Neutral Citation: 2000 ONFSCDRS 167

FSCO A98-000102

FINANCIAL SERVICES COMMISSION OF ONTARIO

BETWEEN:

JEFFREY BLAKE

Applicant

and

JEVCO INSURANCE COMPANY

Insurer

DECISION ON EXPENSES

Before:

M. Kaye Joachim

Heard:

Written submissions

Appearances:

Robert H. Littlejohn for Mr. Blake

Brian Bangay for Jevco Insurance Company

Issues:

The Applicant, Jeffrey Blake, was injured in a motor vehicle accident on October 13, 1994. In a decision dated March 22, 2000, 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:

Jevco shall pay Mr. Blake weekly income benefits at the rate of $292.07 from June 3, 1997 to September 27, 1999, plus interest.
Mr. Blake's residual earning capacity is $268.49 per week.
Mr. Blake is not entitled to a special award.

The issues in this further hearing are:

Is Mr. Blake entitled to his expenses incurred in respect of this arbitration hearing?
Is Jevco entitled to its expenses incurred in respect of this arbitration hearing?

Result:

Mr. Blake is entitled to his expenses incurred in respect of this arbitration hearing.
Jevco is not entitled to its expenses incurred in respect of this arbitration hearing.

EVIDENCE AND ANALYSIS:

Mr. Blake and Jevco each seek an order in respect of expenses of the arbitration hearing held before me on November 29 and 30, 1999 in Barrie. This decision is based on Mr. Littlejohn's submissions of June 30, 2000, Mr. Bangay's submissions of July 5, 2000 and Mr. Littlejohn's reply of July 12, 2000.

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:

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:

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

Arbitrators must consider these legislated criteria and apply them to both parties. Concern for insureds access to the dispute resolution system continues to play a significant role in the exercise of arbitral discretion in deciding entitlement to expenses.

The issues in the hearing before me were:

What is Mr. Blake's residual earning capacity?
Is Mr. Blake entitled to income replacement benefits from June 3, 1997 until 14 days after the issuance of the REC DAC Report dated September 13, 1999?
Is Mr. Blake entitled to a special award?

With respect to the first issue, Mr. Blake asserted that he had no residual earning capacity. Jevco asserted that Mr. Blake's residual earning capacity was $21,424, as determined by the REC DAC. I found that Mr. Blake's residual earning capacity was $17,680, which translated to a gross weekly income of $340. It is not disputed that this resulted in a LECB of $62.07.

With respect to the second issue, Mr. Blake had already been awarded income replacement benefits from June 3, 1997 to September 13, 1997, in an interim decision. The same issue was raised before me, on a final basis. Mr. Blake was successful on that issue. However, the argument of that issue did not consume a significant portion of the hearing time.

With respect to the third issue, Mr. Blake was not successful in establishing entitlement to a special award. This issue did not consume a significant portion of the hearing.

I find that Mr. Blake was largely successful in his claims. While Mr. Blake was only partially successful in establishing his claim to an LECB, the determination of residual earning capacity is a complex one. Mr. Blake raised legitimate concerns about the reliability of the REC DAC assessment. Although his arguments were not accepted, they were not without merit. This was a case that deserved to be heard, regardless of the outcome. Further, Mr. Blake presented his case effectively and efficiently. Neither party made written settlement offers prior to the hearing.

Having regard to the complex nature of the issues, Mr. Blake's partial success, the lack of settlement offers, and the efficient presentation of his case, I am satisfied that Mr. Blake is entitled to his reasonable expenses incurred in respect of this arbitration proceeding. For those same reasons, I am not satisfied that Jevco is entitled to its expenses.

I urge the parties to resolve the amount of expenses. If they are unable to do so, either party may request an expense assessment, in accordance with of the Dispute Resolution Practice Code. (3rd. ed., April 15, 1997).

September 11, 2000

M. Kaye Joachim Arbitrator

Date