Financial Services Commission of Ontario
Commission des services financiers de l’Ontario
Neutral Citation: 2006 ONFSCDRS 52
FSCO A04-001496
BETWEEN:
CLEMENTE PETROCELLI Applicant
and
ALLIANZ INSURANCE COMPANY OF CANADA Insurer
DECISION ON A PRODUCTION ISSUE
Before: Jeffrey Rogers
Heard: By telephone conference call on January 24, 2006. Written submissions were completed on March 20, 2006.
Appearances: Rachel Hepburn-Craig and Theodore P. Charney, solicitors for Mr. Petrocelli Lorraine Takacs, solicitor for Allianz Insurance Company of Canada
Issues:
The Applicant, Clemente Petrocelli, was injured in a motor vehicle accident on August 18, 1999. He applied for and received statutory accident benefits from Allianz Insurance Company of Canada ("Allianz"), payable under the Schedule.1 Disputes arose concerning his entitlement to further benefits. The parties were unable to resolve their disputes through mediation, and Mr. Petrocelli applied for arbitration at the Financial Services Commission of Ontario under the Insurance Act, R.S.O. 1990, c.I.8, as amended.
The hearing was scheduled to start on January 30, 2006. At a Settlement Discussion on January 24, 2006, the parties agreed to adjourn the hearing and requested that I rule on a disputed production issue. Neither party was prepared to fully argue the issue at that time. It was therefore agreed that submissions would be made in writing. Those submissions were completed on March 20, 2006.
The production issue is:
- Should Mr. Petrocelli be required to produce to Allianz a copy of the report of Janet L. Olson, accountant, prepared for the defendants in the related tort action, received by Mr. Petrocelli in response to an accounting report prepared for him primarily for the tort action, but produced by him to Allianz to support his position on quantum in this arbitration?
Result:
Mr. Petrocelli shall produce to Allianz a copy of the report of Janet L. Olson, accountant, prepared for the defendants in the related tort action, within 10 days.
The issue of expenses of this hearing is reserved to the hearing arbitrator.
EVIDENCE AND ANALYSIS:
Mr. Petrocelli's entitlement to further IRBs is one of the issues in this arbitration. Quantum is in dispute. Allianz initially paid IRBs of $202.42 per week, based on an accounting report it commissioned by Chang Walter & Associates. In support of his position that he is entitled to $400 per week, Mr. Petrocelli recently served Allianz with a copy of an accounting report he commissioned for the related tort action. The tort defendants have served Mr. Petrocelli with a responding report prepared by Janet L. Olson. Allianz seeks production of that report. The tort reports consider documents that were not available to Chang Walter and Associates, when it prepared its report.
It is not disputed that Ms Olson's report is relevant to the issue of quantum of IRBs. At the Settlement Discussion, counsel for Mr. Petrocelli indicated that production was opposed on the grounds of litigation privilege. Counsel abandoned that position in the written submissions.
Litigation privilege is based on the proposition that, in an adversarial system, counsel must be free to conduct investigations and do research without risking disclosure of their opinions, strategies and conclusions. It allows counsel to control the information presented to the court about their case. The protection of privilege is lost, once the facts or documents have been disclosed to the opposite party or the court. Since Ms Olson's report was prepared for the tort defendants, the right to protection was theirs. It was lost once the report was disclosed to Mr. Petrocelli.
In written submissions, counsel for Mr. Petrocelli correctly acknowledged that an arbitrator has discretion to order production of expert reports generated in related court proceedings. Discretion is to be exercised, having regard to the impact of production on the arbitration process, bearing in mind the following:
- relevance of the documents;
- prejudice to the parties;
- the sufficiency of existing documents;
- whether the documents will complicate or unduly prolong the arbitration proceeding.2
Mr. Petrocelli's written submission is that there is no prejudice to Allianz if it is required to retain Chang Walter & Associates to review the new documents and the report prepared for him, and provide a further opinion. It is suggested that Chang Walter & Associates might already have been retained for that purpose, raising the possibility that he could be prejudiced by facing two opposing opinions at the hearing, should he be required to produce Ms Olson's report.
Disputes about production of tort related documents usually arise in the context of defence medicals, raising concerns about unnecessary invasion of privacy, expanding the production process available in arbitration and complication of the arbitration proceeding. Those concerns do not arise here. Allianz is not seeking to expand the scope of the evidence it would ordinarily be able to produce for an arbitration and there is no issue of invasion of privacy.
I find that, without those concerns, the mandate of Rule 1.1 of the Dispute Resolution Practice Code to interpret the Rules in order to produce the most just, quickest and least expensive resolution of disputes, becomes paramount. I find that production of the existing report by Ms Olson will likely result in avoiding the effort and expense of commissioning a further report from Chang Walter & Associates. Rather than complicating the arbitration proceeding, the likely effect of production would be to simplify and expedite the process. If Allianz nevertheless seeks to rely on a further report by Chang Walter & Associates, any prejudice to Mr. Petrocelli can be remedied by the hearing arbitrator taking into consideration the circumstances of its production, in exercising discretion whether to allow its admission as evidence at the hearing.
I have therefore ordered Mr. Petrocelli to produce Ms Olson's report.
EXPENSES:
Allianz made no submissions on expenses. Rather than add a further step to the proceeding, I reserve that issue to the hearing arbitrator.
April 6, 2006
Jeffrey Rogers Arbitrator
Date
Financial Services Commission of Ontario
Commission des services financiers de l’Ontario
Neutral Citation: 2006 ONFSCDRS 52
FSCO A04-001496
BETWEEN:
CLEMENTE PETROCELLI Applicant
and
ALLIANZ 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. Petrocelli shall produce to Allianz a copy of the report of Janet L. Olson, accountant, prepared for the defendants in the related tort action, within 10 days.
The issue of expenses of this hearing is reserved to the hearing arbitrator.
April 6, 2006
Jeffrey Rogers Arbitrator
Date
Footnotes
- The Statutory Accident Benefits Schedule —Accidents on or after November 1, 1996, Ontario Regulation 403/96, as amended.
- See: CAA Insurance Company (Ontario) and Rajinder Sandhu, FSCO P01-00044, January 18, 2002