Neutral Citation: 2003 ONFSCDRS 61

FSCO A02-000468

FINANCIAL SERVICES COMMISSION OF ONTARIO

BETWEEN:

BLAKE BERTRAM

Applicant

and

CGU INSURANCE COMPANY OF CANADA

Insurer

DECISION ON A PRELIMINARY ISSUE

Before:

Tanja Wacyk

Heard:

Written submissions were received by January 28, 2003.

Appearances:

Mark DeWitt for Mr. Bertram

Catherine Ann Korte for CGU Insurance Company of Canada

Issues:

The Applicant, Blake Bertram, was injured in a motor vehicle accident on August 10, 2001. He applied for and received statutory accident benefits from CGU Insurance Company of Canada ("CGU"), payable under the Schedule.¹ However, benefits were denied and the parties were unable to resolve their dispute through mediation. Mr. Bertram applied for arbitration at the Financial Services Commission of Ontario under the Insurance Act, R.S.O. 1990, c.I.8, as amended.

The pre-hearing in this matter was held on October 29, 2002. Mr. Bertram participated, as did Ms. Nimira Thawer on behalf of CGU. Mr. DeWitt, agent, represented Mr. Bertram. Ms. Korte, legal counsel, represented CGU. Mr. Vaskevich, Clinical Director, Centre City Health Recovery, was also in attendance.

At that time, the primary issue in dispute was identified as follows:

1. Is Mr. Bertram entitled to receive a medical benefit of $3,975 for chiropractic care provided by Centre City Health Recovery, claimed pursuant to section 14 of the Schedule?

Preliminary Issue:

At the pre-hearing, CGU raised the following preliminary issues:

1. Should all disputed treatment plans by Centre City Health Recovery be added to the existing arbitration proceeding?

2. Should Mr. Bertram's representatives be required to provide signed, informed consents from Mr. Bertram agreeing to be represented by them?

Result:

1. All disputed treatment plans by Centre City Health Recovery are added to the existing arbitration proceeding.

2. If it is Mr. Bertram's intention that Mr. Vaskevich continue to represent him, then a signed, informed, "Glinka" acknowledgement to that effect must be provided.

3. The parties are to contact the Commission in order to schedule a resumption of the pre-hearing.

BACKGROUND:

The following facts are not in dispute.

Centre City Health Recovery ("Centre City") submitted to CGU a total of four treatment plans for Mr. Bertram, all dated between August 20, 2001 and November 13, 2001, with an outstanding disputed account of $5,005.61 as of July 3, 2002.

On March 25, 2002, Mr. Bertram applied for arbitration of only one treatment plan, dated August 20, 2001, in the amount of $3,975.00.

On October 31, 2002, Mr. Bertram issued a Small Claims Court action with respect to a second treatment plan, dated November 2, 2001, in the amount of $2,120.00.

At the pre-hearing, Mr. Bertram refused to consent to the addition of any of the other outstanding treatment plans to the existing arbitration.

On December 11, 2002, the Insurer applied for a fast-track mediation of all outstanding treatment plans and they have now all been mediated.²

CGU provided the following chart of the benefits in dispute:

No.

Date of Treatment

Type of Treatment

Cost

Mediation

August 20, 2001

Chiropractic treatments, massage therapy, active conditioning gym and physical modalities

$3,975.00

Yes - Report of Mediator dated January 8, 2002

November 2, 2001

Chiropractic treatments, and rehabilitative strengthening program, physical modalities and home icing and stretching programs

$2,120.00

Yes - Report of Mediator dated July 10, 2002

November 2, 2001

Massage therapy

$960.00

Yes - Report of Mediator dated December 18, 2002

November 13, 2001

Acupunture

$975.00

Yes - Report of Mediator dated December 18, 2002

THE APPLICABLE PROVISIONS:

Section 281.(1) of the Insurance Act provides:

Litigation or arbitration

281. (1) ...

(a) the insured person may bring a proceeding in a court of competent jurisdiction;

(b) the insured person may refer the issues in dispute to an arbitrator under section 282; or

(c) the insurer and the insured person may agree to submit any issue in dispute to any person for arbitration in accordance with the Arbitration Act, 1991.

Section 282 provides:

Arbitration

282. (1) An insured person seeking arbitration under this section shall file an application for the appointment of an arbitrator with the Commission.

Arbitrator's appointment

(2) The Director shall ensure that an arbitrator is appointed promptly.

Determination of issues

(3) The arbitrator shall determine all issues in dispute, whether the issues are raised by the insured person or the insurer. 1996.

ARGUMENT:

Combination of Disputes

CGU's Submissions

CGU's position was that all disputed treatment plans between Mr. Bertram and CGU should be heard together.

CGU emphasized that the treatment plans result from the same motor vehicle accident, involve the same parties, the same treatment centre, a related period of time, and raise the same issue of the reasonableness and necessity of the proposed treatment.

CGU submitted that section 281 of the Insurance Act provides an insured person with the option of bringing an action for statutory accident benefits before a court or an arbitrator. CGU maintained that once Mr. Bertram elected to pursue his entitlement to Centre City medical benefits through the arbitration process, CGU, pursuant to section 282(3), is entitled to raise other disputed issues.

In support of its position, CGU relied on the case of Nand and State Farm Mutual Automobile Insurance Company.³ In that case, Arbitrator Baltman concluded that State Farm could raise the issue of entitlement in the arbitration hearing dealing with the deduction of collateral benefits.

Arbitrator Baltman held at page 5 that section 282(3) "marks a new and significantly broader approach to setting the parameters of an arbitration." She stated at page 6:

Until the recent amendment, therefore, the case law consistently held, as noted by Arbitrator Beyefsky [sic] in Carby "that the applicant must have some control over the arbitration process and that insurers are, consequently, not entitled to raise disputes regarding entitlement to or the amount of a different benefit." (emphasis in original) It was against this background that the new section 282(3) was passed, suggesting, I believe, that the legislators intended to clarify what the parameters of an arbitration should be. The contrast between what was permitted under the old wording - "such other issues as the parties may agree" - and the new wording - "whether the issues are raised by the insured person or the insurer" - is, in my view, a clear movement toward an inclusive approach to the hearing. Once an applicant has opted for arbitration, this amendment requires the arbitrator to determine "all" issues in dispute. As such, it goes well beyond the guidelines expressed in Carby."

The Insurer also relied on the case of Dutton and Liberty Mutual Insurance Company.⁴ In that case, Arbitrator Seife followed the decision in Nand and State Farm. He held that the issue of repayment of income replacement benefits could be added to the arbitration proceeding dealing with ongoing income replacement benefits on the basis that section 282(3) requires the arbitrator to hear all issues in dispute. He further found that the issue of repayment reasonably and consequentially flows from the issue of entitlement.

CGU further pointed out that in DeCicco and State Farm Mutual Automobile Insurance Company,⁵ affirmed on appeal,⁶ Arbitrator Naylor decided to include the unmediated issue of repayment in the arbitration dealing with income replacement benefits and care benefits. She stated at page 9:

The scope of the issues before the arbitrator should not be defined in a narrow and technical way. The authority of the arbitrator extends to anything that reasonably and consequentially flows from the issues that are before her.

CGU further argued that Rule 1.1 of the Dispute Resolution Practice Code,⁷ (the "Code") states: "these Rules will be broadly interpreted to produce the most just, quickest and least expensive resolution of the dispute." CGU also pointed out that Rule 33.1 of the Code states that a pre-hearing arbitrator will assist the parties by "(a) identifying and obtaining agreement as to the issues for arbitration; ... and (h) dealing with any other matters that the arbitrator considers appropriate."

The Insurer maintained that these provisions affirm the jurisdiction of an arbitrator to decide which issues are to be determined in the course of an arbitration and to structure the proceeding so as to achieve the most just and expeditious disposition of the matter.

CGU submitted that Mr. Bertram's representatives are heedless of the potential enormous cost exposure to their own client in having the same physicians attend to testify at numerous proceedings when the issues are so closely related.

CGU states the actions of the Applicant's representatives are an attempt to harass the Insurer by the implicit threat of multiple proceedings brought on at different times in different forums.

In support of this, as well as its position that all the disputed treatment plans should be heard together, CGU also relied on the decision of Arbitrator Blackman in Suliman and Economical Mutual Insurance Company.⁸

In that decision, Centre City had submitted fourteen treatment plans on behalf of Mr. Suliman, all dated between January and June 2002, with an outstanding disputed account of $11,637.97. In that instance, Mr. Suliman, by his representatives, Messieurs Mark DeWitt, Mr. Walter Vaskevich and Mr. Vladislav Simkhaev, would agree only to proceed on three treatment plans which had been mediated, submitting it was his right to pursue payment of the other plans at a future date and possibly in a different forum.

Arbitrator Blackman disagreed. He held that all the outstanding issues involving the various Centre City treatment plans should be arbitrated together. He further found that Centre City's actions, on their face, suggested a deliberate attempt to harass the Insurer by the implicit threat of multiple proceedings.

Arbitrator Blackman, for reasons which included his concern that their actions were a deliberate attempt to harass" the Insurer, subsequently excluded Messieurs DeWitt, Vaskevich and Simkhaev from the proceeding in a decision dated December 16, 2002.

Mr. Bertram's Submissions:

Mr. Bertram arguments, although dated January 8, 2003, did not acknowledge that all the treatment plans involving Centre City have now been mediated. Consequently, much of his argument focussed on an arbitrator's lack of jurisdiction to add unmediated disputes to an arbitration.

In that regard, Mr. Bertram relied on Arbitrator Bayefsky's decision in Carby and Co-operators General Insurance Company.⁹ In that decision, Arbitrator Bayefsky summarized what was at that time, the developing jurisprudence regarding the addition of issues by an Arbitrator - the first criteria being that the matter had been mediated.

Mr. Bertram did acknowledge that section 282(3) of the Insurance Act grants arbitrators authority to add issues to an arbitration proceeding whether raised by the insured person or the insurer. However, he also pointed out that subsection 281(1) grants the right to initiate arbitration proceedings to the insured only. Consequently, Mr. Bertram argued that by allowing CGU to undertake mediation proceedings with a view to adding those issues to an existing arbitration, I would, in effect, be granting CGU the right to initiate arbitration proceedings.

In making this argument, Mr. Bertram relied on the decisions in DeCiccio and State Farm Mutual Automobile Insurance Company¹⁰ and Slivecka and Canadian General Insurance Company¹¹ both of which dealt with an earlier and significantly different version of section 282(3) of the Insurance Act.

Mr. Bertram also maintained that Arbitrator Blackman erred in his decision in Suliman,¹² when he required the insurer to request an expedited mediation to deal with outstanding Centre City treatment plans - as there was no evidence they were "issues in dispute" as required by section 282(3) of the Insurance Act.

Signed Acknowledgment:

CGU's Submissions

CGU requested an order requiring Mr. Bertram's representatives to provide an acknowledgement signed by Mr. Bertram, that they:

• are not lawyers;

• are not members of the Law Society of Upper Canada and are not subject to the supervision or discipline of a professional body;

• are not required to carry insurance as legal agents or representatives;

• have advised Mr. Bertram that he is personally potentially liable to pay a portion of the Insurer's legal expenses;

and that Mr. Bertram, having been informed of the above, wishes them to act for him.

In Suliman, Arbitrator Blackman had required Messieurs DeWitt, Vaskevich and Simkhaev to provide the same "Glinka" acknowledgment, in accordance with the appeal decision in Glinka and Dufferin Mutual Insurance Company.¹³

The Insurer submitted there is a public policy reason for a signed acknowledgment, and referred to Director's Delegate Nancy Makepeace's comments in the Dhawan and State Farm Mutual Automobile Insurance Company decision¹⁴ set out at pages 18 and 19:

I believe the principles set out in Romanowicz are applicable in FSCO proceedings. In considering the responsibility of the trial judge where the accused is represented by an agent, the Court of Appeal broke the issues down into two: has the accused made an informed choice to be represented by an agent rather than a lawyer, and is the agent competent to represent the accused in the proceedings? All parties agreed that trial judges should make some inquiry to satisfy themselves that the accused has made an informed choice, and the Court agreed.

CGU pointed out that despite two representatives at Mr. Bertram's pre-hearing, only one has given a signed acknowledgment as described above. The Insurer suggested this is an attempt to prevent the FSCO tribunal" from determining whether Mr. Bertram has made an informed choice in its selection of representatives.

Mr. Bertram's submissions

Mr. Bertram made no submission regarding the Insurer's request for signed acknowledgements.

ANALYSIS:

It was not contested that the disputed treatment plans arise out of the same motor vehicle accident, involve the same parties and treatment centre, and raise the same issue of the reasonableness and necessity of the proposed treatment. Nor is it disputed that resolution of Mr. Bertram's entitlement to payment for the treatment plans would require the evidence of the same experts.

Furthermore, all the treatment plans have now been mediated and are clearly issues in dispute" as required by subsection 282(3).

As pointed out earlier, the case law relied on by Mr. Bertram dealt with the pre-1996 amendment to subsection 282(3) of the Act. Prior to that amendment, subsection 282(3)¹⁵ provided as follows:

The Arbitrator shall determine all issues in dispute and such other issues as the parties may agree.

It was within that statutory limitation that arbitrators struggled over whether to add issues to which an applicant had not consented. These earlier decisions held the insurer had no independent right to refer matters to arbitration which did not "naturally or consequentially flow" from applicants' claims, unless the parties agreed.

However, the current language of section 282(3), which is applicable in this case, specifically allows insurers to raise issues at arbitration.

This may not mean that all disputes between the parties should be heard together in the same proceeding or even in the same forum. However, it cannot be said that the disputes in this instance are separate and discrete, and can reasonably be dealt with separately. If Mr. Bertram were allowed to litigate the outstanding disputes in various forums, i.e. arbitration or court proceeding, this would result in delay, split proceedings, and duplication of time and cost. This would be at odds with the public policy goal underlying section 282(3) - namely to encourage speedy and effective dispute resolution.

On the other hand, an arbitration for the entire outstanding account and ongoing entitlement prevents a multiplicity of proceedings, with the attendant possibility of inconsistent results. It would reflect the public policy of a speedy and effective dispute resolution process, and would be cost effective, pragmatic, fair, and just.

Furthermore, even applying the approach of the earlier decisions relied on by Mr. Bertram, the outstanding treatment plans by Centre City should be added to the existing arbitration.

For example, in Carby and Co-operators (supra), Arbitrator Bayefsky set out five criteria to be considered before adding an issue. They are: whether the issue has been mediated, whether the issue involves a different benefit category, whether it is reasonably incidental to the issues raised by the insured person, whether it would unduly expand the scope of the arbitration proceeding, and whether its inclusion would benefit both parties by avoiding multiple proceedings.

In this instance, applying the above criteria, it is clear the various Centre City treatment plans should be arbitrated together as they have been mediated, do not involve a different benefit category, are intertwined with and flow naturally and consequentially from the treatment plan which is proceeding to arbitration, would not unduly expand the scope of the arbitration, and would definitely benefit both parties by avoiding multiple proceedings.

Consequently, I find that all the disputed treatment plans between Mr. Bertram and Centre City should be heard together in one arbitration.

Signed Acknowledgment:

While Mr. DeWitt indicated he was representing Mr. Bertram at the pre-hearing, Mr. Bertram's Application for Arbitration was accompanied by a document authorizing Mr. Vaskevich to act on his behalf. Both Mr. DeWitt and Mr. Vaskevich attended the pre-hearing. Consequently, it is not clear who has carriage of this matter.

In light of the failure of Mr. Bertram's representatives to make factually or legislatively accurate submissions, I find CGU's request that Mr. Bertram execute a "Glinka" acknowledgement entirely appropriate.

Such an acknowledgement has been provided regarding Mr. DeWitt but not regarding Mr. Vaskevich. If it is Mr. Bertram's intention that Mr. Vaskevich continue to represent him, then a signed, informed "Glinka" acknowledgement to that effect must be provided.

EXPENSES:

As no submissions were made regarding expenses incurred in this preliminary issues hearing, I will leave the issue of expenses to the discretion of the hearing arbitrator.

April 16, 2003

Tanja Wacyk Arbitrator

Date

Neutral Citation: 2003 ONFSCDRS 61

FSCO A02-000468

FINANCIAL SERVICES COMMISSION OF ONTARIO

BETWEEN:

BLAKE BERTRAM

Applicant

and

CGU 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:

1. All disputed treatment plans by Centre City Health Recovery are added to the existing arbitration proceeding.

2. If it is Mr. Bertram's intention that Mr. Vaskevich continue to represent him, then a signed, informed, "Glinka" acknowledgement to that effect must be provided.

3. The parties are to contact the Commission in order to schedule a resumption of the pre-hearing.

April 16, 2003

Tanja Wacyk Arbitrator

Date

Footnotes

1. 1The 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, 114/00 and 482/01.
2. 2An order for CGU to fast-track a mediation to deal with the outstanding treatment plans had originally been sought by CGU, but is now moot as the mediation has taken place.
3. 3(FSCO A96-001835, July 28, 1997)
4. 4(FSCO A97-000593, February 10, 2000)
5. 5(OIC A-000277, December 18, 1991)
6. 6(OIC P-000277, February 21, 1992)
7. 7Fourth Edition, May 31, 2001
8. 8(FSCO A02-000596, October 16, 2002)
9. 9(FSCO A-950220, January 12, 1996)
10. 10Supra at Footnote 6
11. 11(OIC 008342, September 27, 1995)
12. 12Supra at footnote 9
13. 13(FSCO P01-00002, March 7, 2001)
14. 14Appeal (FSCO P01-00025, February 1, 2002)
15. 15Insurance Act, R.S.O. 1980, c. 218, as amended by the Insurance Statute Law Amendment Act, 1990, S.O. 1990, c.2.