Financial Services Commission of Ontario
Commission des services financiers de l’Ontario
Neutral Citation: 2005 ONFSCDRS 118
FSCO A04-001459
BETWEEN:
AVTAR THIND
Applicant
and
ING INSURANCE COMPANY OF CANADA
Insurer
DECISION ON A PRELIMINARY ISSUE
Before: Judith Killoran
Heard: July 25 and 26, 2005, at the offices of the Financial Services Commission of Ontario in Toronto.
Appearances:
Richard Gordon for Mr. Thind Talaal F. Bond for ING Insurance Company of Canada
Issues:
The Applicant, Avtar Thind, was involved in a motor vehicle accident on September 12, 2003. He claimed statutory accident benefits from ING Insurance Company of Canada ("ING"), payable under the Schedule.1 The parties were unable to resolve their disputes through mediation, and Mr. Thind applied for arbitration at the Financial Services Commission of Ontario under the Insurance Act, R.S.O. 1990, c.I.8, as amended.
Preliminary Issue:
- Should Mr. Thind's representative be excluded from representing him in these proceedings?
Result:
- Mr. Thind's representative is excluded from representing him.
Procedural Issues:
Mr. Richard Gordon, a statutory accident benefits (SABS) representative, represented Mr. Thind until June 14, 2005. When ING raised the issue of a potential conflict of interest, Mr. Thind terminated his retainer with Mr. Gordon. He retained Mr. Bhim Goordial. On Saturday, July 23, 2005, he terminated his retainer with Mr. Goordial and retained Mr. Gordon again. Neither ING's counsel nor the Commission were informed of the change in representatives until shortly before the hearing on July 25, 2005.
ING submitted that Mr. Thind's former representative could not withdraw unless the Dispute Resolution Practice Code (the "Code") was complied with by Mr. Thind and his representatives. Rule 9.5 requires a party who changes his or her representative to promptly inform the former representative, the other party and the Dispute Resolution Group in writing together with all pertinent information relating to the new representative. Rule 9.7 requires a representative who seeks to withdraw to provide a written request for withdrawal with reasons to the Dispute Resolution Group and the other parties together with all pertinent information relating to the represented party. Under Rule 9.8 an arbitrator may permit a representative's withdrawal if the represented party provides written consent to the request for withdrawal. ING requested that the substantive issues relating to the arbitration should be adjourned. As a result of the change in representatives, previous agreements about the calling of witnesses and certain evidence were no longer in effect.
I made the following orders:
I required Mr. Thind's written consent before allowing his former representative to withdraw.
ING should bring its motion for an order excluding Mr. Gordon as Mr. Thind's representative at 10:00 a.m. on the following morning.
The arbitration hearing scheduled for July 25, 26, 27 and 28, 2005 was adjourned.
MOTION HEARING
At the outset of the motion, I permitted the withdrawal of Mr. Thind's former representative on the basis of his written request and Mr. Thind's written consent.
ING requested that Mr. Richard Gordon, Mr. Thind's new representative, be excluded under Rule 9.9 of the Code from representing Mr. Thind. Rule 9.9 states:
An adjudicator may exclude from a proceeding hearing anyone, other than a duly qualified barrister and solicitor, appearing as a representative or agent on behalf of a party, or as an advisor to a witness, if the adjudicator finds that such person is not competent to properly represent or to advise the party or witness or does not understand and comply with these Rules and the duties and responsibilities of a representative, agent or advisor.
Under subsection 23(3) of the Statutory Powers Procedure Act, a tribunal may exclude an agent from a hearing where the agent does not comply at the hearing with the duties and responsibilities of an advocate or adviser.
EVIDENCE:
ING claims that Mr. Gordon has a conflict of interest which was not disclosed and that I should exclude him from acting as Mr. Thind's SABS representative.
The documents filed as evidence and relied on by ING are:
- a Business Names Report from the Ministry of Consumer and Business Services identifying ABC Law Clerk Services as a sole proprietorship in the name of Richard J. Gordon with the address of 2390 Eglinton Avenue E., No. 234, Scarborough, Ontario M1K 2P5.
- A Corporation Profile Report for WAD 3 Incorporated with one director listed as Richard John Gordon and a business address of 2390 Eglinton Avenue East, No. 234, Scarborough, Ontario M1K 2P5.
- The first page of an arbitration brief for Mr. Thind with a stamp reading: WAD 3 Incorporated, Litigation Support Services, 234-2390 Eglinton Avenue East, Scarborough, ON M2K 2P5, Tel: 416-615-2727, Fax 416-615-2723.
- A Digital Motion X-Ray of Mr. Thind with ADIO DMX on the face and a notation: "powered by WAD 3 incorporated media management and litigation support solutions. Contact: WAD 3 incorporated (t) 416-615-2727 and (f) 416-615-2723."
- A page from a ADIO DMX website entitled "DMX and the Attorney" promoting Digital Motion X-rays.
- Pages from a ADIO DMX website listing Dr. John Baird and Mr. Richard Gordon as contacts and phone numbers for ADIO Diagnostic Services and WAD 3 Incorporated.
- A DMX Digital Motion X-Ray which stated: "For further information and bookings contact: WAD 3 Incorporated, 234B-2390 Eglinton Avenue East, Scarborough, ON M1K 2P5, 416.615.2727 (t), 416.615.2723 (f)."
- A WAD 3 Incorporated business card which indicated litigation support services and booking agent for ADIO DMX with the address 234-B 2390 Eglinton Ave. E., Scarborough, ON M1K 2P5, (t) 416 615 2727, (f) 416 615 2723.
Mr. Gordon is the sole director of WAD 3 Incorporated, which conducts business at the same address as Mr. Gordon's business as a SABS representative. Dr. John Baird is the sole director of ADIO. I find that Mr. Gordon is the directing mind of WAD 3 Incorporated and Dr. Baird is the directing mind of ADIO.
Mr. Gordon referred his client, Mr. Thind, and other clients, to ADIO for digital or dynamic motion x-rays (referred to as "DMX") for the assessment of soft tissue whiplash-type injuries. Both Mr. Gordon and Dr. Baird had an interest in DMX technology which they intended to use in their respective businesses.
The initial assessment of Mr. Thind on December 8, 2003 predates the incorporation of WAD 3 Incorporated by 8 months. The second assessment of Mr. Thind was on March 3, 2005 with a report on March 26, 2005. All appointments were booked by Dr. Derek Zibin, an associate of Dr. Baird.
Dr. John Baird testified that there was no financial benefit to Mr. Gordon or WAD 3 Incorporated as a result of his assessments of Mr. Thind. He testified that he paid no referral or contingency fee to Mr. Gordon. Dr. Baird denied, on cross-examination, that Mr. Gordon was a booking agent for ADIO DMX. He reviewed the documentary evidence from ING listed above. Dr. Baird testified that Mr. Gordon overstepped his authority when he produced business cards listing WAD 3 as a booking agent and added WAD 3 to the ADIO DMX DVDs.
Mr. Gordon submitted that a prerequisite for proving conflict of interest is that he must receive a financial benefit. In his opinion, the remoteness of him receiving any potential financial benefit is not in keeping with the Code's emphasis on referral fees. Rather, he and Dr. Baird shared mutual goals of assisting Mr. Thind meet his burden of proof for the purpose of receiving statutory accident benefits. They had a mutual interest of providing a proper diagnosis and appropriate treatment for the health and well-being of Mr. Thind.
ANALYSIS AND CONCLUSION:
ING asked me to find that on a balance of probabilities, the evidence establishes a business relationship between Mr. Gordon and Dr. Baird so that Mr. Gordon receives a financial benefit when he refers clients to Dr. Baird. Hence, ING asserts that Mr. Gordon is in a conflict of interest as a SABS representative.
Mr. Gordon has complied with the requirements necessary to be registered as a SABS representative with the Financial Services Commission of Ontario. Effective November 1, 2003, the Superintendent of Financial Services issued a Code of Conduct for Statutory Accident Benefit Representatives ("Code of Conduct"). The Code of Conduct defines "conflict of interest" as follows:
(a) the representative could receive, directly or indirectly, a financial benefit that arises out of the claim, other than compensation for providing a service referred to in subsection 398(1) of the Insurance Act or for representing a claimant; or
(b) anyone related to the representative may receive, directly or indirectly, a financial benefit that arises out of the claim.
For the purpose of clause (a), a financial benefit arises out of a claim for statutory accident benefits where the benefit is related to the claim and would not have arisen if the claim had not been made.
A SABS representative who has a conflict of interest relating to a claim for statutory accident benefits is required to disclose the conflict to his client and the appropriate insurer. An undisclosed conflict of interest is an unfair or deceptive act or practice under Ontario Regulation 7/00 and is prohibited under section 439 of the Insurance Act.
The remedy for a breach of the Code of Conduct or the regulation is found in section 440 of the Insurance Act which states that the Superintendent may examine and investigate to determine if someone has been, or is engaged in any unfair or deceptive practice. The Superintendent may issue a cease and desist order after giving notice in writing. The SABS representative may then request a hearing before the Financial Services Tribunal.
While the issue of remedying a breach of the Code of Conduct or the regulation remains within the jurisdiction of the Superintendent, I retain my authority pursuant to the Insurance Act, Statutory Powers Procedure Act and the Dispute Resolution Practice Code. I have reviewed the requirements for SABS representatives and the definition of "conflict of interest" under the Code of Conduct when considering whether Mr. Gordon "is not competent to properly represent or advise" Mr. Thind or has not understood or complied with the Dispute Resolution Practice Code and the duties and responsibilities of a representative.
In the case before me, the DVDs, business card and website suggest that Mr. Gordon and Dr. Baird have a business relationship with the common goal of promoting DMX technology in assessing and establishing impairment relating to soft tissue injuries. This leads to the inference that Mr. Gordon could receive a financial benefit from referring Mr. Thind to Dr. Baird for DMX assessments.
Although Mr. Gordon may not have received any financial benefit from his relationship with Dr. Baird, the test is whether he "could" receive a financial benefit. This changes the test from one of actually receiving a financial benefit to one of whether a reasonable person would have an apprehension that Mr. Gordon could receive a financial benefit from his relationship with Dr. Baird. I believe that the answer to that question is an unequivocal "yes." Mr. Gordon has not avoided the appearance of a possible or potential conflict of interest.
Mr. Gordon's failure to avoid the appearance of a possible or potential conflict of interest is one way in which he has not fulfilled his duties and responsibilities as a representative. There are others. For example, according to the Code of Conduct, Mr. Gordon is required to conduct himself with the utmost courtesy to the Commission and the other side. At the motion hearing before me, he approached insurer's counsel, grabbed a document from his table and ripped some pages from it. Prior to the hearing, he did not notify insurer's counsel immediately when he was retained to represent Mr. Thind. Rather, he waited until minutes before the hearing began to disclose that he was representing Mr. Thind. When Mr. Gordon made submissions about expenses, he made inappropriate allegations with respect to the competence of another SABS representative and the conduct of insurer's counsel.
I respect Mr. Thind's right to the representative of his choice. However, this right is not absolute. It must be balanced against the public interest in maintaining confidence in the administration of justice by avoiding even the appearance of impropriety.
Another example of Mr. Gordon's lack of understanding and competence to represent his client in this proceeding occurred when I heard submissions with respect to expenses. When ING stated that it would not be seeking the payment of expenses from Mr. Thind, but rather from Mr. Gordon personally, Mr. Gordon made submissions as to why Mr. Thind should be responsible for expenses. As a result, ING submitted that if I decided that Mr. Gordon should not personally pay expenses, I should consider, in the alternative, whether Mr. Thind should pay expenses. This is an example of Mr. Gordon preferring his interests to those of his client.
EXPENSES:
I heard submissions from both parties about the issue of expenses. ING submitted that Mr. Gordon should be personally responsible for expenses pursuant to subsection 282(11.2) of the Insurance Act.
Subsection 282(11.2)(c) states:
An arbitrator may make an order requiring a person representing an insured person or an insurer for compensation in an arbitration proceeding to personally pay all or part of any expenses awarded against a party if the arbitrator is satisfied that,
(c) the representative caused expenses to be incurred without reasonable cause or to be wasted by unreasonable delay or other default.
I am satisfied that Mr. Gordon's conduct resulted in expenses being incurred without reasonable cause. If Mr. Gordon had informed ING before the hearing on July 25, 2005 that he would be representing Mr. Thind, an unnecessary journey and appearance by ING's counsel together with a wasted day could have been avoided.
I fix expenses at $500 to be paid to ING personally by Mr. Richard Gordon.
August 24, 2005
Judith Killoran Arbitrator
Financial Services Commission of Ontario
Commission des services financiers de l’Ontario
Neutral Citation: 2005 ONFSCDRS 118
FSCO A04-001459
BETWEEN:
AVTAR THIND
Applicant
and
ING 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:
Mr. Gordon is excluded from representing Mr. Thind in these proceedings.
Mr. Gordon shall personally pay to ING expenses of $500.
August 24, 2005
Judith Killoran Arbitrator
Footnotes
- The Statutory Accident Benefits Schedule —Accidents on or after November 1, 1996, Ontario Regulation 403/96, as amended.