Irina Karpenko v. ING Insurance Company of Canada, 2005 ONFSCDRS 41

Neutral Citation: 2005 ONFSCDRS 41

FSCO A04-002404

BETWEEN:

IRINA KARPENKO

Applicant

and

ING INSURANCE COMPANY OF CANADA

Insurer

PRE-HEARING DECISION

Before:

Joyce Miller

Heard:

March 24, 2005, at the offices of the Financial Services Commission of Ontario in Toronto.

Appearances:

Oksana Kripak for Ms. Karpenko

Tullio D'Angela for ING Insurance Company of Canada

Issues:

The Applicant, Irina Karpenko, was injured in a motor vehicle accident on November 9, 2002. She applied for statutory accident benefits from ING Insurance Company of Canada ("ING"), payable under the Schedule.¹ ING denied Ms. Karpenko's claim for benefits. The parties were unable to resolve their disputes through mediation, and Ms. Karpenko applied for arbitration at the Financial Services Commission of Ontario under the Insurance Act, R.S.O. 1990, c.I.8, as amended.

On March 24, 2005, a pre-hearing discussion was held to deal with Ms. Karpenko's Application for Arbitration. At the pre-hearing, ING asked for a Preliminary Issue hearing, alleging Ms. Karpenko had not attended insurer's medical examinations pursuant to sections 42 and 50(b) of the Schedule. Although a date was set for the preliminary issue hearing for June 28, 2005, I have reconsidered this request for a hearing and will deal further with this issue below.

The issues for arbitration were identified and agreed to as follows:

Is Ms. Karpenko entitled to receive weekly caregiver benefits pursuant to section 13 of the Schedule from November 10, 2002 to November 9, 2004?
Is Ms. Karpenko entitled to receive a medical benefit for psychological treatment claimed pursuant to section 14 of the Schedule?
Is Ms. Karpenko entitled to payments for housekeeping and home maintenance services, pursuant to section 22 of the Schedule from November 10, 2002 to November 9, 2004?
Is ING liable to pay a special award pursuant to subsection 282(10) of the Insurance Act because it unreasonably withheld or delayed payments to Ms. Karpenko?
Is ING liable to pay Ms. Karpenko's expenses in respect of the arbitration under section 282(11) of the Insurance Act.
Is Ms. Karpenko liable to pay ING's expenses in respect of the arbitration under section 282(11) of the Insurance Act.

At the conclusion of the pre-hearing I made the following order: "ING shall pay Ms. Karpenko $150 forthwith in any event of the cause." I advised the parties that I would provide written reasons for my order.

Reasons for the Expense Award:

The pre-hearing on March 24, 2005 was held to deal with Ms. Karpenko's Application for Arbitration regarding her November 9, 2002 accident. Ms. Karpenko was involved in a second accident on March 5, 2003, for which she has made a claim for benefits to ING. The claims, which were denied, have yet to be mediated and were not part of the Application for Arbitration that was being considered at this pre-hearing. There was nothing in ING's Response to indicate that it was considering joining the second accident to be part of the pre-hearing discussions. Nevertheless, when the settlement talks began, ING stated that if Ms. Karpenko did not discuss settlement regarding her second accident, then it refused to have any settlement talks on the issues for arbitration. The tone and attitude taken by ING was, in my view, inappropriate in the circumstances of this case.

Arbitration is a process that encourages the speedy resolutions of issues in dispute under the no-fault rules. The pre-hearing is one of the steps in the arbitration process to assist in an early resolution of issues.

The Notice of Pre-Hearing Discussion sent to the parties clearly states that "The purpose of the pre-hearing discussion is to attempt to settle the dispute and assist the parties to prepare for arbitration...." [emphasis added]

Succinctly, the main reason why parties are required to appear in person at a pre-hearing discussion is to engage in settlement talks. While this does not mean that the parties must settle their dispute, it does however mean that, unless there is a valid reason not to have a settlement discussion, e.g. legal defences or production issues, the parties must come with full authority and in good faith to be prepared to engage in settlement talks.

In the circumstances of this case, I did not find that ING's position that it would not engage in settlement talks unless Ms. Karpenko include issues of her second accident, which had not even been mediated, was a valid reason to refuse to discuss settlement. ING had ample notice of the second accident. If it was the intention of ING not to fully participate in this pre-hearing until the two claims were joined, then it should have asked for an adjournment. It did not do so. As I noted above, there was nothing in ING's Response that would have led the Applicant to know ING would not be fully participating in this pre-hearing unless she agreed to settle the unmediated claims arising from her second accident.

I was impressed with the thoroughness of the preparation by the Applicant's representative and the Applicant's willingness to participate in good faith in a settlement discussion on the issues in her Application for Arbitration. I did not have a similar impression from ING. Although ING engaged in some talks, after I pointed out the cost consequences of their attitude, I did not find their participation was a serious one.

Accordingly, for these reasons, I agreed with the Applicant that ING had wasted her time at this pre-hearing and after hearing submissions, I awarded Ms. Karpenko, to be paid forthwith in any event of the cause, the amount of $150, pursuant to the expense rules regarding the conduct of a party to prolong or hinder a proceeding.

Preliminary Issue:

In its Response to Ms. Karpenko's Application for Arbitration for caregiver benefits, ING stated:

The insurer takes the position that the insured is not entitled to caregiver benefits pursuant to the applicable section of the SABS. Furthermore, the insured has failed to attend medical examinations set to assist in the handling of this claim.

At the pre-hearing, ING requested a Preliminary Issue hearing to be set down to deal with Ms. Karpenko's failure to attend an insurer's medical examinations on the issue of caregiver benefits. Ms. Karpenko objected to this preliminary issue and submitted that she in fact had attended ING's requested insurer's medical examination and noted the reports of the assessors. ING insisted that this was not so and to resolve the dispute, I set down a Preliminary Issue hearing for June 28, 2005.

After the pre-hearing, I reviewed Ms. Karpenko's pre-hearing arbitration brief, which I only received just before the pre-hearing. In this brief, Ms. Karpenko provided details and copies of the reports of the Insurer's assessor's as well as a DAC report in support of her position that she had in fact complied with ING's request. These reports include:

an Occupational Therapy In-Home Assessment, conducted by Functional Rehabilitation Inc. on April 30, 2003 pursuant to section 42 of the Schedule;
an examination conducted by an orthopaedic surgeon, Dr. Bruce Paitich, on October 10, 2003 pursuant to section 42 of the Schedule;
a DAC assessment for caregiver benefits conducted by RMD Management on January 8, 12, 13 and February 3, 2004.

After reviewing these documents, I am not convinced that this Preliminary Issue hearing requested by ING should necessarily proceed. These documents appear to confirm what Ms. Karpenko submitted at the pre-hearing discussion, namely, that she had not failed to attend the requisite examinations. Since the assessments include insurer's examinations, as well as a DAC assessment, ING clearly must have copies of these reports.

As with any proceeding at the Commission there are potential cost consequences for conduct that tends to prolong, obstruct or hinder a proceeding. It is conceivable that a frivolous or unnecessary preliminary issue hearing could have such cost consequences for a party.

Given the need for a timely hearing process, I am ordering that ING, within 30 days of receipt of this decision, advise Ms. Karpenko, with a copy to FSCO, if it wishes to withdraw this preliminary issue, or in the alternative, within 30 days of this decision, to provide cogent reasons why a Preliminary Issue hearing should be held in this case. Ms. Karpenko has10 days to respond to ING's submission.

April 1, 2005

Joyce Miller Arbitrator

Date