Hargraves v. Lombard General Insurance Company of Canada, 2007 ONFSCDRS 27

Commission des services financiers de l’Ontario

Neutral Citation: 2007 ONFSCDRS 27

FSCO A06-000209

BETWEEN:

HEATHER HARGRAVES

Applicant

and

LOMBARD GENERAL INSURANCE COMPANY OF CANADA

Insurer

DECISION ON A MOTION

Before:

David Muir

Heard:

January 19, 2007, at the offices of the Financial Services Commission of Ontario in Toronto.

Appearances:

David Payne for Ms. Hargraves
Harry Brown for Lombard General Insurance Company of Canada

Issues:

The Applicant, Heather Hargraves, was injured in a motor vehicle accident on December 31, 2000. She applied for statutory accident benefits from Lombard General Insurance Company of Canada ("Lombard"), payable under the Schedule.¹ The parties have been unable to resolve their disputes through mediation, and Ms. Hargraves applied for arbitration at the Financial Services Commission of Ontario under the Insurance Act, R.S.O. 1990, c.I.8, as amended.

In this somewhat unusual Motion Lombard seeks the following Orders:

An Order confirming their right to speak to members of a DAC assessment team in order to prepare for the arbitration hearing; and,
An Order confirming that they are not obliged to provide details of their conversations with a DAC assessment team prior to an Arbitration.

Ultimately what the parties and in particular Lombard are seeking is clarification of an insurer's right to communicate privately with a member of a DAC assessment team for the purpose of preparing that individual to give evidence at an arbitration hearing.

Having considered the submissions of the parties, I have concluded that I am unable to make either Order in these circumstances.

The issue arises in the following way.

Ms. Hargraves sought a determination from Lombard that she was catastrophically impaired. The question was remitted to a CAT DAC for its decision. The DAC concluded that Ms. Hargraves did not meet the criterion as set out in section 2(1.1) of the Schedule. Amongst the issues referred to arbitration is this question of whether or not Ms. Hargraves meets this test.

Counsel for Ms. Hargraves wrote to one of the DAC assessors in June 2006. The enquiry appears to have related to the methodology used by the DAC. Ms. Hargraves suggested that this kind of discussion with the DAC was somehow different than what Lombard was proposing, that is, preparing a witness to give evidence. I don't know why that would be the case, where in many cases and apparently in this matter, the methodology being used by the DAC is part of the dispute.

In any event, in anticipation of the hearing proceeding, counsel for Lombard made arrangements to meet with one or more of the DAC assessors whom it intended to call to give evidence. Counsel for Ms. Hargraves learned of the proposed meeting and objected to it. Counsel took the position that Lombard could only meet with the DAC in his presence - that is counsel for one party could only meet with a DAC witness in the presence of counsel for the other.

Counsel for Ms Hargraves requested the advice of the Commission. Mr. Bruce Green, Manager, Automobile Insurance Services advised by email that the Minister's Committee on the DAC System has indicated in the past that a DAC assessor should, in the interest of preserving neutrality, make themself available to both counsel. Mr. Green was not aware of a requirement that such a meeting take place with counsel at the same time.

By way of further background, both Dr. Arthur Amies and Ms. Phillipa Samworth, both key individuals in the creation and administration of the DAC system, are apparently of the view that one sided contact with either party prior to the hearing is prohibited.²

On January 18, 2007, immediately prior to oral argument on this issue, counsel for Ms. Hargraves wrote to Dr. Lacerte, executive coordinator of the DAC asking for its position on this issue. Perhaps unsurprisingly given the controversy, Dr. Lacerte responded to the effect that the DAC would only meet with counsel together. Dr. Lacerte offered, as his rationale for this view, the appeal decision of Villers and Pilot Insurance Company.³ Reading between the lines of Dr. Lacerte's letter it appears likely that this "policy" was a new one and that in the past if an assessor made it known to him that he had been contacted by one party or the other, he would advise the assessor ought to ensure that the representative of the other party be notified as expressly required by Guideline #4 and a subsequent Communiqué from 1999. Lombard insists that issues of trial efficiency require that the parties have independent access to DAC assessors prior to trial and suggested that with safeguards, the essential neutrality of the DAC could be preserved. Lombard submits that the DAC Guidelines are intended primarily to avoid one-sided contact with either party prior to the assessment, and before the DAC renders its conclusions. In Lombard's view, these Guidelines do not apply to the circumstance where one party or the other is preparing a DAC assessor to give evidence at the hearing. The neutrality of the DAC, consel argued, is preserved by the fact that at the time of hearing the DAC has already made its decision, that the other party must be informed of such a meeting, that it is inappropriate to coach or tailor the evidence of any expert witness, and finally that the DAC witness is subject to cross-examination about what was discussed with counsel in preparation for the hearing.

The question here arises in an unusual way. The ultimate issue would normally arise in the course of an arbitration hearing when considering the weight to be given to the opinions of the DAC. As discussed in the Villers decision, any number of options present themselves, including discounting the opinion of the DAC entirely because its conclusions were so tainted by partisan contact of one kind or the other.

The Guidelines do make it clear what is expected of the DAC in most respects. There is detailed discussion about how the DAC is intended to conduct itself vis-a-vis the parties prior to and during the assessment phase of its work. Complete transparency is required. In short, unilateral communication with one party or the other is essentially prohibited. The Guideline provides that these requirements to maintain the reality and appearance of neutrality continue after the assessment report is released and as the matter proceeds to court or arbitration. However, the Guidelines do not expressly prohibit pre-trial meeting with one side alone. Indeed, a July 1999 Communiqué appears to contemplate just such meetings:

The DAC Committee and the Accident Benefit Analysis Unit have had a number of questions regarding whether the prohibition of one-sided communication extends to parties preparing for trial or arbitration.

The decision to meet either party is left to the discretion of a DAC. However, DAC assessors should be aware that any meeting must not be used, or be perceived as being used, to tailor their DAC testimony.

As outlined in General Guideline #4, it is critical to the dispute resolution process that DAC's and their assessors to maintain their actual and perceived neutrality. In keeping with this fundamental principle, DAC's are required to notify the other party if they choose to meet with either parties' counsel.

Does the Guideline or the Communiqué prohibit a DAC from meeting with one party alone? No, it clearly does not. All it expressly requires is that the other party be informed of the meeting with counsel.

That said, the Director's Delegate in Villers, supra, has suggested that the need for maintaining the appearance of neutrality will go beyond the strict words of the guidelines and communiqués. The Director's Delegate was critical of a letter written for counsel for the insurer that was not initially copied to counsel for the applicant. Although the letter came to light, counsel was never provided with the details of other verbal communications with the DAC. The heart of the letter as it relates to this issue is set out here:

The reason I forward to you the additional report that had been omitted earlier when you completed your CAT DAC assessment, is because the solicitor for the claimant is arguing that since this report of March 29, 2002, was not before you, your opinion may be in error.

From reviewing the matter, it seems to me that you considered precisely the issue of causation as suggested by Dr. Porter in his report dated March 29, 2002. The (OCF-19/509) form prepared by Dr. Porter described the same position on causation. It was also set out in Dr. Lapp's medical documentation which you reviewed.

The Director's Delegate opined that she could "not accept that the drafters of the Guidelines contemplated a letter like the one [above] which could only undermine the neutrality or appearance of neutrality of the DAC assessors."

The partisan purpose of this written communication and its criticism by the Director's Delegate highlights the difficulties that will ensue if parties' meetings with DAC assessors are sanctioned. One-sided contact such as that discussed in Villers, supra and the decisions cited therein will inevitably lead to questions which must be answered, sidetracking the hearing and potentially fatally damaging the evidence of the DAC.

It is trite to note that DAC's have a unique and important position in the dispute resolution process. Moreover, their role in the process has a dual aspect. The DAC's primary role is as a "legislatively created" decision maker⁴ whose determination is final unless one of the parties chooses to challenge that determination through litigation. In addition to this statutory decision making role, where their determinations have not resolved the dispute DAC assessors are often called upon to give evidence in arbitration hearings or court proceedings. At such hearings, the evidence of a DAC assessor, notwithstanding its unique place in the process, is assessed not unlike that of any other expert witness called by the parties.

Although all experts are not really the property of either party but of the tribunal, the fact is that they are normally called to present one or the other parties' point of view. Lombard is quite correct in its view that it is imperative, indeed the professional responsibility of counsel, to properly prepare witnesses to give evidence.

However, DAC witnesses, because of the central, neutral and statutory role DACs play in the dispute resolution process must remain neutral, and at least as importantly must appear to be neutral. Arbitrators will carefully scrutinize the conduct of a DAC where there is evidence of one-sided partisan contact. To my mind, these considerations, as a matter of policy, trump the concerns raised by Lombard about hearing efficiency and fairness to the witnesses themselves. In short, the unique place of the DAC in the dispute resolution process takes them outside of these considerations, as important as they are. Therefore, I do not believe that it can be said that there is a right to meet with a DAC assessor to discuss their evidence with them for an arbitration hearing, as there might be said to exist for other expert or lay witnesses.

In addition to these considerations it seems to me that I have little or no jurisdiction to tell the DAC to do anything in this regard.⁵ As I have indicated, I do not think that the Guidelines specifically address the issue and the 1999 Communiqué appears to contemplate such meetings occurring. Ultimately it is within the discretion of a DAC to best assess whether it will speak to anyone prior to a hearing or trial, subject to the requirements of the SABS and Guidelines that have been issued from time to time.

The first Order sought amounts to a declaration that Lombard has the right to speak to the DAC alone. This implies an obligation on the part of the DAC to speak to counsel. I am doubtful about my jurisdiction to make a declaration that Lombard, for example, has a right to speak to the DAC alone. Morever, such an Order has no meaning unless the DAC could be compelled to meet with counsel. I note that the DAC in question, although perhaps manipulated by circumstances, has said what it will do in this case. For these reasons as well, I decline to make the Order sought by Lombard.

As regards the second Order requested, if there is no right as such to speak privately to a DAC then there is no right to the "protected space" that lay at the heart of the rationale for litigation privilege.⁶ Although this is a hypothetical question at this point, it would seem to follow that in the event that there was a one-sided meeting with a DAC assessor, on Order requiring the production of a written record of the substance of that conversation might be appropriate.

What contact with the parties might be acceptable in preparation for the hearing? I appreciate Lombard's point that while a DAC witness is confined to their initial findings and their report when examined in chief, on cross-examination they will often be called upon to comment on material at variance with their conclusions. Clearly a pre-trial meeting with both counsel present would be acceptable. Alternatively, written interlocutories copied to counsel might be an acceptable alternative. Both of these approaches would allow some preparation of the expert witness without raising issues of perceived or actual compromise of neutrality.

February 12, 2007

David Muir
Arbitrator

Date

Financial Services Commission of Ontario