Financial Services Commission of Ontario

Commission des services financiers de l’Ontario

Neutral Citation: 2003 ONFSCDRS 87

Appeal P03-00018

Appellant

and

Respondent

Before: David R. Draper

Representatives: David Payne for Mr. Bolger Robert H. Rogers for CGU

Motion Date: May 28, 2003, by telephone conference

APPEAL ORDER ON MOTION

Under section 283 of the Insurance Act, R.S.O. 1990, c.I.8, as amended, it is ordered that:

CGU Insurance Company of Canada's request to appeal the Arbitrator's preliminary order, dated May 9, 2003, before all of the issues in dispute have been finally decided, is denied.

May 29, 2003

David R. Draper Director of Arbitrations

Date

REASONS FOR DECISION

I. NATURE OF THE MOTION

Mr. Bolger filed an application for arbitration and, later, a supplementary application for arbitration, claiming various benefits under the SABS–1996.¹ CGU Insurance Company of Canada ("CGU") objected to the proceedings on the following grounds:

Mr. Bolger's claims were already the subject of an outstanding court action.
Because the determination that Mr. Bolger was catastrophically impaired was not made until January 2003, the assessment of his attendant care needs by the Designated Assessment Center ("DAC") had not been completed.
Mr. Bolger's claim for case manager services had not been properly mediated.

The parties made oral and written submissions to the Arbitrator on whether Mr. Bolger should be allowed to proceed with the arbitration and, if so, whether all of the issues should be combined in the proceeding scheduled for hearing on June 10, 11 and 12, 2003. In a decision dated May 9, 2003, the Arbitrator allowed Mr. Bolger to proceed to arbitration on all his claims "on the condition that he confirms in writing within 14 days of the date of this order, that he has amended his statement of claim, issued December 12, 2001, to withdraw all claims that may potentially overlap with the claims being decided at the arbitration hearing."

Because this is a preliminary order, CGU cannot pursue an appeal at this stage without an order of the Director of Arbitrations.² On May 21, 2003, it asked for such an order.

II. ANALYSIS

The criteria for allowing an appeal from a preliminary order have been discussed in previous decisions. I adopt the following statement from Director's Delegate Makepeace in Torok and Allstate Insurance Company of Canada, (FSCO P01-00021, May 29, 2001):

The purpose of Rule 46.2 [now Rule 50.2] is to facilitate the most cost-effective resolution of disputes by minimizing the time and money spent on procedural or collateral matters. The decision whether to hear an appeal of a preliminary order is discretionary. As Delegate Naylor stated in General Accident and Glynn, the over-arching principle guiding the exercise of the discretion is that the rule " should be broadly interpreted to produce the quickest, most just and least expensive resolution of the dispute." The criteria to be considered include the apparent strength of the appeal, the importance or novelty of the issue raised, and whether rejecting the appeal or hearing it will prejudice either party. [p. 3, footnotes omitted]

More recently, in Pato and National Frontier Insurance Company, (FSCO P02-00037, February 5, 2003), Director's Delegate McMahon reviewed the governing principles. I also accept his analysis, which follows:

The discretion to proceed with an appeal from a preliminary or interim order should be exercised keeping in mind the overarching principles enunciated in Rule 1.1, which states: "These Rules should be broadly interpreted to produce the most just, quickest, and least expensive resolution of the dispute." The rule limiting appeals from interim or preliminary rulings is designed to ensure that protracted disputes over procedural matters do not jeopardize a timely or affordable hearing of the substantive issues. However, in some cases it makes good sense to delay the main hearing to allow the appeal to proceed.

For example, if a successful appeal will dispose of all the remaining issues, proceeding with the appeal of an interim or preliminary decision may save the parties the time and expense involved in the main hearing. Based on this rationale, appeals relating to limitation periods, or whether the incident qualifies as an accident, have commonly been acknowledged. In contrast, appeals relating to issues that will not dispose of all the issues are acknowledged more sparingly. However, it may be appropriate to acknowledge appeals that raise novel legal issues, or seek to clarify a point on which there are competing arbitration decisions. In the same vein, appeals that raise questions of general importance are more likely to be acknowledged. Underlying all of these considerations are the merits of the appeal. The stronger the apparent merits, the greater the likelihood that the appeal will be acknowledged.

The parties' wishes and intentions are also important. When counsel are considering the pros and cons of setting up a preliminary issue hearing (and before there is a winner and a loser), they should think about the possibility of an appeal, and discuss whether it should be argued before the main arbitration hearing. Any agreement can be recorded in the pre-hearing letter.

Finally, preliminary or interim issue hearings are not generally argued on as complete an evidentiary record as a full hearing, and they demand a quick answer from the arbitrator. Consequently, these decisions will not generally be as fulsome as a decision after a full hearing. An appellate review of these decisions must recognize this reality. [pp. 3 - 4]

In this case, CGU claims the Arbitrator's order is inconsistent with previous Commission decisions, particularly my decision in Mangat and Non-Marine Underwriters, Mbrs. of Lloyd's, (FSCO P00-00020, August 1, 2000). It also claims the form of her order — making Mr. Bolger's right to proceed with the arbitration contingent on amending his Statement of Claim — is unclear and puts the parties in a difficult position given that the hearing is scheduled to start in less than two weeks.

I accept that multiple proceedings are to be avoided. As stated in Mangat, the insured person's right to choose court or arbitration does not convey an unfettered right to split claims between the two forums. However, this does not create a fixed rule in the opposite direction. The insured person's initial decision to go to court or arbitration does not necessarily determine the forum for all future claims. What is required is a "pragmatic balancing of interests."³

As I read the Arbitrator's decision, that is precisely what she did. She considered the criteria identified in Mangat and the arbitration decision in King and Royal Insurance Company of Canada, (FSCO A98-000234, March 24, 1999), but noted there were other factors. Most significantly, Mr. Bolger agreed to withdraw any overlapping claims from his court action. This was a relevant consideration. While the Arbitrator had to weigh CGU's claim that Mr. Bolger's concession was insufficient and came too late in the day, I find no suggestion that she failed to do so.

The Arbitrator was faced with unusual facts. The dispute had not unfolded neatly, and the parties were at odds on many points. Her decision required a review of the facts and an exercise of discretion that should not be disturbed lightly on appeal. It was up to CGU to provide some compelling reason to deviate from the usual rule that appeals must wait until all of the issues in dispute have been finally decided. In short, it did not meet this burden. I am not persuaded that the Arbitrator's decision is so clearly wrong, or that her order creates such insurmountable problems, that it must be reviewed on appeal at this point. On the contrary, it appears that CGU's principal concern is not the forum, but whether the dispute is ready to be heard. In my view, its request for an adjournment due to the unavailability of the Attendant Care DAC report, and clarification on what must be withdrawn from the court action, are best dealt with by the Arbitrator, not by interrupting the arbitration process with an appeal.

For these reasons, CGU's request to appeal the Arbitrator's preliminary order, before all of the issues in dispute have been finally decided, is denied.