Financial Services Commission des

Commission services financiers

of Ontario de l’Ontario

Neutral Citation: 2010 ONFSCDRS 14

FSCO A09-000531

BETWEEN:

L.G.

Applicant

and

LOMBARD GENERAL INSURANCE COMPANY OF CANADA

Insurer

Before: Arbitrator John Wilson

Heard: December 4, 2009, in at the offices of the Financial Services Commission of Ontario in Toronto, Ontario.Written submissions were received on December 7, 2009.

Appearances: L.G. was self-represented.

Harry Brown for Lombard General Insurance Company of Canada

Issues:

The Applicant, L.G., claims to have been injured in a motor vehicle accident on January 20, 2003. She applied for and received statutory accident benefits from Lombard General Insurance Company of Canada (“Lombard”), payable under the Schedule.¹ The parties were unable to resolve their disputes through mediation, and L.G. applied for arbitration at the Financial Services Commission of Ontario under the Insurance Act, R.S.O. 1990, c.I.8, as amended.

The issues are:

Is L.G. barred from proceeding to arbitration without the appointment of a litigation guardian in accordance with Rule 10 of the Dispute Resolution Practice Code?

Result:

L.G. is not barred from proceeding without the appointment of a litigation guardian.

EVIDENCE AND ANALYSIS:

In this arbitration the disputes centre around L.G.’s request for an order requiring Lombard to pay for medical benefits at Integrated Health, “all other surgery related to the accident” and reconstructive breast surgery involving the replacement of nipples, estimated at 5 to 7 thousand Euros.

The Insurer in its response noted that the chiropractic and related treatments likely derived from a fall at work and were reported to the WSIB which should have been responsible for any payments. In any event, according to Lombard the treatments were not appropriate.

With regard to the breast reconstructive surgery, Lombard notes that removal of the nipples, and the resultant need for reconstructive surgery pre-dates the accident, and as such is not properly part of the arbitration.

At the most recent resumption of the pre-hearing, on December 4, 2009, I ordered that the arbitration hearing in this matter be stayed for 30 days from the latest pre-hearing to allow the parties to provide further information as to capacity, and to make submissions if so advised.

In its submissions Lombard notes the problems with the issues noted above and submits that it “has concerns regarding the applicant’s ability to manage the arbitration process without counsel.”

Lombard also claims that the claim described as “all other surgery related to the accident” has not been subject to mediation, nor have there been treatment plans or invoices submitted.

At the pre-hearing on December 4, 2009 Lombard took the position that at the very least regarding the reconstructive surgery and the “other surgery related to the accident” it was clear and obvious that these issues could not succeed.

L.G. does not agree with Lombard’s analysis of the issues she has brought to arbitration.

L.G., of course represents herself in this matter, since she has no lawyer. She states that she has been unable to retain a lawyer.

Many people choose to represent themselves for a variety of reasons. Although every self-represented party starts at a disadvantage when dealing with serious legal issues in a formal setting, especially when opposed by skilled and experienced counsel, L.G. appeared to show difficulties in dealing with the process, difficulties that appeared to go beyond a mere unfamiliarity with legal concepts.

In my mind, given the presentation of L.G. at pre-hearings and the somewhat obtuse references to psychological issues in the materials submitted this is an appropriate case to enquire into whether there should be intervention in accordance with Rule 10 of the Dispute Resolution Practice Code (“DRPC”).

L.G.’s presentation during the pre-hearings thus far has at times been puzzling with some appearance of what might be interpreted as an impaired understanding of the nature of her claim and the dispute resolution process in which it is framed.

Specifically, L.G. has exhibited difficulties in understanding Lombard’s submissions that since the reconstructive surgery is intended to repair damage done by prophylactic surgery prior to the accident, it is hard to characterize such surgery as arising from an accident.

It would appear as well that the request to perform the proposed surgery in Germany arises from a fear of the type of anesthetic that would be used were the same surgery to be performed in Ontario.

I note, as well, that Lombard’s Response refers to a diagnosis of “schizophrenic/borderline personality disorder.” Although the diagnosis does not determine capacity, such information is not totally irrelevant. The knowledge of such a diagnosis combined with anecdotal evidence arising from the conduct of the party can give rise to further concerns, and necessitate a reference to Rule 10.3 of the DRPC.

Rule 10.3 of the DRPC provides:

10.3 Where an adult party has not been declared mentally incapable under the provisions of the SDA, but exhibits signs of mental difficulty during the course of a mediation, settlement discussion, neutral evaluation or proceeding, either party may request a hearing on a preliminary issue, or the Dispute Resolution Group may direct a hearing on a preliminary issue to determine whether: (a) the party has the mental capacity to proceed in the dispute resolution process.

As noted earlier, both the nature of her claims and L.G.’s conduct at the pre-hearings could be suggestive of frustration and an inability to understand information that is relevant to making decisions in the claims and arbitration process, or an inability to appreciate the reasonably foreseeable consequences of decisions made, required or not made, as the case may be, in the arbitration process.²

While Rule 10 of the DRPC provides a grounding for an enquiry into the capacity of a party to participate in the arbitration process, it does not specify either a procedure, or the nature of the evidence that is to be considered.

Since the superior courts, in addition to the powers under the Rules of Civil Procedure concerning capacity also exercise a parens patriae jurisdiction over persons under a legal disability, it is useful to examine their approach to such matters.

It is clear from the jurisprudence that any consideration of limiting the autonomous rights of a party to engage in litigation should only be considered on the basis of hard evidence rather than mere supposition. While a judge or an arbitrator may observe and record behaviour, adjudicators rarely have either the qualifications or training to interpret such observations without some medical context.

The courts have consistently held that medical evidence is a requirement in the determination of “mental incapacity” under s. 6 of the Substitute Decisions Act. In Barnes v. Kirk, 1968 CanLII 389 (ON CA), [1968] 2 O.R.213, (C.A.), Ayelsworth J.A. held that: “[t]he question of a party’s unsoundness of mind essentially is one to be decided upon medical evidence; without direct cogent evidence from a person duly qualified to speak with authority upon the subject, it is difficult to perceive how the Court could pass upon the question judicially (216). This requirement of medical evidence was followed in McGowan et al v. Haslehurst et al (1978), 1977 CanLII 1192 (ON HCJ), 17 O.R. (2d) 440 (Ont. C.A.) at 441; Taylor v. Noronha, [1998] O.J. No. 1967 (Gen. Div.) at para. 5; Perino v. Perino, [2008] O.J. No. 1019 (Sup. Ct.) at para. 46; and Lico v. Griffiths, 2008 CanLII 11047 (ON SC), [2008] O.J. No. 1018 (Sup. Ct.) at para. 30.³

Even though medical evidence is necessary, the test for incapacity is not simply addressed by medical observation. Rather, since the test for capacity is time and situation specific, there must be an application of the medical evidence to the circumstances in which capacity is required. Capacity in such cases becomes a medical-legal rather than a strictly medical analysis.

The onus in any matter rests upon the person alleging incapacity. No-one is obliged to prove their own capacity.⁴ Indeed, section of 4 of the Substitute Decisions Act (“SDA”) provides for a presumption of capacity, albeit one that is rebuttable.

Rather than a single test for capacity there is in effect a spectrum of capacity. At the low end of the spectrum are such matters as marriage, the consent to which is not supposed to engage complex thought, with the highest level perhaps being the making of a will, which is supposed to engage an analysis of not only of the disposition of the property involved, but of a recognition of obligations to others for support and recognition that would be affected by the testamentary disposition.

It is likely that the engagement in the arbitration process, and especially acting as one own’s counsel in such a process would be toward the higher end of such a spectrum.

Iacobucci J., speaking for the Supreme Court that undertaking a legal procedure involves much more than just the formal steps provided by law:

It should also be noted that the act of writing a letter may by itself be a simple one, but in this context it requires a consideration of many factors and a mental capacity to address and assess those.⁵

Similarly, the Superior Court in Bizoukis commented on the complexity of legal procedure:

The act of bringing an action requires that a person make several informed decisions arising out of a complex of facts which form the basis for a potential cause of action. Such facts would include the existence of a duty owed to the person by the prospective defendant and a breach of that duty causing injury, damage or loss. For a person's decision to commence an action to be informed, he or she will require the advice of competent persons, such as lawyers, doctors and accountants. As well, a decision to commence a lawsuit must be informed by a competent legal assessment of its chances of success and the range of recoverable damages, and whether these factors justify the expenditure involved, including the cost to the plaintiff if the action should fail.⁶

Accepting that the arbitration process is akin to litigation, it follows that it would require a significant level of capacity to proceed to arbitration.

In addition to the references to schizophrenia in the Insurer’s Response, Lombard filed the psychological portion of a disability DAC dated July 13, 2004 which suggests that L.G. may suffer from a borderline personality disorder as well as a mild major depressive disorder, a post-traumatic stress disorder and features of a pain disorder.

The psychological report also registers L.G.’s comment that “Dr. Raffi (her treating psychologist) reportedly misinterpreted that she had been diagnosed with schizophrenia, which she states was not the case.” This would appear to be the only reference to schizophrenia in the document.

Even had the report contained such a diagnosis, it would not necessarily follow that L.G. currently lacks the appropriate level of capacity. It goes without saying that there is not necessarily a direct relation between diagnosis and capacity, since the effects of a mental illness may be mitigated by treatment, may be in remission, or may not ultimately affect the reasoning capacity of an individual.

In addition, it should be noted that the psychological examination, which did not directly address the issue of capacity, is dated 2004. A lot can change for better or worse in a period of some five years or more.

I note as well that as recently as 2006, L.G. engaged in another arbitration proceeding with the same insurer, with some degree of success. The arbitrator who presided at that matter did not express any concerns about L.G.’s capacity in his final decision.

Having observed L.G.’s efforts to advance her case, I have no difficulty in concluding that her interests might be better served if she was represented by experienced counsel who could, as a part of the advocacy process, assist her in evaluating the merits of her claim and make appropriate decisions.

The test for interfering with the autonomy of an individual, to the extent of requiring him or her to be represented by a litigation guardian if an insured wishes to pursue an accident benefit claim at arbitration is not however one of the “best interest” of the party in question. Rather it is whether there is evidence before the arbitrator that would justify the conclusion that L.G. is “not able to understand information that is relevant to making a decision in the management of his or her property, or is not able to appreciate the reasonably foreseeable consequences of a decision or lack of decision.”

In the end, I was provided with no evidence that could displace the presumption of capacity contained in section 2 of the SDA.

While it is clear that L.G. has difficulties understanding the procedure at arbitration, the technicalities of the laws of evidence and the law of insurance which frame this claim, and importantly the burden of proof that she is required to meet in order to be successful in this claim, it is not at all apparent that such shortcomings, are either due to any cognitive impairment or lack of capacity.

Difficulties in the hearing process may be caused by L.G.’s single-minded determination to proceed with what she considers her just claim, if necessary without the assistance of an advocate.

Such actual difficulties in the context of a complex adjudicative environment while a complication, and indeed a challenge for the party concerned, do not translate directly into a finding of lack of capacity to appreciate the consequences of any decisions she must make in this proceeding.

It has often been said that a capable person is free to make foolish, ill-advised, or merely wrong decisions provided that at the time of the decision that person had the necessary intellectual capacity to make the necessary analysis.

My ruling on capacity in this matter reflects more on the paucity of positive evidence on this issue capable of defeating the presumption of capacity, than it does on a direct finding on L.G.’s mental and cognitive status. A contemporary report by a qualified assessor addressing capacity in a litigation context would have been useful in making a more definitive decision, but none was available.

Notwithstanding Rule 10 of the DRPC, there is really no effective means provided in the Insurance Act, the Schedule or the Statutory Powers Procedure Act for an arbitrator to enquire into the capacity of a party. Nor do I have the power to order an assessment of capacity or to refer such an issue to the courts, or to the Public Guardian and Trustee. Rather I must depend on the parties to file any evidence and to make appropriate submissions.

While Lombard is not entirely satisfied as to L.G.’s capacity, L.G.believes that she has the necessary capacity to pursue this matter. Despite the hints of psychological issues in past documentation, the record of the arbitration does not demonstrate any current clear lack of capacity.

In the absence of cogent evidence sufficient to displace the presumption of capacity I have no authority to interfere. Consequently L.G. is entitled to continue with her arbitration without the appointment of a litigation guardian.

EXPENSES:

Given the nature of this decision, I make no order as to expenses.

January 28, 2010

John Wilson

Arbitrator

Date