Neutral Citation: 1999 ONFSCDRS 131

FSCO A-950212

FINANCIAL SERVICES COMMISSION OF ONTARIO

Before:

David Evans

Heard:

By telephone conference call on April 23 and 30, 1999.

Appearances:

Paul Ledroit for Mr. Caputo

Grant Dow for Allstate Insurance Company of Canada

Issues:

The Applicant, Oreste Caputo, was injured in a motor vehicle accident on January 9, 1992. He was a self-employed ceramic tile setter. He returned to work after the accident for approximately a year, although he hired a worker to do the actual work of laying the tiles. After mediating a dispute with his insurer Allstate Insurance Company of Canada ("Allstate") about the termination of his benefits and their amount, he filed an Application for Arbitration, received at the Ontario Insurance Commission (as it was then known) on May 11, 1995. In a decision dated June 18, 1997, I dealt with Mr. Caputo's claims for statutory accident benefits under the Schedule.¹ I made the following orders:

1. Mr. Caputo is entitled to benefits to January 9, 1995, plus an additional eight weeks of benefits for work conditioning totalling $4,800.

2. Mr. Caputo is entitled to benefits in the amount of $600 per week.

3. Allstate is not entitled to a refund for overpayment of benefits or a deduction for benefits which may be available as a result of the second accident of December 21, 1994.

4. Mr. Caputo is entitled to his reasonable expenses of this arbitration hearing.

5. Mr. Caputo is entitled to interest on the outstanding benefits of $29,170.58 from August 1, 1996.

The issue in this further hearing is:

1. What is the amount I should award Mr. Caputo for his expenses incurred in respect of this arbitration hearing?

Result:

1. Allstate Insurance Company of Canada shall pay Mr. Caputo $23,239.21 in reimbursement of Mr. Caputo's arbitration expenses.

EVIDENCE AND ANALYSIS:

In my original decision, I awarded Mr. Caputo a total of approximately $34,000 in benefits and his expenses. His appeal of this decision was dismissed,² and Director's Delegate Rotter ordered that no appeal expenses were payable. The parties were not able to agree on the expenses of the hearing. Mr. Ledroit, counsel for Mr. Caputo, initially presented a "Bill of Costs" totalling $42,511.44. Mr. Dow, counsel for Allstate, raised a number of objections in his letter of April 8, 1999, and suggested that a reasonable amount for expenses would be $14,342.59. On the morning of the first teleconference of April 23, Mr. Ledroit's office faxed a response as well as additional supporting documentation. In light of the late response and the fact that the Bill of Costs was still not in the approved form, the hearing was adjourned one week to allow a revised Bill of Costs to be filed. The revised Bill of Costs claims $39,889.28 in fees and disbursements.

Mr. Ledroit and another member of his office billed 14.4 hours between January 9, 1995 and April 24, 1994 for "preliminary steps" and preparation for and participation in mediation at the Commission. Mr. Ledroit did not concede that the Expenses Schedule ("the Schedule")³ does not provide for these items, and submitted that most of the work had little to do with the mediation, in that his firm was gathering information for the case in general during a period that happened to precede the mediation. I do not accept that this proposition changes the established law that mediation expenses are not recoverable.⁴

Mr. Ledroit and Ms. Susan Murdoch shared most of the duties preparing for the hearing during the period September 18, 1995 to April 1, 1996. They were also both present for the first three days of the hearing (April 2, 3 and 4, 1996). However, afterwards, either one or the other was present at the hearing; Ms. Murdoch was present at the videotaping of the evidence of Mr. Blaak, the bookkeeper, on August 12, 1996, and at the hearing on August 28 and 29, while Mr. Ledroit was present at the hearing on August 20, 21 and 30. Since either Mr. Ledroit or Ms. Murdoch were clearly able to represent Mr. Caputo on his or her own on a number of hearing dates, I find it unnecessary to award a second counsel fee. When Mr. Ledroit was present at the hearing, expenses will be at his applicable hourly rate ($83.75); otherwise, they will be at Ms. Murdoch's rate ($75.38).

Mr. Dow objected to the ratio of hours of preparation in relation to the hours at the hearing itself. I calculate an overall average ratio of 4 for the period from September 18, 1995 to the last day of the hearing on August 30, 1996 (157.2 hours in preparation and 39.6 for the hearing). The ratio was 7 up to April 4, 1996, (86.8/12.5) and fell to 1.75 (38.4/14) for the last two days of the hearing. Mr. Ledroit's office claimed an additional 21.2 hours for matters subsequent to the hearing, including preparing written submissions. As discussed by Arbitrator Makepeace in her decision on expenses Henri and Allstate Insurance Company of Canada,⁵ arbitration decisions reveal a fair amount of variation in the ratio of pre-hearing or hearing attendance time to preparation time and other services provided before a hearing. Although some arbitrators applied a ratio of 1, Arbitrator Makepeace applied a ratio of 4 in Henri. This case bears considerable similarity to Henri, in that in both cases the applicants ran their own businesses, claimed ongoing weekly benefits (including weekly benefits after 156 weeks), and disputed the amount of the benefits, leading to issues of accounting. (The most important accounting issue was the reapportionment of several invoices that Mr. Wilt Blaak, the person hired by Mr. Caputo to do his bookkeeping, originally included in Mr. Caputo's 1992 income and then attributed to his 1991 income, thereby increasing the amount on which his benefit was calculated and decreasing the deduction for post-accident income.) I heard a similar number of witnesses, and the total hours of hearing were roughly the same as in Henri. Considering that this was also a case of moderate complexity, I allow the same ratio of 4, creating a multiplication factor of 5 (one hour of hearing plus four hours of preparation) to be applied against the hours either Mr. Ledroit (accompanied or alone) or Ms. Murdoch (alone) was present at the hearing. Mr. Ledroit's fee is $10,259.38 ($83.75 x 24.5 hours x multiplication factor of 5), and Ms. Murdoch's fee is $5,691.19 ($75.38 x 15.1 hours x 5), for a total of $15,950.57, plus GST on the total of $1,116.54.