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Scope of Documentary Production in Loss Transfer Disputes: Reasonableness, Probative Value and Costs of Production

By Colleen Mackeigan

In the recent decision of Unifund Insurance Company v. Chartis Insurance Company of Canada (January 14, 2021), Arbitrator Bialkowski granted a wide breadth of documentary production requested in the context of a loss transfer dispute. His decision was predicated on the reasonableness of the requests and the probative value of the documents requested versus the cost the first party insurer would bear in fulfilling the requests.


Matthew Asiedu was involved in a collision in 2013 with a tractor-trailer. Mr. Asiedu was insured by Unifund Insurance Company (“Unifund”) and the tractor-trailer was insured by Chartis Insurance Company of Canada (“Chartis”).

Mr. Asiedu suffered orthopaedic injuries a result of the accident and an alleged traumatic brain injury. An issue in dispute in the first party accident benefit claim was whether he suffered psychosis/schizophrenia arising from the accident.

Unifund paid accident benefits to Mr. Asiedu and sought loss transfer from Chartis pursuant to s. 275 of the Insurance Act and s. 9 of O.Reg. 644.

Chartis paid the first ten loss transfer indemnity requests received by Unifund in full. However, the last loss transfer indemnity request, consisting of the $630,000.00 lump sum accident benefits settlement paid to Mr. Asiedu by Unifund is now in dispute. Chartis questions the reasonableness of the payment and particularly, Unifund’s assessment of the risk that Mr. Asiedu was catastrophically impaired, in face of the medical documentation available to Unifund at that time.

Documentary Production Request

Chartis requested numerous documents to be produced by Unifund in order for Chartis to assess the reasonableness of the lump sum settlement payment, including CVs of the file handlers, unredacted log notes, all internal communications of Unifund regarding the claim, the transcript of the examination under oath of the claimant, legal opinions, the LAT pleadings, a breakdown of how each of the settlement amounts were reached, and a sworn Affidavit of Documents.[1]

Legal Test

Arbitrator Bialkowski agreed with Arbitrator Samis in Royal and SunAlliance v. Wawanesa (April 17, 2012) that the test to be applied for disputed productions in a loss transfer proceeding is “relevance”, such that if a document is not protected by privilege and is relevant to the issue between the parties, it should be produced.

Arbitrator Bialkowski also agreed with Arbitrator Novick in Portage La Prairie Mutual Insurance Company v. Royal and SunAlliance Insurance Company of Canada (February 13, 2017)and Wawanesa v. Zurich (January 25, 2019). In these cases, Arbitrator Novick found that any documents or notes in the file of the first party insurer that can reasonably be expected to illuminate claims handling decisions and the criteria applied in adjusting the file should be produced to the second party insurer.

The underlying factor Arbitrator Bialkowski considered, in addition to relevance, was the costs involved to provide the additional information weighed against the probative value of the information being sought.


Arbitrator Bialkowski ordered that that the accident benefit file be delivered to Chartis in an organized fashion.

Arbitrator Bialkowski found that the request for job titles, job descriptions and CVs of the members of the First Loss Review Team and Large Loss Review Team was unreasonable on the balance of the costs involved with providing such information versus the probative value the information would hold for Chartis and refused to order the production of same.

With respect to the request for all internal communications of Unifund employees involved in the handling of the accident benefits file, Arbitrator Bialkowski found that the cost considerations of same made it unreasonable to require that each individual involved in the file search their e-mail history for communications. The request was limited to the communications readily available in the accident benefit file, subject to privilege.

While a sworn Affidavit of Documents is uncommon in loss transfer and priority disputes, in this case it was considered that the claims of privilege in the documentary production ordered may be too contentious to proceed in the normal course of the first party insurer advising which documents (or portions thereof) privilege is claimed over and providing the reasons for same. Accordingly, it was ordered that the Affidavit of Documents be drafted and produced by Unifund if requested.

Arbitrator Bialkowski ordered the production of the balance of documents requested, if such documents exist and subject to claims of privilege and gave specific reasons for each request, although the overall theme was that the documents requested were relevant and the probative value of the production of the documents outweighed any costs associated with producing same.

Arbitrator Bialkowski also ordered an examination under oath of one adjuster/file handler of Unifund, the choice of whom is left to Chartis. He noted that it would be unreasonable to order an examination under oath of multiple adjusters involved in the claims handling, and the second party insurer should only be entitled to one examination under oath. However, if Unifund wished to avoid the potential of extensive undertakings they may wish to produce both claims handlers for examination.

Furthermore, if it was found at the examination under oath that Unifund had relied on any legal opinion in respect to the payment of any disputed benefits, then the production of the legal opinion is ordered.

Arbitrator Bialkowski followed the reasoning of Justice Perrell in Creative Career Systems Inc. v. Ontario, 2012 ONSC 649, and Arbitrator Novick in ING Insurance Co. of Canada v. Insurance Corp of British Columbia, such that if a first party insurer is attempting to defend a decision that was made as a result of legal advice received, the solicitor-client privilege attached to the document is impliedly waived because the state of mind of the first party insurer is put at issue and the state of mind was guided by a legal opinion.


This decision serves as valuable direction regarding the wide breadth of documentary production a first party insurer faces in a loss transfer dispute. While the issue of “relevance” is often the main focus of arguments on preliminary hearings regarding documentary production, counsel will want to turn their mind to advancing arguments regarding the probative value of the documents requested versus the costs the first party insurer will bear in fulfilling the requests. 

Furthermore, this decision reminds first party insurers and defence counsel retained in first party accident benefit matters that written opinions providing strategic legal advice are producible and likely not covered by solicitor-client privilege in the context of a loss transfer dispute, if the first party insurer relied on the opinion of their counsel in handling the payment and settlement of an accident benefit claim.  

[1] This is a summary of the list of documents requested by Chartis. For further particulars of the documents sought please see paragraph 3 of Unifund Insurance Company and Chartis Insurance Company of Canada (January 14, 2021, Arbitrator Bialkowski).