre-hearing discussion, being May 3, 2002.
Ms. Lyght pay Allstate its expenses of the pre-hearing arbitration process fixed at $500, inclusive of G.S.T., payable in any event of the cause, but payable only as an offset to any award to her in respect of her claim for payment of the accounts of Target Rehab Centre and/or Sheppard-Leslie Chiropractic Clinic and/or legal expenses of this arbitration proceeding.
May 14, 2002
Lawrence Blackman Arbitrator
Date
Footnotes
- The Statutory Accident Benefits Schedule —Accidents on or after November 1, 1996, Ontario Regulation 403/96, as amended by Ontario Regulations 462/96, 505/96, 551/96, 303/98 and 114/00.