Simpson v. Trafalgar Insurance Company of Canada, 2000 ONFSCDRS 129

Neutral Citation: 2000 ONFSCDRS 129

FSCO A98-000215

BETWEEN:

PAMELA SIMPSON

Applicant

and

TRAFALGAR INSURANCE COMPANY OF CANADA

Insurer

DECISION ON EXPENSES

Before: Judith Killoran

Heard: By telephone conference call on June 22, 2000.

Appearances:

David S. Wilson for Mrs. Simpson

Brian Bangay for Trafalgar Insurance Company of Canada

Issues:

The Applicant, Pamela Simpson, was injured in a motor vehicle accident on November 1, 1995. In a decision dated February 4, 2000, 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:

The benefits payable to Mrs. Simpson after October 31, 1997 should be characterized as income replacement benefits until August 30, 1999, which was 14 days following receipt of the assessment of her residual earning capacity by a REC DAC. As of August 30, 1999, Trafalgar could begin paying to Mrs Simpson LECBs determined in accordance with sections 23 and 23(5.1) of the Schedule. The LECBs are subject to the reviews established in sections 33-35 of the Schedule.
Trafalgar shall pay Mrs. Simpson a lump sum special award of 10 percent of the amount to which she was entitled at the date of Arbitrator Palmer's order of July 16, 1998, together with interest on all amounts then owing to her (including unpaid interest) at the rate of 2 percent per month, compounded monthly, from the time the benefits first became payable under the Schedule.

The issue in this further hearing is:

What is the amount of expenses to which Mrs. Simpson is entitled in respect of this arbitration hearing?

Result:

Trafalgar shall pay Mrs. Simpson's expenses, including legal fees of $18,000 plus GST and disbursements of $1,688, plus GST on those disbursements to which GST is applicable.

EVIDENCE AND ANALYSIS:

Assessment of Expenses:

Subsection 282(11) of the Insurance Act R.S.O. 1990, c.I.8, provides that:

The arbitrator may award, according to criteria prescribed by the regulation, 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.

Trafalgar has agreed that Mrs. Simpson is entitled to her expenses of the arbitration hearing. The issue is the amount of expenses to which she is entitled.

In the decision of Henri and Allstate Insurance Company of Canada,² Arbitrator Makepeace listed a number of general principles that have emerged from arbitration decisions regarding assessments of expenses. I agree with her conclusion that: "the main criterion in assessing an applicant's claim for arbitration expenses is reasonableness, subject to the rules set out in the expense regulation," and "rather than a 'line by line' enquiry into an applicant's claim for expenses, arbitrators should fix a reasonable ballpark figure based on all the circumstances, including the dockets submitted, and the length and complexity of the hearing."

Disbursements:

Mrs. Simpson seeks payment of disbursements totalling $1,688 plus GST on those disbursements to which GST is applicable. Trafalgar has agreed to pay the total amount claimed, subject to invoices being provided for the cost of medical reports. I find that the disbursements claimed were reasonable and necessary. Therefore, Mrs. Simpson is entitled to payment of the disbursements incurred on her behalf.

Legal Fees:

Section 3 of Ontario Regulations 664, R.R.O. 1990, as amended, provides the following:

(1) The legal fees payable by the insured person or the insurer for the following matters may be awarded:

For all services performed before an arbitration, appeal, variation or revocation hearing.
For the preparation for an arbitration, appeal, variation or revocation hearing.
For attendance at an arbitration, appeal, variation or revocation hearing.
For services subsequent to an arbitration, appeal, variation or revocation hearing.

(2) The number of hours for which legal fees may be awarded shall be determined by the arbitrator, having regard to the criteria set out in subsection 12(2) of the Regulation.

(3) The maximum amount that may be awarded for legal fees is the amount calculated using the hourly rates set out in the Dispute Resolution Practice Code published by the Ontario Insurance Commission, as it may be amended from time to time.

Trafalgar agreed to pay the maximum fee allowable under Rule 76.1 of the Dispute Resolution Practice Code (Third Edition, April 15, 1997) of $150 per hour for applicant's counsel. Therefore, the only issue in dispute is the amount of hours to be paid by Trafalgar for preparation and attendance by Mrs. Simpson's counsel.

Hours of Preparation and Attendance:

The number of hours for which legal fees may be awarded shall be determined according to the criteria found in subsection 12(2) of Ontario Regulation 664, R.R.O. 1990, as amended. 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 offers to settle made after 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 response 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.

Mrs. Simpson has submitted a bill of costs for 144.85 hours of her counsel's time which totals $21,727.50 plus GST. Trafalgar claims that Mrs. Simpson is entitled to payment of only 70 to 75 hours of her counsel's time.

Mrs. Simpson and Trafalgar made extensive submissions relating to the bill of costs and indeed, did conduct a 'line by line enquiry' of the bill. I have considered all of these submissions and the criteria in the regulation when arriving at my decision.

The bill of costs submitted by Mrs. Simpson was for preparation and attendance with respect to two separate hearings for which decisions were issued and an attempted appeal by Trafalgar of an interim decision in the case. There was approximately a day of attendance on April 28, 1998 for a motion on interim benefits and then preparation of written submissions at the request of the arbitrator followed by further submissions which were requested. On September 25, 1998, there was a further pre-hearing to which counsel had to prepare an outline of the issues at the request of the arbitrator. There was preparation for a telephone conference with the Director's Delegate and preparation of submissions. On March 22, 1999, there was an attendance and submissions until the matter was adjourned. As well, there were approximately 1-1/2 days of hearing before an arbitrator on October 18 and 19, 1999.

There were a number of instances where counsel were requested to file written submissions which added considerable time to the work done on this file. This case was unusual with some unique issues which were of great significance to Mrs. Simpson because they related to her entitlement to benefits, including a loss of earning capacity benefit, interest and a special award.

I have reviewed the bill of costs and reduced some preparation time which appeared excessive. However, in consideration of the particular circumstances of this case, Mrs. Simpson should be compensated for 120 hours of counsel time at $150 per hour which totals $18,000 plus GST.

Conclusion:

I find that Trafalgar shall pay Mrs. Simpson's legal fees for 120 hours of her counsel's time at $150 per hour which equals $18,000 plus GST. I also find that Trafalgar shall pay Mrs. Simpson for disbursements of $1,688 plus GST on those disbursements to which GST is applicable.

July 10, 2000

Judith Killoran Arbitrator

Date