In Veilleux and Halifax Insurance Company - Ing, A00-000374, December 20, 2001 the applicant had been injured in a motor vehicle accident on July 16, 1996. At a preliminary issue hearing, Arbitrator Sapin found that the applicant was mentally capable within the terms of the Dispute Resolution Practice Code - Fourth Edition and Sections 6 and 45 of the Substitute Decisions Act, and did not require a litigation guardian to proceed with the arbitration.

The insurer submitted that the medical information filed, on its face, presented reasonable grounds to require that a determination of capacity be made. The applicant had been admitted to hospital for psychiatric illness on three occasions between 1999 and 2001. In October 1999, The applicant had stopped taking his anti-psychotic medication and was admitted to hospital on February 2, 2000 in a state of acute paranoid psychosis. He failed to return to the clinic for treatment and was again admitted to hospital on October 26, 2000.

The arbitrator accepted that the applicant suffered from delusions and irrational thought processes when he was in acute or active phases of his illness. However, when he was taking his medications he did not suffer from these difficulties. The arbitrator also noted that the applicant did not exhibit any signs of mental difficulty at the hearing. The arbitrator concluded that the evidence presented by Halifax was not sufficiently compelling to overturn the presumption that the applicant was mentally capable of representing himself in the proceedings. The general presumption of capacity is found in s.2 of the Substitute Decisions Act. It is also commented upon in Hayden and Guarantee Insurance Company (A98-001325, May 4, 1999) and in Re Koch (1997) 33 O.R. 3rd 485.

 

In Gocan and State Farm Mutual Automobile Insurance Company, A01-000799, December 31, 2001, the insurer sought production of the insured's transcript of his examination for discovery in a related tort action. Arbitration Alves held that the applicant was not required to produce the transcript. Rule 30.1.01 of the Rules of Civil Procedure, known as the deemed undertaking rule, codifies the common law rule set out in Goodman v. Rossi (1995), 24, O.R. (3d) 359, Ont. C.A. The transcript which State Farm sought to obtain was subject to this rule. Mr. Gocan did not consent its production. Arbitrator Alves held that FSCO arbitrators should no more entertain a motion which is properly before a court in relation to a court action, than they should hear other motions in an action commenced in a court. In considering the case law, which has been divided on the issue she stated:

With respect, I disagree with the views of Arbitrators Blackman, Allen, Wacyk, and Sone, that an arbitrator at FSCO has jurisdiction to decide these questions. The undertaking is made before the court. In my view, the only adjudicative body with the authority to make such a decision to relieve against the implied or deemed undertaking would be the court before which the undertaking was given, namely the court in which the applicant's tort action was commenced (p.7).

The rights of an insurer to compel its insured to produce documents from a related tort action was also considered in CAA Insurance Company and Sandhu, Appeal, P01-00044, January 18, 2002. The insurer appealed from an arbitration decision which held that Mr. Sandhu was not required to produce the transcript. The decision was upheld by Director's Delegate McMahon. In making the decision, he stated:

For the reasons noted above in relation to the relevance of the medical reports, I reject Mr. Sandhu's submission that the transcript is not relevant. This category of documents provides the starkest example of the different procedures governing a civil proceeding and an arbitration. FSCO's processes do not include examinations for discovery. An insured person who elects to arbitrate, instead of bringing a civil action, forgoes the opportunity to conduct a pre-hearing examination of one of the insurer's representatives. But correspondingly, he is not subjected to such an examination at the behest of the insurer. The insured person's election must be honoured and given meaning. If the insurer can routinely obtain production of the discovery transcript from a related tort action, the parity identified at the top of the paragraph is lost (p. 16).

 

In Jagpal and Kingsway General Insurance Company, A01-000296, January 4, 2002 the insurer was ordered to produce to the applicant all of its investigator's reports relating to the alleged offer of employment. Kingsway argued that it was crucial that the investigator was hired not by it but by its lawyer's office. The insurer was willing to provide a memo summarizing what its investigator would say if called to testify. However, it put the applicant on notice that while it did not intend to call the investigator, it would call him if the potential employer's evidence at the hearing contradicted what he had told the investigator. The arbitrator ordered productions of the investigator's reports, finding that this was in the spirit of full and fair disclosure, in keeping with the production requirements set out in Rule 40 of the DRPC.

 

In Whale and Guarantee Company of North America, A01-000545, January 18, 2002 it was held that the applicants were not entitled to received death benefits for the death of their unborn child, pursuant to s. 25(2)(5)(i). Mrs. Whale was 26 weeks pregnant when the vehicle in which she was travelling was struck head on by another vehicle. Mr. and Mrs. Whale both suffered soft tissue injuries and fractures as a result of the accident. Earlier on the day of the accident Mrs. Whale had undergone an ultrasound, which showed that she was carrying a healthy girl. Given the age of the unborn child, Mr. and Mrs. Whale were required by law to arrange a funeral and burial (p. 3). The insurance company paid for the funeral on compassionate grounds. The common-law has developed a legal fiction which holds that the property rights of an unborn child who is subsequently born alive is in the same position as a child living at the time of the death of the benefactor (Bonisteel and Pilot Insurance Company (1998), 40 O.R. (3rd) 90 (Gen. Div)). The applicants argued that it would be unfair to suggest that the legal fiction did not apply with respect to their application for death benefits and that it would run contrary to the intention of the schedule.

The arbitrator acknowledged that it was a tragic case, but found that the law did not allow for the exception.
Arbitrator Miller found that for such a significant departure from the present law, the legislature would have to clearly articulate an expansion of the definition of "insured person" (p. 9).

 

In Hodgins - Babin and Coseco Insurance Company/HB Group/Direct to Protect, A00-001252, January 22, 2002, the reasonableness of various medical examinations requested by the insurer was considered. Arbitrator Evans found it was reasonable for the applicant to undergo neurological and psychological examinations. The requests for a psychological evaluation and a FAE were not found to be reasonable. In considering the issues the arbitrator considered the appeal decision in Prudential of America General Insurance Company and Chafe-Moote, P99-00044, September 8, 2000. In that decision the Director's Delegate stated that the appropriate question is: Given the information already available, does the insurer reasonably require these examinations? (p. 7). With respect to the onus of proof, the arbitrator referred to the decision of Farley J. in Manolakos v. Royal Insurance, 1998 (O.J no. 2157, upheld on appeal O.J. no.3356).

The court held that the onus is on the insurance company in such circumstances to demonstrate its request for such (s. 65 - insurer's examination) is reasonable in the circumstances (although this would be "automatic" where there has never been an examination) (p. 8). In the case Sandhu, there had been at least one relevant insurer examination and DAC assessments had been conducted. Therefore, the arbitrator found that the onus was on Coseco to demonstrate the reasonableness of further assessments. Similar issues were canvassed in Dhir and RBC General Insurance Company, A01-000741, January 15, 2002 where Arbitrator Allen held that the examinations requested by the insurer were not reasonable. Furthermore, she found the materials to be defective in that neither the purpose for the examinations nor the benefits to which the examinations related were clear (p. 10). Accordingly, the applicant was not precluded from proceeding to arbitration.