Québec – no second opinion on issue determined by award issued by physician arbitrator – #408

In Rivain v. La Capitale assureur de l’administration publique Inc. (La Capitale, assurances et services financiers), 2020 QCCS 3936, Mr. Justice Christian Immer declined to order parties to re-arbitrate an issue determined by a physician arbitrator under an insurance policy.  That policy submitted medical disputes to arbitration before a physician and subjected awards to the typical three (3) post-award options available to arbitral parties: compliance, homologation, annulment. Immer J. did determine that the policy anticipated a 4th option, namely a subsequent arbitration before another medical specialist if the 1st arbitrator determined that the medical dispute fell within that other medical speciality.  Immer J. also noted that, despite the complexity of the facts, a court was better placed to determine the jurisdictional issue, rather than defer to a first determination by the arbitrator, as the request to refer the parties to arbitration raised principally a question of law.

Plaintiff employee and Defendant insurer (“Insurer”) disputed whether Plaintiff’s health condition qualified as a disability covered by Defendant’s disability insurance policy (“Policy”).  Following issues experienced by Plaintiff at the workplace and despite a sabbatical period, Plaintiff’s treating physician declared Plaintiff unable to work due to both a cardiac condition and anxiety.  Under the Policy, Plaintiff’s employer paid salary insurance to Plaintiff for the first two (2) years following which Insurer was obliged to do so provided the Policy applied.  Despite the determination made by Plaintiff’s treating physician, Insurer contested its obligation to make further payment.

The Policy included an agreement to arbitrate disputes over the existence or absence of a disability. The arbitration would be presided by a sole arbitrator chosen by agreement of Plaintiff’s employer and Plaintiff’s union.  The arbitrator would issue a final decision, binding on Plaintiff and Insurer. 

The agreement to arbitrate further required that disputes involving disagreements over medical issues regarding the existence of a disability.  Such disputes were to be determined by arbitration presided by a physician.  The physician arbitrator would be chosen by agreement of Plaintiff’s employer and Plaintiff’s union. 

A cardiologist, appointed as arbitrator, issued a March 2017 award (“Award”).  Though the arbitrator determined that Plaintiff did not suffer from a total disability, he noted that Plaintiff had a further condition involving sleep apnea.  The cardiologist as arbitrator identified another category of medical specialist who the arbitrator mentioned ought to prescribe a specific treatment for the sleep apnea and which should last three (3) months.  If that treatment worked, the arbitrator determined that Plaintiff ought to be able to return to work in the Fall of 2017.

Plaintiff did not apply to set aside the Award in the three (3) months after receipt of the Award as set out in article 648 of the Québec Code of Civil Procedure, CQLR c C-25.01 (“C.C.P.”).  Insurer continued to pay salary for the three (3) month treatment period, then stopped paying after August 2107 even though the treatment did not resolve the medical condition observed in the Award.

Plaintiff did not return to work in September 2017 after his treating physician again declared Plaintiff unable to work.  Plaintiff took a leave without pay as of that month.

Two (2) years later, Plaintiff issue a notice to Insurer requiring it to engage in arbitration again so that an arbitrator could issue a complementary opinion on the sleep apnea treatment. In the notice, Plaintiff insisted that, at the date of the Award, Plaintiff had no prior history of sleep problems.  Plaintiff also required that Insurer recognize a disability confirmed earlier by a psychiatrist, failing which an arbitrator had to be appointed.  Insurer refused.

Plaintiff applied to the Superior Court for an order referring Plaintiff and Insurer to arbitration in order to determine whether Plaintiff’s anxiety condition qualified as a disability within the terms of the Policy, issue an opinion on the sleep apnea and order payment of disability amounts due from September 2017 and exemplary damages.

Insurer applied for an order dismissing Plaintiff’s application, arguing that the Award was final and binding.  Insurer argued that the sole recourse Plaintiff had against the Award was to set it aside but that the delay in which to do so had expired.

Immer J. identified two (2) issues.  First, did the Award definitively resolve the dispute between Plaintiff and Insurer over Plaintiff’s disability?  Second, given the conclusions in the Award regarding sleep apnea, should another arbitrator now decide whether Plaintiff’s sleep apnea condition qualified as a disability under the Policy.

Despite neither party raising the issues, Immer J. addressed a question of jurisdiction.  At para. 39, he questioned whether he should be the first to determine whether issue estoppel arose on the record, asking if he should defer the determination first to a physician arbitrator.  Having noted it, he then observed that physician arbitrators are asked to resolve medical disputes and not judicial ones like the one before him.  As such, he held that he had jurisdiction to determine the issue of issue estoppel.

Immer J. noted that the parties’ agreement to arbitrate, set out in part at section 7.14 of the Policy, stipulated that the physician arbitrator’s decision was final and binding.  Immer J. determined that the arbitration conducted before the physician was subject to the general lex arbitri set out in article 2638 and following of Québec’s Civil Code of Québec, CQLR c CCQ-1991 (“C.C.Q.”) and article 620 and following of Code of Civil Procedure, CQLR c C-25.01 (“C.C.P.”).  See also articles 1-7 C.C.P. for general principles applicable to private dispute prevention and resolution processes.

The responses to such awards governed by Québec’s lex arbitri are limited to the three (3) options: compliance, homologation or annulment.  That said, Immer J. added a fourth option, available from the terms of the Policy.

[informal translation] ‘The physician-arbitrator’s decision is final and without appeal, executory and binding on the parties and binds the agents as well as the insured person and thus excludes all recourses to the courts unless the physician-arbitrator raises a concern governed by a specialty other than that of the physician-arbitrator.  In that case, a new medical arbitration is held involving a physician-arbitrator of the concerned specialty’.

As Plaintiff had not sought to set aside the Award within three (3) months after receipt of the Award, the Award was no longer subject to challenge under article 648 C.C.P.

Immer J. determined that the Award constituted res judicata (chose jugée) for the health conditions considered by the physician arbitrator in the Award.  He also held that the Award had determined issues raised in the newest demand made by Plaintiff and was subject to issue estoppel (préclusion découlant d’une question déjà tranchée).  See Construction S.Y.L. Tremblay Inc. v. Agence du revenu du Québec, 2018 QCCA 552 para. 20.  Unlike res judicata, Immer J. held that with issue estoppel the court still retained discretion to refuse application of the earlier determination.

To determine the impact of the Award on Plaintiff’s new demand, Immer J. reviewed the Award to determine the scope of the issues submitted to arbitration and the terms of the dispositive contained in the Award.  He concluded that the Award constituted a final and binding resolution on part of Plaintiff’s new demand and he refused to grant Plaintiff’s application to name an arbitrator in regard to the issues decided.

Immer J. also determined that issue estoppel did not preclude an order referring Plaintiff and the Insurer to arbitrate the sleep apnea condition before another physician having a specialty in that practice area.  He cautioned that the next physician arbitrator was not to call into question earlier determinations made by the first physician arbitrator and acknowledged that it was a ‘delicate balance’.

In his analysis, Immer J. flagged the complexity of the arbitrations covered by section 7.14. At para. 57, he noted that a single arbitration could cover a range of medical specialties in order to determine an insured’s disability and, in identifying an issue outside his or her speciality, the physician arbitrator could justify another arbitration for the parties.

Immer J. remarked that Plaintiff had applied for an injunction to name an arbitrator and not an application under article 625 C.C.P.  He stated that the procedural format of an injunction was ‘very heavy’ and inappropriate.  As he had not been asked to name an arbitrator under article 625 C.C.P., he would not do so.  When pleading, the parties acknowledge the procedural issue.  They informed Immer J. that they understood their options and would conduct themselves in accordance with the result of his decision.

urbitral notes – First, in addition to those authorities cited in the reasons, see Boucher v. Stelco Inc., 2005 SCC 64 (CanLII), [2005] 3 SCR 279 for an illustrations of the Supreme Court of Canada’s distinctions between res judicata and issue estoppel arising from a civil case originating from the courts of Québec.

Second, arbitral parties are often urged to consider the benefit of appointing a decision maker learned in the subject matter of their dispute.  The parties to the Policy did embrace that opportunity and, in doing so, further acknowledged the possibility that the arbitration conducted by one medical specialist might well lead to a second arbitration before a medical specialist learned in another area.  The parties to the Policy clearly endorsed that option and ability.  The reasons set out by Immer J. demonstrated that they were right to leave open the possibility of the ‘4th option’ to an award, namely another arbitration before another physician arbitrator on another issue.

Third, the reasons underline the limits of identifying a decision maker learned in the subject matter. Immer J. noted that the physicians, well-versed in their medical specialties, were not as well placed as the courts to resolve jurisdictional questions raising questions of law. In such cases, and despite the complexity of the evidence, the first determination of jurisdiction was kept by the court. 

This approach is a potential exception or nuance to the general approach, confirmed in Dell Computer Corp. v. Union des consommateurs, 2007 SCC 34 (CanLII), [2007] 2 SCR 801 and Seidel v. TELUS Communications Inc., 2011 SCC 15 (CanLII), [2011] 1 SCR 531, which urges courts to defer the first determination about jurisdiction to the arbitral tribunal.  That exception might arise when the decision maker has a speciality which includes no training or experience in law and the jurisdictional question requires a determination of law.  In that case, the courts would make the determination rather than defer first to the arbitral tribunal despite the need to consider extensive facts.