Neutral Citation: 1999 ONFSCDRS 177 FSCO A97-001946

Between:

Maria N. Jimenez Applicant

and

CUMIS General Insurance Company Insurer

Decision on Expenses

Before: Judith Killoran

Heard: Written Submissions received on July 9, 16 and 27, 1999

Appearances: Mark Baker for Ms. Jimenez Elizabeth Cummins Seto for CUMIS General Insurance Company

Issues:

The Applicant, Maria N. Jimenez, was injured in motor vehicle accidents on September 5 and November 19, 1993. In a decision dated April 28, 1999, I dealt with her claim for statutory accident benefits under the Schedule.¹ I made the following order, while reserving on the issue of expenses:

Ms. Jimenez' claim for weekly benefits is dismissed.

The issue in this further hearing is:

Is Ms. Jimenez entitled to her expenses of the arbitration hearing and this hearing on expenses?

Result:

Ms. Jimenez is entitled to her expenses of the arbitration hearing and this hearing on expenses.

Evidence and Analysis:

Background:

Ms. Jimenez suffered significant injuries in a motor vehicle accident on November 19, 1993, including a fractured left hemipelvis and ligamentous injuries to both knees. Although Ms. Jimenez suffered some limitation of activity, I was not satisfied that she sustained such a degree of impairment as to continuously prevent her from engaging in substantially all of her former activities. I found that she did not satisfy the test to receive weekly benefits under subsection 13(8)(b) of the Schedule.

Test for Awarding Expenses:

As Ms. Jimenez' application for arbitration was filed after November 1, 1996, the amendments to the expense provisions apply. Subsection 282(11) of the Insurance Act specifies:

The arbitrator may award, according to criteria prescribed by the regulations, to the insured person or the insurer, all or part of such expenses incurred in respect of an arbitration proceeding as may be prescribed in the regulations, to the maximum set out in the regulations.

Ontario Regulation 664, as amended by Ontario Regulation 464/96, and reflected in Rule 73.2 and Section F of the Dispute Resolution Practice Code (the "Code"), prescribes the criteria. They are:

Each party's degree of success in the outcome of the proceeding.
Conduct of the insurer or the insured person that tended to shorten or facilitate the proceeding or that tended to prolong, obstruct, or hinder the proceeding, including failure to comply with undertakings or orders.
Whether the proceeding or any position taken by the insurer or the insured person during the proceeding was manifestly unfounded, frivolous, vexatious, fraudulent, or an abuse of process.
The degree of complexity, novelty or significance of the factual or legal issues raised in the proceeding.
If the insurer or the insured person requests, any written offer to settle made after the conclusion of mediation and before the conclusion of the arbitration in accordance with the rules of practice and procedure applicable to the proceeding, including the terms of the offers, the timing of the offers and the responses to the offers, having regard to the result of the proceeding.
Any other matter related to the proceeding that the arbitrator considers relevant to the issue of whether an award of expenses is justified.

Although Ms. Jimenez was not successful with her claim, the degree of either party's success is not the only criterion on which I may base an award of expenses. In the appeal of Gray and Zurich Insurance Company, Director's Delegate Draper made the following comments:

Arbitrators now have an obligation to consider the legislated criteria, including the result, applying them to both parties. However, I agree with the arbitrator that the criteria do not reflect a move to the kind of results-based approach used by the courts. Success is only one criterion in an open-ended list and, therefore, must be weighed against the other relevant considerations. I also agree with the arbitrator that the criteria, specifically clause 6, leave room for concerns about the access to the dispute resolution system.²

Offer to Settle:

The Insurer submitted that I consider its Offer to Settle in connection with an award of expenses. On March 5, 1999, one day after a pre-hearing conference, the Insurer served Ms. Jimenez with an Offer to Settle.

With respect to Offers to Settle, the Code provides:

74.1 An adjudicator will consider an Offer to Settle in connection with an award of expenses provided that:

(a) it was made in writing, was served on the other parties and contains:

(i) the full terms of the Offer to Settle;

(ii) the date when the Offer was served and the time period during which it remained open for acceptance;

AND

(b) the Offer was made after the conclusion of mediation and before the conclusion of the hearing, with particular consideration given to any Offer served after the conclusion of the pre-hearing discussion or preliminary conference, as the case may be, up to five days before the commencement of the hearing.

However, the Insurer did not file, within five days of the release of the decision in this case, any Offer to Settle for consideration in connection with an award of expenses. Rule 75.2 of the Code specifies:

75.2 In connection with an award of expenses, the parties will not advise the adjudicator of an Offer to Settle or a Response to an Offer to Settle except as provided in this Rule:

(a) the adjudicator will deliver confirmation to the parties that all issues in dispute have been decided, except expenses;

(b) within 5 days of the delivery of such confirmation, either party will file any relevant Offer to Settle which was made in accordance with Rule 74.1, for consideration in connection with an award of expenses provided that:

(i) notice of intention to rely on an Offer to Settle is served on the other party along with a copy of the Offer; and

(ii) such notice and copy of the Offer are filed, together with Statement of Service in Form E.

However, the Code also provides:

Waiver of Procedural Requirements

79.1 Subject to the requirements of the Insurance Act and the SPPA, the adjudicator may on such terms as he or she considers appropriate:

(a) set aside any time limit set out in these Rules for doing any act, serving any notice, filing any document or holding any hearing;

(b) decide that any Rule does not apply in respect of a proceeding.

I am prepared to consider the Offer to Settle contained in counsel's letter of March 5, 1999 in connection with this expense hearing. Her letter states: "My intention is to bring this offer to the attention of the Arbitrator on the issue of costs at the end of the hearing." This provided adequate notice to Ms. Jimenez. There is no prejudice to Ms. Jimenez if the procedural requirement found in Rule 75.2 is waived.

However, the Offer to Settle from the Insurer was not served on Ms. Jimenez within the five-day period before the hearing. Therefore, it does not qualify for "particular consideration". As well, it is an attempt to settle entitlement to all potential accident benefits, not just the benefits claimed in the arbitration hearing. I attach little weight to Offers to Settle, which a party wishes to have considered for the purposes of expenses, when the offer represents a lump sum settlement of all outstanding issues, including those not being considered in the arbitration.³

Findings:

Cumis asked that I consider 14 submissions in addition to the fact that the Insurer was successful in the result. These submissions related to Ms. Jimenez' conduct and ranged from delays attributed to her frequent change of counsel to the absence of physical findings to support her claim. After considering all the Insurer's submissions, I am not persuaded that Ms. Jimenez' conduct disqualifies her from entitlement to her reasonable and allowable expenses.

Although Ms. Jimenez was not successful in her application for weekly benefits under subsection 13(8)(b) of the Schedule, this does not mean her application was unreasonable. I exercise my discretion to award Ms. Jimenez her expenses of the arbitration hearing and this hearing on expenses. Ms. Jimenez suffered serious injuries and continues to experience a degree of impairment. The issue between the parties was the extent of the impairment and this issue was properly taken to hearing. With very minor exceptions, both parties prepared the necessary medical evidence, complied with production requirements and presented a joint brief for use at the hearing.

The dispute resolution process facilitates access to the arbitration system for the speedy adjudication of disputes. Another relevant consideration when awarding expenses is the issue of accessibility. I am mindful that the fear of expenses being awarded against applicants could deter them from bringing forward meritorious claims. This, in turn, could jeopardize reasonable accessibility to the dispute resolution system.

In his submissions, Ms. Jimenez' counsel indicated that he hoped that if Ms. Jimenez were awarded her expenses, he and counsel for the Insurer would be able to come to some reasonable compromise on the amount. To assist in that exercise, I direct counsel to Rule 77 of the Code governing the assessment of expenses and encourage them to resolve the amount of expenses.

September 21, 1999

Judith Killoran Arbitrator

Arbitration Order

Under section 282 of the Insurance Act, R.S.O. 1990, c.I.8, as amended, it is ordered that:

Cumis shall pay Ms. Jimenez for the expenses of the arbitration hearing and this hearing on expenses.