Arbitration easily dismissed in Dukaj v. State Farm Mutual Automobile Insurance Company

Case

Burim Dukaj v. State Farm Mutual Automobile Insurance Company, FSCO A13-004027

Facts

Burim Dukaj, the applicant, sustained injuries in a motor vehicle accident.  He then made an application to receive from State Farm Mutual Automobile Insurance Company statutory accident benefits, according to the Statutory Accident Benefits Schedule.  There was disagreement over the entitled benefits, and although the parties went into mediation, the disagreement persisted.  As a result, Dukaj applied to the Financial Services Commission of Ontario (FSCO) for arbitration under the Insurance Act, R.S.O. 1990, c.I.8.  Although FSCO gave proper notices to Dukaj about the arbitration, he still did not attend the arbitration.  Additionally, the law firm, Lofranco Corriero Personal Injury Lawyers, made a request to discontinue its role as the representative on record for Dukaj.

Issues

  1. Should Lofranco Corriero Personal Injury Lawyers be allowed to withdraw as the representative on record for Dukaj?
  2. Should the Application for Arbitration by Dukaj be dismissed?

Law

Statutory Accident Benefits Schedule – Accidents on or After November 1, 1996, O Reg 403/96

Insurance Act, R.S.O. 1990, c.I.8

Dispute Resolution Practice Code—Fourth Edition, Rule 9.1(c), 9.8, 37.7

Discussion

Dukaj did not attend the pre-hearing discussion, and it was carried on despite his absence.  Following that, Dukaj was properly notified about the purposes of this hearing and what would ensue in his absence.

Because there is no reason to believe that the notifications were lost as Dukaj did not inform FSCO about changes to his address or contact information, the Commission is satisfied that proper notice of the motion and hearing was served at his last known address, according to Rule 9.1(c) of the Dispute Resolution Practice Code (the “Code”).  The motion and arbitration hearing continued in his absence, pursuant to Rule 37.7 of the Code.

Also, since Dukaj did not contest to the withdrawal request of Lofranco Corriero Personal Injury Lawyers, the Commission accepts that the solicitor-client relationship was broken.  The firm is permitted to be removed, with no terms, pursuant to Rule 9.8 of the Code.

Lastly, the onus of showing that he is entitled to the benefits claimed still rests with Dukaj.  As he did not attend the hearing, there was no evidence available to give his claims support.

Conclusion

The arbitration was dismissed.

Significance

In addition to being a good example of an arbitration decision resulting in a dismissal, this case is demonstrative of a few rules in the arbitration process:

  • Demonstrates the application of Rule 9.1(c) of the Code, which gives the Dispute Resolution Group (the “Group”) the right to rely only upon the last know contact information for communications.
  • Demonstrates how Rule 37.7 of the Code gives the right to the Group to continue the hearing as scheduled if neither parties notify the Group of a different agreed upon time and date, within 20 days after the date of notice is issued.
  • Acknowledges that representatives should have the right to be removed from record should a solicitor-client relationship break down, pursuant to Rule 9.8 of the Code.
  • Recognizes that the applicant has the burden to attend the hearing and provide evidence in support of his claims.
Hermione is a Paralegal student at Centennial College in Toronto studying professional communications with Omar Ha-Redeye.

Malin and State Farm, Case Summary: Is More Arbitration the Best Solution?

Case Summary: Malin and State Farm (FSCO A12-000108)

Nature of the Case:

To deal with possible expenses entitled the Respondent, State Farm, as the Applicant, Mr. Abdi Malin, failed to attend both pre-hearing discussions and the actual hearing of this case. (FSCO A12-000108, April 30, 2014)

History of the Case:

Mr. Abdi Malin, the Applicant’s claim for accidental benefits, from State Farm Mutual Automobile Insurance Company, was dismissed on March 31, 2014, according to the statutory accident benefits under The Statutory Accident Benefits Schedule regarding accidents on or after November 1, 1996; however, the arbitrator, Edward Lee, had reserved on the issue of expenses.

The Facts of the Case are as Follows:

  • A pre-hearing was held on September 10, 2013 with the applicant Mr. Malin in attendance with his counsel and another pre-hearing was scheduled on that date for December 6, 2013
  • Mr. Malin’s council served a motion to withdraw as his representative following the meeting and the arbitrator permitted Mr. Malin’s former counsel to withdraw
  • Mr. Malin failed to attend the second pre-hearing on December 6, 2013
  • The hearing was scheduled for March 21, 2014
  • Mr. Malin did not attend the hearing on March 21, 2014.
  • Mr. Malin’s application was dismissed on March 21, 2014.
  • Parties were given thirty dates to submit all evidence and submission regarding expenses.
  • State Farm provided documentation while Mr. Malin provided nothing

Issues:

  1. Is State Farm entitled to expenses incurred in respect to this arbitration hearing?
  2. If the answer to the first question is ‘yes’, what is the amount of expense to which State Farm is entitled?

Decision:

  1. State Farm is entitled to expenses incurring in respect of this hearing.
  2. State Farm is entitled to $2,000 as expenses in respect to this arbitration hearing, inclusive of all costs, disbursements and taxes.

Reason for Decision:

State Farm was successful in handling this case and is entitled to expenses. Based off case law (Salva and Paramanantham and Allstatem, FSCO A05-002958 and FSCO A06-000004, July 30, 2007), the main consideration of arbitration expenses is reasonableness (Ragulan and Security National, FSCO A05-002940, January 7, 2008). State Farm appeared before the Financial Services Commission of Ontario on three occasions, although no arbitration was actually conducted. State Farm is awarded $2,000 (inclusive of all disbursements, costs and taxes) based on time spent by counsel, legal assistance and preparation.

Significance of Decision

The main issue here is that the Applicant initiated the case, but then failed to follow through and attend the mandatory pre-hearing conference and the hearing itself, essentially abandoning his own application. This wasted time and resources for both the FSCO and the Respondent. There is a need for reform to prevent abuse in regards to wasting time and resources of the parties involved.

In my previous article, I discussed the potential for new tribunals and amendments to help lower insurance rates for consumers, one of the recommendations in Justice Cunningham’s Report was to focus on scheduled arbitrations.

 Importance of Arbitration

Clearly, this case in support of his recommendations, as the arbitration process was able to save actual court time, which would have been wasted since Mr. Malin would likely not have appeared or followed through with his application. The important factor here is having a skilled arbitrator appointed under an order in council who understands the system to administer the appropriate decisions based off previous case law and is accountable for their decisions.

Penalties for Not Meeting Timelines

Justice Cunningham also recommended new penalties for not meeting timelines. If this recommendation was in place, it would prevent Mr. Malin from being eligible for his claim much earlier, and the cost would be awarded much faster. With less wasted time on these cases, which have no merit or follow through from the Applicant, more time and money could be saved.

Conclusion

Overall, Malin and State Farm is a case that provides strong evidence and support of Justice Douglas Cunningham’s recommendations on the Ontario auto insurance dispute resolution system.

 

Case Citation: Malin and State Farm  (FSCO A12-000108, July 4, 2014)

Jason E. Lau is a Paralegal student at Centennial College in Toronto studying professional communications with Omar Ha-Redeye.