Neutral Citation: 2005 ONFSCDRS 84
FSCO A95-000168
FINANCIAL SERVICES COMMISSION OF ONTARIO
BETWEEN:
BRONWEN NAVAGE
Applicant
and
PILOT INSURANCE COMPANY
Insurer
DECISION ON A PRELIMINARY ISSUE
Before:
David Muir
Heard:
By telephone conference call on June 14, 2005.
Appearances:
David S. Wilson for Ms. Navage
Robert Barrett for Pilot Insurance Company
Issues:
The Applicant, Bronwen Navage, was injured in motor vehicle accidents on February 8, 1994 and February 17, 1996. She applied for and received statutory accident benefits from Pilot Insurance Company ("Pilot"), payable under the Schedule.1 Pilot terminated weekly income replacement benefits on March 14, 1995. Ms. Navage has applied for arbitration under the Insurance Act, R.S.O. 1990, c.I.8, as amended.
The background to this current dispute is somewhat complicated but, for purposes of this decision, can be succinctly stated as follows. Ms. Navage was involved in car accidents in 1994 and 1996. She submitted applications for mediation of disputes to claims arising out of both accidents. On the eve of an arbitration hearing the parties entered into a purported full and final settlement of all their disputes. As a result of a series of court proceedings and my decision dated April 7, 2005, the parties find themselves again on the eve of an arbitration of the issues Ms. Navage raised in the two applications for mediation. The question remains what statutory accident benefit claims can now proceed to arbitration.
In my letter of June 6, 2005, I set out my characterization of the preliminary issue in more precise terms as follows:
What statutory accident benefit claims are captured in the description of issues in dispute contained in the applications for mediation of claims arising from the February 1994 and February 1996 accidents, and, as a consequence, included in the issues in dispute that may proceed to an arbitration now scheduled to begin on June 20, 2005?
Result:
Ms. Navage may proceed to arbitration of the following issues:
Is Ms. Navage entitled to receive a weekly income replacement benefit from March 15, 1995, and ongoing pursuant to section 7 of the Schedule on the basis that she suffers a substantial inability to perform the essential tasks of her employment?
What is the amount of weekly income replacement benefit that Ms. Navage is entitled to receive pursuant to section 10 of the Schedule?
Is Ms. Navage entitled to weekly loss of earning capacity benefits (LECBs) pursuant to section 20 of the Schedule?
Is Ms. Navage entitled to supplementary medical expenses claimed pursuant to paragraph 36(1) of the Schedule?
Is Ms. Navage entitled to rehabilitation benefits claimed pursuant to paragraph 40(5) of the Schedule?
Is Pilot liable to pay a special award pursuant to subsection 282(10) of the Insurance Act, as amended because it unreasonably withheld or delayed payments to Ms. Navage?
Is Pilot liable to pay Ms. Navage's expenses in respect of the arbitration under section 282(11) of the Insurance Act?
Is Ms. Navage liable to pay Pilot's expenses in respect of the arbitration under section 282(11) of the Insurance Act.
Is Ms. Navage entitled to interest for the overdue payment of benefits pursuant to section 68 of the Schedule?
ANALYSIS:
No evidence was lead in respect of these issues. Both applications for mediation and subsequent reports of mediator were referred to. The outcome of this dispute turns on those documents and the relevant law.
Ms. Navage relied upon two decisions of the Superior Court. In both Woodman v. State Farm Mutual Automobile Insurance Co. [1998] O.J. No. 521 and Pilon v. Zurich Insurance Canada [1998] O.J. No. 333, wherein issues that were not expressly addressed in mediation were added or consolidated with other issues already before the court. In relying on these cases Ms. Navage expressly acknowledged that adjudicators at FSCO have taken a more restrictive view of what issues not explicitly enumerated in the mediation process can subsequently be found to not require mediation. Pilot provided no authority for its positions in respect of the various items in dispute.
Pilon and Zurich, supra, was a motion brought by Pilon to consolidate a tort and an accident benefits action. As well, there was an application by Zurich to strike from a statement of claim paragraphs pleading entitlement to statutory accident benefits that were being paid and/or had not been mediated. The underlying facts are a bit murky. However, in the result, the court rejected Zurich's contention that the disputes at issue could not proceed and appears to have added a claim to income replacement benefits where those benefits were still being paid, and future medical and rehabilitation benefits which had not been denied or mediated. Nonetheless, the court was convinced "that all of the relevant issues were dealt with by the mediator and it would make no sense to simply leave the plaintiff dangling at the mercy of the benefits insurer when the obvious answer is to resolve all outstanding issues at one time." In the end, the court was clearly of the view that all of the parties' issues needed to be consolidated in one action, with a "meaningful pre-trial" involving all of the parties.
Woodman and State Farm, supra, is clearer on its facts. State Farm brought a motion to dismiss a claim on two grounds, one being that the claim at issue had not been mediated. Looming in the background, according to the court, was the fact that the two-year limitation period to bring an action had elapsed. Accordingly, if the motion to dismiss were granted, the plaintiff would have been unable to pursue the claim before the court.
Woodman took the position that so long as he had sought mediation on one of the potential accident benefit claims, there should be no requirement to mediate other issues. State Farm took the contrary view that each and every issue in dispute had to be mediated and failed.
In the result, the court concluded that while the scheme of the Act in this respect was comprehensive and normally ought to be followed there were valid reasons not to hold the plaintiff to the strict technical requirements of the Insurance Act in the case at bar. The motion of State Farm was dismissed. The factors considered by the court were as follows:
That the plaintiff had advised the defendant of the claim in issue at the outset of the action.
There had been a failed mediation involving the same accident.
Despite taking the technical position that it did, State Farm continued to negotiate "the matter."
Although the defendant brought the motion 9 months after first raising the technical defence, it consented to 7 adjournments and "pursued attempts to settle allowing the limitation period to run its course in the meantime."
In at least two instances referred to in Woodman, the court has taken a different and more restrictive view relying on a more literal reading of the act.2
Arbitrators have also taken a more restrictive view of this issue. Although recognizing that the requirement to mediate issues in dispute ought not raise technical bars to the parties proceeding to litigation, unless an issue could be said to flow "directly and consequentially" from an issue in dispute that had been mediated, an arbitrator had no jurisdiction to consider it.3
If there was any doubt prior, it has now been made clear by the Supreme Court of Canada in Smith and Co-operators General Insurance Company 2002 SCC 30, [2002] 2 S.C.R. 129, that this legislation is intended to protect consumers and it ought to be interpreted in that light. In trying to square the apparently contradictory approaches from the cases, I have considered the underlying policy rationale of the requirement for mediation. As is often stated, the requirement is not intended solely as a procedural roadblock to matters going forward. To my mind this requirement is primarily intended to ensure that the parties bring their disputes, in an orderly manner, before a mediator in a good faith attempt to resolve their disputes. It makes little sense given that underlying rationale, to inflexibly require the parties return to square one to mediate an issue that for one reason or the other was not mediated with other earlier identified issues in dispute. I find that a pragmatic and flexible approach is required, having regard to the underlying purposes of the dispute resolution process, the just, expeditious and least costly resolution of disputes, and, as part of those considerations, the need to protect both parties from undue prejudice.
Turning now to the specific issues at hand.
Income Replacement Benefits
There is no dispute that entitlement to income replacement benefits arising out of both accidents is an issue in dispute that has been mediated and failed. This is an issue that can proceed to arbitration.
Quantum of Income Replacement Benefits
Ms. Navage states that the amount of IRB that she was paid does not include an amount for the value of her employment benefits. In her view, the quantum of income replacement benefits should be $458.14 or $467.42 and not $453.94 as apparently was paid. I have no evidence as to when this issue was first raised by Ms. Navage, other than counsel for Pilot indicating that the numbers in question were being disclosed for the first time.
In the application for mediation dated May 24, 1995, the following appears under the heading "Weekly Income Replacement Benefits":
The insurer refuses and continues to refuse to pay the claimant the appropriate Weekly Income Benefits even after receiving the appropriate documentation.
The report of mediator dated July 26, 1995 contains the following:
Issue: Income Replacement - Part 2
Details: Duration/Length of Time Benefit is Paid
The insured received benefits of $453.94 per week until March 14, 1995. Benefits were paid pursuant to O.Reg. 776/93 PART II. The insured claims that she continues to suffer a substantial inability to perform the essential tasks of her occupation.
The insured seeks reinstatement of benefits at $453.94 per week from March 15, 1995 and continuing on an indefinite basis.
The insurer is of the opinion that any remaining disability is as a result of pre-existing problems and not as a result of this accident.
In the application for mediation in respect of the 1996 accident, Ms. Navage has merely checked off the box indicating that there was a dispute respecting a weekly benefit. Although the instruction for the section indicates that if there is more than one amount in dispute for a benefit, give all amounts in the detail box - all that is checked is the income replacement box under the heading, "Which benefit are you disputing?". Under the heading, "What are you disputing?", of the many boxes that could have been utilized to describe potential disputes all that is completed is the end date of the benefit being August 31, 1996.
Both applications for mediation appear to be signed by counsel for Ms. Navage.
The corresponding report of mediator, dated January 28, 1997, records the following:
Issue: Income Replacement - Part 2
Details: Entitlement/Eligibility for Benefit
Ms Navage claimed entitlement to to (sic) ongoing income replacement benefits from September 1, 1996.
Ms. Navage states that these references are ambiguous and can be construed as implying that quantum was in issue and was mediated. I agree with Pilot that whatever ambiguity that might exist in the first application for mediation is entirely dispelled by the report of mediator in respect of that accident. As for the subsequent application and report of mediator, they are entirely silent on the question.
Does a pragmatic and flexible approach to the requirements of section 281(2) require that the issue of quantum be expressly mediated or, alternatively, can it be said that the issue of quantum flows directly and "consequentially from the issue of entitlement"?
I find that the quantum of income replacement benefits claimed by Ms. Navage, whether in fact mediated or not, may proceed to arbitration.
To my mind quantum and entitlement of income replacement benefits are inextricably linked. In practice, there are occasions at the pre-hearing where quantum is not an issue, however, even where not explicit, quantum is very often a potential, albeit murky, issue in dispute between the parties. It is not in the least unusual for there to be no express indication that quantum is in issue until the pre-hearing or thereafter.
Despite the frailty of the evidence respecting when and how this issue was raised by Ms. Navage, I find that to require a separate mediation of quantum, is an overly technical approach imposing significant potential for added delay and expense for parties in these proceedings. Moreover, other than in perhaps being required to pay more in income replacement benefits than it might have thought, there is no evident prejudice to Pilot in having to respond to this issue at this juncture, subject, of course, to issues of documentary disclosure and ultimate proof of Ms. Navage's claim.
This, of course, does not mean that either the insurer or the insured can raise this issue at any time in a proceeding. Issues of fairness will ultimately govern how the introduction of a quantum dispute late in the game will be dealt with, however having raised this issue at the latest at the pre-hearing in October 2004, I find that Ms. Navage is entitled to proceed to arbitration of this quantum dispute. I have already adjourned this aspect of the arbitration to a later date which will afford Pilot ample time to respond to the issue.
Entitlement to a Loss of Earning Capacity Benefit
The right of Ms. Navage to proceed to arbitration of this issue is not disputed.
Supplementary Medical Benefits and Rehabilitation Benefits
There are several claims advanced under this head which are outlined in a letter to Pilot from counsel for Ms. Navage dated November 30, 2004.
These include:
The services as provided for in a report of Janus Rehabilitation Management dated August 21, 1996.
The recommendations of Rehabilitation Management Inc. contained in a report dated December 5, 1996.
These reports were apparently provided to Pilot when received in 1996 and not responded to, although this may be a consequence of the purported settlement in December 1996.
The application for mediation and subsequent report of mediator in respect of the 1994 accident make no reference to medical or rehabilitation benefits.
The application for mediation following the 1996 accident includes under Supplementary Medical Benefits - "Payment supplementary medical benefits", and under Rehabilitation Benefits - "Selection of Rehabilitation Specialist and payment of invoices and Payment of Future Rehabilitation Benefits."
The report of mediator refers only to the settlement of Ms. Navage's claims to the selection of a rehabilitation specialist and the payment of outstanding invoices.
To my mind the description of the issue in dispute contained in the application for mediation is more than broad enough to capture the types of claims which may flow from the Janus Rehabilitation Management report, as well as those recommended in the report of Rehabilitation Management Inc. I agree with Ms. Navage that the objection of the Insurer that these matters could not be mediated or arbitrated because they involved the payment of future benefits is somewhat beside the point given the passage of time.
These claims in the form of the two cited reports were submitted to Pilot prior to the purported settlement around or about December 13, 1996. The manner in which Pilot chose to deal with them at the time is not the responsibility of Ms. Navage, however the inference can be drawn that these issues were in the mind of the parties when they made their purported settlement in December 1996. They are also, as I have said, squarely contemplated by the description of the issues set out in the November 1996 application for mediation.
Attendant Care and Housekeeping and Home Maintenance
Ms. Navage also claims other benefits: housekeeping and home maintenance in the form of shopping and housework, and, attendant care, in the form of appointment accompaniment and personal assistance.
These issues were not expressly mediated. It also appears to me that they are unrelated to any of the other benefits in dispute - they do not flow directly or consequentially from any of the other issues that have been mediated. I also note that these benefits are provided for in different Parts of the Schedule than the medical and rehabilitation claims, and that in the application for mediation, which mirrors the structure of the Schedule to some degree, the places in the application corresponding to those Parts of the Schedule were not completed and are left blank. Accordingly, it would be difficult to conclude from these materials that any reasonable person would have reason to know that there was an attendant care or housekeeping issue in dispute at the time.
Does a pragmatic and flexible approach to the problem assist in resolving the question? Ms. Navage asserts that the medical evidence with respect to them will be the same as for the supplementary medical benefits and rehabilitation claims. From the perspective of the Applicant, that maybe the case. However, I cannot make that finding on the basis of the material before me. Moreover, in the absence of any indication of how or when these issues were raised by Ms. Navage, it is difficult not to infer significant potential prejudice to Pilot in having to litigate these issues now, having had, so far as the record reveals, no knowledge that these issues were in dispute until recently.
I find therefore that the issues of attendant care and housekeeping and home maintenance have not been mediated and failed, and therefore may not proceed to arbitration.
EXPENSES:
I exercise my discretion to award Ms. Navage her expenses incurred in this preliminary issue hearing. In the event that the parties are unable to agree on the quantum of those expenses, they may speak to the issue now in accordance with section 79 of the Dispute Resolution Practice Code 4th ed.
June 17, 2005
David Muir
Arbitrator
Date
Neutral Citation: 2005 ONFSCDRS 84
FSCO A95-000168
FINANCIAL SERVICES COMMISSION OF ONTARIO
BETWEEN:
BRONWEN NAVAGE
Applicant
and
PILOT 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:
A. Ms. Navage may proceed to arbitration of the following issues:
Is Ms. Navage entitled to receive a weekly income replacement benefit from March 15, 1995, and ongoing pursuant to section 7 of the Schedule on the basis that she suffers a substantial inability to perform the essential tasks of her employment?
What is the amount of weekly income replacement benefit that Ms. Navage is entitled to receive pursuant to section 10 of the Schedule?
Is Ms. Navage entitled to weekly loss of earning capacity benefits (LECBs) pursuant to section 20 of the Schedule?
Is Ms. Navage entitled to supplementary medical expenses claimed pursuant to paragraph 36(1) of the Schedule?
Is Ms. Navage entitled to rehabilitation benefits claimed pursuant to paragraph 40(5) of the Schedule?
Is Pilot liable to pay a special award pursuant to subsection 282(10) of the Insurance Act, as amended because it unreasonably withheld or delayed payments to Ms. Navage?
Is Pilot liable to pay Ms. Navage's expenses in respect of the arbitration under section 282(11) of the Insurance Act.
Is Ms. Navage liable to pay Pilot's expenses in respect of the arbitration under section 282(11) of the Insurance Act.
Is Ms. Navage entitled to interest for the overdue payment of benefits pursuant to section 68 of the Schedule?
B. Ms. Navage is entitled to her reasonable expenses of this further preliminary issue hearing.
June 17, 2005
David Muir
Arbitrator
Date
Footnotes
- The Statutory Accident Benefits Schedule —Accidents after December 31, 1993 and before November 1, 1996, Ontario Regulation 776/93, as amended by Ontario Regulations 635/94, 781/94, 463/96 and 304/98. O.R. 776/93 was extensively modified by O.R. 781/94; accordingly, where necessary, "1994 Schedule" refers to the original O.R. 776/93, and "1995 Schedule" refers to O.R. 776/93 as amended.
- See Whitaker v. Dominion of Canada [1998] O.J. No 2981(Gen. Div.), and Christakos v. Dominion of Canada General Insurance [1997] O.J. No. 1279.
- See Robertson and Co-operators General Insurance Company (September 15, 1997, OIC A96-001940).