Financial Services Commission of Ontario
Commission des services financiers de l’Ontario
Neutral Citation: 2005 ONFSCDRS 159
FSCO A05-000852
BETWEEN:
SANDRA WEAVER
Applicant
and
CERTAS DIRECT INSURANCE COMPANY
Insurer
PRE-HEARING DECISION
Before:
Lawrence Blackman
Heard:
By telephone conference call on October 20, 2005
Appearances:
Allen Wynperle for Mrs. Weaver
David Dinner for Certas Direct Insurance Company
Issues:
This matter arises out of a February 19, 2002 automobile accident in which Mrs. Weaver was injured. As a result of her injuries, Mrs. Weaver applied for statutory accident benefits from her first-party insurer, Certas Direct Insurance Company ("Certas"), pursuant to the Schedule.1
Certas paid Mrs. Weaver weekly income replacement benefits ("IRBs") until November 25, 2004. Mrs. Weaver disputes this termination of benefits. The parties were unable to resolve their dispute through mediation, and Mrs. Weaver 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 discussion in this matter was held before me on October 20, 2005 by telephone conference call. Mrs. Weaver participated, as did Ms. Eva Bondar on behalf of Certas. Both parties were represented by legal counsel noted above.
In issue in this arbitration proceeding are:
Mrs. Weaver's entitlement to post-104 week income replacement benefits ("IRBs") ongoing from November 25, 2004, claimed pursuant to paragraph 5(2)(b) of the Schedule, (the parties agree that the correct weekly IRB quantum is $51.23);
Mrs. Weaver’s entitlement to a special award pursuant to subsection 282(10) of the Insurance Act, R.S.O. 1990, c. I.8, as amended, on the ground that Certas unreasonably withheld or delayed payments; interest on any overdue payment of benefits, claimed pursuant to subsection 46(2) of the Schedule; and, the parties' legal expenses in respect of the arbitration proceeding, claimed pursuant to subsection 282(11) of the Insurance Act.
During the pre-hearing, as part of the discussion on document exchange, Mrs. Weaver sought from her Insurer the reasons it continues to deny payment of weekly IRBs. Mrs. Weaver maintains that Certas is unreasonably withholding IRBs, specifically in light of her more recent medical history.
Certas objected to Mrs. Weaver's request, arguing that it really amounted to examination for discovery rather than document exchange. Certas argued that the Dispute Resolution Practice Code (Fourth Edition - Updated October 2003) (the "Code”) does not provide for such discovery, and that to allow the Applicant same, without affording an equal right to the Insurer, was unfair.
I agree with Certas' submission that the Commission's Rules do not provide for oral examination or for written interrogatories. Discovery at the Commission has been largely restricted to the exchange of existing documentation, rather than the creation of new documents.
Mrs. Weaver, however, notes that I requested that she provide Certas, within a reasonable period, with written particulars of her claim for a special award. Both sides agreed that the Applicant was to provide same at least sixty days prior to the start of the arbitration hearing.
My request regarding such particulars was based on the reasoning in Royal Insurance Company of Canada and Clark (FSCO P97-00008, September 26, 1997). This decision held that while the question of a special award is always before a hearing arbitrator, reasonable notice of the particulars of such a claim must be provided to the insurer. This appellate decision relied on section 8 of the Statutory Powers Procedure Act, R.S.O. 1990, c. S. 22 (the "SPPA")2 and the principles of natural justice and fairness.
There are, however, further reasons particular to the pre-hearing process which support the provision of such details, including the importance of:
endeavouring to narrow the issues in dispute (or as described in paragraph 5.3(1)(a) of the SPPA, simplifying the issues); both sides understanding the case they face; and, facilitating a more expeditious, less expensive and fairer system of dispute resolution, and avoiding spending time on matters that are not in dispute or should not reasonably be in dispute.
Complementary to these goals are the provisions of the Schedule itself. Paragraph 33(1)(1) of the Schedule requires an applicant to provide "any information reasonably required to assist the insurer in determining the person's entitlement to a benefit." Paragraph 32(2)(c) requires an insurer to promptly provide their insured with "information to assist the person in applying for benefits." Further, the Supreme Court of Canada, in Smith v. Co-operators 2002 SCC 30, [2002] 2 S.C.R. 129, stated that:
There is no dispute that one of the main objectives of insurance law is consumer protection, particularly in the field of automobile and home insurance.
Subsection 37(1) of the Schedule requires that if the insurer determines that a person is not entitled or is no longer entitled to receive IRBs (or other weekly benefits), the insurer shall give notice of its determination, with reasons. As stated by the Ontario Court of Appeal in Turner and State Farm (C42007, February 7, 2005), the "purpose of the requirement to give reasons is to permit the insured to decide whether or not to challenge the cancellation."
While the Commission does not have oral examinations or written interrogatories, one of the means of facilitating the aforesaid goals of the Schedule, consumer protection and of the pre-hearing process are the Commission's particular form of pleadings, namely the Application for Arbitration, the Response by Insurer (the "Response") and the Reply.
One purpose these documents serve is to identify the parties' positions regarding the issues in dispute. In reference to the Response, Rule 27.1(a) of the Code states that the Response "must" include a response to "each issue raised in the Application for Arbitration." Hence, the Response includes a section for completion entitled "Response to Special Award Claim." Certas completed this portion by stating that:
The Insurer contends that any denial of benefits is based upon the failure of the Applicant to present any evidence, medical or financial, substantiating his [sic] claims. The Applicant bears the onus of proving her claims and has not met that onus. The Insurer denies that the Applicant is entitled to any special award.
I find this response unhelpful. Given that the issue in dispute is entitlement rather than quantum, the relevance of financial evidence is obscure. In light of the Applicant having received IRBs for more than two years and Certas' recitation of four pages of exchanged medical documentation in its Response, the reference to lack of any medical evidence seems peculiar. The Response provides no meaningful particulars. The Response fails to assist the Insured in deciding whether "to challenge the cancellation" of IRBs and whether to pursue a claim for a special award. I find that this portion of the Response is simply what is better known as "boilerplate."
Certas is entitled to specifics of the claim for special award so that it might know the case it faces. The Insurer has been promised same. The Applicant is entitled to a meaningful response to its claim for a special award, once the Applicant's particulars have been provided, because:
it provides symmetry to the Applicant's obligations and accords with the principles of fairness and natural justice;
it requires the Insurer to consider and articulate its own position in advance of the hearing, and hence assists the Insurer in preparing for the arbitration;
it assists the Applicant in understanding the Insurer's position and avoids surprise at the hearing;
it is in accordance with the Insurer's ongoing responsibility to provide relevant information to the Applicant, enhance consumer protection and provide meaningful reasons;
it assists the Applicant in making a reasoned decision whether to continue her claim for a special award, or, indeed her claim for IRBs; if it does not eliminate these issues, it serves to better define and narrow the issues in dispute; and,
it thereby assists the goals of facilitating a more expeditious, less expensive and fairer system of dispute resolution.
Accordingly, pursuant to my authority as pre-hearing arbitrator under Rule 33 of the Code, and pursuant to the authority of subsection 5.3(3) of the SPPA to make such orders at a pre-hearing conference as are necessary or advisable with respect to the conduct of the hearing, I hereby order that:
Within twenty days of receipt of the Applicant's particulars of her claim for a special award, the Insurer shall provide the Applicant with specific particulars of its response to the Applicant's claim for a special award.
EXPENSES:
The question of the expenses of this pre-hearing discussion is left to the hearing arbitrator, subject to any further or other order of an arbitrator.
November 8, 2005
Lawrence Blackman
Arbitrator
Date
Financial Services Commission of Ontario
Commission des services financiers de l’Ontario
Neutral Citation: 2005 ONFSCDRS 159
FSCO A05-000852
BETWEEN:
SANDRA WEAVER
Applicant
and
CERTAS DIRECT 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:
- Within twenty days of receipt of the Applicant's particulars of her claim for a special award, the Insurer shall provide the Applicant with specific particulars of its response to the Applicant's claim for a special award.
I. The issue of the expenses of this pre-hearing discussion is left to the hearing arbitrator, subject to any further or other order of an arbitrator.
November 8, 2005
Lawrence Blackman
Arbitrator
Date
Footnotes
- the Statutory Accident Benefits Schedule — Accidents on or after November 1, 1996, Ontario Regulation 403/96, as amended
- the right to disclosure of reasonable information of any allegations when, amongst other things, the propriety of conduct of a party is in issue.