Financial Services Commission of Ontario

Commission des services financiers de l’Ontario

Neutral Citation: 2005 ONFSCDRS 142 FSCO A05-000346

BETWEEN:

CEZARY KACZMAREK Applicant

and

COACHMAN INSURANCE COMPANY Insurer

PRE-HEARING DECISION

Before: Fred Sampliner

Heard: July 13, 2005 at the offices of the Financial Services Commission of Ontario in Toronto, and by teleconferences on August 24, 2005 and September 2, 2005

Appearances: Shawn H. Patey for Mr. Kaczmarek Melaine Malach for Coachman Insurance Company

Issues:

The Applicant, Cezary Kaczmarek, was injured in a motor vehicle accident on December 24, 2001. His claims for statutory accident benefits from Coachman Insurance Company ("Coachman"), payable under the Schedule,¹ are the subject of this arbitration proceeding at the Financial Services Commission of Ontario (FSCO) under the Insurance Act, R.S.O. 1990, c.I.8, as amended.

I held a pre-hearing discussion at the FSCO offices with the parties and their representatives on July 13, 2005, during which they identified two disputes about their production requests. Mr. Kaczmarek objected to Coachman's request for the clinical notes and records of his treating psychiatrist, Dr. Jiri Hurdalek. Coachman objected to Mr. Kaczmarek's request to produce its adjuster's notes after the date he filed for mediation. Both parties forwarded this documentation to me for my review, in accordance with their procedural agreement and my order.

The issues are:

1. What portion, if any, of Coachman's post-mediation adjuster's notes is Mr. Kaczmarek entitled to review for this arbitration?

2. What portion, if any, of Dr. Hurdalek's clinical notes and records is Coachman entitled to review for this arbitration?

Result:

1. Mr. Kaczmarek may review the May 14, 2004, March 2, 2005, March 22, 2005 adjuster's notes, and the portion of the February 17, 2005 adjuster note mentioning his settlement offer.

2. Coachman may review all of Dr. Hurdalek's clinical notes and records, but may not release this information to any party that is not directly named in this proceeding.

EVIDENCE AND ANALYSIS:

Adjuster's Notes

Coachman argues that its post-mediation adjuster's notes are protected from Mr. Kaczmarek's review on the basis of litigation privilege or solicitor/client privilege. The established legal concepts of litigation and solicitor/client privilege require that communications about adversarial legal conflict are protected when made within the parameters of a fiduciary relationship, are intended to be confidential, the dominant purpose of which is legal advice directly related to the ongoing conflict.²

The chief rationale for the rule is that fostering open communications within a fiduciary relationship enables parties to freely discuss issues and receive legal advice in order to make appropriate decisions in adversarial situations. Coachman argues that once the parties' discussions during the mediation failed to resolve matters (April 2, 2004), they were in an adversarial position, and Coachman reasonably contemplated Mr. Kaczmarek would arbitrate those issues.

The practice at this Tribunal accepts mediation as a convenient dividing line establishing that parties are in a legal conflict position, but recognizes that adjusting first party claims often continues afterwards. I am of the view that Insurer communications or notes that do not relate to the disputed claims with their first party insurer are outside litigation privilege, and the insured person is entitled to review them.

The nature of the communication itself determines whether its dominant purpose relates to the adversarial aspect of the claims.³ Therefore, I do not accept Coachman's position that litigation privilege or solicitor/client privilege automatically attaches to protect its adjuster's records after mediation. Instead, I rely on the contents of the adjuster's records to make a determination.

This evidence establishes that 14 out of the 18 adjuster entries between April 5, 2004 and July 8, 2005 are privileged communications. Three entries are subject to solicitor/client privilege, as they are entirely devoted to lawyer/adjuster discussions and advice about the parties' ongoing conflict after their mediation failed on April 1, 2004.⁴ Eleven entries wholly deal with Coachman's investigation/surveillance⁵, and are protected by litigation privilege because the Insurer has not decided whether or not to rely on this material as evidence at the hearing.⁶

I find that four of the adjuster's notes are not privileged communications. One relates to a Designated Assessment Centre, and two others document the administrative receipt of the Application for Arbitration and naming of a representative.⁷ One line relating to the adjuster's discussion with the investigator in the February 17, 2005 entry continues to be protected by litigation privilege. Mr. Kaczmarek's settlement offer, receipt of the Application for Arbitration and forward it to counsel, which comprises the remainder of that entry, are outside any privilege claim.

Coachman agreed it will decide if it will rely on any portion of its investigation, and release it to Mr. Kaczmarek on or before November 1, 2005.⁸ If the surveillance is relied upon and the investigator's notes are thereby released, then the adjuster's notes of his discussions with Coachman's investigator also lose privilege and should be produced to Mr. Kaczmarek at the same time.

Dr. Hurdalek's Clinical Notes:

I had great difficulty reading Dr. Hurdelak's handwritten notes of his four meetings with Mr. Kaczmarek. What I am able to discern from the notes directly mentions Mr. Kaczmarek's accident and follows his symptoms subsequent to the accident. Dr Hurdelak's clinical notes are clearly relevant to Mr. Kaczmarek's claims for accident benefits.

Despite the relevance of Dr. Hurdelak's clinical notes, Mr. Kaczmarek does not necessarily waive all privacy rights by instituting this arbitration.⁹ Getting at the truth through disclosure of probative evidence in a legal proceeding must be balanced with the goal of avoiding harm to a potentially vulnerable person under therapeutic care.¹⁰

In this case though, Mr. Kaczmarek has not established that the release of Dr. Hurdelak's clinical notes could damage either his doctor/patient relationship or his health. He produced no expert report or other documentary evidence in support of his counsel's argument, and I read nothing in the notes themselves that Mr. Kaczmarek or the physician/patient relationship is at risk if the notes are released within this proceeding.

However, it is reasonable under the circumstances to impose one condition on the release of this information so as to provide some assurance to Mr. Kaczmarek that his treatment records remain confidential to the parties in this dispute. Coachman should not release Dr. Hurdelak's clinical notes outside of the health care practitioners involved in this matter.

EXPENSES:

I defer the expenses of this pre-hearing decision to the arbitrator who ultimately decides the substantive claims.

October 7, 2005

Fred Sampliner Arbitrator

Date

Financial Services Commission of Ontario

Commission des services financiers de l’Ontario

Neutral Citation: 2005 ONFSCDRS 142 FSCO A05-000346

BETWEEN:

CEZARY KACZMAREK Applicant

and

COACHMAN INSURANCE COMPANY Insurer

ARBITRATION ORDER

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

1. Coachman shall produce to Mr. Kaczmarek the adjuster's notes of May 14, 2004, March 2, 2005, March 22, 2005 and the edited February 17, 2005 entry.

2. Mr. Kaczmarek shall produce to Coachman the complete clinical notes of Dr. Hurdelak. Coachman shall not reproduce or reveal the contents of Dr. Hurdelak's records outside of the health care practitioners involved in this arbitration.

October 7, 2005

Fred Sampliner Arbitrator

Date

Footnotes

1. 1The Statutory Accident Benefits Schedule — Accidents on or after November 1, 1996, Ontario Regulation 403/96, as amended.
2. 2General Accident Assurance Company v. Chruz (1999) 1999 CanLII 7320 (ON CA), 45 OR (3rd) 321; Pritchard v. Ontario Human Rights Commission (2004) 2004 SCC 31, 1 SCR 809
3. 3Partola and Liberty Mutual Insurance Company (FSCO A03-000097, July 15, 2004), Dyczok and Wawanesa Mutual Insurance Company (FSCO A02-000766, October 14, 2003), Graper and Liberty Mutual Fire Insurance Company (FSCO A00-000133, July 20, 2001), and Campeau and Liberty Mutual Insurance Company (FSCO A00-000522, March 12, 2001)
4. 4April 5, 2004, March 17, 2005, July 8, 2005
5. 5August 8, 2004, November 3, 2004, November 17, 2004, December 2, 2004, December 16, 2004, January 6, 2005, January 26, 2005, February 18, 2005, March 11, 2005, April 20, 2005, June 23, 2005
6. 6Rule 40 of the Dispute Resolution Practice Code (4th ed. - Updated October 2003).
7. 7May 14, 2004, March 2, 2005, March 22, 2005
8. 8Rule 40, Dispute Resolution Practice Code (4th ed. - Updated October 2003)
9. 9M. (A) v Ryan (1997) 1997 CanLII 403 (SCC), 1S.C.R. 157
10. 10Ms. Z and Dominion of Canada General Insurance Company (FSCO P00-00023, September 11, 2001)