Neutral Citation: 2011 ONFSCDRS 47 FSCO A09-002953

BETWEEN:

MURUGIYAH RAJENDRAN Applicant

and

TD HOME AND AUTO INSURANCE COMPANY Insurer

DECISION ON A MOTION

Before: William Renahan Heard: May 20, 2011 by teleconference Appearances: Peter Quansah for Mr. Rajendran Alison Varga for TD Home and Auto Insurance Company

Issues:

The Applicant, Murugiyah Rajendran, was injured in a motor vehicle accident on August 18, 2008. He applied for and received statutory accident benefits from TD Home and Auto Insurance Company, payable under the Schedule.¹ TD Home terminated weekly caregiver, attendant care and housekeeping benefits after about six months. The parties were unable to resolve their disputes through mediation, and Mr. Rajendran applied for arbitration at the Financial Services Commission of Ontario under the Insurance Act, R.S.O. 1990, c.I.8, as amended. I conducted the arbitration hearing on April 11, 12, 13 and 14, 2011.

The issue on this motion is:

Should I recuse myself from the hearing of this arbitration and schedule a new hearing?

Result:

I will not recuse myself from this hearing.

EVIDENCE AND ANALYSIS:

Background:

I concluded this four day hearing on April 14, 2011. I finished writing the Reasons for Decision in mid-May. As is the practice in this office, an assistant formats the Reasons for Decision before the arbitrator signs the document. After I had written the Reasons, but before I had submitted them to the assistant for formatting, the case administrator for the file gave me several pieces of correspondence from the parties. I stopped reading the correspondence when it appeared that I was reading an offer of settlement. I asked another arbitrator to read the correspondence and that arbitrator advised me that it was an offer of settlement copied to the Commission prior to the hearing.

I convened a teleconference with the parties' representatives on May 20, 2011 and advised them that I read the words "settlement" and a dollar figure and that I believed that it was on the letterhead of the Applicant's counsel. I also advised them that I asked another arbitrator to read the correspondence to determine whether the parties were advising me that they had settled the case and that arbitrator advised me that it was an offer of settlement submitted before the hearing. I asked the parties for their submissions as to whether I should sign the Reasons for Decision and release it or recuse myself and schedule a new hearing.

Ms. Varga asked me to release the decision. Mr. Quansah asked me to recuse myself on the grounds of a reasonable apprehension of bias. During the discussion Ms. Varga advised me that her firm forwarded a copy of the settlement offer to the Commission prior to the hearing.

Analysis:

Parties are encouraged to resolve disputes on their own. Parties must feel secure that any settlement offer they make will not be used against them and will not be disclosed to the decision maker. A settlement offer may unconsciously affect the arbitrator's view of the case. For this reason, every pre-hearing letter sent to the parties following the pre-hearing of their case contains the following paragraph:

A party should not advise the hearing arbitrator of any offer to settle. If a party advises the hearing arbitrator of any offer to settle, the arbitrator may terminate the hearing with serious cost consequences to the party who communciated the existence of the offer to the arbitrator.

Allstate Insurance Company of Canada v. Sharma, 2009 CanLII 71001 (December 17, 2009) is a decision of the Divisional Court of the Superior Court of Justice of Ontario reviewing a decision of an arbitrator not to recuse himself on the basis of an apprehension of bias. The Court described the issue as:

. . . whether an informed person, viewing the matter realisticly and practically, and having thought the matter through, would conclude that it is more likely than not that the decision maker, whether consciously or unconsciously, would not decide fairly. Actual bias need not be established. The matter has to be determined on the probabilities based on the circumstances of the decision. The apprehension of bias must rest on serious grounds in light of the strong presumption of judicial impartiality. The inquiry is highly fact specific.

Factors I find significant in considering what an informed person would think are: I had finished writing the Reasons for Decision; I did not change my decision; it was not clear to me who had sent the correspondence; it was not clear to me whether the correpondence was advice that the parties had settled the case or whether it was an offer of settlement.

I cannot say whether reading the offer unconsciously confirmed that my decision was correct. Nor can I say whether an entirely different figure would unconsciously influence me to re-read or reconsider my decision. However, the test for reasonable apprehension of bias is not whether it was possible that I unconsciously decided unfairly, it is whether it is more likely than not that I decided unfairly. And, the test is not what I conclude, but what I think an informed person would conclude.

The one thing that an arbitrator brings to a proceeding that the parties cannot bring is impartiality. I am not satisfied that an informed person, viewing the matter realistically and practically, would likely conclude that my impartiality was compromised by reading the settlement offer or that I would not decide fairly.

I will therefore release my Reasons for Decision in the main hearing along with this decision.

EXPENSES:

The parties may make written submissions on the issue of entitlement to expenses of this motion with their submissions with respect to expenses of the arbitration proceeding

May 25, 2011

William Renahan Arbitrator

Financial Services Commission of Ontario