Recent Cases in ADR
By Nayla Mitha*
Ontario Court of Appeal Found that the Motor Vehicle Accident Claims Fund is an “Insurer” under Regulation 283 of the Insurance Act
Background
The status of the Motor Vehicle Accident Claims Fund (the “Fund”) in the process for resolving disputes over the payment of accident benefits was at issue in this appeal. All Ontario residents are entitled to accident benefits. The Fund was established under the Motor Vehicles and Accident Claims Act and is largely financed through fees paid by licensed Ontario drivers. A principal purpose of the Fund is to alleviate financial hardship on persons who are injured in a car accident and who have no recourse to any insurance policy. If the injured party is insured and there is a dispute between insurers as to who should pay, O.Reg. 283/95 governs the dispute. Pending the resolution of the dispute, the first insurer to receive a claim for benefits must pay. This requirement ensures that victims receive benefits promptly. Disputes over payment must then be resolved by arbitration under the Arbitration Act.
Allstate Insurance Company of Canada v. Motor Vehicle Accident Claims Fund, 2007 ONCA 61 – January 31, 2007
Insurance arbitration – The principal issue on this appeal was whether the Fund is an “insurer” under regulation 283 – The Fund paid benefits to the family of an accident victim and sought reimbursement from Allstate Insurance Company of Canada and Manitoba Public Insurance – Both insurers denied coverage and the Fund then commenced arbitration – Allstate objected to the arbitrator’s jurisdiction on the ground that the Fund was not an insurer under the regulation – The arbitrator concluded that he had jurisdiction and held that Allstate was liable for the accident benefits – On appeal, Ferguson J. set aside the arbitrator’s award for lack of jurisdiction, concluding that he was bound by the Court of Appeal’s decision in Kalinkine v. Ontario (Superintendent of Financial Services), [2004] O.J. No. 5138, which said that the Fund was not an insurer under regulation 283 – The Fund appealed this decision and sought reinstatement of the arbitrator’s award – The Ontario Court of Appeal held that the Fund is an insurer under regulation 283 – It must arbitrate disputes over the payment of accident benefits and is bound by the provisions of the regulation – However, in rare cases (such as in Kalinkine), where there is no dispute to be arbitrated, the Fund may sue for restitution in the courts
Defendant Failed to Obtain an Order to Attend Mediation by Telephone
Laporte v. Ridgewell, 2007 CanLII 2805 (ON S.C.) – February 7, 2007
Civil procedure – Defence counsel requested that the insurance company representative attend the mediation session via telephone – The plaintiff did not consent – Six days before the mediation session, defence counsel wrote a letter to the plaintiff’s lawyer stating that an insurance representative would not attend the mediation in person, but would be available by phone – The mediation was scheduled to take place in Windsor and the insurance company’s representative would have had to travel from outside of Windsor to attend the mediation – Since December 31, 2002 when Rules 77 and 24.1 came into force in Windsor, courts regularly grant orders permitting insurance company representatives to attend settlement conferences via telephone – When a plaintiff gives consent, however, defence counsel usually do not go through the extra step of obtaining a court order as required by subrule 24.1.11 – In the case at hand, the plaintiffs did not give consent and the mediation was not held – Subrule 24.1.11(1.1) is clear that a representative of an insurer is required to attend a mediation session unless a court orders otherwise – “Attend” means attend in person – The insurance company neither attended the mediation session, nor obtained a court order permitting participation by telephone – The court found that the insurance representative breached subrule 24.1.11(1.1) and the defendants were ordered to pay costs
Ontario Court of Appeal found that Mediator Practiced Law
The Law Society of Upper Canada v. Boldt, 2007 ONCA 115 (CanLII) – February 16, 2007
Contempt of court – In a decision dated March 22, 2006, Hennessy J. found that the appellant was in contempt of an order dated September 1, 2000 – The order placed a permanent injunction on the appellant, restraining her from acting as a lawyer and in particular from preparing separation agreements – Hennessy J. found that the appellant had prepared documents that, notwithstanding their title of “MOU”, were prepared with the intention of affecting the legal rights and obligation of the parties who signed them – The appellant appealed the decision of Hennessy J. to the Ontario Court of Appeal (the “OCA”) – The OCA found that there was no merit in the appeal and dismissed it – The OCA held that the penalty phase should proceed before the motion judge and noted that it should have been completed before an appeal was made
Appellant Was Not a Party to the Arbitration Agreement
Rampton v. Eyre, 2007 ONCA 331 – May 2, 2007
Arbitration agreement – The appellant appealed the dismissal of his application for the appointment of an arbitrator – The appellant was a major shareholder of SloGold Resources Ltd. (“Slogold”) – The respondent entered into an agreement with Slogold whereby in return for 60% of the shares in Slogold, he would raise capital within a specified amount of time – The agreement provided that it would terminate if the capital were not raised in time – The agreement also had an arbitration clause that stated: “Any dispute arising out of or relating to this Agreement, including any question regarding its existence, validity or termination which cannot be amicably resolved by shall be settled before three arbitrators” – The respondent replaced the appellant as the President and Director of Slogold – He transferred two of Slogold’s concessions to a new corporate vehicle, Wharf Resources Plc. (“Wharf”) – Slogold shareholders were to receive a 40% interest in Wharf as consideration for the transfer – The shares in Wharf were not delivered to Slogold’s original shareholders – The respondent claimed that he was holding them in trust – The appellant gave written notice of this dispute and requested arbitration – The respondent refused to proceed with arbitration and the appellant applied for an order appointing an arbitrator under the Arbitration Act – The primary reason that that application judge dismissed the appeal was that the contract had terminated as the respondent had not raised the necessary amount of capital and therefore the arbitration clause was of no force and effect – The Court of Appeal held that the application judge had errerd in that the question of whether the contract had terminated fell within the scope of he arbitration clause and therefore he ought not to have made that determination – Also, even if the contract had terminated, the parties’ obligation to arbitrate continued – Parties who have included an arbitration clause in their contract will continue to be obliged to submit disputes arising from, in respect of, with regard to, or under the contract to arbitration in accordance with its terms despite the contract’s expiration or termination – Nonetheless the Court of Appeal dismissed the appeal because the parties to the agreement were the respondent and Slogold – The appellant brought the application under his own name an as he was not a party to the agreement, he could not invoke it
*Nayla Mitha is a Toronto-based mediator, lawyer, negotiator, facilitator, and trainer with the Stitt Feld Handy Group.
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