The Importance of Settlement Authority at a Pre-Hearing


Arbitrator Wilson’s recent decision in Dabrowska and Aviva Canada [FSCO A13-007793] is a warning to Insurers attending Financial Services Commission of Ontario (FSCO) pre-hearings – always have authority!

In this case, the parties attended a pre-hearing and had arrived at a tentative settlement.  Unfortunately, no one at Aviva was available to approve the settlement even though the parties waited “a significant time for anyone in authority to respond.”  As a result, the pre-hearing was adjourned.

While Arbitrator Wilson recognized a settlement was voluntary, he noted that the parties should attend a pre-hearing in a position to have a meaningful and fulsome discussion about the file.  Further, the parties should be able to respond during the pre-hearing discussion to developments or information.  Arbitrator Wilson concluded that in pre-hearings, time is of the essence and it is important that the parties to litigation be in a position to make decisions in real time.  The failure to do so could result in a missed opportunity with the matter proceeding to Arbitration by default.

Arbitrator Wilson noted that Aviva should have been aware of the responsibilities as it was a sophisticated party at FSCO.  Further, he found that the Insurer’s failure to have a party with the requisite authority was considered an abuse of process.  Arbitrator Wilson concluded that an award of expenses was appropriate in the circumstances.

While the award was not significant (less than $100.00 in part because the Claimant’s representative was not a lawyer), the decision sends a message to Insurers that a representative should always have proper authority when participating in a pre-hearing. 


Topics:  Arbitration, Canada, FSCO, Insurance Companies, Rules of Civil Procedure, Settlement

Published In: Alternative Dispute Resolution (ADR) Updates, Insurance Updates, Personal Injury Updates

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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