Implementation of internal firewalls between accident benefits
and bodily injury departments has been a struggle for automobile
insurers since the publication of the Insurance Bureau of
Canada's Bulletin 184, called "Internal Transfer of
Information from Accident Benefits Adjuster to Tort
Adjuster"1. The type of information that a firewall
protects and the direction in which it blocks the flow of
information is not always clear. Caution and privacy concerns have
at times hindered vital communications between different
departments of an insurance company, particularly when dealing with
positive results of fraud investigations.
Arbitrator Alves addressed some of these concerns in the recent
Financial Services Commission of Ontario decision in Al-Taee
and West Elgin Mutual Insurance Company2. She was
asked to considered whether a firewall restricts the transmission
of information both to and from the accident benefits file, and
whether the claimant can have an expectation of privacy that
extends to preclude disclosure of liability information that
undermines the merits of his accident benefits claim.
Mr. Al-Taee reported that he was injured in a motor vehicle
accident with an unidentified motorist on September 17, 2011. He
claimed and received first party statutory accident benefits from
West Elgin Mutual. He also commenced an action against West Elgin
Mutual for inadequate insurance coverage, pursuant to the OPCF 44R
endorsement on his insurance policy.
West Elgin Mutual secured two engineering reports within the
context of the unidentified driver lawsuit. The reports strongly
suggested that the accident did not occur in the manner described
by Mr. Al-Taee. West Elgin Mutual disclosed the reports to its
counsel in the accident benefits claim, which prompted a denial of
Mr. Al-Taee's accident benefits claim on the basis of
Mr. Al-Taee brought a motion to have the engineering reports
excluded from evidence at the hearing of the accident benefits
dispute. His counsel argued that West Elgin Mutual breached its
firewall and violated Mr. Al-Taee's reasonable expectation of
privacy by sharing the engineering reports between its departments
without Mr. Al-Taee's consent.
Firewall is a One-Way Street
Arbitrator Alves was not persuaded that the firewall had been
breached. She accepted West Elgin Mutual's argument that a
firewall operates in one direction only, by protecting the
claimant's accident benefits file from the same insurer's
bodily injury adjusters. A firewall does not stop the flow of
information from the bodily injury claim to the accident benefits
Reasonable Expectation of Privacy Only Exists in a First Party
Arbitrator Alves was also not persuaded that Mr. Al-Taee would
have had a reasonable expectation of privacy in a tort action. His
expectation of privacy was, however, reasonable within the context
of his inadequate insurance claim. In Arbitrator Alves' view,
the inadequate insurance action was a first party claim because it
was based on the insurance contract between Mr. Al-Taee and West
Privacy is Important, but Not Unassailable
Arbitrator Alves concluded that West Elgin Mutual breached Mr.
Al-Taee's privacy when it disclosed the engineering reports to
its accident benefits counsel. She nevertheless refused to exclude
the reports from the hearing in the interest of ensuring that all
relevant evidence was available to her in the determination of the
merits of Mr. Al-Taee's claim. Arbitrator Alves also
acknowledged the principle that a privilege or privacy interest is
waived when there is a need to defend against a claim.
Arbitrator Alves' decision will be helpful to those hoping
to contain the spread of the firewall to its most basic purpose,
which is to protect a claimant's accident benefits file from
the same insurance company's bodily injury adjusters.
The decision also highlights the practical implications of
disclosing information that goes to the merits of the case and
raises questions regarding the claimant's credibility. This
may, by extension, include surveillance documentation. The decision
arguably illustrates that information of this nature does not
warrant the same degree of protection that is typically afforded to
This decision is currently under appeal.
 January 22, 1997.
 FSCO A14-001776, March 4, 2016.
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