Neutral Citation: 2003 ONFSCDRS 157

FSCO A02-001290

FINANCIAL SERVICES COMMISSION OF ONTARIO

BETWEEN:

RASPAL SINGH

Applicant

and

KINGSWAY GENERAL INSURANCE COMPANY

Insurer

DECISION ON A MOTION

Before:

John Wilson

Heard:

October 22, 2003, by teleconference

Appearances:

Albert Conforzi for Mr. Singh

Jean-Claude Rioux for Kingsway General Insurance Company

Issues:

The Applicant, Raspal Singh, was injured in a motor vehicle accident on May 19, 2001. He applied for statutory accident benefits from Kingsway General Insurance Company ("Kingsway"), payable under the Schedule.¹ Kingsway terminated weekly income replacement benefits. The parties were unable to resolve their disputes through mediation, and Mr. Singh applied for arbitration at the Financial Services Commission of Ontario under the Insurance Act, R.S.O. 1990, c.I.8, as amended.

On October 16, 2003, counsel for the Insurer requested that Mr. Singh attend a further medical examination, pursuant to section 42 of the Schedule. Mr. Singh, through his counsel, Mr. Conforzi, refused to attend.

Consequently, Mr. Rioux served and filed the following motion:

This motion is for:

An Order compelling the Applicant to attend for an Independent Medical Examination ("FME") by Psychologist,² Dr. Mark Berber, or, alternatively, adjourning the hearing of the arbitration in this matter to a date not less than 60 days from the date on which the Applicant makes himself reasonably available for a further Psychological IME, and,
To deal with outstanding production.

At the commencement of the hearing, Mr. Rioux advised that the Insurer was withdrawing the request for an adjournment and for a production order.

Result:

Mr. Singh cannot be compelled to attend an Independent Medical Examination by Dr. Berber.

EVIDENCE AND ANALYSIS:

Compulsory medical examinations in the arbitration forum are provided for in subsection 42(1) of the Schedule, which reads as follows:

For the purpose of determining whether an insured person is entitled to a benefit, except a funeral or death benefit, an insurer may give the insured person notice requiring him or her to be examined by one or more persons specified by the insurer, each of whom is a member of a health profession or a person with expertise in vocational rehabilitation.

The Insurer first requested that Mr. Singh attend for a psychiatric examination in March of 2003. At that time, his counsel replied to the Insurer that he would not attend, since in his opinion, the proposed examination was not for the purpose of "determining whether an insured person is entitled to a benefit" but rather for a medical-legal examination of the type provided for in Rule 33 of the Rules of Practice, which apply to court actions.

His counsel took this approach since the Insurer stated that it required a psychiatric opinion to respond to the issues raised by Dr. Rex Samuel, a psychologist, in his report dated December 28, 2001. His report, in turn, was a response to Dr. Jonathan Siegel's psychological report which was issued in October of 2001.

Following this refusal, the Insurer took no action to enforce its rights under section 42 of the Schedule, until it brought this motion to compel attendance at a psychiatric examination.

Given that the hearing of this matter is to commence shortly, on December 1, 2003, and the Insurer, to date, has shown no interest in reinstating benefits to date, it is Mr. Conforzi's opinion that there can be no proper characterization of the examination as a determination of the Applicant's entitlement.

At common law, no one, including insurers, had a right to compel an insured to make him or herself available for examination simply because a claim was being advanced. (See Redly v. City of London et al. (1891), 14 PR (Ont.) 171). Parties to civil actions may now move under section 105 of the Courts of Justice Act to obtain an order for a compulsory medical examination where the plaintiff's health is at issue in the matter.

It goes without saying that forcing an individual to undergo an unwanted medical examination can be considered both stressful and extremely invasive of a person's privacy. Such an order should not be made lightly, nor without clear and cogent reasons. The law and the jurisprudence are clear, however, that section 42 of the Schedule gives the insurers a right to override such normal privacy concerns, provided that the legal pre-conditions for the examination are met.

It is not abundantly clear just what circumstances provide the pre-conditions for a section 42 examination.

There are few areas in accident benefit practice so confused and contradictory as the rules applicable to insurer's examinations. They have been the subject of numerous applications and many decisions, some of which are difficult to reconcile with each other.

Some common threads, however, can be discerned.

In Glynn and General Accident Assurance Co. of Canada (OIC A96-000004, November 25, 1996), Arbitrator Makepeace summarized the normal requirements for insurer's medical examinations.

I find that the Insurer's right to require the Applicant to attend an Insurer Medical Examination is subject to the following requirements under sections 23(2) and 25:

(i) The examination must be required in respect of a claim for weekly benefits.

(ii) The Insurer may require an IME "as often as it reasonably requires."

(iii) The Insurer must give the Applicant "reasonable notice" that it requires the examination.

(iv) The examination must be performed by a "qualified medical practitioner, psychological advisor or chiropractor."

The second of Arbitrator Makepeace's requirements has engendered significant problems, since each side views the reasonableness of any particular examination through very different lenses. Later decisions, although recognizing the overall right to require insured persons to submit to medical examinations, have delineated limits to such examinations. Director's Delegate Draper commented in Traders General Insurance Company and Levey (FSCO P98-00035, February 25, 1999):

Insurers do not have an absolute right to schedule examinations whenever they want. The examination must be reasonably necessary and scheduled at a time reasonably convenient for the insured person. As Director's Delegate Naylor held in F.S. and Belair Insurance Company Inc., (OIC P96-00039, June 11, 1996), this involves a balancing of the interests of the parties, with the timing of the examination as an important consideration. Absent a clear explanation, examinations scheduled on the eve of the hearing suggest the kind of tactical brinkmanship that arbitrators have properly rejected as part of this system.

Although there are very different considerations when evaluating requests under Rule 33 of the Rules of Practice, arbitrators have looked to court decisions for guidance in applying subsection 42 of the Schedule, and its predecessors.

In Manolakos v. Royal Insurance ([1998] O.J. No. 2157), a decision of Farley J. dealt with an insurer's request for assessments of an insured. He stated:

In my view the onus is on the insurance company in such circumstances to demonstrate its request for such as reasonable in the circumstances (although this would be "automatic" where there has never been an examination).

Arbitrators have also evaluated the consequences of a failure to attend examinations, following proper notice.

In F.S. and Belair, Director's Delegate Naylor considered whether an arbitrator has jurisdiction to stay an arbitration because of a failure by an insured to attend an insurer's medical examination.

The arbitrator also concluded that the words "commence a mediation proceeding" in section 25 were unambiguous and could not be modified so as to read "commence or proceed through the dispute resolution process." He concluded that he had no authority to preclude Ms. S. from proceeding to a hearing, disagreeing with contrary reasoning in Hanna and Royal Insurance Company of Canada, (December 2, 1994, OIC A-005409). He held that while Ms. S. could not be prevented from proceeding to a hearing, an adverse inference could be drawn against her for failing to attend the examination.

It would be an extraordinary result if, in the face of an express authority to require an examination, insureds could circumvent this condition by insisting on proceeding to arbitration, while shifting the basis of their claim. It is even more anomalous if an insured - the only party who can initiate arbitration - can deprive an insurer of the ability to evaluate the insured's condition through independent sources - by choosing arbitration over court. Nor do I accept the premise that considerations of fairness in adjudication or an arbitrator's obligation to hold a fair hearing should not inform the inquiry. The fact that the primary purpose of section 23(2) is to assist in the insurer's assessment of the claim does not mean that it cannot be applied to serve the ends of fairness. (FS)

This decision must be read with some caution in the light of the decision of the Court of Appeal inMcCombie v. Cadotte.³ While the court was considering section 258.6 (1) of the Insurance Act, which relates to the right of insurers to require the examination of an insured prior to the commencement of an action (presumably a court action), many of the interpretive principles are equally valid when applied to section 42 of the Schedule.

Relying on the dictum of Lord Tenterden C.J. in Doe d. Bishop of Rochester v. Bridges⁴ (1831) 1 B & ad 847, Morden J.A. stated:

These considerations incline me to the view that the legislative scheme was intended to involve plaintiffs submitting to requests, possibly after some variation agreed upon with the defendant, of their own accord and not under the compulsion of a court order. I do not think that the legislature intended the medical examination scheme for settlement purposes to be more inflexible and onerous than the one provided for the purpose of trial.

Morden J. essentially concluded that if a specific penalty is provided for in the legislation, then it is wrong to attempt to import other recourse into the legislative scheme.

Such a strict interpretation can be supported by pointing to important differences between the arbitration forum and the courts.

Subsections 42(8)(a) and (b) of the Schedule provide specific penalties for the failure to submit to an examination. Neither subsection provides for an order compelling the insured to attend.

The arbitration forum has been described as "quicker, less expensive and less formal."⁵ One of the procedural differences arising from the expedited process is the lack of examinations for discovery. Rule 33 examinations as used in the courts form part of this discovery process. It is, therefore, not surprising that neither the Insurance Act nor the Schedule provide specifically for medical examinations in aid of litigation.

Given the relative speed of the arbitration process, the legislation assumes that parties are to proceed to hearing without cumbersome and time-consuming discoveries, and without medical-legal examinations aimed solely at bolstering their case.

Like the provisions for section 24 examinations (at the instance of the insured), section 42 examinations are for limited purposes. In fact, permission to conduct examinations is qualified by the words "for the purpose of determining whether an insured person is entitled to a benefit."

Since it is incumbent upon an insurer to demonstrate the reasonableness, and compliance with the notice requirements of section 42, it is also incumbent upon it to demonstrate that the proposed examination is for the purpose of establishing entitlement to a benefit.

While the jurisprudence has accepted that is possible for an insurer to still be determining entitlement, even after a refusal to pay benefits, there are practical reasons why an insurer might wish to carefully consider the use of section 42 examinations once litigation or arbitration has commenced. The foremost among these reasons is the need to demonstrate that the examination is required for determination of the benefit. Arguably, this puts the state of mind of the insurer or its employees in question, and opens the "Pandora's box" of the waiver of litigation privilege concerning events surrounding a proposed examination.

In this matter, I have no evidence before me supporting Mr. Rioux's bald assertion that the proposed examination is for the purposes of determining entitlement to a benefit, and find that the Insurer has not met the onus of proving that assertion.

It goes without saying, however, that parties are free to agree to any proposed examinations, outside of section 42, and, indeed, it may well be in the interests of both parties to have an objective report on a contentious issue. In this case, however, Mr. Singh is not prepared to agree to the proposed examination.

Because the power of an arbitrator derives from statute, a source for any arbitral action must be found in statute as well, in this case the Insurance Act and the Statutory Powers Procedure Act.

Neither explicitly grant an arbitrator the power to order a person to undergo an examination.

While it is generally accepted since F.S. and Belair (supra) that the power to prevent an abuse of process may permit a stay of an arbitration⁶, there is no jurisprudence recognizing a power to order attendance. As Arbitrator Blackman noted in M.S.D and Citadel General Assurance Company (FSCO A01-001561 February 19, 2003),

This accords with Arbitrator Manji's decision in Granic and Allstate Insurance Company of Canada (OIC A-006615, January 30, 1995) that arbitrators "do not have authority to compel an insured person to attend an examination."

For the above reasons I find that arbitrators at FSCO lack jurisdiction to order Mr. Singh to attend at a medical examination.

Even if I have erred on the question of jurisdiction, I find that there are compelling reasons for not sanctioning Mr. Singh's failure to attend the planned medical examinations.

Timing:

The Insurer first raised psychological issues by having Mr. Singh examined by a psychologist, Dr. Siegel, in September 2001. Mr. Singh responded to these issues with a report from Dr. Rex Samuel, a psychologist, which was produced and filed in January 2002.

Kingsway then waited until March 2003 to propose a psychiatric examination to deal with issues contained in Dr. Samuel's January 2002 report. Following a refusal of Mr. Singh to attend without some action to reinstate benefits, Kingsway sat back until about a month before the scheduled hearing, when it took action to enforce its request for a psychiatric examination. In fairness to Mr. Rioux this was not brinkmanship on his part and can be attributed directly to the timing of instructions from his client.

One of the criteria often used in considering whether an examination is reasonable is the balancing of the relative prejudice that may occur to parties if the examination is available or not. One element of potential prejudice is incorporated in the doctrine of laches, a legal term denoting remissness or slackness. Black's Law Dictionary (7th ed.) defines it as:

Unreasonable delay or negligence in pursuing a right or claim - almost always an equitable one - in a way that prejudices the party against whom relief is sought.

Mr. Conforzi alleges that a motion to enforce a section 42 examination this late in the game is highly prejudicial to Mr. Singh.

This would be the first examination by a psychiatrist. It would be impossible to obtain his own expert opinion commenting on its findings before the hearing of this matter, even if (as Mr. Rioux suggested) the Insurer would waive any time requirements for the serving and filing of such reports.
Given the timing of the proposed examination, Mr. Singh will be forced to deal with new evidence on the eve of an arbitration, or seek an adjournment to a later date, and, consequently, postpone any hope of benefits even further.
Had the Insurer not lulled Mr. Singh into a belief that it would not pursue the matter of a psychiatric report through its delay in bringing this motion, Mr. Singh could have taken the necessary steps to arrange for his own psychiatric evaluation within the time-frames set by the Practice Code.

I accept Mr. Conforzi's submissions and find that the ordering of a psychiatric assessment at this point would potentially create prejudice for the Applicant.

While I also accept that the Insurer may suffer some prejudice if it is prevented from obtaining new psychiatric evidence, such prejudice may be accounted for by its own decision to delay the initial request for examination some 14 months and the request to enforce its rights to the eve of the hearing.

As the parties were advised earlier, no order will go compelling Mr. Singh to attend the insurer's medical examination with Dr. Mark Berber.

EXPENSES:

I leave the question of expenses incurred in this motion hearing to the hearing arbitrator.

November 5, 2003

John Wilson Arbitrator

Date