What You Need to Know to be Comfortable at FSCO

What You Need to Know to be Comfortable at FSCO The Pre-Hearing Process Presented by Lawrence Blackman and John Wilson, Arbitrators
Back to Basics
To litigate or to arbitrate? That is the question. There are different options following the
mandatory mediation of first-party accident claims: litigation, private arbitration or statutory
arbitration (under the Insurance Act). All are about the resolution of disputes involving
entitlement to and the quantum of accident benefits.
Each option has its own attributes. Private arbitration may be timely, but also potentially
expensive, both parties often sharing the cost of the arbitrator and the facilities used.
Litigation is often lengthy and expensive, although the cost grid is potentially more generous for
a successful party than at alternatives such as FSCO.
FSCO offers expertise. It offers a significant range of dispute resolution options and
opportunities. It offers flexibility. Being a tribunal, it does not have the formality of court.
Being an open forum, its decisions are available to the public (www.fsco.gov.on.ca; user name:
“decisions”, password: “subscription”). A searchable database of FSCO decisions is also found
in Quicklaw.
The vast majority of cases, whether in the court system or in the tribunal setting, settle without
an adjudicative decision being rendered on the substantive issues in dispute. FSCO’s statistics
show that less than five percent of its cases close by way of a decision and the percentage is
decreasing, hence, the pre-eminent importance of the pre-hearing process in dispute resolution.
The purpose of this paper is to provide you with information and ideas of how to employ
FSCO’s pre-hearing process to productively facilitate the resolution of your dispute:
−
as early as possible;
−
as inexpensively (in terms of time, aggravation and legal expense) to your
client as possible; and,
−
as fairly and justly as possible.
This is the venerated triad of any dispute resolution process. What FSCO offers follows.
Statutory Arbitration under the Insurance Act
Subsection 281(1) of the Insurance Act provides that only an insured may refer issues in dispute
to an arbitrator.
Procedures at arbitration are governed by the Dispute Resolution Practice Code (the “DRPC”)1,
a series of rules issued under both the Insurance Act and the basic piece of legislation of any
administrative tribunal, the Statutory Powers Procedure Act (the “SPPA”).2
An arbitrator may, pursuant to Rule 1.2 of the DRPC, guide the parties as to procedure where an
existing rule does not address a particular situation. Such directions are mandated to be by
analogy to other rules in the DRPC. In practice, however, the model is sometimes the Rules of
Civil Procedure, in conjunction with the DRPC, the SPPA and principles of natural justice.
Rule 81 of the DRPC gives arbitrators the specific power to suspend the application of a rule or
to alter its application to the proceeding before them, on terms as they consider just.
Case Management if necessary . . .
The majority of cases at FSCO are relatively straightforward and can be handled within the basic
structures and timelines set out in the DRPC.
1
Despite the title, these rules are neither a complete code of practice at FSCO, nor are they conclusive.
As noted below, arbitrators have considerable discretion to vary or suspend the DRPC, as appropriate.
2
The SPPA brings with it a host of administrative law concepts such as fairness, notice, audi alterem
partem and jurisdiction that are indispensable in understanding practice and procedure at FSCO, as well as filling
lacunae in the DRPC.
2
A few, more complex cases, in order to fairly and, ultimately, more efficiently and cost
effectively resolve the dispute, require greater access to the motion procedures, case conferences
and case management potentially available in the pre-hearing process.
Recent practice has been that interlocutory motions are heard by the pre-hearing arbitrator
specifically to discourage the over-litigation of the process and avoid an inconsistent approach to
the same case.
Getting the Process going – “Pleadings”
The DRPC is the necessary guide for every representative who appears at FSCO. The DRPC,
especially in the context of pre-hearings, provides basic practice and is the starting point for any
necessary procedural refinement. It also contains a summary of time frames and a road map to
the arbitration process.
The process starts with FSCO’s form of pleadings, the Application for Arbitration, the Response
by Insurer and (where helpful) the Reply by the Applicant. Besides defining and narrowing the
issues in dispute, they also advance documentary discovery.
They also serve as a form of limited (unsworn) affidavit of documents in the context of our more
streamlined process. The parties advise of and request “key” documents, rather than providing a
shopping list of anything that seems remotely relevant.3
Pleadings must be complete enough to give the opposing party fair notice of the case to be met
and allow him or her to respond.
The Application should give specific details of the precise monetary amounts and the duration
benefits are being claimed. As issues may also be raised by an insurer, the Response must
provide “a description of any additional issues which the insurer wishes to have arbitrated,
3
Although there is no formal provision for Affidavits of Documents in arbitration, arbitrators have, in
extraordinary circumstances, ordered their creation where a sworn statement is necessary.
3
provided the issues were submitted to mediation and failed.”4 A Response should include
reference to both substantive and procedural defences. If a time-limits defence, for example, is
not pleaded early on in the process there may be problems in relying on it at the hearing itself.
The Pre-hearing Discussion
The pre-hearing discussion offers parties an opportunity to address before an arbitrator any
procedural issues. Procedural orders or agreements are confirmed by the arbitrator in an ensuing
pre-hearing letter. As pre-hearings also provide a further opportunity for parties to attempt to
settle any or all of the issues in dispute, with the assistance of the pre-hearing arbitrator, there is a
general rule that the pre-hearing arbitrator will not preside at the substantive issue hearing in that
proceeding.
The Practice Notes included in the DRPC provide general guidance as to the parties’ obligations
during the pre-hearing process, including the need for early and continuing exchange of
necessary and relevant documentation. The pre-hearing process does not include formal
examinations for discovery, so efficient documentary discovery is vital.5
FSCO Arbitrators may play an active role not only in moving matters along, but in shaping the
hearing process as well. Arbitration is a simplified process, but one that should not run
roughshod over justice.
Setting Dates and Venue
Generally a pre-hearing is set in-person at FSCO’s offices in Toronto if the applicant resides in
the Greater Toronto Area.
Rule 33.2 of the DRPC, however, provides that an arbitrator has the discretion to decide the
manner and location of the pre-hearing. This can include ordering a face-to-face pre-hearing in
a location other than Toronto, where the balance of convenience favours such an approach.
4
Rule 27 of the DRPC.
5
The pre-hearing does however allow for certain informal alternatives to discovery, as discussed later.
4
Written requests by a representative to group several pre-hearing discussions consecutively at the
same location over the course of a few days will likely be more sympathetically received by
FSCO.
The DRPC mandates that FSCO shall have pre-hearing dates available within six to eight weeks
of the registration of a completed Application for Arbitration. Hearing dates are to be available
within four to six months of the conclusion of the pre-hearing discussion. With the recent
addition of new arbitrators to our roster, FSCO has the capacity to provide for expeditious
proceedings.
Case administrators consult the parties to book convenient pre-hearing dates. Parties are not
simply sent notice of a unilaterally set meeting time, but are invited to participate in the selection
of dates. However, the setting of timely dates on consent may at times become problematic due
to the unavailability of counsel.
When setting dates, if the other side is not available within a reasonable period of time, you may
request that a timely date be set by FSCO in compliance with its own guidelines.
Parties under a Disability
Although such situations are infrequent, counsel, as well as arbitrators, must be alive throughout
the process to the issue of the capacity of applicants to undertake arbitration. Like Rule 7 of the
Rules of Civil Procedure,6 Rule 10 of the DRPC deals with the incapacity of a party, whether due
to minority or cognitive disability.
As with any litigation involving potentially incapable parties, prudent counsel should address the
issue directly and arrange to have a litigation guardian appointed where that is appropriate. If
necessary, an arbitrator may also raise the issue and order a hearing on the issue of capacity.
Failure to deal with such issues promptly can result in serious delay and cost consequences.
6
Although Rule 10 of the DRPC provides some guidance, prudent counsel will also consider the provisions
of the Rules of Civil Procedure, the Substitute Decisions Act, and where minors are involved, subsection 51(1) of the
Children’s Law Reform Act, R.S.O. 1990, c.12. Insurers may also pay settlement funds into court pursuant to section
214 of the Insurance Act, if there is no-one authorized to receive the money.
5
Severing Issues / Combining Applications / Adding parties
Pursuant to subsection 5.3(3) of the SPPA, the pre-hearing arbitrator also has the power to make
“such orders as he or she considers necessary or advisable with respect to the conduct of the
proceeding, including adding parties.”
At the pre-hearing, an arbitrator may, pursuant to Rule 31 of the DRPC, sever an arbitration into
“distinct issues to be heard separately.” Rule 30 allows applications to be combined where there
are common issues of law, fact or policy, or where the aims of Rule 1 (fairness, speed and costefficiency) will best be met. Parties should be prepared to address the form, structure and
timelines of the hearing process at the pre-hearing discussion.
The main purposes of the pre-hearing discussion, which are, in turn, the main purposes of the
entire pre-hearing process, are as follows:
The Importance of the Pre-Hearing in Facilitating Dispute Resolution
1.
clarifying the issues and the manner in which they will be determined
−
“no surprises”
The first step in endeavouring to resolve any dispute to is know precisely what is in dispute. It is
the pre-hearing tradition, therefore, to “shake the issue tree;” to try to ensure that there are no
lurking issues that suddenly descend on the parties at the start of the hearing. There should be
“no surprises” in the arbitration process.
−
is there jurisdiction?
The arbitrator’s jurisdiction to hear a substantive issue is dependent on the issues having been
mediated. FSCO, in considering its mandate to provide “a relatively speedy and cost efficient
alternative to the court process,” has declined to take an overly restrictive technical approach to
6
this.7 Rather, it has taken a pragmatic approach that once a matter is in arbitration, those issues
which flow naturally and consequentially from the issues already mediated may also be brought
into the existing proceeding.8
Hence, every single medication expense does not have to be separately mediated. Further,
Navage and Pilot Insurance Company (FSCO A95-000168, June 17, 2005) held that, subject to
concerns of fairness regarding possible late notice, justice, expeditiousness and cost effectiveness
favoured adding an IRB quantum issue to an existing IRB entitlement proceeding, without
requiring the former to first be mediated.
In the specific context of special awards claimed under subsection 282(10) of the Insurance Act,
Royal Insurance Company of Canada and Clark (OIC P97-0008, September 26, 1997) held that
such an issue is always before an arbitrator, subject to the general common law principles of
natural justice and fairness. Hence, the pre-trial discussion is the obvious opportunity to confirm
whether such a claim is being advanced, and if so, have timelines set for particulars to be
provided as to the basis of the claim.
−
adding new issues
As provided in subsection 282(3) of the Insurance Act 9 (notwithstanding the applicant having
the choice of forum), the hearing arbitrator is to determine all issues in dispute whether raised by
the insured or the insurer.
The arbitrator, in defining the issues, must also be satisfied that the issues for determination are
genuine,10 that such issues are not raised late merely for tactical purposes, and that there are no
overriding reasons to refuse to add the issue.
7
There are often strong practical and functional reasons for hearing all potential issues together. There will
be a lesser risk of duplication of necessary evidence, a speedier process, and a lower risk of inconsistent decisions in
different forums if all the issues are heard together.
8
9
DeCicco and State Farm Mutual Automobile Insurance Company (OIC P-000277, February 21, 1992),
Nand and State Farm Mutual Automobile Insurance Company (OIC A96-001835, July 28, 1997).
10
Carby and Co-operators General Insurance Company (OIC A-950220, January 12, 1996).
7
Most issues are added on consent. Permission to add issues where there is jurisdiction is usually
granted, except where the conduct of a party in bringing forward the new issue raises
fundamental questions of notice, fairness, undue prejudice or unjustifiable, inexcusable or
unreasonable delay.11
−
companion court actions
Where there is a companion civil action advanced by the insured, FSCO12 follows a pragmatic
balancing approach.13 In determining whether the arbitration proceeding should be stayed,
the arbitrator looks at which action began first, which party has the chief burden of proof and
which proceeding is the most comprehensive.
−
clarification of issues
A crucial component of clarifying the issues in dispute is, of course, defining the particulars of
each claim with as much specificity as possible, including the precise amounts in dispute, the
period of the claim, the specific provision(s) pursuant to which the claim is advanced and any
other relevant and helpful details.
−
getting agreements
In order to reduce the hearing time of the actual arbitration, it is equally important in the prehearing discussion to confirm what, if anything, is agreed.14
If there is agreement, or the potential for agreement, the pre-hearing arbitrator can encourage,
and the hearing arbitrator will appreciate, agreed statements of fact to avoid the need to hear
11
Kennedy and Traders General Insurance Company (FSCO A02–001715 February 3, 2004).
12
Reid and Royal & SunAlliance Insurance Company of Canada (FSCO A00-00014, August 1, 2000).
13
Citadel General Assurance Company v. Gogna [1992] O.J. 1996.
14
If IRBs are disputed, do the parties agree on quantum? Is there a period of agreed entitlement? Is it
agreed that the person was employed or self-employed? Is there agreement as to the type of employment or the
essential tasks of such employment?
8
unnecessary oral evidence. If the injury, disability, the existence of an accident, or any other
salient fact is not disputed, that fact should be set out in an agreed statement of fact.
2.
eliminating barriers to settlement
−
lack of preparation and failure to exchange information
A principal barrier to any settlement at any stage of a proceeding is lack of proper preparation
and the failure to exchange information. The DRPC presumes that the parties will have
addressed document exchange prior to the pre-hearing discussion. The pre-hearing is meant to
address disputed requests, not to be the first time documents requests are made.
The parties are entitled to expect that the other side is knowledgeable about the case and has,
or has made reasonable efforts to obtain the relevant, necessary documents for the proceeding.
Rule 34 sets out some of the remedies available should a party fail to comply with time
requirements set by the Rules (or with an order or agreement), including paying legal expenses,
an adverse inference being drawn or a document being excluded.
Historically, there has been a tendency of parties in litigation to withhold information until the
eve of the hearing, or later, if possible. As Carthy J.A. commented, “[i]t is an instinctive reflex of
any litigation counsel to collect evidence and to pounce at the most propitious moment. That’s
the fun in litigation.”15
The Ontario Court of Appeal also noted that “the ground rules are changing in favour of early
discovery.” Early dispute resolution is impeded by bluffing and is facilitated by the parties
showing their cards as early as possible. Hence, the requirement that parties deal with
productions prior to the pre-hearing and Rule 40 of the DRPC which requires disclosure of all
surveillance if a party is relying on any surveillance or similar investigative information.16
15
General Accident Assurance Co. v. Chrusz et al., [1999] 45 O.R. (3d) 321.
16
All such information is to be produced, at a minimum, thirty days before the hearing. An arbitrator may
also alter the timelines provided in Rule 40 pursuant to Rule 81, and order earlier production of surveillance. In that
sense, Rule 40 is a minimum requirement for disclosure.
9
This Rule complements section 8 of the SPPA which entitles a party to be furnished prior to the
hearing with reasonable information of any allegations respecting its good character, propriety of
conduct or competence.
“No surprises” also makes sense in the context of settlement. If you really have a “smoking gun,”
disclosure on a timely basis should have a favourable effect on any negotiations.17
Parties are free to request an order at the pre-hearing that the other party advise of the existence
of surveillance and whether it is going to rely on it. An arbitrator may then set deadlines for its
disclosure.
−
lack of binding authority
It is also crucial to have one’s principals fully participate in the pre-hearing discussion. The
principals are those who have full binding authority. As stated in Practice Note 3 of the DRPC,
full authority means never having to pick up the telephone to get instructions. Binding authority
does not exist where one merely has authority to say ‘no’.18
The non-attendance of one’s principal can be an unfair bargaining tactic. Since settlement of a
case is voluntary, parties should not be coerced or forced into a settlement. Both the DRPC and
the Insurance Act provide that parties should be present and should be in a position to have a
meaningful and fulsome discussion and be able to respond during the discussion to any new
developments or information.
Precluding direct participation through intentional absence may result in cost consequences,19
as well as inhibiting settlement.
17
It is the view of some adjudicators that generally solid surveillance that is persuasive will be produced
early in order to resolve the file; it is poor surveillance that is held back until the last possible moment.
18
As stated in Tounian and Citadel General Assurance Company (FSCO A01-000076, September 26,
2001). See also Premananda and RBC General Insurance Company (FSCO A05-001236, February 21, 2006).
19
The rules include as one criterion in awarding expenses, the conduct of a party or a party’s representative
which tends to prolong, obstruct or hinder any proceeding.
10
The involvement of one’s principal in the pre-hearing discussion facilitates resolution in
numerous ways. It serves an educational purpose, acquainting parties with the nature of the
arbitration process. Further, it often removes unrealistic expectations or mistaken
pre-conceptions and fills in gaps in understanding the other party’s position.20 It also allows for
something that could be characterized as an informal examination for discovery.21
Since pre-hearings are neither conducted under oath nor transcribed, they allow for the free
exchange of relevant information.
−
having the necessary players present
Parties should come to the pre-hearing discussion with an open mind. Having the claims
experience of the adjuster handling the file combined with the fresh perspective of a new pair of
adjusting eyes can significantly advance resolution. As well, the parties should not hesitate in
including in the discussion any other persons or third parties whose participation can assist
resolution, be they the third-party tort defendants, collateral insurers, the applicant’s spouse,
family or friends, treatment providers, employers, experts, etc.
−
getting an impartial expert opinion
There are specific rules in the DRPC for a formal neutral evaluation process (Rules 44 to 49).
These rules provide for a neutral evaluator, who is always an arbitrator, to give the parties a
confidential oral opinion on the probable outcome of the proceeding.22 This process is little used.
20
They further provide an opportunity to fully hear the other side’s explanation of its case and better
understand any underlying or tacit concerns or suspicions. Such participation also helps inform counsel of the
potential strength, credibility and impact as a witness of one’s own client as well as the other side.
21
There is no provision for transcription of anything said at a pre-hearing discussion, nor are statements
made under oath, thereby limiting any “discoveries” to an informational status.
22
The difficulty with the present formal neutral evaluation process is that it completely bypasses the
pre-hearing discussion and assumes that the parties are ready for the hearing. Hence, it does not allow for further
production exchange, nor any other preliminary or procedural decisions.
11
However, every pre-hearing discussion offers the opportunity for an informal neutral evaluation
by the pre-hearing arbitrator. You get the same experienced evaluator as in a formal neutral
evaluation without the complexity of that process. As well, the evaluator will not be conducting
the substantive arbitration hearing. A pre-hearing arbitrator is an asset and a resource in dispute
resolution. Take advantage.
To obtain a meaningful opinion on the case, it is crucial to provide the arbitrator, in advance of
the pre-hearing, with the key documents relevant to the issues in dispute, both those that help
your case and those that do not. A brief pre-arbitration memo is extremely helpful. What is not
helpful to either the pre-hearing or the evaluation process is routinely filing briefs containing
every scrap of paper generated by the dispute.
Another under used approach in obtaining an impartial expert opinion is the joint retainer of an
agreed expert to examine and report on a specified issue.23 The potential cost-savings in
arbitration time and expert fees are only part of the advantage equation. Early settlement prior to
arbitration should be a reasonable prospect where such a collaborative approach is used.
3.
documentary disclosure
The key questions on production are whether a document is relevant, whether it is privileged,
and whether it will enhance in a meaningful way the parties’ understanding of the case and, in
turn, help the hearing arbitrator.
It is largely accepted that a broader range of documentary discovery may be allowed during the
pre-hearing process than may be accepted into evidence at the actual hearing. A certain degree
of “fishing” may be allowed of information that may ultimately not be allowed into evidence.
For example, as a general practice, since the medical condition of applicants is almost invariably
in issue, insurers are allowed production of an applicant’s medical records from one year
pre-accident, subject to submissions as to why that scope of documentary disclosure should be
broadened or narrowed.
23
This is increasingly important in the absence of DACs under the current legislation.
12
Whatever is needed, however, should be sought early in the process or risk the non-production or
non-availability of the document for the arbitration hearing.
4.
identifying prospective witnesses / preparing for the arbitration
hearing
FSCO also encourages the early identification of potential witnesses who may be called to give
evidence at the arbitration hearing. Rule 41 of the DRPC provides that an arbitrator may exclude
from attending at the hearing any witness who was not identified at the pre-hearing discussion.
The Rule also requires a party, at least thirty days before the start of the hearing, to notify the
other side, as well as the witness, of its intention to call that person.
The pre-hearing arbitrator can set earlier time limits for identifying witnesses. As noted, Rule 81
of the DRPC allows an arbitrator considerable flexibility in directing this process.
−
expert witnesses
Rule 42 of the DRPC limits expert witnesses to two per party, subject to the discretion of the
hearing arbitrator. It can be argued before the hearing arbitrator as to whether a witness called
solely for cross-examination counts as your witness, the other side’s witness, or no-one’s
witness. Flexibility regarding the two-expert limit might be sought where there is a broad range
of issues involving a spectrum of expertise (eg. psychological issues, physical impairment,
accounting questions, retraining, rehabilitation, etc.).
There is little sense in calling an expert to the arbitration hearing to merely read one’s notes.
Likewise, illegible clinical notes should be transcribed before the hearing, rather than being read
at the hearing. Arbitrators have, further, often questioned the utility of an expert witness “arms
race” in which parties compete for the greatest numbers of expert opinions.
Rule 42 sets out the prerequisites for calling an expert witness, including the requirement that a
document be served which sets out the subject matter of the testimony to be presented and the
substance of the facts and opinion which the witness will present.
13
Counsel often struggle with the question of whether to call an expert or file the expert report.
Their concerns might better be focussed on the quality of the evidence provided, rather than the
manner in which it is presented. FSCO jurisprudence24 has set out some of the criteria in
evaluating expert medical evidence, including whether the expert:
−
was alive to the appropriate statutory tests and the case law interpretation;
−
was fully cognizant of the relevant pre and post-accident history, including the
pertinent reports, records and notes of other medical professionals;
−
was forthright regarding any weaknesses in the report;
−
offered alternate explanations or theories;
−
supported his or her opinion, and if so, on what basis;
−
set out a persuasive basis for any difference of opinion with other experts; and,
−
put on the mantle of an advocate rather than the cloak of an impartial neutral
expressing an independent opinion.
−
lay witnesses
Lay witnesses are often more critically important than experts, and are often undervalued.
The applicant is usually one crucial witness. Also of importance are witnesses25 who know the
insured well and can assist in painting a picture of the state of affairs prior to and following an
accident.
Physicians who have seen the applicant on a fairly regular basis, both before and after the
accident, can sometimes provide more forceful evidence than a series of “drive by” assessments
by experts who may see a party only briefly.
24
See Pantelidis and Certas Direct Insurance Company (FSCO A01-001126, January 25, 2002).
25
Such individuals include the applicant’s spouse and relatives; co-workers, supervisor or business
customers; housekeepers, caregivers and other providers of assistance, or treatment providers who testify as to what
they saw or heard as opposed to expressing their opinions.
14
There are applicant’s representatives who sometimes seem to believe that they can make their
cases by breaking down the insurer’s experts on cross-examination. Given the applicant’s burden
of proof, neutralizing opposing witnesses does not, by itself, make one’s case without positive
evidence in support of the claim.
5.
“Defence” Medicals
There are no Rule 33 medical examinations of parties at FSCO. Insurer medical examinations
(“IMEs”) are obtained under section 42 of the Schedule which provides for examinations “for the
purpose of determining whether an insured person is entitled to a benefit.” Arbitrators have no
authority to compel an applicant to attend a medical examination.26
−
failure to attend a section 42 examination
Where an applicant has refused to attend a reasonably required section 42 examination, an
arbitrator has the discretion27 under section 21 of the SPPA to stay a hearing until the applicant
attends the scheduled examination.
Stays are generally refused where the purpose of the medical examination is found to have been
to acquire medical evidence to bolster an insurer’s case for the hearing rather than to adjust the
claim.28 As well, in cases of tactical brinkmanship (examinations scheduled on the eve of the
hearing) or where the prerequisites of notice and scheduling have not been made out, stays have
been denied.29
26
Granic and Allstate Insurance Company (OIC A-006615, January 30, 1995).
27
F.S. and Belair Insurance Company Inc. (OIC P96-00039A, June 11, 1996). 28
Swanson and Wellington Insurance Company (FSCO A98-000067, May 26, 1998). 29
Traders General Insurance Company and Levey, (FSCO P98-00035, February 25, 1999). 15
6. Setting hearing dates / identifying prospective witnesses / preparing
for the arbitration hearing
As set out earlier, the DRPC contemplates setting hearing dates within four to six months of the
completion of the pre-hearing discussion. Hearings are held as close to where the applicant lives
as reasonably possible.
There is flexibility at FSCO as to how issues will be determined.30 If there is an issue, the result
of which may resolve the entire proceeding, a preliminary issue hearing may be set. Matters may
also proceed by written hearing or a combination of written and oral hearing, where appropriate.
Preliminary issue hearings are usually scheduled for one day. FSCO, as a general rule, sets a
maximum of four days for substantive hearings, subject to extraordinary circumstances. The
average length of a substantive hearing is still thought to be approximately three days.
Hearing dates are set at the pre-hearing discussion. FSCO does not have anything similar to
assignment court. Hearing dates are set in consultation with the parties. Availability of an
arbitrator or a venue is now rarely the problem in setting an early hearing date; usually the
limitations are counsel unavailability and necessary documentary evidence remaining
outstanding.
As with any adjudicative body, resources are limited. Hearings are set on a ratio of at least four
to one on the assumption that most matters will ultimately settle. As there are a finite number of
hearing dates, FSCO’s adjournment policy, set out in Practice Note 9 of the DRPC, rests on the
presumption that providing a hearing date in one matter ultimately deprives other parties of the
availability of that date. Hence, FSCO’s strict adjournment policy which largely limits
adjournments to unforeseen circumstances beyond the parties’ control.
30
At the discretion of the arbitrator, a complex matter may be case-managed through a variety of steps
including preliminary issue hearings and motions as well as case conferences. A relatively straightforward matter
may be dispatched promptly towards the final hearing process.
16
−
interpreters and court reporters
All FSCO proceedings, including pre-hearings and hearings, are held in either English or French,
at the applicant’s election. FSCO will provide an interpreter for participants who do not speak
the language of the proceeding, at no cost to the parties. FSCO will also provide interpreters for
non-official languages, again, at no cost to the parties, for an applicant or any witness who feels
they require such assistance.
Requests for an interpreter at the pre-hearing should be made in writing, well in advance of the
scheduled date. Requests for an interpreter at the arbitration hearing should be made at the prehearing discussion.
FSCO does not provide court reporters. Parties are at liberty to retain and pay for court reporters,
subject to the discretion of the hearing arbitrator. Under Rule 74 of the DRPC, a party which
orders all or part of a transcript of a proceeding must provide a copy both to the opposing party
and to the adjudicator.
−
presenting evidence
Rule 39 of the DRPC provides that all documentary evidence must be served on the other party
at least thirty days before the start of the hearing. Documents do not have to be filed with FSCO
prior to the start of the hearing.
Joint briefs, wherever possible, are useful and appreciated. Having two or more copies of the
same documents in the exhibits creates unnecessary confusion and delay at the hearing.
The utility of agreed statements of fact, as well, cannot be overstated in focussing and expediting
the hearing process.
17
Production Exchange
If an item is relevant and not privileged, it is generally producible. A general consensus at FSCO
regarding production exchange has resulted, over time, in far fewer production disputes. Some
problems still crop up on a recurrent basis, however, such as:
1. clinical notes and records of an applicant’s treating medical
practitioners / OHIP summary
The general approach of FSCO arbitrators is to order production of the clinical notes and records
of an applicant’s treating medical practitioners, as well as that person’s decoded OHIP summary,
from one year pre-accident.31 This rule is subject to variation, either expanding or limiting
disclosure should cogent reasons be provided.32
2. the insurer’s file, including reserves
In most matters mediation is seen as the prima facie dividing line for production from an
insurer’s file.33 The date of the Application for Mediation is an arbitrary line representing an
assumption that a dispute has crystallized by that point. The insurer’s file is usually considered as
being protected by litigation privilege from there on.
The period or scope of production in a particular case may be broadened or narrowed in response
to submissions on issues such as privilege, especially when multiple claims are at issue, and
multiple mediation dates, as well as circumstances where no privilege has been established or
privilege may have been waived by the conduct or representations of an insurer.
31
This reflects a balance between disclosure and some consideration for an applicant’s privacy, as well as a
functional approach to benefit entitlement, i.e., if a claimant was clearly functional in the year pre-accident, the need
to delve deeper into a claimant’s past medical history becomes questionable.
32
For example, where the prejudice to the applicant far outweighs any tentative relevance to the issues in
dispute or where there is a prior accident or a pre-existing continuing medical condition relevant to the issues in
dispute.
33
Campeau and Liberty Mutual Insurance Company (FSCO A00-000522, March 12, 2001).
18
3. the tort file, including defence medicals, surveillance and transcripts
from the examination for discovery
Based on the guiding principles of the arbitration system, FSCO case law holds that in the
absence of some compelling reason why the section 42 medical reports obtained under the
Schedule are insufficient, defence medicals from the tort file will not be ordered produced, as
they would inevitably and unnecessarily lengthen and complicate the arbitration proceeding.34
It can be argued that outside surveillance should be treated similarly.
As for transcripts from the tort trial, or transcripts of an examination for discovery, the Sandhu
appeal decision noted that FSCO processes do not include formal examinations for discovery35
and that in arbitration an insured will have no opportunity to examine for discovery an insurer
representative. Hence, fairness dictated that an insured should not be subjected to such an
examination by the insurer indirectly through production of tort transcripts.
4. IMEs / DAC reports / clinical notes and records
As there are no Rule 33 medical examinations of parties at FSCO, insurer’s medical
examinations are obtained under section 42 of the Schedule which provides for examinations
“for the purpose of determining whether an insured person is entitled to a benefit.” This has
been considered a part of the adjustment process, not a litigation-related examination.
Consequently, no privilege attaches to section 42 insurer IME reports, or to DAC medical
reports. As well, neither the raw data, draft reports or the clinical notes and records of the
persons who prepared the reports are privileged.36
34
CAA Insurance Company (Ontario) and Sandhu (FSCO P01-00044, January 18, 2002).
35
Pre-hearings also have the potential to serve as informal oral discoveries. Since the parties are supposed
to be present, the opportunity arises to ask questions and clarify matters, subject to the arbitrator’s discretion. While
any answers given in such circumstances are neither under oath nor recorded in an official transcript, they provide
an opportunity to resolve or narrow issues and to demonstrate the credibility of a party witness. Such “discovery” is
often a key to settlement at a pre-hearing.
36
Campeau and Liberty Mutual Insurance Company (FSCO A00-000522, March 12, 2001).
19
5.
Crown Briefs
In cases where criminal charges have been laid relating to a motor vehicle accident, the
production of the Crown briefs is covered by the protocol outlined in D.P v. Wagg,37 where it
was held that the party in possession of the Crown brief must disclose its existence, but that
the documents are not to be produced without either the approval of the agency involved (the
Attorney General and/or the police service), or a court order obtained on notice to the relevant
agency.38
Subsection 9(1) of the SPPA – Public Hearings
As noted earlier, pre-hearings are hybrid events. That part of the pre-hearing process addressing
settlement of the issues in litigation demands confidentiality. On the other hand, the more formal
portion of the pre-hearing where motions may be dealt with and orders may be made, likely has
the effect of engaging subsection 9(1) of the SPPA which provides for all oral hearings to be
open to the public except in very limited circumstances. Of course all hearings, whether motions,
preliminary issues or substantive issues are public, absent an order closing the hearing.
Interim Benefits
Subsection 279(4.1) of the Insurance Act gives arbitrators a discretionary authority to make
interim orders pending the final order in any matter. Rule 67 of the DRPC, which deals with
motions, suggests that although the general rule is that requests for an interim order must be in
writing, interim orders may also be made orally at the pre-hearing, subject to the discretion of the
arbitrator. In practice, however, except for minor matters the obligations of fairness and notice
often make the more formal setting of a motion or an interim benefits hearing more appropriate.
If the arbitration process is working to an appropriate schedule, with the hearing set within a few
months of the pre-hearing discussion, interim applications for benefits would presumably be the
exceptional situation.
37
D.P. v. Wagg [2004] O.J. No. 2053.
38
See Possyssaeva and Primmum Insurance Co. (FSCO A05–000686, January 11, 2006).
20
Interim benefits as well as interim expense orders have been awarded in the context of contested
adjournments, where they can be seen to address any perceived prejudice arising from an
adjournment, especially late in the process.
Arbitrators have attempted to define the parameters of interim benefits. Earlier decisions spoke
of the requirement that an applicant must make out a prima facie case for benefits.39 In other
cases, concepts of irreparable harm, balance of convenience and a disregard for the process set
out in the Schedule were introduced as either factors to be considered or pre-conditions to relief.
A few cases even suggest that the requirements go beyond those of an interim mandatory
injunction.
Another order that could be characterized as interim is an insurer’s request that interest be
suspended as a condition of an adjournment, pending the ultimate hearing of the matter. Given
the mandatory language of subsection 46(2) of the Schedule, there remains an issue as to the
jurisdiction to make such orders, absent the consent of both parties.
Motions
The majority of cases at FSCO proceed quickly through the system without any interlocutory
proceedings. As noted earlier, the only formal proceeding in most arbitrations is the pre-hearing,
since fewer than 5 percent of cases require an adjudicative resolution. There is provision in the
DRPC, however, for motions and orders within the arbitration process.
While Rule 37 of the Rules of Civil Procedure takes up some 55 pages of the current Ontario
Annual Practice in dealing with “motions,” Rule 67 of the DRPC takes at most a half a page to
provide a framework for motions within proceedings at FSCO. There is no rule specifically
directed at motions for summary judgment, default proceedings, determination of an issue before
trial, or even motions to stay an arbitration; elements of all these have been accommodated under
the framework of Rule 67 and sections of the SPPA, including section 4.6 (dismissal of
proceeding without hearing).
39
See Kolonjari and Co-operators General Insurance Company, (FSCO A97-002059, November 18, 1998).
21
There is an overriding reason however why motions are covered sparsely in the DRPC: in a
simplified and time-limited process, they are not to be encouraged, except when a motion itself
reinforces the timeliness, cost-effectiveness and fairness of the process.
Considerations:
“timely, cost-effective and fair”
Motions are not intended to:
1. Be routine procedures,
2. supplant a collaborative approach to problem solving, or
3. augment billable hours.
Motions may, however, be appropriate tools in advancing the process:
1. where a process has stalled due to the unwillingness of a party to take a necessary step,
such as fulfilling an undertaking or order,
2. where production from a third party is required,
3. where the failure or default of a party has made further proceedings redundant,
4. where the jurisdiction of FSCO to hear the substantive case is at issue,
5. where the matter is res judicata, or
6. where a necessary interim or other order is required and cannot be obtained on consent,
or otherwise.
Before going the motion route, however, it is important that counsel discuss the issue with the
other side. Simple communication can save aggravation and unnecessary work. If a motion is
absolutely necessary, bring it on early.
Rule 67 frames motions at FSCO. Notice must be given. A motion may be heard viva voce, by
teleconference or in writing. Solid supporting evidence, including exhibit books and sworn
affidavit material, should be served with one’s notice of motion or written response.
22
Although motions or preliminary matters may be heard at the pre-hearing discussion, they are
frequently scheduled separately, if the pre-hearing allows insufficient time for the motion, or if
insufficient notice was provided (which can be addressed when speaking to costs). If you intend
a motion be heard in person or by teleconference, the case administrator can assist you in
co-ordinating dates and times.
Preliminary Issues
A preliminary issue hearing is one set prior to the main arbitration hearing, whose purpose is to
determine an issue where such a determination could result in disposing of all or part of the
arbitration and substantially shorten the arbitration hearing and reduce the costs to all parties.40
A preliminary issue may take place electronically, by writing only, or as a full-blown hearing
with viva voce evidence. Given the intention to provide for quick resolution of the issues, it may
be set on relatively short timelines, and may be heard by the pre-hearing arbitrator to expedite
matters.
Bifurcated Hearings
Where there is a preliminary matter that could have the same effect as above but is primarily
evidence driven (such as whether there was an accident), an arbitrator may also order the hearing
process bifurcated, with the same arbitrator hearing both the preliminary matter and the balance
of the hearing. As such, should the hearing proceed beyond the first stage, there will be no need
to duplicate evidence and call the same witnesses twice in the same process.
Unrepresented Applicants
Given the consumer protection aspect of the Statutory Accident Benefits scheme and a party’s
right to a fair hearing, arbitrators will grant some indulgence to unrepresented parties trying to
40
A preliminary issue hearing has certain similarities with a Rule 21 determination under the Rules of Civil
Procedure, with the exception that leave is not required to call evidence.
23
feel their way through a complex system within the parameters of remaining neutral and above
the interests of the parties to the process.
Options explored to address concerns about fairness where a litigant is unrepresented include the
appointment of a lawyer as an amicus curiae where a party did not wish to retain counsel
directly, and the ordering of interim expenses where funding is the primary reason for the
absence of counsel.
Adjournments
Adjournment requests may be heard by the pre-hearing arbitrator, the designated adjournment
officer, or the hearing arbitrator if a hearing is in process.
Adjournments are not granted as of right, and are subject to a strict adjournment policy which
largely limits adjournments to unforeseen circumstances beyond the parties’ control. Delay is not
an appropriate strategy in arbitration. Practice Note 9 and Rule 72 of the DRPC cover the
grounds for adjournments. Rule 72.4 specifically provides for adjournments being “on such
terms as he or she [the adjudicator] considers just.”
The adjournment process applies equally to pre-hearings as to hearings.
Failure to follow up with outstanding production undertakings or to make early arrangements for
further medical examinations will not support an adjournment request.
If an adjournment is granted, an arbitrator may impose strict terms including strict new time
limits, or as stated above, expense orders, or even interim benefit orders.41
41
Wilson and TD Home and Auto Insurance Company (FSCO A03-001091, March 10, 2006).
24
Conclusion
While litigation at FSCO has its own dynamic and its own rules, its basic practices should not be
unfamiliar to anyone acquainted with a civil procedure in Ontario. Used intelligently by counsel,
the arbitration system can offer flexibility and dispatch – two qualities that help keep this form of
dispute resolution both practical and affordable.
By giving the pre-hearing process the attention and preparation it is due, counsel can derive the
greatest advantage from the arbitration process.
Remember to keep the following in mind:
−
−
−
−
−
−
−
obtain and exchange information as early as possible, conducting the proceeding
in the spirit of “no surprises;”
narrow the issues to what is truly in dispute;
have the necessary players and the necessary binding authority present at every
settlement opportunity the pre-hearings process provides;
communicate throughout the pre-hearing process with the other party, seeking
wherever possible a collaborative approach to the presentation of evidence from
agreed statements of fact to joint exhibit briefs;
try to agree on or seek from the pre-hearing arbitrator timely, cost-efficient
procedures to simplify the process;
make use of the pre-hearing arbitrator’s expertise, experience and willingness to
help advance the matter to early, efficient and fair resolution;
make use of the flexibility and variability that arbitration affords; look not only to
the full array of dispute resolution tools that arbitration provides, but also think
outside the box as to how your dispute can most efficiently, quickly and justly be
resolved
and the process will reward you.
25