FSCO reserves decision on awarding costs against paralegal pursuing an AB arbitration on behalf of his deceased client

A Financial Services Commission of Ontario (FSCO) arbitrator in an accident benefits case has reserved a final decision on whether to award costs against a paralegal who brought an application for arbitration on behalf of his client — apparently without informing the insurer or FSCO that his client was deceased.

The client, Corinne Warren Hancock, was injured in a motor vehicle accident on Feb. 18, 2009. She applied for accident benefits from RBC General Insurance Company.

Hancock died on Aug. 14, 2010. The arbitrator and the insurer agreed the reasons for her death were unrelated to the motor vehicle accident.

A mediator issued a report a few weeks after Hancock’s death, on Sept. 2, 2010. Since the parties had been unable to resolve their disputes in mediation prior to her death, her representative, Michael Wentzel, made an application for arbitration.

FSCO found that he had done so without anyone authorized by law to bind the estate of the late Corinne Hancock.

“While there is no question that at the time of the application for arbitration, Ms. Hancock was in no position to be self-sufficient in housekeeping or other needs, all such benefits claimed in both the application for mediation and the arbitration are predicated on being alive and in need of the benefits,” the arbitrator found. “Any such ongoing claims after Aug. 14, 2010 were clearly both highly irregular and unsustainable.”

The mediator’s report contained no indication that the mediator was aware Hancock was deceased, the arbitrator found. Also, Wentzel did not include in his application for arbitration that he was making the application on behalf of a deceased person.

The arbitrator ruled the arbitration was a nullity. He then reserved a decision on costs awarded against Wentzel, pending contact with one of Hancock’s potential heirs. The arbitrator sought to clarify the heir’s status and whether or not he endorsed Wentzel’s actions on behalf of the estate.