Valerie Toth v. Personal Insurance Company of Canada, 2007 ONFSCDRS 30

Financial Services Commission of Ontario

Commission des services financiers de l’Ontario

Neutral Citation: 2007 ONFSCDRS 30

FSCO A04-001975

Before:

Robert A. Kominar

Heard:

Written submissions received on September 28, November 21, 28, 2006.

Appearances:

Michael J. Gillen for Ms. Toth

Sean A. Brown for Personal Insurance Company of Canada

Issues:

The Applicant, Valerie Toth, was injured in a motor vehicle accident on January 29, 2002. She made a claim for funding of reconstructive medical treatment. A series of pre-hearing discussions were held. The parties ultimately advised that they reached an agreement regarding the substantive issue but were unable to resolve the issue of expenses and asked that a determination of entitlement to expenses be made. Both parties provided written submissions regarding the issue of entitlement to expenses.

The issue in this further hearing is:

1. Is either party entitled to expenses in this arbitration, and if so in what amount?

Result:

1. Each party shall bear their own expenses in this arbitration.

EVIDENCE AND ANALYSIS:

The parties have resolved the issue of entitlement to the medical benefits which Ms. Toth claimed in this arbitration, which were a series of plastic surgery treatments for scarring that resulted from facial lacerations that she received in the automobile accident. There was no dispute by the insurer that Ms. Toth had serious injuries that required treatment. The real issue between the parties seems to have been with the "manner" in which the treatment was requested. The insurer denied the initial treatment plan prepared by the treating plastic surgeon. As Mr. Gillen points out in his submissions, the explanation of benefits associated with the treatment plan gives the insurer's reasons for the denial as the following:

1. The proposed treatment does not appear to be reasonable and necessary.

2. The proposed treatment appears to be excessive.

I must say that these statements are in reality conclusions, not reasons, and I do not understand how the adjuster believed that simply asserting what appears to be unwarranted conclusions, satisfies, the requirements imposed on the insurer in the Schedule?¹ The adjuster's covering letter on the matter is no more helpful to someone trying to understand the rational basis for the insurer's denial than the OCF-9 form.

In Mr. Gillen's view this denial of the treatment was problematic on its face. But notwithstanding any such technical concerns, the treatment issues were referred to a medical rehabilitation DAC, which ultimately issued a report partially approving and partially disapproving of the proposed treatment. I have read the DAC report and agree with Mr. Gillen that it is challenging to understand clearly what its actual recommendations were in this case.

Ms. Toth was understandably concerned about her disfigurement and wished to proceed with treatment. Her physician wanted to know how the treatment was going to be paid for. The insurer's position seemed to be that it would only consider approving treatment in some sort of "phased" manner, whereas the plastic surgeon was seeking funding for the complete set of proposed procedures. There were also disagreements as to whether the plastic surgeon's treatment plans were prepared in the proper form. At some point a new treatment plan was prepared.

As a result of these problems the original pre-hearing arbitrator chose to adopt what can only be called a "case management" approach to the dispute. There were multiple pre-hearings held and during those pre-hearings I am led to believe that Ms. Toth's ongoing treatment was monitored and the parties were encouraged to co-operate in her best interests to get the treatment which she needed arranged.

Ultimately, the parties agreed to a multi-stage treatment plan, with the insurer assessing whether to pay for the next stage after it learned of the satisfactory outcome of the earlier one. To this end there was an agreement to the dismissal of the arbitration. This all sounds completely reasonable to me, and I must admit I have some problem in understanding why this was all so contentious to begin with.

The only issue still in dispute is the expense consequence of what happened here. The insurer seeks its expenses on the premise that the whole arbitration process was unnecessary and needlessly caused the insurer to incur legal costs and have levied against them the arbitration assessment by the Commission. Specifically, the insurer is requesting that it be awarded its expenses, fixed in the amount of $1,000.00, and further that they be awarded one half of the Commission's assessment, being $1,500.00. The applicant's position is that the arbitration should be dismissed without costs.

The first observation I make is that it is difficult for an arbitrator to assess entitlement to expenses in a matter that has been settled by the parties. There is no doubt that the criteria which arbitrator's are required to use in making decisions regarding expenses are skewed towards situations where actual hearings have been held and determinations of success on the substantive issues have been made. As a statutory decision maker an arbitrator has no inherent authority to consider other factors than those outlined in the Expense Regulation² Considering each of those criteria I make the following findings on the limited information available to me: