In Nazarali and Allianz, A01-000061, July 12^th, 2001 the applicants applied for death benefits following the death of their husband and father, Moshnali Nazarali, who was killed in a motor vehicle accident while on a business trip in Malawi. Arbitrator Renahan denied the claim.

The Applicants argued that the decision of the Court of Appeal in Prasad v. Gan Canada, (1997) 33 O.R.(3d) 481 should be followed. The case considered a death benefits claim under the SABS- 1994 and held that an insured person had worldwide coverage. The plaintiff was therefore able to recover death benefits following a scooter accident in Mexico. Given that the definition of “insured person” is the same in the SABS - 1996 as it was in the SABS-1994, the applicants urged the arbitrator to find in their favour. The arbitrator found that to accept this argument would render meaningless subsection 243(2) of the Insurance Act and subsection 3(2) of the 1996 Schedule.

In Verrette and Liberty Mutual, A00-000644, July 13^th, 2001 the insurer was not required to pay the applicant an income replacement benefit. Under the SABS - 1990 and the SABS - 1994, an insurer was not required to pay income replacement benefits where the driver was convicted of operating the automobile while it was not insured under a motor vehicle liability policy. The wording of the section changed in the SABS - 1996, excusing an insurer from paying an income replacement benefit where the driver “knew or ought reasonably to have known” that he was operating an uninsured vehicle. The arbitrator found that the use of the word “reasonably” meant that an individualized inquiry was called for, but only to the extent of the exercise of reason by an ordinary, rational person in the situation of the applicant (p.4). In the circumstances of the case, the arbitrator did not find it reasonable that Mr. Verrette should have expected his estranged, bankrupt mother to continue paying insurance premiums on the vehicle. Mr.Verrette’s assertion that he had provided his mother with money to make the insurance payments was not accepted.

In Mizzi and York Fire & Casualty Insurance Company, A01-000176, July 17, 2001 the applicant’s motion for interim benefits was denied as he failed to discharge the onus of proof. Arbitrator Miller was not satisfied that there was sufficient objective evidence to support the applicant’s submission that he was employed at the time of the accident (p.8). It was also found that the insurer was not required to pay weekly income replacement benefits where the applicant had not requested a DAC within fourteen days and had delayed attending a DAC for almost a year (p.8).

In Pafco Insurance Company and Howden, P00-00028, June 22, 2001 the applicant belonged to a union and her wage was governed by a collective agreement. An arbitration decision included the employer’s contribution to employment benefits in Ms. Howden’s gross income for the four weeks before the accident, but did not include accrued vacation pay and a sick day benefit paid after the accident (p.6). On appeal, Pafco argued that the order should include these benefits, while Ms. Howden cross-appealed with respect to the excluded benefits. The Director’s Delegate defined the issue to be considered as whether Ms. Howden’s gross income from employment was her gross pay as shown on her pay stub or whether it also included the cash value of benefits provided by her employer under the collective agreement. The Director’s Delegate acknowledged that Pafco’s concern that including employment benefits in the equation would complicate the administration of benefits was a legitimate one. Nonetheless, she was not convinced that including employment benefits in the equation would hamper the fast and effective delivery of benefits or significantly impair the efficiency of the system. The appeal was allowed in part and the cross-appeal was dismissed. It was held that the following were to be included in “gross income from employment”: life insurance premiums, weekly indemnity insurance premiums, contributions to the Nursing Homes and Related Industries Pension Plan, pay equity adjustment and uniform allowance. Not to be included were : vacation pay, sick leave credits, the employer’s contribution under the Canada Pension Plan and the employer’s premium under the Employment Insurance Act.

Liberty Mutual was ordered to pay a special award in Persofsky. It accepted the arbitrator’s finding that it had unreasonably withheld benefits, but appealed the amount of the special award. It also submitted that the order could not stand because of institutional bias. It argued that in a system where only insured persons can choose arbitration instead of court, there will be a reasonable apprehension of bias if arbitrators do not have security of tenure and, as a result, have an interest in encouraging insured persons to choose arbitration, and an ability to do so through their decisions (Liberty Mutual and Persofsky, P00-00041, July 3, 2001, p.7) Director (A) Draper was satisfied that s.283(1) of the Insurance Act was broad enough to include a jurisdictional challenge of this nature (p.7).

In a motion to admit evidence, Liberty Mutual sought to have two affidavits, which contained exhibits in support of its arguments, admitted into evidence. In preparing its appeal, it had sought information about the process for appointing arbitrators, their employment status and security of tenure (p.11). The Superintendent had refused its requests for the information, advising that she had no obligation to do so and that the information was not relevant to the issues in dispute (p.11) Liberty Mutual then moved under the Freedom of Information and Protection of Privacy Act to obtain the information although there was no guarantee that it would be admitted.

Director (A) Draper was of the opinion that the issue of institutional bias could have been raised at the arbitration hearing. However, he was satisfied that the issue was not raised when it was as a matter of strategy. Reluctant to restrain the insurer’s argument regarding institutional bias, he allowed an affidavit containing relevant information as extrinsic evidence. The second affidavit, which contained an Application for Expenses form that had been completed by Mrs. Persofsky and an Accident Benefits claims package was not admitted. Director (A) Draper remarked that even if it was accepted that Mrs. Persofsky used the forms, her understanding of the benefits that she was entitled to was a matter of evidence.

Mrs. Persofsky was to be allowed to file evidence in response. The Ontario Trial Lawyer’s Association and the Insurance Bureau of Canada, who were granted the status of intervenors in the matter, were to be permitted to make legal submissions on the issues of special award and institutional bias (p.15).