Neutral Citation: 1997 ONICDRG 30
OIC A-010292
ONTARIO INSURANCE COMMISSION
BETWEEN:
KLIME MILEVSKI
Applicant
and
STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY
Insurer
ASSESSMENT OF EXPENSES DECISION
A hearing in this matter was held on June 1, 7 and 8, October 17 and 18 and November 2, 1995. In her decision dated June 6, 1996, Arbitrator Marsha Faubert awarded Mr. Milevski his expenses incurred in the arbitration. An assessment of expenses hearing was held at the Ontario Insurance Commission on January 27, 1997 at 10:00 a.m.
Mr. Milevski, through his counsel, presented State Farm Mutual Automobile Insurance Company ("State Farm") with his bill of expenses dated June 19, 1996, together with a copy of the time dockets covering the period from June 23, 1994 to June 19, 1996. At the assessment hearing, Mr. Milevski's counsel filed a copy of his time dockets covering the period from June 19, 1996 to January 27, 1997. At the hearing he added to his time docket the expenses associated with the assessment hearing.
Attendance:
Mr. Pasternak represented Mr. Milevski and Mr. Adams represented State Farm.
Issue:
Is Mr. Milevski entitled to the legal expenses claimed?
Result:
I allow Mr. Milevski's legal expenses of $9,098.58 including G.S.T for the period from June 23, 1994 to June 19, 1996. I also allow his legal expenses of $404.09 including GST for the period from June 20, 1996 to January 24, 1997.
I do not allow Mr. Milevski's legal expenses of $324.16 including GST for preparation for and attendance at the assessment hearing for the period January 26 to January 27, 1997.
I do not allow the $5.00 parking charge claimed by Mr. Milevski as his counsel's parking expense for the day of the assessment hearing.
Mr. Milevski's Claim:
Mr. Milevski claims in respect of the arbitration, legal expenses incurred up to and including the expenses associated with the assessment hearing.
Mr. Milevski claims the following expenses for the period from June 23, 1994 to June 19, 1996:
Hearing preparation time
64.9 hours
Correspondence
2.7 hours
Pre-hearing time
4.25 hours
Hearing time (six days)
32.5 hours
Total
104.35 hours
Mr. Milevski maintains the claim for 102.45 hours for this period (as stated in his bill), despite a slight discrepancy in the calculation of hours. His claim is based on the senior counsel legal aid rate of $83 per hour in accordance with the Legal Aid Act, amounting to a bill of $9,098.58 including 7% GST.
After submitting his original bill of expenses, Mr. Milevski claimed the following additional legal expenses:
June 20, 1996 to January 24, 1997
4.55 hours
Assessment hearing preparation and attendance time, January 26 and January 27, 1997
3.65 hours
Total
8.20 hours
Mr. Milevski's total bill for the above items is $728.25 (8.20 hours X $83.00 per hour + 7% G.S.T.). He also claimed an additional $5.00 for his counsel parking his automobile on the day of the assessment hearing.
State Farm did not challenge the reasonableness of Mr. Milevski's bill for legal expenses, but rather argued that he did not claim legal expenses in accordance with Schedule 1 to the Dispute Resolution Practice Code, Regulation 664 (the 'Expenses Schedule") under the Insurance Act, R.S.O. 1990, c.I-8 as amended (the "Act"). State Farm specifically contended that Mr. Milevski's legal bill exceeds the maximum hours allowable under Schedule 3 to Regulation 710 under the Legal Aid Act.
The Law:
Under section 282 (11) of the Act an arbitrator may award to an insured person expenses incurred in respect of an arbitration proceeding, subject to the Expenses Schedule. Section 282 (11) provides:
282 (11) The arbitrator may award to the insured person such expenses incurred in respect of an arbitration proceeding as may be prescribed in the regulations to the maximum set out in the regulations.
Section 2 of the Expenses Schedule deals with awards with respect to legal fees:
2 (1) The legal fees payable by the insured person for the following matters may be awarded:
For all services performed before the hearing
For the preparation for an arbitration, an appeal or a variation hearing
For attendance at an arbitration, an appeal or a variation hearing
(2) The maximum amount that may be awarded for legal fees is the amount calculated using the hourly rates established under the Legal Aid Act for professional services in civil matters before the Ontario Court (General Division).
(3) For the purposes of subsection (2), the hourly rate may be adjusted to include, in appropriate circumstances the experience allowance established under the Legal Aid Act for more experienced solicitors.
The Act gives an arbitrator the discretion to award to an insured, as prescribed by regulation, his or her expenses incurred in respect of an arbitration proceeding. Section 2 of the Expenses Schedule provides that, when considering the amount of legal fees, an arbitrator may be guided by the hourly rates established under the Legal Aid Act1. Commission arbitration decisions have confirmed that the deciding factor in assessing an expense is the reasonableness of the expense as determined at the arbitrator's discretion.2 Courts consider such factors as the complexity of the proceeding, the importance of the issues, the conduct of any party that tended to shorten or unnecessarily lengthen the proceeding and whether any part of the proceeding was improper, vexatious or unnecessary.3
Reasons For Decision:
Legal Expenses from June 23, 1994 to June 19, 1996:
I have reviewed the legal expenses claimed for the period from June 23, 1994 to June 19, 1996 and allow the expenses claimed. I do not accept Allstate's submission that an applicant claiming legal fees in respect of an arbitration proceeding is limited in his or her claim to the maximum hours allowed under the Legal Aid Act, Regulation 710. In coming to my decision, I exercise the discretion allowed me under the Act and Expenses Schedule to examine the reasonableness of Mr. Milevski's claim.
For the period in question, Mr. Milevski claims 102.45 hours for a fee of $9,098.58, including G.S.T. I find this is a reasonable fee. In reaching my decision I took into account that the hearing involved six days, during three separate periods and took place over a period of six months. Mr. Milevski's counsel submitted that the resumptions of the hearing, which were spaced over months, required additional preparation time. I also considered that the hearing involved a number of complex issues, including duration of entitlement and the amount of Mr. Milevski's benefit, which would reasonably have affected the duration of preparation hearing time.
Legal Expenses for the Period From June 20, 1996 to January 24, 1997:
For this period, Mr. Milevski billed for 4.55 hours for a total fee of $404.09 including G.S.T. A review of the dockets for the period from June 19, 1996 to January 24, 1997 reveals mainly time billed for correspondence and communications with opposing counsel and the Commission with respect to the expense issue.
I find the $404.09 billed for the period June 20, 1996 to January 24, 1997 is reasonable. I find that the time billed during this period involved a response to the arbitrator's order as to expenses and hence falls within the scope of time spent in respect of the arbitration.
Legal Expenses for the Assessment Hearing - January 26 and 27, 1997
I do not accept that the 3.65 hours docketed and the $324.16 billed for preparation for and attendance at the assessment hearing is compensable under the Expenses Schedule. In my opinion, the assessment hearing is a new proceeding, separate and distinct from the arbitration proceeding. The Expenses Schedule in section 2 (2) specifically provides that expenses may be awarded for preparation and attendance at an arbitration, an appeal or a variation hearing. There is no provision for expenses for an assessment hearing.
I therefore do not allow the $324.16 billed for preparation for and attendance at the assessment hearing.
I also decline to allow the $5.00 parking expense charged by Mr. Milevski's counsel. There is no provision in the Expenses Schedule for such an expense.
Order:
I allow Mr. Milevski's legal expenses of $9,098.58 including G.S.T for the period from June 23, 1994 to June 19, 1996. I also allow his legal expenses of $404.09 including GST for the period from June 20, 1996 to January 24, 1997.
I do not allow Mr. Milevski's legal expenses of $324.16 including GST for preparation for and attendance at the assessment hearing for the period January 26 to January 27, 1997.
I do not allow the $5.00 parking charge claimed by Mr. Milevski as his counsel's parking expense for the day of the assessment hearing.
February 7, 1997
Beth Allen
Arbitrator
Date
Footnotes
- The Legal Aid Act, Regulation 710, Schedule 3, Part II provides certain maximum and minimum hours allowable for various stages in a civil proceeding.
- Ahmadi-Nadoushan and Allstate Insurance Company of Canada - Expenses Assessment (May 14, 1996), O.I.C. A-008488.
- Rules of Civil Procedure, Rule 57.01(1).