Jennifer Esterreicher v. Non-Marine Underwriters, Mbrs. of Lloyd's, 2008 ONFSCDRS 172

Financial Services Commission des

Commission services financiers

of Ontario de l’Ontario

Neutral Citation: 2008 ONFSCDRS 172

FSCO A04-001750

BETWEEN:

JENNIFER ESTERREICHER

Applicant

and

NON-MARINE UNDERWRITERS,

MBRS. OF LLOYD'S

Insurer

DECISION ON A MOTION

Before: Jeffrey Rogers

Heard: By telephone conference call, October 17, 2008.

Appearances: Mr. Christopher D. J. Hacio, solicitor for Ms. Esterreicher

Mr. Peter I. Aldgate, solicitor for Non-Marine Underwriters, Mbrs. Of Lloyd’s

Issues:

The hearing in this application is scheduled to take place in Thunder Bay, commencing on October 27, 2008. The issue in this motion is:

Should Dr. Fry, Dr. Advent and Monique Hansen, proposed witnesses for Ms. Esterreicher, be permitted to testify by way of video conference from Sioux Lookout or should they be required to attend in Thunder Bay to give their evidence?

Result:

Leave is granted for Dr. Fry, Dr. Advent and Monique Hansen, to testify by way of video conference from Sioux Lookout.

FACTS:

The substantive issue in dispute in this arbitration is Ms. Esterreicher’s entitlement to medical benefits for treatment as set out in 6 treatment plans, prepared by Dr. Advent, Monique Hansen and Tara Mueller. Ms. Esterreicher resides in Sioux Lookout which is about 370 km from Thunder Bay. According to her counsel, although the total amount of the disputed treatment plans is approxomately $15,000, the total amount in dispute in this arbitration, after deduction of payments made by Ms. Esterreicher’s collateral benefits insurer, is between $5,000 and $7,000. Ms. Esterreicher proposes to call Dr. Advent, Monique Hansen, Tara Mueller and Dr. Fry as witnesses at the hearing. Dr. Fry is her family doctor. Dr. Fry, Dr. Advent and Monique Hansen live and practice in Sioux Lookout. Counsel for Ms. Esterreicher estimates that the expense associated with these witnesses attending to testify in Thunder Bay would be approximately $3,000 to $5,000 while the cost of their testifying by videoconference would be about $1,000.

In both Applications for Arbitration that form the basis of the hearing, Ms. Esterreicher indicated that she wanted an oral hearing to take place in Thunder Bay. She confirmed that request at the pre-hearing which took place on May 8, 2008. The parties have agreed that Tara Mueller, who resides in southern Ontario, may give her evidence by videoconference from Aurora.

On September 16, 2008 counsel for Ms. Esterreicher wrote to counsel for Lloyd’s requesting consent for Dr. Fry, Dr. Advent and Monique Hansen to give their testimony by videoconference from Sioux Lookout. Counsel for Lloyd’s gave that consent by letter dated September 17, 2008. Counsel for Ms. Esterreicher therefore reserved time at the relevant video conferencing facilities and arrangements were made for a resumption of the pre-hearing to discuss the logistics of taking the testimony by way of videoconference. Counsel for Lloyd’s then sent a further letter dated September 19, 2008 in which he indicated that he gave consent without authority from his client and that his client did not consent. The parties sought a decision on this issue at the resumption of the pre-hearing on September 25, 2008 but the presiding Arbitrator deferred the decision. Ms. Esterreicher therefore brought this motion.

ANALYSIS:

Rule 42.4 of the Dispute Resolution Practice Code (“DRPC”) provides that a party may not call more than two expert witnesses to give opinion evidence at a hearing, unless an arbitrator orders otherwise. I therefore raised the question of Ms. Esterreicher’s apparent intention to call four expert witnesses, before hearing the motion. Counsel for Lloyd’s indicated that he would, in any event, require all of Ms. Esterreicher’s expert witnesses for cross-examination, pursuant to Rule 41.1. Therefore, the issue of leave under Rule 42.2 does not arise.

Jurisdiction to hold an electronic hearing is addressed in Rule 37 of the DRPC. The relevant provisions are as follows:

37.1 The arbitrator may:

(a) hold an oral hearing;

(b) hold a written hearing;

(d) hold a hearing which combines one or more of the above formats.

37.2 The arbitrator will not hold a written hearing where a party satisfies the arbitrator that there is a good reason for not doing so.

What Ms. Esterreicher proposes is a hearing that combines the two formats referred to in Rule 37.1(a) and 37.1(c). Rule 37.1(d) clearly gives an arbitrator the discretion to do that. There being no issue of jurisdiction, it is my view that the most important consideration in deciding this motion is the fact that counsel for Lloyd’s gave his consent. The efficient functioning of the dispute resolution process requires the co-operation of parties in resolving disputes on their own. Enforcement of their procedural agreements encourages that co-operation and is necessary for preservation of the integrity of the process.

Representation by counsel does not alter this approach. Counsel are presumed to act with their clients’ authority and Ms. Esterreicher was entitled to act on that presumption when counsel for Lloyd’s gave his consent. Mr. Aldgate’s suggestion that the consent he gave should be vitiated because he did not have authority to give it would add an unwieldy, additional step in dealings between represented parties and invite inquiry into the otherwise privileged communication between solicitor and client.

Counsel for Lloyd’s alleged that he understood that the Commission considered the issue of testimony by videoconference to be a live one when he received notice that the pre-hearing would be resumed. He indicated that, because the issue had not been decided, he was entitled to withdraw his consent. I do not agree that the issue was a live one. The pre-hearing Arbitrator reported that the purpose of the resumption was to discuss logistics and declined to decide the issue of leave. In any event, even if the purpose of the resumption was to decide whether leave should be granted, that would not allow counsel to withdraw consent. The decision on whether to grant leave would nevertheless take into account the fact that counsel gave consent.

I do not suggest that I am bound by the parties’ agreement. However, absent lack of jurisdiction to do what the parties agreed or some factor that would seriously compromise my ability to conduct a fair hearing, my view is that the agreement should be enforced. As noted above, there is no issue of jurisdiction. Further, I find it highly unlikely that the process Ms. Esterreicher proposes will have any impact on my ability to conduct a fair hearing. There is perhaps some advantage to close, in person observation of a witness’ demeanour, where credibility of the witness is at issue. But credibility is rarely at issue in assessing expert evidence and Lloyd’s did not raise credibility as an issue.

The only prejudice counsel for Lloyd’s suggested is that, because there are numerous documents that he would like to put before the witnesses, his ability to do so might be compromised if they testify by videoconference. However, this is not an issue unique to testimony by videoconference. The solution is early preparation of a joint Document Brief which can be provided to the witnesses before they testify. Once counsel for Lloyd’s confirmed that he had listed all of the relevant documents in the material filed on this motion, counsel for Ms. Esterreicher undertook to prepare a joint Brief and provide the witnesses with copies. In the circumstances, I find that enforcing Lloyd’s agreement would not adversely affect my ability to conduct a fair hearing or prejudice Lloyd’s in any way.

Based on that finding, I would grant the order requested even if counsel had not given his client’s consent. Rule 37.3 of the DRPC provides that an arbitrator will not hold an electronic hearing if satisfied that doing so would “significantly prejudice” a party. Exercise of this discretion is informed by Rule 1.1 which requires that the Rules be interpreted broadly “to produce the most just, quickest and lease expensive resolution of the dispute.”

I give no weight to Lloyd’s submission that Ms. Esterreicher must have known the cost of the hearing she proposed, when she named the place of hearing as Thunder Bay in her applications. Perhaps an oral hearing in Sioux Lookout would have been a viable and inexpensive option. But it is now too late in the proceedings to fully investigate and pursue that option, without additional expense. I do not construe the request for a hearing in Thunder Bay as a waiver of Ms. Esterreicher’s right to request the exercise of discretion under Rule 37 to tailor the hearing in order to achieve the least expensive resolution, without impact on efficiency or fairness.

Given the amount in dispute, the cost of personal attendance, relative to the amount in dispute and the absence of any prejudice to Lloyd’s, I find that testimony by videoconference would produce the quickest, most just and least expensive resolution of the dispute. Counsel for Lloyd’s must have appreciated that when he gave his consent. It is unfortunate that his client’s failure to do so made this motion necessary.

EXPENSES:

I reserve my decision on the expenses of the motion until the Arbitration hearing has been completed. I remain seized of the issue, should the parties resolve all other issues without a hearing, but are unable to resolve the issue of expenses of this motion.

October 24, 2008

Jeffrey Rogers

Arbitrator

Date