Financial Services Commission des
Commission services financiers
of Ontario de l’Ontario
Neutral Citation: 2016 ONFSCDRS 330
FSCO A15-007635
BETWEEN:
TERESA LATOCH
Applicant
and
STATE FARM MUTUAL AUTOMOBILE
INSURANCE COMPANY
Insurer
DECISION ON A PRELIMINARY ISSUE
Before: Isabel Stramwasser
Heard: Written submissions were received on November 17, 2016.
Appearances: Loreto Scarola for Ms. Latoch
D’Arcy McGoey and Christopher McCormack for State Farm Mutual Automobile Insurance Company
Teresa Anne Martin for Western Assurance Company
Issues:
The Applicant, Teresa Latoch, was injured in a motor vehicle accident on July 9, 2014. She applied for statutory accident benefits from State Farm Mutual Automobile Insurance Company, payable under the Schedule.1 Disputes arose concerning her entitlement to benefits. The parties were unable to resolve their disputes through mediation and, in October 2015, Ms. Latoch applied for arbitration at the Financial Services Commission of Ontario under the Insurance Act.2
The preliminary issues are:
May Western Assurance Company be added as a party to this arbitration?
May State Farm be removed as a party to this arbitration?
Result:
Western Assurance is hereby added as a party to this arbitration.
State Farm is hereby removed as a party to this arbitration.
EVIDENCE AND ANALYSIS:
The Motion is brought on Consent
In August 2016, the parties called a resumption of pre-hearing discussion to address State Farm’s motion to “transfer” the arbitration proceedings to Western Assurance. The parties advised that there had been a priority dispute between insurers, which had resolved with Western Assurance assuming carriage of the claim file. Western Assurance was in attendance and consented to the motion. Ms. Latoch said that she also consented to the motion, except that she wished to maintain her claim for a special award against State Farm. Consequently, I sought the parties’ written submissions.
By written submission of November 2016, Ms. Latoch withdrew her claim for a special award against State Farm. She confirmed that Western Assurance had assumed carriage of her claims for accident benefits.
An Arbitrator has the Jurisdiction to Add and Remove Parties
I agree with State Farm that both the Statutory Powers and Procedures Act3 (SPPA) and the Dispute Resolution Practice Code4 give an arbitrator the authority to add and remove parties to an arbitration. Specifically, section 5.3(3) of the SPPA provides an arbitrator at a pre-hearing conference with the express jurisdiction to add parties:
A member who presides at a pre-hearing conference may make such orders as he or she considers necessary or advisable with respect to the conduct of the proceeding, including adding parties.
Although the SPPA does not make explicit mention of a member’s authority to remove parties, I find it is a reasonable corollary to the broad powers it does mention. I find that, in this case, removing parties from an arbitration is a power similar in nature and scope to adding parties.
While the Code does not specifically give an arbitrator authority to add or remove parties, section 33.1 grants broad powers to deal with procedural and preliminary issues:
33.1 One or more pre-hearing discussions may be held before an arbitrator who will attempt to resolve the dispute, and will assist the parties to prepare for the arbitration by:
(d) dealing with procedural and preliminary issues, and requests for interim relief or interim expenses;
(h) dealing with any other matters that the arbitrator considers appropriate.
Furthermore, section 1.1 of the Code provides that “[t]hese Rules will be broadly interpreted to produce the most just, quickest and least expensive resolution of the dispute.”
The Most Just, Quickest and Least Expensive Resolution
I agree with State Farm that the proposed order to resolve the motion is the most just, quickest and least expensive manner of proceeding. In the alternative, State Farm would seek, and likely obtain, a dismissal order on the ground that it is not the priority insurer. Ms. Latoch would then have to file a new Application for Arbitration, possibly at the License Appeal Tribunal, in circumstances where her claim could be statute-barred. As a result, Ms. Latoch and Western Assurance would incur additional costs, even if the filing fees for a new arbitration were waived.
Conclusion
For these reasons, I add Western Assurance as a party to this arbitration and remove State Farm.
EXPENSES:
I leave the expenses of this preliminary issue hearing in the discretion of the hearing arbitrator.
December 8, 2016
Isabel Stramwasser
Arbitrator
Date
Financial Services Commission des
Commission services financiers
of Ontario de l’Ontario
Neutral Citation: 2016 ONFSCDRS 330
FSCO A15-007635
BETWEEN:
TERESA LATOCH
Applicant
and
STATE FARM MUTUAL AUTOMOBILE
INSURANCE COMPANY
Insurer
ARBITRATION ORDER
Under section 282 of the Insurance Act, R.S.O. 1990 c. I.8 as it read immediately before being amended by Schedule 3 to the Fighting Fraud and Reducing Automobile Insurance Rates Act, 2014, and Regulation 664, as amended, it is ordered that:
Western Assurance Company is hereby added as a party to this arbitration.
State Farm Mutual Automobile Insurance Company is hereby removed as a party to this arbitration.
December 8, 2016
Isabel Stramwasser
Arbitrator
Date
Footnotes
- The Statutory Accident Benefits Schedule — Effective September 1, 2010, Ontario Regulation 34/10, as amended.
- R.S.O. 1990, c.I.8, as amended.
- R.S.O. 1990, c. S.22
- Fourth Edition - Updated January 2014