DECISION ON A MOTION

Financial Services Commission of Ontario Commission des services financiers de l Ontario BETWEEN: RAFFAELLA DE ROSA Applicant and WAWANESA MUTUAL INSURANCE COMPANY Insurer DECISION ON A MOTION Before: Arbitrator Deborah Anschell Heard: In-person at ADR Chambers on March 16, 2017 Appearances: Mr. A. Fabio Longo participated for Ms. Raffaella De Rosa Mr. J. Claude Blouin and Ms. Hue Nguyen participated for Wawanesa Mutual Insurance Company Issues: The Applicant, Ms. Raffaella De Rosa, was injured in a motor vehicle accident on May 1, 2013 ( the accident ) and sought accident benefits from Wawanesa Mutual Insurance Company ( Wawanesa ), payable under the Schedule. 1 The parties were unable to resolve their disputes through Mediation, and the Applicant, through her representative, applied for Arbitration at the Financial Services Commission of Ontario ( FSCO ) under the Insurance Act, R.S.O. 1990, c. I.8, as amended. amended. 1 The Statutory Accident Benefits Schedule - Effective September 1, 2010, Ontario Regulation 34/10, as

Ms. De Rosa brought a Notice of Motion seeking the following relief: 1. An Order declaring that Blouin Dunn LLP is in a conflict of interest. 2. An Order declaring that Blouin Dunn LLP is precluded from representing Wawanesa in the within Arbitration. 3. An Order requiring Wawanesa to retain new counsel to represent them in the Arbitration. 4. An Order that the information of Ms. De Rosa and the non-party, Mr. Eugenio De Rosa ( Mr. De Rosa ), be kept separate and confidential. 5. In the alternative, an Order removing Blouin Dunn LLP as counsel for Wawanesa, as they exchanged confidential information of a non-party without consent and have expressed a manifest intention to use that information. 6. An Order abridging time for service of this Motion. 7. An Order that the costs of this Motion be payable by Wawanesa within 30 days on a substantial indemnity basis, as well as costs thrown away. Result: 1. Blouin Dunn LLP is not in a conflict of interest. 2. Blouin Dunn LLP may continue to represent Wawanesa in the within Arbitration. 3. Wawanesa is not required to retain new counsel to represent them in the Arbitration. 4. Blouin Dunn is ordered to keep the information of Ms. De Rosa and the non-party, Mr. De Rosa, separate. 5. No medical information pertaining to the non-party, Mr. De Rosa, including the report of Dr. Jonathan Briskin dated September 13, 2013, shall be admissible in this Arbitration. 6. The time for service of this Motion is abridged. 7. Each party shall bear its own expenses with respect to this Motion. EVIDENCE AND ANALYSIS: APPLICANT S EVIDENCE AND SUBMISSIONS 2

Affidavit of Kristy Kerwin Ms. De Rosa relied on the Affidavit of Kristy Kerwin, dated March 15, 2017 (the Kerwin Affidavit ). Kristy Kerwin is a lawyer with the law firm of Trianta Longo LLP, counsel for Ms. De Rosa. The Kerwin Affidavit states that Ms. De Rosa was involved in the accident on May 1, 2013. As a result of the accident and the injuries she sustained, Ms. De Rosa made a claim for accident benefits to Wawanesa. Ms. De Rosa and her husband, Mr. De Rosa, had a single policy of automobile insurance with Wawanesa. Mr. De Rosa was also involved in the accident and made a separate claim for accident benefits. On or about September 4, 2014, Ms. De Rosa filed an Application for Arbitration with FSCO. On or about October 9, 2014, Blouin Dunn LLP served A. Fabio Longo, Ms. De Rosa s counsel, with the Response by Insurer to an Application for Arbitration on behalf of Wawanesa. On or about September 29, 2014, Mr. De Rosa filed an Application for Mediation with FSCO. Wawanesa retained the services of Blouin Dunn LLP to represent it with respect to Mr. De Rosa s Mediation. On October 23, 2014, Mr. George Kanellakos served Mr. De Rosa s counsel with an Insurer s Form B, Response to an Application for Mediation. On or about January 7, 2015, FSCO closed its file. Ms. Nguyen, counsel for Wawanesa, with respect to Ms. De Rosa s accident benefit claim, was not involved with Mr. De Rosa s accident benefit claim. On January 18, 2016, the parties to Ms. De Rosa s case attended a Pre-Hearing at the offices of ADR Chambers. At no time during that meeting was an intention to rely upon documents contained in Mr. De Rosa s file ever raised. On February 2, 2017, Ms. De Rosa s counsel advised Ms. Nguyen, counsel for Wawanesa, that they would be calling Mr. De Rosa as a witness at the Arbitration. Subsequently, however, Ms. 3

De Rosa s counsel changed his mind and decided that he would not be calling Mr. De Rosa as a witness. On March 6, 2017, Ms. Nguyen sent Ms. Kerwin an email requesting that Mr. De Rosa still be made available for cross-examination at the Hearing. Further, Ms. Nguyen attached a report from Dr. Jonathan Briskin (the Briskin Report ), dated September 13, 2013, regarding Mr. De Rosa. Ms. Nguyen advised that it was her client s intention to rely upon that report at the Hearing. On March 6, 2017, Ms. Kerwin advised Ms. Nguyen that she would need to summons Mr. De Rosa if Ms. Nguyen intended to call him as a witness at the Arbitration. Further, Ms. Kerwin stated that she would be objecting to the introduction of the Briskin Report, and anything in relation to Mr. De Rosa s accident benefits file. Ms. Nguyen responded on March 6, 2017, advising that her firm represented Wawanesa in relation to Mr. De Rosa s claim for accident benefits, and therefore they had Mr. De Rosa s accident benefits file in their possession. On March 7, 2017, Ms. Kerwin responded, disputing Wawanesa s use of Mr. De Rosa s accident benefits file without his consent to dispute Ms. De Rosa s claim to accident benefits. On March 7, 2017, Mr. De Rosa was served with a summons to appear at Ms. De Rosa s Arbitration Hearing. Ms. Kerwin deposed that the Briskin Report contains confidential information of a personal nature regarding Mr. De Rosa. Further, Mr. De Rosa did not authorize the disclosure of his file contents to Ms. Nguyen, and did not consent to her using materials from his file in the ongoing litigation relating to his wife s Arbitration. From a review of the correspondence from Blouin Dunn LLP and Wawanesa, at no point did Wawanesa or its counsel request documentation regarding Mr. De Rosa for the purposes of defending or litigating Ms. De Rosa s claim for accident benefits. Furthermore, neither 4

Wawanesa nor its counsel requested permission to use information obtained in adjusting Mr. De Rosa s accident benefits claim to defend or litigate a claim from Ms. De Rosa. Submissions of Mr. Longo, Counsel for the Applicant Mr. Longo submitted that Mr. De Rosa never gave consent to the use of the Briskin Report for this Arbitration. The report was provided to Wawanesa for the purpose of adjusting Mr. De Rosa s claim for accident benefits. Blouin Dunn LLP, on behalf of Wawanesa, at no time sought a Motion to access Mr. De Rosa s accident benefits file for the purpose of using it in this Arbitration. Furthermore, Mr. De Rosa formally advised Wawanesa that he did not consent to the access or use of his medical information for any purpose other than the reason it was collected. Blouin Dunn LLP made no pretense of erecting a firewall or maintaining a code of silence between the accident benefit files in defending Mr. De Rosa s claim. Mr. Longo submitted that Wawanesa has an obligation to maintain the confidentiality of information of its Insured, and to ensure that information supplied by its Insured is kept private. 2 Further, the duty of confidentiality is also mandated by federal legislation. Mr. Longo submitted that Wawanesa is bound by the Personal Information Protection and Electronic Documents Act ( PIPEDA ) that prohibits the disclosure of a person s personal information without the knowledge or consent of that person, unless, amongst other things, that disclosure is required to comply with an Order made by a court, or person with jurisdiction to compel production of that information. 3 In addition, Wawanesa has posted its privacy policies online to recognize the importance of protection from disclosure of personal information. Wawanesa s privacy policy states that information will not be used or disclosed for other purposes except with the consent of the customer or as required by law. 2 Dervisholli and Cervenak and State Farm, 2015 ONSC 2286 (Div. Ct.), at pars. 43, 45. 3 Personal Information Protection and Electronic Documents Act, S.C. 2000, c. 5. 5

Mr. Longo submitted that Wawanesa had a duty to act in good faith; separate from its obligation to compensate it s Insured for losses covered by the insurance policy. Mr. Longo relied on the Dervisholli and Cervenak and State Farm case, 4 where the Divisional Court found that the only basis on which a non-party was entitled to access the contents of an accident benefits file was with the consent of the party or by Court Order. Mr. Longo also relied on Jones v. Tsige, 5 where the Court of Appeal characterized invasions of personal privacy into matters such as one s health records to be highly offensive. Further, Mr. Longo referenced Director Delegate Blackman s decision in Mujku and State Farm. 6 In that decision, Director Delegate Blackman found that a production Order for the accident benefits file for the claimant s husband must follow rules of service under the Dispute Resolution Practice Code. Mr. Longo concluded that Wawanesa had a duty to protect the confidential information of Mr. De Rosa in addition to its duty of good faith. Wawanesa is only permitted to use this information for the intended purpose of adjusting Mr. De Rosa s claim. Mr. Longo submitted that Ms. De Rosa would be prejudiced if the Briskin Report is admitted. She has not had access to this report prior to the 30-day deadline, and would be unable to call responding evidence. Pursuant to Rule 39.1, all documents to be introduced at a Hearing by either party must be served on the other party at least 30 days before the first day of the Hearing. 7 A party can only serve a document or report outside of the 30 days in extraordinary circumstances to justify an exception. 4 Supra, note 2 5 2012 ONCA 32. 6 Mujku and State Farm Mutual Automobile Insurance Company, FSCO Appeal P13-00008. 7 Dispute Resolution Practice Code, Rules 39.2 and 39.3. 6

Mr. Longo argued that even if the report is excluded, Blouin Dunn LLP must be removed as counsel for Wawanesa. Neither Ms. De Rosa nor her counsel has any indications as to the extent that Blouin Dunn LLP accessed Mr. De Rosa s accident benefits file. Mr. Longo also submitted that the conduct of Wawanesa s counsel has led to a conflict of interest. Counsel for Wawanesa received confidential information for the accident benefits claim of Mr. De Rosa, relevant to the accident benefits of Ms. De Rosa. Wawanesa s counsel must be removed as counsel of record due to the violation of Mr. De Rosa s privacy interests, and their irreconcilable conflict due to the unlawful receipt and use of Mr. De Rosa s information. INSURER S EVIDENCE AND SUBMISSIONS Affidavit of Hue Nguyen Wawanesa relied on the Affidavit of Hue Nguyen, sworn March 15, 2017 (the Nguyen Affidavit ). Ms. Nguyen swore that she is the lawyer with carriage of this file. In her Affidavit, she swore that on May 1, 2013, Ms. De Rosa and Mr. De Rosa were involved in a motor vehicle accident. Mr. De Rosa was driving, and Ms. De Rosa was a front-seat passenger. On May 7, 2013, Wawanesa received a call to inform it about the accident. According to the adjuster s log notes, it appeared that Mr. De Rosa s son, Mr. Alberto De Rosa, spoke on his parents behalf. On June 19, 2013, Mr. Longo, then with Neinstein & Associates, wrote to Wawanesa to advise that he had been retained to represent Mr. and Ms. De Rosa relating to the accident. Both Mr. and Ms. De Rosa submitted Applications for Accident Benefits on July 10, 2013. On April 23, 2014, Ms. De Rosa submitted an Application for Mediation. The Report of Mediator was issued on July 31, 2014. On September 4, 2014, Mr. Longo filed an Application for Arbitration. On October 6, 2014, Wawanesa retained Blouin Dunn LLP to represent it in the Arbitration. On October 9, 2014, Mr. George Kanellakos of Blouin Dunn LLP filed the Response by Insurer to an Application for Arbitration. On September 29, 2014, Mr. Longo filed a second 7

Application for Mediation on behalf of Ms. De Rosa. On October 22, 2014, Mr. Kanellakos filed the Response to an Application for Mediation. This Arbitration was scheduled to commence on March 14, 2017. With respect to Mr. De Rosa, he submitted an Application for Mediation on or about September 29, 2014. On October 22, 2014, Mr. Kanellakos filed the Response to an Application for Mediation. By e-mail, dated January 7, 2015, FSCO wrote to Mr. Longo and Mr. Kanellakos to advise that Mr. De Rosa s file had been closed. No Mediation took place with respect to Mr. De Rosa s claim. In January 2015, Mr. Kanellakos internally transferred the files relating to both Mr. and Ms. De Rosa to Mr. Claude Blouin of Blouin Dunn LLP. Mr. Blouin subsequently requested that Ms. Nguyen maintain the day-to-day carriage of both claims. The Pre-Hearing with respect to Ms. De Rosa s matter took place on January 12, 2016. In the meantime, Mr. Longo wrote to Mr. Blouin on several occasions, including in August, September, and October 2015, with respect to settling Mr. De Rosa s claim. At all times, both Mr. Longo and Ms. Kerwin were aware that Blouin Dunn LLP represented Wawanesa in the defence of the accident benefits claims made by both Mr. and Ms. De Rosa. According to the Nguyen Affidavit, Ms. De Rosa s claim for Non-Earner Benefits is one of the main issues in dispute in this Arbitration. In a witness list provided on February 2, 2017, Ms. Kerwin advised that she would be calling Mr. De Rosa as a witness. Similar information was provided by Ms. Kerwin on February 14, 2017. As noted, in a March 6, 2017 email, Ms. Kerwin provided a schedule of witnesses, omitting Mr. De Rosa. Ms. Nguyen wrote to Ms. Kerwin advising that she wanted Mr. De Rosa available for cross-examination. Further, she attached the Briskin Report and advised of her intention to rely on that report at this Arbitration. 8

Ms. Kerwin objected to the introduction of the Briskin Report, and suggested that Wawanesa summons Mr. De Rosa if it required his evidence at the Hearing. The first time that Mr. Longo advised Ms. Nguyen that he would be seeking an Order removing Blouin Dunn LLP as counsel of record was on March 14, 2017 at approximately 9:55 a.m., immediately before the Arbitration Hearing was to commence. Submissions of Mr. Blouin, Counsel for the Insurer Mr. Blouin argued that Wawanesa s decision to retain Blouin Dunn LLP to represent Wawanesa in the claims for accident benefits made by both Mr. De Rosa and Ms. De Rosa did not create a conflict of interest. First, in contrast to cases cited by Ms. De Rosa s counsel, neither Mr. De Rosa nor Ms. De Rosa s files have been disclosed in separate civil proceedings to which they are parties in breach of their privacy interests. Second, Blouin Dunn LLP never acted on behalf of Mr. De Rosa or Ms. De Rosa, and therefore they are owed no duty of confidentiality arising from a past or present solicitor-client relationship. Mr. Blouin argued that there is no duty to keep accident benefit files of different parties segregated. Further, in accordance with the Court s decision in Economical Insurance Company v. Fairview Assessment Centre Inc., 8 the disclosure of parts of Mr. De Rosa s accident benefits file to Wawanesa s legal counsel was authorized by Mr. De Rosa s signed consent when he submitted a claim for accident benefits. Mr. Blouin submitted that there is no conflict of interest when the same law firm represents the same party. At no time did Blouin Dunn LLP act for and against Wawanesa. There is no risk that the confidential information obtained will prejudice Wawanesa, as it is favourable to its defence. Mr. Blouin argued that a contract of insurance is founded on a duty of utmost good faith. But the duty of good faith is a mutual duty. An Insured must be honest and make full disclosure in the claims process. Consistent with the duty of utmost good faith, neither an Insured s privacy 8 2016 ONSC 3169, at paras. 6-9. 9

interest in their accident benefits file nor an Insurer s duty of confidentiality is absolute. In this case, both Ms. De Rosa and Mr. De Rosa provided their consent to disclosure of their personal information for purposes related to the claims process, and broader policy considerations such as the prevention and detection of fraud, when they signed their separate Applications for Accident Benefits, dated July 10, 2013. Mr. Blouin submitted that in Economical v. Fairview, the Ontario Superior Court found that the consent provided in an Application for Accident Benefits is sufficiently broad to consent to the use of the medical documentation of claimants in a separate civil proceeding without the claimant s knowledge or express consent. 9 ANALYSIS I agree with Mr. Longo s submission that Mr. De Rosa did not consent to the use of the Briskin Report in this Arbitration. The report was provided to Wawanesa for the purpose of adjusting Mr. De Rosa s claim for benefits, and I cannot find that his signed authorization permitted the use of the Briskin Report to defend against Ms. De Rosa s claim for accident benefits. The authorization speaks to the investigation of Mr. De Rosa s claim, obtaining information relating to his claim, recovering payments from other Insurers for amounts paid in connection with his claim, identifying and analyzing goods and services provided by health care providers, preventing fraud, compiling statistics, and assessing risks. In my view, the purposes listed do not extend to using the Briskin Report to defend Ms. De Rosa s claim. Furthermore, by the time this issue came before me, Mr. De Rosa had made it clear through his counsel that he did not consent to the access or use of his medical information for any purpose other than the purpose for which it was collected. In this sense, I agree with Mr. Longo that consent is not irrevocable and can be withdrawn. As noted by Mr. Longo, Mr. De Rosa explicitly withdrew any previous implied consent to Wawanesa s use of his personal information for the purposes of this Arbitration by Ms. Kerwin s email, dated March 6, 2017. 9 Economical v. Fairview, supra, at para. 6. 10

Furthermore, at no time prior to the hearing of this Motion were allegations of fraud made with respect to either Mr. or Ms. De Rosa. I am therefore not prepared to find that fraud exempts Wawanesa from the application of PIPEDA. I am also not prepared to find that fraud allegations somehow make the Briskin Report admissible. As noted by Mr. Longo, the fraud issue had never been raised previously, and no supporting information was provided to substantiate fraud. Mr. Longo also relied on Wawanesa s privacy policy to argue that the Briskin Report should not be admitted at the Arbitration. That Policy provides in part that: Personal information shall not be used or disclosed for purposes other than those for which the information was collected, except with the consent of the Customer or as required by law. 10 On the basis of this Policy, and the fact that Mr. De Rosa has objected strongly to the introduction of the Briskin Report, I find that it would be inappropriate to introduce this report at the Arbitration. Wawanesa did not have Mr. De Rosa s consent or a Court Order to obtain the report. On this basis, I find that the Briskin Report is inadmissible in these Arbitration proceedings. It could be admitted at a later date if Mr. De Rosa provides his consent or if a Court Order is obtained. This leaves the issue of whether or not Blouin Dunn LLP should be removed as Wawanesa s counsel on the basis of conflict of interest. Mr. Longo relies on the Dervisholli case 11 to support his position that the law firm should be removed. In that case, Mr. Dervisholli was successful at removing the defendant s counsel notwithstanding the fact that he was never formally a client of that firm. The Court found that the Insurer s duty went beyond good faith, and it also has an obligation to ensure that the information supplied by its Insured is kept private. In Dervisholli, Reisler Franklin was hired by State Farm in relation to Mr. Dervisholli s accident benefits claim. Mr. Dervisholli also commenced a tort lawsuit and named State Farm with respect 10 Wawanesa Insurance, Personal Information Protection Policy Online: http://www.wawanesa.com/canada/pip/pip-personal.html, Section 5. 11 Supra. 11

to his uninsured coverage. State Farm hired Reisler Franklin to defend both the third-party claim and Mr. Dervisholli s claim to accident benefits. The Divisional Court considered at length the duty of an Insurer acting in a dual capacity as both the accident benefit Insurer and the tort Insurer. The Court states as follows at paragraph 58: State Farm had an obligation to maintain the confidentiality of the plaintiff s accident benefit file. State Farm may very well be one distinct corporate entity and, as such, has possession of both information found within the accident benefit file and the tort file under one roof. Nonetheless, the insurance industry has recognized and implemented the principle of a firewall between the accident benefit department and the tort department within an insurance company. While the bodily injury adjuster for State Farm might very well be tempted to take a surreptitious look at the accident benefit file, such conduct is not condoned within the insurance industry, as reflected in the Bulletin. State Farm should not have retained Reisler to defend itself both with respect to the claims by the plaintiff for statutory accident benefits as well as in the plaintiff s tort action. The failure to separate the interests of State Farm on the tort and accident benefit side, by retaining the same law firm and disclosing confidential information to that law firm, resulted in a disqualifying conflict of interest as set forth in MacDonald Estate v. Martin, 1990 CanLII 32 (SCC), [1990] 3 S.C.R. 1235. The Divisional Court seemed to be influenced a great deal by the practice of the insurance industry to implement a firewall between the accident benefit department and the tort department. However, similar evidence was not provided in this matter with respect to any practice in the insurance industry regarding an Insurer defending two related accident benefits claims, arising from the same motor vehicle accident. In this sense, I agree with Mr. Blouin. MacDonald Estate v. Martin 12 dealt with whether a law firm representing the respondent should be disqualified where one of its associates used to work at 12 MacDonald Estate v. Martin, supra, at p. 1260 12

the appellant s law firm. The Court ruled in favour of disqualification, finding that confidential information could potentially be disclosed, applying a two-part test: 1) Did the lawyer receive confidential information attributable to a solicitor and client relationship relevant to the matter at hand? 2) Is there a risk that it will be used to the prejudice of the client? But this authority has not been applied in the accident benefits context, where a law firm defends an Insurer from two related accident benefit claimants. As noted by Mr. Blouin, at no time did Blouin Dunn LLP act for and against Wawanesa. There is no risk that the confidential information obtained will cause prejudice to Wawanesa as it is entirely favourable to its defence. 13 I am not satisfied that Blouin Dunn LLP is in a conflict of interest. I do not find that the jurisprudence goes so far as to find a conflict of interest where one firm represents an Insurer in defending two accident benefit claims arising out of the same motor vehicle accident. Accordingly, I am not prepared to declare that Blouin Dunn LLP is precluded from representing Wawanesa, nor am I prepared to order that Wawanesa retain new counsel to represent them in the Arbitration. EXPENSES: As the parties achieved mixed success with respect to this Motion, I am directing that each party shall bear its own expenses. Deborah Anschell Arbitrator Financial Services Commission of Ontario Commission des services financiers de l Ontario June 12, 2017 Date 13 Wawanesa s Statement of Law, at p. 4, para. 7. 13

BETWEEN: RAFFAELLA DE ROSA Applicant and WAWANESA MUTUAL INSURANCE COMPANY Insurer ARBITRATION ORDER Under section 282 of the Insurance Act, R.S.O. 1990, c. I.8, as it read immediately before being amended by Schedule 3 to the Fighting Fraud and Reducing Automobile Insurance Rates Act, 2014, and Ontario Regulation 664, as amended, it is ordered that: 1. Blouin Dunn LLP is not in a conflict of interest. 2. Blouin Dunn LLP may continue to represent Wawanesa in the within Arbitration. 3. Wawanesa is not required to retain new counsel to represent it in the Arbitration. 4. Blouin Dunn LLP is ordered to keep the information of Ms. De Rosa and the non-party separate. 5. No medical information pertaining to the non-party, including the report of Dr. Jonathan Briskin dated September 13, 2013, shall be admissible in this Arbitration. 6. The time for service of this Motion is abridged. 7. Each party shall bear their own expenses with respect to this Motion. Deborah Anschell Arbitrator June 12, 2017 Date