Neutral Citation: 1999 ONFSCDRS 117 FSCO A98-001157

BETWEEN:

LINDA KHAN Applicant

and

ALLSTATE INSURANCE COMPANY OF CANADA Insurer

DECISION ON EXPENSES

Before: K. Julaine Palmer Heard: Written submissions received from June 8 to 15, 1999

Appearances: Phil Bouranov for Mrs. Khan Grant R. Dow for Allstate Insurance Company of Canada

Issues:

The Applicant, Linda Khan, was injured in a motor vehicle accident on April 4, 1998. In a decision dated May 20, 1999, I dealt with her claims for statutory accident benefits under the Schedule.¹ I made the following orders, while reserving on the issue of expenses:

Mrs. Khan is not entitled to further caregiver benefits or payments for housekeeping services.
Allstate shall pay Mrs. Khan $585 for an occupational therapy assessment, plus interest as calculated pursuant to section 46 of the Schedule at 2 percent per month from 30 days after the account for the assessment was rendered to Allstate.
Mrs. Khan is not entitled to a special award pursuant to section 282(10) of the Act.

The issue in this further hearing is:

Is either party entitled to its expenses incurred in respect of this arbitration hearing?

Result:

Each party shall bear its own expenses of this arbitration proceeding.

EVIDENCE AND ANALYSIS:

Mrs. Khan submits that Allstate should pay her expenses, while Allstate says that she should pay its expenses. Both parties submitted brief written submissions in support of their positions.

In deciding this issue, I have considered the criteria set out in Rule 73.2 of the Dispute Resolution Practice Code (Third Edition — April 15, 1997) and organized my reasons following the same order as the six subparagraphs that comprise that rule.

Mrs. Khan was not successful with regard to her housekeeping and caregiving claim, which formed the greatest part of her claims against Allstate. She was successful only on the issue of the payment of the occupational therapy assessment, which cost $585.

No conduct by either party could be said to have either substantially shortened or unduly prolonged the proceeding. I do not accept Allstate’s submission that the vagueness and superficiality of the testimony about the caregiving and housekeeping unreasonably prolonged the hearing. My comment, at page 5 of the Decision, suggested the contrary — that the testimony and evidence was insufficiently detailed.

No position taken by either party was manifestly unfounded or constituted an abuse of process. However, it may be noted that until 12 days before the hearing, only Mrs. Khan's physiotherapy had been paid by Allstate. She had received no payment at all for caregiving or housekeeping expenses.

Some degree of novelty could be said to attach to this arbitration with respect to the payment of the occupational therapy assessment. Only one prior arbitration decision had dealt with this issue.

The Offer to Settle from Allstate, dated March 31, 1999, complies with paragraphs 74.1(a) and (b) of the Code, so I must consider it on the issue of expenses. I am unable to comment on any offer from Mrs. Khan, because although her representative submits that two such offers were made to Allstate, they are not before me. (These Offers to Settle were originally included in the brief of documents presented by the Applicant at the hearing, but were removed at the beginning of the hearing by the Applicant’s representative after Allstate objected. I did not read the offers before they were removed.) Mrs. Khan’s representative should have forwarded these offers with his submissions. I do not know if either of the Offers to Settle from Mrs. Khan responded to Allstate's offer or if they were independent.

Allstate offered $1,313 to Mrs. Khan "in full satisfaction of the balance of claims made for housekeeping and caregiving expenses incurred and as submitted as well as the account of Canadian Supplies & Consulting." It would appear that the account referred to is the one for the occupational therapy assessment, in the sum of $585. (This offer was additional to the $1,456 sent the same day directly to Mrs. Khan for housekeeping and caregiving expenses incurred.)

I agree with Allstate’s submission that this offer exceeds the amount which Mrs. Khan recovered after the arbitration, which was only the occupational therapy account of $585, plus interest, amounting to approximately $143, according to Allstate’s calculation. I note, however, that this offer came a scant 12 days before the hearing was to begin. Even at that late date, however, a reasonable assessment of Mrs. Khan’s entitlement under the Schedule would have been that she would not recover more after a hearing.

In addition, as part of its offer, Allstate required "a full and final release in the form satisfactory to the solicitors for the insurer." In other words, Allstate required Mrs. Khan to give up any other potential claims that she might have against Allstate for statutory accident benefits arising out of the accident.

As I stated in the Decision on Expenses in A.K. and Allstate Insurance Company of Canada; (FSCO A97-0003SS, May 12, 1999), the requirement by the insurer of a release was superfluous to the settlement of the arbitration. A release is never required by the Commission to settle the issues in dispute in any arbitration. Depending upon an individual insured person’s situation, providing a release of all claims could be a significant concession, because, for example, it would preclude applying to the insurer for any future treatment of injuries caused by the accident.

In Mrs. Khan's case, at the hearing she was still complaining of back pain, but I do not know if future treatment will be recommended. It is difficult to assess the value of a release in these circumstances. Providing a release is a serious decision that could be oppressive, because it demands a degree of prescience that anyone, let alone an injured lay person, could find impossible to reasonably predict. I consider this requirement by Allstate to be a significant impediment to obtaining an order for expenses against this insured person.

As for other matters related to the proceeding that I consider "relevant to the issue of whether an award of expenses is justified," as set out in paragraph 73.2(f) of the Code, I would include the systemic considerations that Arbitrator Alves identified and discussed in her Decision on Expenses in Gray and Zurich Insurance Company, (FSCO A97-001660, January 29, 1999). This system continues to be one "designed to facilitate applicants' access to a speedy adjudication of disputes."²

Taking all of the above criteria into consideration, the most fair distribution of the expenses of this proceeding is for each party to bear its own expenses.

June 23, 1999

K. Julaine Palmer Arbitrator

ARBITRATION ORDER