FSCO arbitrator requires disclosure of intended tort action against insurer

The Financial Services Commission of Ontario (FSCO) has ordered Eva Wren, an applicant for arbitration with State Farm Mutual Automobile Insurance Company, to provide written notification as to whether or not she intends to advance a tort claim against the insurer.
Reyn claims to have been injured in an August 2005 motor vehicle collision. She applied for statutory benefits from State Farm. When she and the insurer were unable to resolve their disputes, Reyn applied for arbitration at FSCO.
At arbitration, Reyn’s counsel, Alon Rooz, did not disclose whether or not Wren contemplated a parallel legal tort action against State Farm, citing solicitor-client confidentiality.
State Farm argued that if litigation was being contemplated in addition to arbitration, Rooz might have prepared medical or other documents for the legal action that might have helped to resolve the accident benefits issue. If true, then State Farm would be able to ask the arbitrator to require production of these documents.
FSCO arbitrator John Wilson ordered that Rooz provide a written answer to State Farm as to whether or not a tort claim would be advanced.
“While there is some controversy about the appropriateness of the use of materials obtained from a tort file in an arbitration, especially transcripts from examinations of discovery, it is not a foregone conclusion that everything created in the context of tort litigation is inadmissible in the arbitration forum,” Wilson wrote. “Certainly relevance would not be difficult to establish in most cases.”