Financial Services Commission of Ontario
Neutral Citation: 2000 ONFSCDRS 117 FSCO A97-000110
Between:
Jose Pires Applicant
and
Zurich Insurance Company Insurer
Decision on Expenses
Before: M. Kaye Joachim Heard: Written Submissions Received December 23, 1999
Issues:
The Applicant, Jose Pires, was injured in a motor vehicle accident on April 24, 1994. In a decision dated November 19, 1999, I dealt with his claims for statutory accident benefits under the Schedule.1 I made the following orders, while reserving on the issue of expenses:
- Mr. Pires shall repay Zurich Insurance Company $51,761.86 plus interest from December 9, 1997.
The issue in this further hearing is:
- Is Zurich entitled to its expenses incurred in respect of this arbitration hearing?
Result:
- Zurich is entitled to its expenses.
Evidence and Analysis:
By letter dated March 15, 2000, counsel for the Applicant, J. Pollack, requested to be removed as solicitor of record as he had lost communication with Mr. Pires. By letter dated March 17, 2000, I removed Mr. Pollack as solicitor of record. On that same date, I invited Mr. Pires to respond to Zurich's submissions on the issue and amount of expenses by April 7, 2000. Mr. Pires made no submissions.
Zurich has requested its expenses of the arbitration hearing. An arbitrator may award expenses to an insurer under subsection 282(11) of the Insurance Act, if the arbitrator is satisfied that the award is justified, having regard to the criteria set out in the Expense Regulation. I find that this is an appropriate case in which to award Zurich its expenses. Not only was Mr. Pires unsuccessful in his claims for ongoing income replacement benefits, but I ordered him to repay all the income replacement benefits he had received on the basis that he misrepresented his self-employment status, and his pre-and post-accident income. Mr. Pires maintained these misrepresentations over the course of seven days of hearings. In light of my findings, as set out in my decision dated November 19, 1999, I concluded that the position taken by Mr. Pires, that he was entitled to further benefits and was not liable to repay any benefits, was manifestly unfounded and an abuse of process. Further, I was made aware of two written settlement offers made by Zurich, in accordance with Rule 74 of the Dispute Resolution Practice Code, in the amounts of $54,334 and $45,000 (inclusive of interest). These are somewhat less than the amount of repayment ordered, $51,761.86, plus interest, when the interest component is considered. In all the circumstances, I find that an award of expenses to Zurich is appropriate.
For these same reasons, I find that Mr. Pires commenced an arbitration that is an abuse of process within the meaning of section 282(11.2) of the Insurance Act. I find that this is an appropriate case to award Zurich the $3,000 assessed against it in respect of the arbitration.
Assessment of Expenses
Zurich claimed legal fees in respect of 140.2 hours in counsel's time and 9.3 hours of clerk/student's time, spent on preparing and attending the arbitration. This hearing proceeded over the course of seven days. Using an average of approximately six hours per hearing day, there were approximately 42 hours of hearing time. This leaves a ratio of approximately 2.3 hours of preparation time for every hour of hearing time (98.20 hours of preparation plus 42 hours of hearing time = 140.2 hours of counsel time). I find that this is a reasonable amount of preparation time.
Zurich claimed the standard hourly rate for a solicitor under the Legal Aid Plan, ($67.00/hour), plus a 25% increase, based on the equivalent of ten years of practice in civil litigation. The solicitor of record was called to the Bar in 1990. Since this hearing proceeded in 1998 and 1999, I am not satisfied that counsel had the requisite ten years experience at the time of the hearing. Accordingly, I am not satisfied that it is appropriate to use the 25% increase.
Zurich is entitled to legal fees in respect of 140.2 hours of counsel's time at the rate of $67.00/hour, for a total of $9,393.40.
I find that the 9.3 hours of clerk/student time claimed, at the Legal Aid rate of $23.00/hour, is reasonable. This totals $213.90.
Zurich is entitled to a total of $9,607.30 in respect of legal fees. GST on this amount is $672.51.
Zurich is entitled to the following disbursements, all of which appear to be reasonable in amount and are specifically addressed in the Commission's Expense Regulation:
Telex/Fax Machine $ 26.75
Courier $ 5.00
Postage $ 48.90
Transportation and Travel Expenses (parking/TTC) $ 70.49
Service of Witness $ 362.14
Photocopying $1,495.91
Long Distance Charges $ 35.18
Genesis Investigation $ 61.80
SubTotal $2,106.17
GST $ 147.43
Total $2,253.60
Mileage $ 58.80
Conduct Money $ 265.00
Clinical Notes and Records $ 250.00
Total $ 573.80
The total of the above amounts is $16,107.21, broken down as follows:
Counsel/Clerk/Student Fees (including GST) $10,279.81
Disbursements (including GST) $ 2,253.60
Additional Disbursements (no GST claimed) $ 573.80
Filing Fee $ 3,000.00
Total $16,107.21
Zurich is entitled to a total of $16,107.21 in dispute resolution expenses and the assessment fee.
Zurich requested interest on its expenses, but I am not satisfied that I have the authority to award interest on arbitration expenses (Henri and Allstate Insurance Company of Canada, A-007954, August 8, 1997).
June 28, 2000
M. Kaye Joachim Arbitrator
Arbitration Order
Under section 282 of the Insurance Act, R.S.O. 1990, c.I.8, as amended, it is ordered that:
- Mr. Pires shall pay Zurich $16,107.21 in dispute resolution expenses and the assessment fee.
June 28, 2000
M. Kaye Joachim Arbitrator
Footnotes
- The Statutory Accident Benefits Schedule —Accidents after December 31, 1993 and before November 1, 1996, Ontario Regulation 776/93, as amended by Ontario Regulations 635/94, 781/94, 463/96 and 304/98. O.R. 776/93 was extensively modified by O.R. 781/94; accordingly, where necessary, "1994 Schedule" refers to the original O.R. 776/93, and "1995 Schedule" refers to O.R. 776/93 as amended.