Neutral Citation: 2003 ONFSCDRS 43

FSCO A01-000969

BETWEEN:

INGRID BURKE

Applicant

and

ALLSTATE INSURANCE COMPANY OF CANADA

Insurer

DECISION ON A PRELIMINARY ISSUE

Before: David Muir

Heard: January 20, 2002, at the offices of the Financial Services Commission of Ontario in Toronto.

Appearances:

Roman Volfson No one appeared for Ms. Burke William M. Sproull for Allstate Insurance Company of Canada

Issues:

The Applicant, Ingrid Burke, was injured in a motor vehicle accident on November 3, 1999. She applied for statutory accident benefits from Allstate Insurance Company of Canada ("Allstate"), payable under the Schedule.¹

The parties were unable to resolve their disputes through mediation, and Ms. Burke applied for arbitration at the Financial Services Commission of Ontario under the Insurance Act, R.S.O. 1990, c.I.8, as amended.

The preliminary issue is:

Is Ms. Burke precluded from proceeding to arbitration of her claims to medical benefits (cognitive-behavioural psychotherapy, massage therapy and physical therapy) pursuant to section 50 of the Schedule for failing to attend an insurer's examination and for failing to return an OCF-14 required to schedule a medical and rehabilitation DAC under section 43 of the Schedule?

In addition the following issue remains outstanding:

Is Mr. Roman Volfson entitled to withdraw as Ms. Burke's representative and if so, on what terms, according to section 9 of the Dispute Resolution Practice Code?

Result:

Ms. Burke is precluded from proceeding to arbitration of her claims to medical benefits (cognitive-behavioural psychotherapy, massage therapy and physical therapy) pursuant to section 50 of the Schedule for failing to return an OCF-14 required to schedule a medical and rehabilitation DAC assessment.
Mr. Volfson may withdraw as Ms. Burke's representative, without conditions.

This preliminary issue came on for hearing on October 9, 2002. At that time, neither Ms. Burke nor her representative were in attendance. The matter proceeded in their absence. In a decision dated November 8, 2002, I reserved on the preliminary issue and required the attendance of the parties to deal with the question of whether or not Ms. Burke had authorized the commencement of this arbitration proceeding. I decided that this question must be decided before proceeding to dispose of the preliminary issue, because I was concerned the decision might, in effect, finally determine Ms. Burke's entitlement to benefits without her having any real understanding of what was at stake for her. The hearing was scheduled to resume on January 20, 2003. Notices were sent to the interested parties, including Mr. Volfson and Ms. Burke. I am satisfied that everyone entitled to notice received it.

At the time and place set for the resumption of the preliminary issue hearing, neither Ms. Burke nor Mr. Volfson were in attendance. In accordance with the Commission's practice, I adjourned the hearing for 15 minutes.

When the hearing began at 10:15 a.m., Mr. Volfson was in attendance. Ms. Burke was not and the hearing proceeded in her absence.

Mr. Volfson indicated that he was attending to answer the suggestion that Ms. Burke had not authorized the application for arbitration and to renew his request to withdraw as Ms. Burke's representative. Evidence was led with respect to these issues from both Mr. Volfson and Ms. Natalia Poliakov, Mr. Volfson's secretary.

In this decision I will deal with Mr. Volfson's motion to withdraw and in doing so will consider the question raised in the prior decision - did Ms. Burke authorize the arbitration proceeding? For the reasons set out below I find that Ms. Burke did authorize this arbitration proceeding. In light of that finding and despite Ms. Burke's continuing refusal to attend the hearing and respond to the preliminary motion of Allstate, I also have decided the preliminary issue.

The Motion to Withdraw:

Mr. Volfson purported to withdraw as Ms. Burke's representative by letter dated October 7, 2002, two days prior to the dates set for the preliminary issue hearing. On October 8, the Commission responded in writing advising Mr. Volfson that the request to withdraw was not made in compliance with the Dispute Resolution Practice Code (the "Practice Code") and that the hearing would proceed to consider the question on October 9.

On October 9, prior to the hearing commencing, the Commission was copied with a letter from counsel for Allstate to Mr. Volfson indicating Allstate's position that Mr. Volfson did not have a unilateral right to withdraw as a representative.

As indicated, neither Mr. Volfson nor Ms. Burke were in attendance when the preliminary issue hearing was scheduled to begin. On the question of whether Mr. Volfson ought to be allowed to withdraw I found as follows:

Mr. Volfson is not entitled, at this point, to withdraw as Ms. Burke's representative. It is not enough to merely announce your desire to withdraw whatever the underlying rationale. In the particular circumstances of this case, where among other issues, it is alleged that Mr. Volfson may have brought this arbitration in his own right and without the knowledge or consent of Ms. Burke, I decline to grant Mr. Volfson's request to withdraw as Ms. Burke's representative at this time.

Some of the background to the critical events is set out in my earlier decision and will not be repeated in great detail here. Suffice it to say that Ms. Burke was initially represented by someone other than Mr. Volfson when the disputes between the parties were first identified. Mr. Volfson was not able to be precise about when he began to represent Ms. Burke but, as I indicated in the prior decision, it was subsequent to mediation in May 2000 but before the arbitration was commenced in the spring of 2002.

Mr. Volfson testified that the intake process he uses with a new client takes one to two hours. Up to an hour of that time is spent in explaining the mediation and arbitration process - the clinic seems to assume that the insurer will dispute the treatment provided. At that time various authorizations are signed by the client. This is the process that Ms. Burke would have gone through when she first came to the clinic, although Mr. Volfson had no personal recollection of this happening in her case.

There was some difficulty in the early stages of this arbitration. The first pre-hearing scheduled to take place in March 2002 could not proceed because Ms. Burke was not present and there was no authorization from her allowing Mr. Volfson to represent her. The application for arbitration was also incomplete - pages were missing from the application form, and it was not signed by Ms. Burke.

Mr. Volfson testified that Ms. Burke attended at his office on April 10, 2002 and signed an application for arbitration and an authorization. This was done, stated Mr. Volfson, in his presence and in the presence of Ms. Poliakov, his secretary, who witnessed the document. This was confirmed by Ms. Poliakov, who testified that she witnessed Ms. Burke's signing the documents in question and then, in turn, signed as a witness. She confirmed and identified the signatures that were hers. Mr. Volfson testified that he explained the arbitration process to Ms. Burke at that time, including the possibility of an expense award against her. He denied threatening to sue her if she did not cooperate with him.

A pre-hearing discussion was held on May 31, 2002. At that time, a so-called "Glinka" authorization² was sought by Allstate. Mr. Morgan testified on the first day of the hearing, and I have already found, that Ms. Burke would not sign the authorization at the pre-hearing, although one was produced for her. Mr. Volfson testified that he and Ms. Burke were somewhat surprised by the request. It is agreed that Mr. Volfson undertook to provide a "Glinka" authorization within 60 days of the pre-hearing. Mr. Volfson also stated that he has not been able to have Ms. Burke sign such an authorization subsequent to the pre-hearing. Although the evidence was a little vague on this point, I accept his testimony that he attempted on at least one occasion to have her sign such an authorization, and that he scheduled an appointment(s) for Ms. Burke to come to his office for that purpose and that she failed to do so. I also accept his evidence that he, and his secretary, attempted on several occasions to contact Ms. Burke with limited success.

Mr. Volfson also testified that because of his failure to get Ms. Burke to sign the required authorization he understood that he could no longer represent her. He also stated that because of Ms. Burke's lack of cooperation - she in effect has disappeared according to Mr. Volfson - he had no option but to withdraw as her representative and to seek recovery of the cost of treatment in small claims court. He testified that he has begun such an action although it has not yet gone to trial.

Allstate essentially conceded that Ms. Burke had authorized the arbitration in the sense that she had signed the application form and had authorized Mr. Volfson to represent her. However, it remained Allstate's submission that Mr. Volfson not be entitled to withdraw, essentially because we do not know to what extent Ms. Burke understood the nature of the arbitration process and the consequences to her. Allstate submitted that it could be inferred from her refusal to sign the "Glinka" authorization when asked to do so, that she had never been apprised of her rights and duties, nor Mr. Volfson's duties and responsibilities to her in this process.

Mr. Volfson submitted, on the other hand, that Ms. Burke authorized him to represent her on April 10, 2002, and then for some reason subsequently chose to distance herself from the process. He submitted that, in the circumstances, he could no longer represent her and, given her lack of cooperation with him, he is entitled to withdraw as her representative.

I find that Mr. Volfson is entitled to withdraw as Ms. Burke's representative without conditions under Rule 9 of the Practice Code. The relationship between Mr. Volfson and Ms. Burke has for whatever reason broken down and she has decided not to provide the "Glinka" authorization necessary for Mr. Volfson to continue as her representative. To my mind, although Allstate presents a plausible scenario, there is no direct evidence to support the allegation that Ms. Burke was unaware of the potential consequences of this arbitration proceeding. I generally accept Mr. Volfson's evidence that he explained the nature of the arbitration process, including the potential for an expense finding against her. I also find, and this is clear, that Ms. Burke did sign the application for arbitration and an authorization for Mr. Volfson to represent her. In the absence of any other evidence, from Ms. Burke in particular, about what was said to her about the process, I am unable to infer from her subsequent conduct that she had been mislead and/or kept in the dark about the nature of the arbitration process. I also cannot infer from the evidence that she was threatened in some way in order to extract the authorization which she gave.

THE PRELIMINARY ISSUE:

Allstate submits that Ms. Burke is prevented from proceeding to mediation (and consequently prevented from commencing an arbitration³) in respect of the treatment issues in dispute because she failed to comply with the provisions of section 50(b)(c) of the Schedule in that she failed to make herself reasonably available for an insurer's examination as required by section 42; and also that she did not provide an OCF-14 in order to allow a medical and rehabilitation DAC assessment to be scheduled as required by section 43.

As indicated above, Ms. Burke was injured in an automobile accident on November 3, 1999. Ms. Burke met with a representative of Allstate on November 9. In a letter dated November 12, she was advised, amongst other things, that she was required to submit an application for accident benefits within 30 days of the receipt of the application form and that, accordingly, she must submit her application for statutory accident benefits on or before December 9, 1999.

A treatment plan of physical therapy prepared by Dr. Leslie Toth of Universal Injury Rehabilitation Centre Inc. ("Universal") was submitted to Allstate on November 29. Allstate wrote to Dr. Toth on the same date and advised that it could not respond to the treatment plan because, as of that point, an application for accident benefits had not yet been submitted. Another treatment plan of massage was submitted to Allstate during November, and it appears to have been rejected as well but it is not clear on the material filed why this decision was made. A further treatment plan was received from Dr. DasGupta of Universal on December 23, 1999 for cognitive-behavioural psychotherapy.

On November 30, 1999, Allstate wrote to Ms. Burke advising her that it had scheduled examinations of her. The letter stated in part:

This letter is to confirm that we have made arrangements for an appointment for you to meet with a psychiatrist and orthopaedic specialist for the purpose of an insurer's examination in order to determine any and all benefits under the Statutory Accident Benefits.

The examinations were both scheduled for Friday, December 17, 1999. The letter further asked that if there were any difficulties with the scheduled appointments, Ms. Burke should contact the Insurer to make other arrangements. There is no evidence that Ms. Burke responded to this letter. Ms. Burke did not attend at the scheduled insurer's examinations (IEs).

On December 14, 1999, Allstate received a letter from Pignalosa & Associates, Ms. Burke's representatives at the time. Under cover of this letter Ms. Burke provided various documents to Allstate, including an application for accident benefits. In this letter Allstate was advised that due to the seriousness of the injuries sustained by Ms. Burke, it should communicate directly with Pignalosa & Associates.

On January 5, 2000, Allstate wrote two letters to Universal in response to the three treatment plans it had received to that time. The treatment plans (of massage, physical therapy and cognitive-behavioural psychotherapy) were all denied and Allstate stated that it required Ms. Burke to be assessed by a designated assessment centre in accordance with section 43 of the Schedule. The letters were addressed to Dr. DasGupta and Dr. Toth respectively. The letter to Dr. Toth was copied to Ms. Burke and her representative. The letter to Dr. DasGupta was copied to the file but no one else.

On the same date Allstate wrote to Ms. Burke acknowledging receipt of her application for accident benefits. The letter dealt with a number of issues. It reiterated an earlier message that she may be entitled to more than one weekly benefit and that an election of benefits had been previously provided to her but had not yet been returned to Allstate. The letter included some discussion of Ms. Burke's entitlement to income replacement benefits and noted some deficiencies in the application which Allstate required be amended.

The letter noted again that Ms. Burke had not attended at the previously scheduled IEs and put Ms. Burke on notice that no benefits would be considered beyond November 29, 1999 until she attended an IE.

The letter also advised Ms. Burke that a treatment plan for cognitive-behavioural psychotherapy from Universal (the treatment plan prepared by Dr. DasGupta) had been received and was rejected by Allstate. The letter indicated that Allstate required Ms. Burke to be assessed by a Designated Medical Assessment and enclosed an OCF-14 (permission to disclose information to the Designated Assessment Centre) which was to be returned to Allstate. The letter further advised that no assessment would be required if Ms. Burke gave written notice that she was not making a claim in respect of the goods and services in question. The letter went on to state that in the event that the OCF-14 was not returned to Allstate by January 19, 2000 Ms. Burke would be "held non-compliant with section 4(3) [sic]" of the Schedule and that "pursuant to section 43(3), no benefit is payable for the period after an insured person failed to make himself or herself reasonably available .... and before the insured person makes himself or herself reasonably available and complies with subsection (2) [sic].

Ms. Irene Kasprzyk, staff claims consultant at Allstate, testified that the letter described above with all of the attachments including the OCF-14 was sent to Mr. Malyshev of Pignalosa & Associates on January 6. She also stated that the letter to Ms. Burke, sent by registered mail, was returned unopened to Allstate on or about February 4, 2002.

On January 12, 2000, Allstate wrote to Mr. Vadim Malyshev, Ms. Burke's representative at the time, correcting a typographical error in the January 5 letter. The typographical error was an incorrect reference to section 4(3) in the passage quoted above, which should have read 42(3). The letter goes on to ask again when Ms. Burke would be available to attend the IEs in order that they could be rescheduled.

On January 25, 2000, Allstate wrote to Ms. Burke, with a copy to Mr. Malyshev, noting that it had not received written notice from her that she was not seeking payment for the goods and services which were to be referred to the DAC. The letter invited Ms. Burke to forward the OCF-14 directly to the Designated Assessment Centre if she wished, and again advised of its view of her responsibilities pursuant to section 43 of the Schedule. The letter also noted that Allstate had still received no response to its requests that Ms. Burke contact the Insurer about rescheduling the IES that she had not attended in December 1999.

Allstate took steps to schedule the DAC assessment, although no OCF-14 was ever received by Allstate or forwarded to the DAC. On February 22, 2000, Allstate received notice of an application for mediation in respect of a claim to medical benefits for the treatment proposed (or provided) by Universal.

Section 50 of the Schedule provides in part as follows:

An insured person shall not commence a mediation proceeding under section 280 of the Insurance Act unless,

(b) he or she made himself or herself reasonably available for any examination required by the insurer under section 42; and

(c) he or she made himself or herself reasonably available for any assessment under section 43 and he or she complied with subsection 43 (2) in respect of the assessment.

Section 42 of the Schedule provides:

(1) 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.

(2) The notice shall state the benefit to which the examination relates.

(4) The insurer shall make reasonable efforts to schedule the examination for a time that is convenient for the insured person and shall provide the insured person with reasonable notice of the examination.

(5) For the purpose of the examination,

(a) the insured person shall provide the person or persons who conduct the examination with such information as is reasonably necessary; and

(b) the insured person shall submit to any reasonable physical, psychological, mental and functional examinations requested by the person or persons who conduct the examination.

Section 43(2) provides:

43(2) For the purpose of the assessment,

(a) the insured person and the insurer shall provide the person or the persons who conduct the assessment with such information as is reasonably necessary; and

(b) the insured person shall submit to any reasonable physical, psychological, mental and functional examinations requested by the person or persons who conduct the assessment.

I find that Ms. Burke is prevented from commencing mediation (and hence proceeding to arbitration) in respect of her claims to medical benefits for physical therapy, massage and cognitive-behavioural psychotherapy, pursuant to section 50 of the Schedule because she has failed to discharge her obligations under section 43(2) of the Schedule. However, I do not agree with Allstate's submission that Ms. Burke has failed to comply with her obligations pursuant to section 42 of the Schedule.

There are problems in the manner in which Allstate proceeded in adjusting this claim. For example, Allstate appears to have jumped the gun in requesting IE's before it had received a completed application for accident benefits (and before Ms. Burke was required to have submitted an application). More significantly, the notice dated November 30, 1999 is also deficient in that it does not specify the benefits to which the assessments were related, perhaps not surprising as no claim for benefits had been made to that point.

It might be argued that subsequent events - the receipt of an application for benefits in mid December as well as the submission of a further treatment plan for cognitive-behavioural treatment - might cure the initial defect. I am inclined to think not. Section 42(2) requires that the notice of the IE states the benefit to which the examination relates. This provision has been strictly construed by arbitrators because it is felt that only with that information can the insured person make an informed judgement about whether or not they wish to submit to the insurer examination and continue to seek the benefit. A notice that an assessment is required in respect of "any and all benefits" does not provide any meaningful information to an applicant. If Ms. Burke's failure to attend these IE's was the sole basis for Allstate's motion, it would not succeed.

However, Ms. Burke clearly failed to meet her obligations under section 43(2) to provide the DAC with such information as is reasonably necessary for an assessment to take place, in this case an OCF-14.⁴ Despite repeated requests and advice of Allstate's position should she not comply, Ms. Burke never responded to the request for an OCF-14 and has never offered any explanation for her not having provided this document. In the circumstances, I find that her failure to do so constitutes a failure to comply with section 43(2) of the Schedule. Accordingly, by virtue of the provisions of section 50 of the Schedule, Ms. Burke is prevented from bringing those issues to mediation, and consequently, referring them to arbitration.

EXPENSES:

Allstate asked that the issue of expenses be deferred pending the release of these determinations. The parties may speak to the issue of expenses within 30 days of the release of this decision in accordance with the Practice Code.

March 24, 2003

David Muir Arbitrator

Date