Neutral Citation: 2004 ONFSCDRS 28
FSCO A02-001512

Between:
Foad Hakimi, Applicant
and
ING Insurance Company of Canada, Insurer

DECISION ON A PRELIMINARY ISSUE

Before: Suesan Alves
Heard: September 18, 2003, at the offices of the Financial Services Commission of Ontario in Toronto.

Appearances:
Brian Sherman for Mr. Hakimi
Derek E. Wilson for ING Insurance Company of Canada

Issue:

The preliminary issue is:

Is Mr. Hakimi precluded from proceeding to arbitration with his disputes for medical and rehabilitation benefits by subsections 50(b) and (c) of the Schedule because he:

(a) failed to return an OCF-14 for a proposed assessment by a medical and rehabilitation designated assessment centre ("DAC"), and

(b) failed to make himself reasonably available for insurer’s examinations?

Result:

Mr. Hakimi is not precluded from proceeding to arbitration with his claims for medical and rehabilitation benefits on either ground.

EVIDENCE AND ANALYSIS:

1.(a) The OCF-14 Forms

Foad Hakimi was injured in a motor vehicle accident on October 6, 2001. At the time of the accident, Mr. Hakimi was 18 years of age, attending high school and working part-time as a dishwasher.

Mr. Hakimi was a passenger in a car driven by his older brother at the time of the accident. His brother was insured with RBC Insurance, and Mr. Hakimi and his brother both submitted their claims for statutory accident benefits to RBC.

Mr. Hakimis parents had a policy of insurance with ING Insurance Company of Canada. RBC notified ING that it should respond to Foad Hakimis claims for benefits under the Disputes Between Insurers Regulation.¹ ING agreed and, in Spring 2002, it took carriage of Mr. Hakimis claims for statutory accident benefits payable under the Schedule.²

Mr. Hakimi applied for mediation and arbitration with respect to his claims for medical and rehabilitation benefits which were denied, but for which no DAC assessment had been arranged. ING alleges that Mr. Hakimi failed to return OCF-14 forms which would have permitted it to arrange a medical and rehabilitation DAC, and seeks an order that Mr. Hakimi be precluded from proceeding to arbitration with respect to these claims.

Mr. Hakimi alleges that he returned at least two OCF-14 forms and submitted them to the Insurer on three occasions—October 23, 2001, November 27, 2001 and December 24, 2001, yet ING failed to schedule a DAC. For the reasons which follow, I conclude that Mr. Hakimi is not precluded from proceeding to arbitration on this ground.

The OCF-14

Under the Schedule, when an insurer wishes to deny a claim for a medical and rehabilitation benefit, it must arrange an assessment by a designated assessment centre or "DAC." As I understand the practice, an insurer sends a letter denying the claim, giving the claimant the option of withdrawing the claim for the benefit, or of completing and returning an enclosed OCF-14— a Permission to Disclose Health Information form.

The OCF-14 form is a one page standard form consisting of four parts. Part 1 is completed by inserting the applicant’s name address, telephone numbers and date of birth. Part 2 is completed with similar information in relation to the insurer. Part 3 consists of a series of tick boxes. The insurer checks one to indicate which type of assessment is to be conducted. Part 4 is completed by a signature and the insertion of a date. By signing, the applicant authorizes the insurer to give the DAC medical information, authorizes the DAC to consult with the applicants treating health professionals, and authorizes the DAC to give the insurer and treating health professionals a copy of its report.

Once the insurer has a completed OCF-14 it is then able to arrange the assessment at the appropriate DAC. The opinion of the DAC may assist the parties in resolving the dispute. Failing resolution, the parties abide by the opinion of the DAC until the dispute is resolved by mediation and, if necessary, adjudication.

Under sections 43 and 50 of the Schedule, if an insured person fails to complete the OCF-14 form or fails to attend the DAC, he is not permitted to access the mediation and arbitration process with respect to the benefit which was claimed but not assessed by a DAC.

Mr. Hakimi's OCF- 14s

Mr. Hakimi alleges that he provided RBC with the first completed OCF-14 in October, 2001. After Mr. Hakimi notified RBC of his claim for accident benefits, RBC arranged for an independent adjuster, Mr. Jack Fox of Davis & Fox Adjusters Inc., to meet with Mr. Hakimi to obtain a statement; to provide him with accident benefit forms and information circulars; to have him sign an acknowledgement for the material he was given; and to complete authorizations for the release of various medical, hospital and employment records.

Mr. Hakimi was represented by Fair Claims Consultants Inc. and Mr. Brian Leila of that office was present at the meeting with Mr. Fox. Mr. Leila testified that during the meeting, he presented one of his own blank OCF-14 forms, had Mr. Hakimi sign it, then gave it to Mr. Fox to give to RBC.

Mr. Leila testified that his practice is to have his clients sign OCF-14 forms in advance of any actual dispute or need for the forms. Once completed, the forms are given to the insurer to use when, and if, needed to schedule a DAC. He testified that he does this because he finds the time frames for the return of such documents are short and can be easily missed, with adverse consequences to the insured person.

Mr. Leila testified that his intention was to have the completed form on file with the Insurer, so that once disputes arose as to Mr. Hakimi’s disability or medical and rehabilitation benefits, the form could be used to avoid any delay in arranging the appropriate DAC assessment.

Mr. Leila testified that in Mr. Hakimi’s case, he had a second reason. He takes issue with the wording at the top of RBC's OCF-14 forms. In his opinion, that wording does not comply with the provisions of the legislation and, for that reason, he prefers to use the standard forms, which he keeps available in his office. Mr. Leila testified that he gave the form to Mr. Fox for return to RBC, to be used if and when needed, and Mr. Fox accepted it. Mr. Leila testified that RBC has therefore had that completed OCF-14 form from the early days of the claim.

An OCF-14 form bearing Mr. Hakimi's signature was filed as Exhibit 4 at the hearing. It is date stamped October 31, 2001, and was produced from the Insurer's files as part of the agreed upon productions. Ms. Linda Dickson, who handled the file while it was with RBC, agreed in cross-examination that the date stamp looked like the RBC date stamp, and that the date on the form was approximately a week after the meeting. She agreed that the date would be consistent with the document having been provided to Mr. Fox, who then returned it to RBC together with the signed documents from Mr. Hakimi.

Ms. Dickson testified that it was not her standard practice to request the completion of OCF-14 forms in advance and she had not requested or instructed Mr. Fox to obtain a signed OCF-14 from Mr. Hakimi. She testified that the proper course, and the one which she followed, was to have all the applicable blanks in the OCF-14 form filled out and only then send the OCF-14 form to the insured person for his or her signature. Ms. Eda Di Liso, the claims handler at ING, agreed with that evidence, and testified that was also her practice. Ms. Dickson testified that throughout the period of time she was handling the file, she never received a signed OCF-14 in which the medical and rehabilitation box was checked off.

Based on the exhibits which were filed, I find there was a further OCF-14 signed by Mr. Leila on November 27, 2001. Mr. Leila testified that he sent it to RBC that day and again on December 24, 2001. Mr. Leila testified that he kept waiting for the DAC assessment to be set up, but one was not scheduled.

Findings and Analysis

ING submitted that Mr. Hakimi did not provide OCF-14 forms; if he did, they were provided before a dispute had crystallized, and outside the required time frames.

Mr. Fox did not testify at the hearing. I accept Ms. Dickson’s testimony that she did not instruct Mr. Fox to obtain a signed OCF-14 form from Mr. Hakimi. I find that RBC hired Mr. Fox as an independent adjuster to have Mr. Hakimi sign several medical authorizations in blank to be used as part of the information gathering process and the assessment and adjustment of the claim. I find Mr. Fox was acting as agent for RBC at the meeting with Mr. Hakimi and Mr. Leila on October 23, 2001, and in that capacity he was authorized to present and receive documents from Mr. Hakimi.

One of Mr. Fox's authorized activities was to have Mr. Hakimi sign a number of standard form authorizations for the provision of medical records. All were signed in blank by Mr. Hakimi at RBC's request. In addition, Mr. Hakimi was given OCF forms 1, 2, 3, 6, 12 and 18 for his completion and return at a later date. He also signed an OCF-5, a Permission to disclose Health information to the Insurer, and an OCF-16, a Permission to Disclose Employment Information, which he returned to Mr. Fox at the meeting. Mr. Fox was to return the completed documents to RBC, so as to permit the Insurer to investigate Mr. Hakimi’s claim at its convenience.

The Permission to Disclose Health Information to the Designated Centre, the OCF-14, is yet another OCF form. I find that it was within the scope of Mr. Fox's ostensible authority to accept a signed OCF-14, a Permission to Disclose Health Information to the Designated Assessment Centre, for return to RBC, to be used as and when needed at any point during the claim. I find Mr. Fox had ostensible authority to accept the document based on the fact that he obtained signed documents of a similar nature for use in relation to the claims adjustment process. I find Mr. Fox accepted the OCF-14 on the basis on which it was proffered by Mr. Hakimi, and the OCF-14 was forwarded to RBC. In fact, it appears in RBC’s records. The rule is that when an agent acts with ostensible authority, whether or not he in fact had the authority, his acts are binding on his principal, in this case, RBC.³

Mr. Hakimi applied for arbitration concerning his physiotherapy and chiropractic treatments by Dixon Rehabilitation and chiropractic treatment by Westend Chiropractic. I deal with all of his treatment plans as it is unclear to me whether these claims are contained in some or all of the four treatment plans referred to in the exhibits.

Mr. Hakimi submitted two treatment plans dated October 10, 2001. RBC received them on October 26, 2001. In a letter dated November 16, 2001, RBC notified Mr. Hakimi that it would pay for the portion of the treatment plan they found reasonable, but not for the portion it believed to be unreasonable. Mr. Hakimi was informed that he could notify RBC in writing if he wished to withdraw his claim for the rejected treatment, or submit an OCF-14 form by December 3, 2001, if he wanted to dispute RBC’s refusal to pay medical and rehabilitation benefits.

Mr. Hakimi's further treatment plans dated November 22, 2001 were received by RBC on February 12, 2002. RBC rejected both plans, again informed Mr. Hakimi of his rights and obligations, and that the OCF-14 form was due by March 11, 2002. In Spring 2002, ING took carriage of Mr. Hakimi’s accident benefits claims and maintained RBC’s denials.

According to the letter from RBC denying the first two treatment plans, the first OCF-14 form was due on December 3, 2001. I find that RBC had a completed OCF-14 in its possession on October 31, 2001 to be used when and if it denied such benefits.

The OCF-14 in relation to the second group of treatment plans was due on March 11, 2002. The Applicant forwarded further OCF-14 forms by fax on November 27, 2001 and on December 24, 2001.⁴ Thus, whether or not the treatment claimed in the arbitration is contained in the first or the second group of treatment plans submitted, I find that RBC had completed OCF-14 forms in its possession which it could have used to schedule a medical and rehabilitation DAC assessment or assessments, but failed to do so.

ING submits that even if those forms were sent in, an insured person cannot send in a form before there is a dispute. ING submits that for an OCF-14 form to be valid, a claim must be made, a dispute must arise, the insurer must check off which type of DAC on the form, and only then can an insured person affix his signature to the OCF-14 form. He submitted the OCF-14 form contains several tick boxes and it was important for the insured person to turn his mind to whether he wished to withdraw a claim or proceed with an intrusive assessment in relation to a particular benefit.

Counsel for ING further submitted that if the Insurer had required Mr. Hakimi to sign the OCF-14 form before there was a dispute, it was unlikely that any adjudicator would have condoned this practice.

I find nothing in the form which prevents an OCF-14 form from being completed in the manner Mr. Hakimi did in October 2001. I do not sanction the practice, as I believe that documents should not be signed in blank. I am of the view that documents should be signed and dated on the dates they are actually executed. It seems to me that Mr. Hakimi and RBC, in the interest of convenience, were prepared to agree to a different procedure. Implicit in that procedure was the insertion of the date on the OCF-14 form by the Insurer when it was needed. I have some difficulty appreciating how it is that the Insurer could on the one hand ask Mr. Hakimi to sign various documents in blank for its benefit and convenience, then assert that Mr. Hakimi’s signed OCF-14 form, provided in advance for similar reasons, could not be valid.

I do not find the reasoning in the Insurer’s argument persuasive. In essence, Mr. Hakimi agreed to submit to any DAC which might be arranged in advance of a dispute concerning entitlement to benefits. RBC agreed to this process through its agent, Mr. Fox. I am not persuaded that the Insurer can now disavow that process, and thereby prevent Mr. Hakimi from accessing the arbitration process.

In Spring 2002, ING took carriage of the accident benefits file pursuant to the provisions of the Disputes between Insurers Regulation. I find that when ING took carriage of the accident benefits file, it was in no different position with respect to the forms than was RBC. For these reasons, I conclude that Mr. Hakimi is not prevented from bringing his claims for chiropractic and physiotherapy treatments to arbitration.

1.(b) Insurer examinations:

Section 42 of the Schedule permits an insurer, on reasonable notice, to request examinations of an insured person to determine whether he or she is entitled to a benefit. ING alleges that Mr. Hakimi failed to attend two insurer's examinations, and is therefore precluded by section 50 of the Schedule from proceeding to an arbitration hearing with respect to his claims for medical and rehabilitation benefits. Mr. Hakimi submits that the insurer examinations were not reasonable.

On January 14, 2002, ING wrote Mr. Hakimi that it was stopping his income replacement benefits ("IRBs" ) based on his return to his part-time job on December 1, 2001. Mr. Hakimi then applied for mediation. According to the Report of Mediator, on July 11, 2002 the IRB issue was resolved, while the issues of medical and rehabilitation benefits, the cost of examinations and interest remained in dispute.

Four days after the mediation was concluded, ING wrote Mr. Hakimi informing him that it had arranged for him to attend insurer examinations by a chiropractor and a physiatrist in relation to his claims for attendant care, IRBs and medical and rehabilitation benefits. ING also wrote Mr. Hakimi that examinations had been arranged in relation to attendant care and rehabilitation benefits. Mr. Hakimi did not attend the assessments.

ING submitted that this was its first request for an insurer’s examination and the right to an examination was therefore "automatic." In Belair Insurance Company Inc. and F.S.,⁵ Director's Delegate Naylor held that while the primary purpose of the provisions in the Schedule which permit insurers examinations is to assist the insurer to assess entitlement to the benefit claimed, that did not mean that these provisions "cannot be applied to serve the ends of fairness. . . . In the arbitration process, the insurer’s right to require an examination is subject to the general discretion of the tribunal to control its own processes in the context of the overall objectives of the system. These include adequate disclosure, settlement of cases and a fair, informed hearing of the issues remaining in dispute. The objectives are generally served by permitting insurers to arrange timely medical examinations, in appropriate cases."

From the perspective that this was ING’s first request for an insurer’s examination, the proposed examinations would be reasonable. However, there was no evidence that he claimed attendant care. Mr. Hakimi had returned to work on December 1, 2001 and there were no other medical or rehabilitation claims on the file. This left discrete claims for medical and rehabilitation benefits, for treatment recommended about a year earlier, which had not been denied in the manner required by the Schedule.

I am not persuaded that an insurer's examination, involving a physical assessment of Mr. Hakimi in these circumstances, would yield any useful information, such as the presence or absence of muscle spasm, which would assist the Insurer in determining entitlement to these benefits. However, the Insurer may still assess the appropriateness of the treatment described in the treatment plans by evaluating the treatment providers' records and those of the family or treating physician.

If I am wrong, I believe that there are other circumstances in this case which should also be considered under the rubric of fairness considerations. I believe it is appropriate to consider the first-party relationship and what transpired following the request for the examinations.

On July 23, 2002, Mr. Hakimi's representative wrote ING and complained that it had provided notice of the assessment to his client, but not to his representative. He questioned the timing of the insurer examination since the parties were now "in dispute resolution." He suggested that this was a form of evidence gathering which appears to have nothing to do with any current benefit in question, and asked, "Can you please explain to me why he should attend as part of your necessary adjusting of his claim?"

ING did not respond to Mr. Sherman's letter, or to his letter in follow up of August 28, 2002.⁶In cross-examination, Mr. Sherman asked Ms. Di Liso why she had not responded. Ms. Di Liso stated that she felt the letters had been abusive and therefore did not reply. Having reviewed the letters in question, I find them brief and direct, but not rude or abusive.

The Applicant made an express request to the Insurer to explain why the examinations at this stage of the process were reasonable. The Insurer was in the best position to provide the answer. The answer may have been persuasive to the Applicant. In that case, it would have been cheaper and more effective than bringing this motion. Even if the Insurer's answer was not persuasive to the Applicant, failing to respond is unacceptable and discourteous. Further, when those letters are copied to counsel, even if the adjuster was troubled by them, professional courtesy would require a response. Counsel for the Insurer offered no explanation for the failure of his firm to respond. I add that the lawyer in question was not Mr. Wilson.

The Applicant and the Insurer are in a first-party relationship and the Applicant was requesting information in the context of that relationship. In that context, I do not accept that an insurer can simply sit back and wait for its insured to run afoul of the provisions of the Schedule and then seek to prevent him from proceeding through the arbitration process. I find an insurer in a first- party relationship has an obligation, especially with the young and inexperienced, to inform insured persons about the requirements of the process when asked for that information.

For these reasons, I am not persuaded that it is appropriate for Mr. Hakimi to be subjected to in-person examinations. I am also not persuaded that Mr. Hakimi should be prevented from proceeding to arbitration.

EXPENSES:

If the parties are unable to agree on expenses, that question may now be addressed.

March 4, 2004

Suesan Alves
Arbitrator

ARBITRATION ORDER

Under section 282 of the Insurance Act, R.S.O. 1990, c.I.8, as amended, it is ordered that:

Mr. Hakimi is not precluded from proceeding to arbitration with his disputes for medical and rehabilitation benefits by subsections 50(b) or (c) of the Schedule. The parties should contact the case administrator to schedule a hearing date.
If the parties are unable to agree, the issue of expenses may now be addressed.