RECONSIDERATION DECISION
Before: Heather Trojek, Vice-Chair
File: 17-004636/AABS and 17-004701/AABS
Case Name: P.Y.J. and L.J. v. The Personal Insurance company
Written Submissions by:
For the Applicant: Ashu Ismail, Chagpar & Associates
For the Respondent: Vikram Kapur, Claims Legal Counsel
OVERVIEW
1This request for reconsideration was filed by the applicants. It arises from a preliminary motion decision where the Tribunal denied the applicants’ request to exclude counsel representing The Personal Insurance Company (The Personal) in proceedings before the Licence Appeal Tribunal (LAT) because he is also acting as counsel in another proceeding, a priority dispute, which creates a conflict of interest.
2The applicants also request a reconsideration of the Tribunal’s decision not to exclude the transcripts from the Examinations Under Oath (“EUOs”) that took place as part of the priority dispute.
3In their request for reconsideration, the applicants argue that the Tribunal made a significant error in law by failing to exclude counsel for The Personal and the EUO from the proceedings at LAT.
4The applicants claim the Tribunal made a number of significant errors in law and in doing so violated their right to procedural fairness. They argue that the Tribunal erred by failing to apply and consider the applicable legislation and case law with regards to both issues.
5Pursuant to s. 17(2) of the Adjudicative Tribunals Accountability, Governance and Appointments Act, 2009, S.O. 2009, c. 33, Sched. 5, I have been delegated responsibility to decide this matter in accordance with the applicable rules of the Tribunal.
RESULT
6For the reasons that follow, I grant the applicant’s request for reconsideration.
BACKGROUND
7The applicants are family members of the deceased (“Z.X.”), who died as a result of the accident. L.J. (the deceased’s daughter) and P.Y.J. (the deceased’s husband), applied to The Personal for death and funeral benefits. The Personal denied the benefits because it did not receive any financial documentation demonstrating L.J.’s and P.Y.J.’s dependency on Z.X.
8At the same time, pursuant to O. Reg. 283/95: Disputes Between Insurers, The Personal initiated an arbitration between itself and CAA Insurance (“CAA”) to determine which of the two insurers is in priority and therefore responsible to respond to the applicants’ applications for accident benefits (“the priority dispute”).
9As part of the priority dispute, and before applying to LAT, L.J. and P.Y.J. participated in EUOs in which they described their relationships with Z.X. Counsel for The Personal acted in both the priority dispute and the EUOs and is now also acting as counsel in the LAT dispute. He submitted the EUO transcripts as part of The Personal’s Case Conference Summary and Brief in the LAT dispute, without notifying the applicants.
SUBMISSIONS OF THE PARTIES
Exclusion of Counsel from LAT proceedings
10The applicants submit that the Tribunal erred in law by finding that a priority dispute does not create an adverse relationship between the applicants and The Personal. They submit that case law clearly supports that it would be procedurally unfair and prejudicial to the applicants to allow counsel who transferred confidential information obtained in the priority dispute to the accident benefits file to continue to appear before the LAT.
11In response, The Personal argues that the priority dispute does not create an adversarial relationship between The Personal and the applicants but is rather a dispute between The Personal and the CAA. The Personal submits that the applicants have failed to provide any authority for the legal test for conflict of interest with the LAT and the priority dispute context. The only case law submitted by the applicants was in the context of tort and accident benefit matters.
Exclusion of EUO transcripts
12The applicants argue that the Tribunal erred in law by not excluding the EUO from the priority dispute as evidence from the LAT proceeding because counsel for The Personal circumvented the notice requirements under s. 33 of the Schedule that deals with requests for EUO in accident benefits disputes.
13In response, The Personal argues that the Tribunal was correct in allowing the EUOs to be submitted into evidence because they are relevant to the issues before the LAT.
ANALYSIS
Counsel for The Personal should be excluded from the proceeding before the LAT
14I agree with the applicant and find that the Tribunal erred in its characterization of the priority dispute as a proceeding that does not create an adversarial relationship between The Personal and the applicants.
15In the accident benefits context, The Personal owes the applicants a duty of good faith arising out of its fiduciary obligations. As the applicants’ accident benefits insurer, The Personal is privy to relevant confidential health and other information of the applicants and has “an obligation to ensure that the information supplied by its insured is kept private.”1
16In the priority dispute, The Personal is seeking to prevent potential liability for paying any benefits to the applicants. This is in clear opposition to the duty of utmost good faith that The Personal owes to the applicants in the accident benefits context. In this way, the priority dispute creates a similar adversarial relationship between the insurer and the applicants as in a tort proceeding.
17I agree with the applicant that the Tribunal failed to properly interpret and apply the relevant law as stated in Dervisholli (Litigation guardian of) v. Cervenak, 2015 ONSC 2286 (“Dervisholli”). Although Dervisholli does not speak directly to the current situation in that it deals with counsel representing the insurer in both an accident benefits claim and a tort claim, I find that the rationale used in Dervisholli is applicable to the one that was before the LAT.
18In Dervisholli, the Court ruled that the failure of the insurer to separate its interests on the tort and accident benefits side by transferring confidential information resulted in a disqualifying conflict of interest.2 In situations where an insurer has the dual obligation to provide tort and statutory accident benefits coverage, it is required to set up a firewall that prevents the transfer of any confidential information between the two files or dialogue between the adjusters and counsel handling them, unless specifically consented to by the insured.3
19Because the Tribunal failed to appreciate the adversarial connection between the accident benefits and the priority dispute proceedings, it failed to consider the principles outlined in Dervisholli, which are binding.
20The Tribunal, for instance, did not consider that The Personal failed to ensure that the applicants’ confidential information, namely the EUO taken in the priority dispute, was kept separate from their accident benefits files.
21I find that the Tribunal erred in distinguishing Dervisholli from the case before it and had this error not been made, the Tribunal would likely have reached a different decision with respect to the removal of The Personal’s counsel as a representative in the proceedings before it.
The Applicants’ EUO transcripts from the priority dispute should be excluded from the proceeding before the LAT
22I agree with the applicants’ submission that allowing the EUO transcripts into evidence enables The Personal to circumvent the statutory requirements under s. 33 of the Schedule. Section 33 falls within Part VIII of the Schedule which provides procedures by which both the applicant and the insurer must comply when the applicant is claiming benefits.
23In deciding the issue, the Tribunal focused on the relevancy of the transcripts and the fact that the applicants have not provided any evidence of prejudice. Pursuant to section 15(1) of the Statutory Powers and Procedures Act, R.S.O. 1990, c. S.22 (“the SPPA”), adjudicative tribunals are given a broad discretion to admit into evidence any oral testimony, document or other thing relevant to the subject-matter of the proceeding. In this respect, the relevance of the evidence in question plays a significant role in the adjudicator’s decision to admit or deny a certain thing into evidence.
24The relevancy of the evidence in question cannot, however, override clear, mandatory legislative provisions. Section 33 is one such provisions.
25In s. 33, the Schedule outlines specific steps for the insurer to follow when requesting that the applicant provide information. When compelling an applicant to attend an EUO, the insurer, among other things, must provide the applicant with notice. Specifically, s. 33(4) requires that the insurer provide reasonable advance notice of the reason or reasons for the examination and that the scope of the examination will be limited to matters that are relevant to the applicant’s entitlement to benefits.
26The notice requirements demonstrate the legislature’s intention to balance the applicant’s right to a fair and transparent process with the insurer’s right to accurately assess the applicant’s entitlement to benefits.
27I find that the Tribunal erred in failing to consider the mandatory requirements of the Schedule as they pertain to the EUOs. Despite the relevancy of the transcripts, the applicants would suffer great prejudice if The Personal were permitted to rely on transcripts of EUOs that were not part of the accident benefits process and did not comply with the Schedule. The requirements of the Schedule and procedural fairness dictate the exclusion of the EUO transcripts as evidence in the proceeding in this case.
CONCLUSION
28I find that the Tribunal made significant errors such that it would likely have reached a different decision had the errors not been made. Counsel for The Personal should be removed as counsel from the accident benefits dispute and the EUO transcripts should not be admitted into evidence.
29For the above reasons, I grant the applicants request reconsideration.
30The Tribunal will contact the parties within 30 days of this decision being issued to schedule and a date for a new case conference.
Heather Trojek Vice-Chair Safety, Licensing Appeals and Standards Tribunals Ontario
Released: November 8, 2018