Dispute Resolution Services

Services de règlement des différends

Neutral Citation: 2019 ONFSCDRS 44

A08-001142 and A13-013397

BETWEEN:

SUBASHINI YOGESVARAN

Applicant

and

STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY

Insurer

Before: Arbitrator Isabel Stramwasser

Heard: By written submissions received November 8, 2019

Appearances: David Wilson for Ms. Subashini Yogesvaran

Jonathan Schrieder for State Farm Mutual Automobile Insurance Company

ISSUES:

Procedural background

The Applicant, Ms. Subashini Yogesvaran, was injured in a motor vehicle accident on May 13, 2007. She applied for, and received, statutory accident benefits from State Farm Mutual Automobile Insurance Company, pursuant to the Schedule.¹

Ms. Yogesvaran sought additional benefits from State Farm, which State Farm denied. The parties were unable to resolve their dispute through mediation. Consequently, Ms. Yogesvaran applied for arbitration at the Financial Services Commission of Ontario under the Insurance Act.²

This matter was heard by Arbitrator Alan Mervin, but Arbitrator Mervin passed away in July 2019 before rendering a decision.

The matter was reassigned to me on August 6, 2019. On August 9, 2019, I advised the parties that the matter would proceed, as agreed, by way of the transcripts of the hearing before Arbitrator Mervin. On August 15, 2019, State Farm advised that it was considering whether to object to proceeding on the record under Rule 71.3 of the Dispute Resolution Practice Code.³ On August 19, 2019, I asked State Farm to advise us promptly whether it would make this objection and, if so, why. That day, State Farm provided reasons for its objection.

Consequently, on August 20, 2019, I invited the parties to provide written submissions by September 10, 2019 on the mode of proceeding, citing facts specific to the arbitration heard by Arbitrator Mervin and the relevant law under Rule 71.3.

On August 21, 2019, I sought further submissions on the following:

Does State Farm, which is seeking re-hearing, agree to use transcripts for the testimony of expert witnesses?
Can both parties provide estimates for the number of days for hearing and their available dates for same as well as submissions on the fact that we are facing time constraints? (Further to the June 2019 amendments to Regulation 664,⁴ a final determination must be made by June 30, 2020 or the file will be extinguished and Dispute Resolution Services expects there to be no hearings after December 31, 2019).

I added that the parties had until September 20, 2019 to respond to each other’s submissions and until September 30, 2019 for any reply.

Consequently, the parties made the following submissions:

September 6, 2019 — Applicant submissions
September 10, 2019 — Insurer’s submissions
September 19, 2019 — Applicant’s response
September 20, 2019 — Insurer’s response
September 26, 2019 — Applicant’s reply

On October 15, 2019, I wrote to the parties advising that I had not received any reply submissions from State Farm regarding Ms. Yogesvaran’s submissions of September 20, 2019 and asked if this was an oversight. State Farm replied that day that it was no oversight and that its submissions were complete.

On November 1, 2019, I gave the parties until November 8, 2019 to make submissions on the appeal decision of Director’s Delegate David Evans dated June 14, 2019 in State Farm Mutual Automobile Insurance Company and A.B.⁵ I received submissions from both parties on November 8, 2019.

Jurisdiction

Under Rule 71, it is the Director’s responsibility to decide on the mode of hearing where an Arbitrator is incapable of completing a hearing. Subsection 71.2 sets out that the Director may notify the parties of its intention to provide a transcript to the new adjudicator “where the Director considers it appropriate.” Rule 71 reads:

71.1 If an adjudicator becomes unable, for any reason, to complete a hearing or issue a decision, the matter may be reheard by a new adjudicator appointed by the Director.

71.2 Where a transcript of the incomplete hearing is available, the Director may notify the parties of the Director's intention to provide a copy of the transcript to the new adjudicator, with a copy to the parties, at the Dispute Resolution Group's expense; where the Director considers it appropriate, or where the parties agree and the Director approves.

71.3 Where a party objects to the use of the transcript by the new adjudicator, the party must promptly notify the Director and all other parties in writing, setting out the reasons for the objection.

On October 24, 2019, the Director delegated this discretion to me, pursuant to s.6(3) of the Insurance Act as it read immediately before being amended by Schedule 3 of the Fighting Fraud and Reducing Automobile Insurance Rates Act, 2014 and Regulation 664, R.R.O. 1990, as amended.

Accordingly, I must decide the following issue:

Will the arbitration of this matter proceed on the record or by way of hearing de novo or by some combination of the two?

RESULT:

The arbitration of this matter will proceed on the record.

REASONS

The following facts were not in dispute.

Ms. Yogesvaran first claimed income replacement benefits in 2008. At her hearing in 2009, she raised a preliminary issue about State Farm’s improper termination of income replacement benefits resulting in an order that State Farm resume those benefits. That order was essentially upheld on appeal.

The hearing was scheduled to resume in 2011 but did not proceed because State Farm had applied to vary the appeal order. As well, State Farm requested that Ms. Yogesvaran attend further medical assessments. An arbitrator dismissed that request for more medical information.

The matter went to hearing before Arbitrator Miller in November 2012. However, after four days of hearing, the parties required more time. Arbitrator Miller retired before completing the arbitration. It was decided that the matter be heard de novo.

After a period of delay owing to interim motions and the schedules of counsel, the matter proceeded before Arbitrator Mervin. By that time, Ms. Yogesvaran had added new issues, including a determination that she was catastrophically impaired. The oral hearing before Arbitrator Mervin took 16 days, stretching from July 2017 to February 2018. Following the oral hearing, the parties made written submissions closing in September 2018. Arbitrator Mervin passed away in summer 2019 before rendering a decision.

There is limited availability of counsel to attend a hearing before December 31, 2019 and into 2020. In September 2019, counsel had nine available hearing days in common.

If the matter is not completed at Dispute Resolution Services by June 30, 2020, Ms. Yogesvaran will have to start the process from the beginning and reapply for arbitration at the Licence Appeal Tribunal.

Positions of the parties

The case for Ms. Yogesvaran is that there is insufficient time to conduct a full hearing at Dispute Resolution Services and it would be unfair to require her to start a new application at the Licence Appeal Tribunal. A decision in her matter has been delayed for years. She has already had 20 days of in-person hearing and can ill afford further legal expenses.

The case for State Farm is that the applicant’s credibility is at issue and it is “only” through an oral hearing that the arbitrator can properly assess credibility and evaluate the documentary evidence in light of the evidence as a whole. A hearing on the transcripts would “result in substantial procedural unfairness to the insurer.” This unfairness cannot be rectified, unlike any financial cost to the applicant, which is at least partially recoverable.

Analysis

The appeal decision of Director’s Delegate David Evans in State Farm Mutual Automobile Insurance Company and A.B.⁶ provides that the decision about the mode of hearing is in the Director’s discretion and that it is not incumbent on a Director’s Delegate to look behind that discretion. I read this to mean that the Director (or an Arbitrator delegated that discretion) need not provide reasons for a decision on the mode of proceeding. Nevertheless, I provide those reasons below.

The overriding mandate of Dispute Resolution Services is to resolve disputes fairly, quickly and cost-efficiently. Rule 1.1 of the Code provides the following: “These Rules will be broadly interpreted to produce the most just, quickest and least expensive resolution of the dispute.”

There is no dispute that this matter has already been heard twice. First, in a four-day hearing and then in a 16-day hearing with subsequent written submissions.

The statement of Director’s Delegate Evans in A.B. that “I fail to see how bringing back these witnesses would make any difference” also applies here. As in A.B., the transcript in this case is a satisfactory substitute for recalling witnesses.

Given that this arbitration has already been heard twice, there is a transcript of the second hearing available, the application for arbitration was initially filed 11 years ago and Dispute Resolution Services is closing its doors in June 2020, I conclude that the “most just, quickest and least expensive resolution of the dispute” is to hear the matter on the record.

I acknowledge that Arbitrator Lee, on this same file,⁷ allowed a hearing de novo. However, I distinguish Arbitrator Lee’s decision on the basis that it was made five and a half years ago without the context of ongoing delay and 16 additional hearing days.

I also distinguish the criminal law case cited by the insurer.⁸ Administrative law is distinct from criminal law. Although it is a principle of natural justice that the person who hears the case must decide it, that principle does not always require a full oral hearing. It is trite administrative law that hearings on the record satisfy this principle.

In any event, the issue before me is not whether the parties are entitled to a full oral hearing with live testimony. The parties have already had two oral hearings with live testimony and they have had opportunities for cross-examination.

Rather, the issue I must decide is whether the parties are entitled to a third such hearing and whether the transcripts of a live hearing satisfy the duty of fairness to ensure the parties have a reasonable opportunity to be heard.

For the foregoing reasons, I exercise the discretion delegated to me by the Director not to hear this same matter a third time, but to hear it with the transcripts of the hearing before Arbitrator Mervin.

I consequently decide this issue in favour of Ms. Yogesvaran.

CONCLUSION:

The overall result of my determination is that the matter shall proceed on the record.

November 29, 2019

Isabel Stramwasser

Arbitrator

Date