Financial Services Commission des

Commission services financiers

of Ontario de l’Ontario

Neutral Citation: 2011 ONFSCDRS 29

FSCO A10-000413

BETWEEN:

PETER LOEWEN

Applicant

and

ECONOMICAL MUTUAL INSURANCE COMPANY

Insurer

Before: Arbitrator Suesan Alves

Heard: By written submissions received on March 11, 2011.

Appearances: Jerry F. O'Brien for Mr. Loewen

Gregory P. Heckel for Economical Mutual Insurance Company

Issues:

The parties seek a consent dismissal Order in relation to this arbitration. Rule 69.4 of the Dispute Resolution Practice Code — Fourth Edition, Updated October 2003 (the “Code”), requires a party who requests such an Order to file a signed Settlement Disclosure Notice, amongst other documents.

Counsel advised the Commission that this matter did not involve a full and final settlement and that no Settlement Disclosure Notice had been prepared. I have treated the correspondence between counsel and the Commission as a motion to vary the requirements of Rule 69.4 of the Code.

The issue on this motion is:

Should the requirements of Rule 69.4 of the Code be varied in the circumstances of this case?

Result:

The requirements of Rule 69.4 of the Code should be varied in the circumstances of this case.

EVIDENCE AND ANALYSIS:

The Applicant applied for arbitration claiming weekly benefits, interest, expenses and a special award. The Insurer claimed its expenses. The parties agreed that the Insurer would reinstate the Applicant’s weekly benefits and resolved their dispute. The parties then requested a consent dismissal order pursuant to Rule 69.4 of the Dispute Resolution Practice Code. That Rule states:

Either party may request an adjudicator to issue an order dismissing the proceeding on consent of the parties, upon filing:

(a) a consent, signed by the parties or their representatives, stating that they consent to the dismissal of the arbitration and confirming that no party to the proceeding is under a disability;

(b) a signed Settlement Disclosure Notice;

(c) the written agreement of the parties that the consent order is final and shall not be subject to appeal, variation/revocation, or judicial review; and

(d) three copies of the consent order, approved as to form and content by the parties, for delivery by the Dispute Resolution Group.

The parties filed a consent, the agreement and copies of the consent order prescribed by paragraphs (a) (c) and (d) of Rule 69.4, but not the signed Settlement Disclosure Notice as required by paragraph (b).

When the Commission requested the signed Settlement Disclosure Notice, counsel wrote to advise that there was no such document because the Insurer reinstated the weekly benefit. I have treated this correspondence as a motion to vary the requirements of Rule 69.4 of the Code.

Rule 81 of the Code provides an arbitrator with the authority to determine that any Rule does not apply in respect of a proceeding. In this case I have determined that Rule 69.4 of the Code should be varied so that Rule 69.4(b) does not apply in the circumstances of this case, for the following reasons.

Rule 81.1 of the Code states:

Subject to the requirements of the Insurance Act and the Statutory Powers Procedure Act, the adjudicator may on such terms as he or she considers just:

(a) set aside any time limit set out in these Rules for doing any act, serving any notice, filing any document or holding any hearing.

(b) decide that any Rule does not apply in respect of a proceeding.

Section 9.1 and 9.2 of O. Reg. 664/1990, (“the Settlement Regulation”) is set out in Appendix A. Section 9.1 defines “settlement” as “an agreement between an insurer and an insured person that finally disposes of a claim or dispute in respect of the insured person’s entitlement to one or more benefits under the Statutory Accident Benefits Schedule.”

In this case there was an agreement between the insurer and the insured person with respect to the weekly benefits dispute which the Applicant sought to have arbitrated. The agreement reinstating his benefits is not finite and I find it is not a resolution which finally disposes of his entitlement to weekly benefits under the Statutory Accident Benefits Schedule within the meaning of the Settlement Regulation.

Under that Regulation, an insurer is obliged to give the insured person a written disclosure notice which is signed by the insurer. The Notice is required to be in a form approved by the Superintendent and is required to contain information as specified in the Regulation.

By referring to the circumstances of this settlement in the context of the requirements of the Settlement Disclosure Notice, it will be evident that several key features of a settlement within the meaning of the Settlement Regulation are not present in this case. This also illustrates the difficulty which the parties would experience in signing the Notice.

For example, the Settlement Disclosure Notice obliges an insurer to set out the amount of the insurer’s offer to settle in relation to “all past and future non-earner benefits.” There is no such offer in this case.

With respect to the Applicant, the Settlement Disclosure Notice states:

NOTICE AND CAUTION

Your insurer is required to give you this SETTLEMENT DISCLOSURE NOTICE if you have both agreed on a cash settlement that will permanently end your entitlement to one or more accident benefits. ¹

I find that the settlement in this case does not permanently end Mr. Loewen’s entitlement to weekly benefits; instead it provides for ongoing entitlement to those benefits.

The Settlement Disclosure Notice goes on to state:

THERE ARE A NUMBER OF CONSEQUENCES OF THIS SETTLEMENT IF YOU SIGN THIS NOTICE AND A RELEASE:

You are finally and permanently settling your claim for the benefits specified. You are forever giving up the right to claim such benefits in the future, even if your medical problems get worse.
You are permanently giving up your right under the Insurance Act to mediate, litigate, arbitrate, appeal, apply to vary, or to proceed to judicial review by a court, concerning the benefits which are the subject of the settlement.

While the parties have settled the dispute which was brought to arbitration, I find that each party retains rights with respect to Mr. Loewen’s ongoing claim for weekly benefits rather than giving up rights.

The agreement to reinstate weekly benefits cannot be said to be final as it incorporates an element of uncertainty with respect to the time period over which Mr. Loewen will be paid weekly benefits. This also means that the total amount Economical will pay Mr. Loewen for weekly benefits is uncertain.

Economical continues to pay Mr. Loewen weekly benefits. However, if there were a significant improvement in his medical condition, such that he no longer met the test for entitlement to those benefits, it would be open to Economical, on fresh medical evidence, to terminate his weekly benefits. Mr. Loewen could, in those circumstances, again apply for mediation and go to arbitration or court, in relation that fresh dispute concerning his entitlement to weekly benefits. Thus, he has not permanently given up his rights under the Insurance Act to mediate, litigate or arbitrate future disputes with respect to weekly benefits.

For these reasons, I conclude that the parties’ settlement is not a settlement within the meaning of the Settlement Regulation. I find that it would not be appropriate to require the parties to provide a signed Settlement Disclosure Notice in these circumstances. I therefore vary the requirement of the Rule 69.4 of the Code so that the parties need not provide that document in order to obtain a consent dismissal order. Accordingly, I have dismissed the arbitration on consent of the parties, in the absence of a signed Settlement Disclosure Notice.

March 25, 2011

Suesan Alves, Arbitrator

Date