Neutral Citation: 2000 ONFSCDRS 153

FSCO A97-001228

FINANCIAL SERVICES COMMISSION OF ONTARIO

BETWEEN:

DONNA YAREMKO

Applicant

and

STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY

Insurer

DECISION ON EXPENSES

Before:

David J. Evans

Heard:

May 18, 2000, at the Offices of the Financial Services Commission of Ontario in Toronto.

Appearances:

David Arn for Mrs. Yaremko

Robert S. Franklin for State Farm Mutual Automobile Insurance Company

Issues:

The Applicant, Donna Yaremko, was injured in a motor vehicle accident on November 16, 1992. In a decision dated October 18, 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:

1. Mrs. Yaremko is not entitled to receive weekly benefits pursuant to section 13 of the Schedule from November 16, 1995.

2. Mrs. Yaremko is not entitled to expenses for home renovations.

3. Mrs. Yaremko is not entitled to receive care benefits, pursuant to section 7 of the Schedule.

4. Mrs. Yaremko is not entitled to the expenses for housekeeping and hairdressing services claimed pursuant to paragraph 6(1)(f) of the Schedule.

5. Mrs. Yaremko is not entitled to the expenses for an adjustable bed, walker and electric scooter claimed pursuant to paragraph 6(1)(f) of the Schedule.

6. Mrs. Yaremko is entitled to transportation expenses of $17 claimed pursuant to paragraph 6(1)(d) of the Schedule, plus interest.

The issue in this further hearing is:

1. Is Mrs. Yaremko entitled to her expenses incurred in respect of this arbitration hearing?

2. If the answer to issue 1 is "yes," what expenses is she entitled to?

Result:

1. Mrs. Yaremko is not entitled to her expenses of this hearing

EVIDENCE AND ANALYSIS:

Mrs. Yaremko seeks her arbitration expenses. State Farm is not seeking its expenses but asks that I exercise my discretion to refuse Mrs. Yaremko her expenses on the basis that most of her claims were frivolous and vexatious and that her conduct unduly prolonged the hearing. The application for arbitration in this case was filed after November 1, 1996. The parties agreed on the applicable law. They disagreed on its application.

Section 282(11) of the Insurance Act now allows expenses to be awarded to either the insured person or the insurer:

282.- (11) The arbitrator may award, according to the 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.

The criteria for awarding expenses are found in section 12(2) of O.Reg. 464/96, which states as follows:²

12.- (2) An arbitrator may award expenses to an insurer or insured person under subsection 282(11) of the Act if the arbitrator is satisfied that the award is justified, having regard to the following criteria:

1. Each party's degree of success in the outcome of the proceeding.

2. Conduct of the insurer or 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.

3. 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.

4. The degree of complexity, novelty or significance of the factual or legal issues raised in the proceeding.

5. If the insurer or the insured person requests, any written offers 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.

6. Any other matter related to the proceeding that the arbitrator considers relevant to the issue of whether an award of expenses is justified.

Arbitrators have an obligation to consider the legislated criteria, including the result, applying them to both parties. However, 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. The criteria, specifically clause 6, leave room for concerns about access to the dispute resolution system.³

Criterion 5 (offers to settle) is irrelevant: an offer had been made at the pre-hearing but was withdrawn prior to the hearing. Regarding criterion 6, Mrs. Yaremko did not raise novel issues of interpretation of general importance.

I will now examine the issues and results of Mrs. Yaremko's case in light of the relevant criteria.

Issues and Results:

Mrs. Yaremko made a claim for weekly non-earner benefits (post-156 weeks). Her counsel did not make any submissions on this claim at the end of the hearing. Mrs. Yaremko had been able to resume her activities after the accident. I find that her conduct in presenting this claim unduly prolonged the hearing.

Mrs. Yaremko made a large claim for home renovations. She claimed payment for a home elevator, yet her counsel again made no submissions. The cost of the other home modifications totalled approximately $50,000. Most of these claims were allegedly required because of her subjective complaints of dizziness. However, I found that inconsistencies in the pre-accident records and post-accident surveillance prevented me from relying on her testimony that the accident exacerbated her dizziness. I found the accident's contribution to her dizziness was at most minimal and therefore I rejected the related renovations. (Because of my negative findings on her dizziness, I also rejected Mrs. Yaremko's claims for an adjustable bed, a walker and a scooter.)

Other home modifications Mrs. Yaremko claimed related to the kitchen, particularly the kitchen cupboards. Although I rejected this claim, Mrs. Yaremko does have shoulder limitations, so at least on this aspect her claims were arguable.

I found Mrs. Yaremko claimed for housekeeping expenses and caregiving services that did not result from the accident nor were required because of the accident. Both of these claims were essentially based on her allegations of exacerbated dizziness. Mrs. Yaremko also claimed for hairdressing, but at the hearing, she testified that she had received the same services before the accident. (I note that State Farm had paid for some of these services until July 1996 and did not seek repayment.)

I did allow Mrs. Yaremko a small claim for travel expenses.

I find that, on balance, most of Mrs. Yaremko's claims were without merit. I find that this lack of merit could have been determined by her or her counsel long before the hearing. Therefore, I find that most of her claims were manifestly unfounded: she had been able to resume her activities yet claimed non-earner benefits, and she had herself paid for housekeeping and hairdressing expenses for a considerable period before the accident yet claimed them from State Farm afterwards as being accident-related expenses.

As for reasonable access to the dispute resolution system, I find that the only claims that could reasonably have required a hearing were those for modifications to the kitchen cupboards and the travel expenses.

Finally, as has already been seen, Mrs. Yaremko was almost completely unsuccessful in her claims.

Recently, in another expense decision Louvarz and Dominion of Canada General Insurance Company,⁴ I did not allow Mr. Louvarz his expenses despite having awarded him approximately $2,000. I find that the situation in this case is similar. Although Mrs. Yaremko had minimal success, and she had only one other claim that was reasonably arguable, I find that the other factors discussed above outweigh these factors. Accordingly, I find that Mrs. Yaremko is not entitled to her expenses of the hearing.

August 22, 2000

David J. Evans Arbitrator

Date

Neutral Citation: 2000 ONFSCDRS 153

FSCO A97-001228

FINANCIAL SERVICES COMMISSION OF ONTARIO

BETWEEN:

DONNA YAREMKO

Applicant

and

STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY

Insurer

ARBITRATION ORDER

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

1. Mrs. Yaremko is not entitled to her expenses of this hearing.

August 22, 2000

David J. Evans Arbitrator

Date

Footnotes

1. 1The Statutory Accident Benefits Schedule —Accidents On or Between June 22, 1990 and December 31, 1993, Regulation 672 of R.R.O. 1990, as amended by Ontario Regulations 660/93 and 779/93.
2. 2These criteria are incorporated into the Dispute Resolution Practice Code - Third edition (Rule 73.2 and section F)
3. 3Gray and Zurich Insurance Company, (FSCO Appeal P98-00047, June 11, 1999)
4. 4(FSCO A98-000446, February 25, 2000)