Neutral Citation: 2000 ONFSCDRS 219

FSCO A98–000816

FINANCIAL SERVICES COMMISSION OF ONTARIO

BETWEEN:

VLADO ARGIROVSKI

Applicant

and

ALLSTATE INSURANCE COMPANY OF CANADA

Insurer

DECISION ON EXPENSES

Before:

K. Julaine Palmer

Heard:

By telephone conference calls on June 2, 2000 and October 27, 2000

Appearances:

Jadranka Cavrak for Mr. Argirovski

Ian D. Kirby for Allstate Insurance Company of Canada

Issues:

Vlado Argirovski was injured in a motor vehicle accident on July 21, 1996. In a decision dated March 14, 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:

1. Allstate Insurance Company of Canada shall pay Vlado Argirovski a weekly income replacement benefit from December 1, 1996, ongoing, pursuant to section 7 of the Schedule until the terms of Part VI of the Schedule relating to loss of earning capacity benefits have been fulfilled, plus interest according to section 68 of the Schedule.

2. Allstate Insurance Company of Canada shall pay Vlado Argirovski $3,716 in supplementary medical expenses for chiropractic and massage treatment claimed pursuant to paragraphs 36(1)(b) and (h) of the Schedule, plus interest from May 21, 1997 at 2 percent per month compounded monthly, according to section 68 of the Schedule.

3. Allstate Insurance Company of Canada shall pay Vlado Argirovski $3,500 in supplementary medical expenses for psychological treatment provided by Dr. Ricardo Harris, pursuant to paragraph 36(1)(b) of the Schedule, plus interest as provided in paragraph 39.1(1) and section 68 of the Schedule.

4. Mr. Argirovski is not entitled to $3,171 claimed for housekeeping services.

5. Allstate Insurance Company of Canada shall pay Vlado Argirovski a special award of 25 percent of the amount to which Mr. Argirovski is entitled for psychological treatment, together with interest on all amounts owing (including unpaid interest) at 2 percent per month, compounded monthly, from May 1997, as the benefits became payable under the Schedule, pursuant to subsection 282(10) of the Insurance Act, R.S.O. 1990, c. I.8, as amended.

6. The issue of expenses is not yet determined.

The issue in this further hearing is:

1. Is Mr. Argirovski entitled to his expenses incurred in respect of this arbitration hearing? If so, what is the amount to which he is entitled?

Result:

1. Mr. Argirovski is entitled to his expenses in the sum of $18,888.71

EVIDENCE AND ANALYSIS:

Allstate conceded that owing to Mr. Argirovski's success on most issues in dispute in the arbitration, he would be entitled to his expenses. I agree.

Mr. Argirovski's file was handled by two lawyers, Henry Goldentuler and Jadranka Cavrak, both of Goldentuler & Associates. Allstate agreed that the hourly rates claimed by lawyers Goldentuler and Cavrak were appropriate but disputed the amount of time claimed as unreasonable. Ms. Cavrak claimed her time at $67.00 per hour. Mr. Goldentuler claimed $75.38 per hour. These rates are set out in section 76.1 of the Dispute Resolution Practice Code by reference to the Legal Aid Act, R.S.O. 1990, c.L.9, as amended.

Allstate did not dispute Ms. Cavrak's claim for her attendance at the hearing, which took place over the course of four days. Allstate was prepared to allow 15.5 hours. According to my notes of the hearing, a more appropriate allocation of time spent at the arbitration hearing would be 20 hours. I allow 20 hours for actual attendance at the arbitration hearing.

Allstate submitted that the total time claimed by lawyers Goldentuler and Cavrak for preparation for the arbitration, that is 54.5 hours and 80.5 hours, respectively, was excessive. Allstate did not dispute three hours claimed by Ms. Cavrak to become familiar with the file in late September and early October 1999.

The time dockets submitted by Mr. Goldentuler were largely illegible photocopies containing many undecipherable abbreviations. Some of the time dockets submitted related to work performed in early 1997 regarding the mediation of Mr. Argirovski's claims. The Application for Arbitration was not filed until June 9, 1998. (Time spent before the arbitration was formally commenced is not normally allowed under Schedule F to the Dispute Resolution Practice Code, subparagraph 3.(1)1.)

Allstate submitted that arbitrators have allowed ratios of time spent in preparation to time spent at hearing of from 1:1 to 4:1 for difficult cases. Allstate submitted that the appropriate ratio in this case would be 2:1 or 3:1.

Ms. Cavrak submitted that the services provided by Mr. Goldentuler before the Application for Arbitration was filed were not being claimed, but the dockets merely appeared on the same time sheet with later entries that are claimed. Ms. Cavrak submitted that Mr. Goldentuler did participate after he handed carriage of the file to her, for example in discussions with the Deahy clinic, but there was no duplication of services. Ms. Cavrak submitted that some extra time was spent in this arbitration since she needed an interpreter to help prepare her client for the hearing and all the conversation was three ways. In response to my question, Ms. Cavrak indicated she was called to the bar in 1999 and that this arbitration hearing was the first one she had participated in that resulted in a full hearing.

Section 3(2) of Schedule F to the Dispute Resolution Practice Code tells us that the number of hours for which legal fees may be awarded shall be determined having regard to the criteria set out in subsection 12(2) of Ontario Regulation 664, R.R.O. 1990, as amended by Ontario Regulation 464/96, made under the Insurance Act. Those criteria include each party's degree of success in the outcome of the proceeding, conduct that tended to shorten or prolong the hearing, manifestly unfounded positions or proceedings, complexity, novelty, or significance of the issues, offers to settle, and any other matter the arbitrator considers relevant.

The ratio of time spent in preparation to time spent in hearing has been used from time to time as a yardstick to determine the reasonableness of fees claimed. However, I find that this is a crude measure that does not take account of the fact that, in many cases, additional time spent in preparation is reflected in decreased time spent in a formal arbitration hearing. Efficient use of the Commission's time for hearings should be encouraged, not discouraged by setting inflexible ratios for preparation to hearing time. The ratios also do not take account of the fact that the lawyer in this case was participating as the sole counsel in her first arbitration that resulted in a complete hearing. Less experienced counsel may be less time efficient than those more experienced, a fact that is partly recognized in the lower hourly rate allowed for their services.

By my calculation, from June 5, 1998 when Mr. Goldentuler spent time preparing the Application for Arbitration, his time dockets total 49.5 hours, not the 54.5 hours claimed in the account of April 17, 2000. I have no difficulty with Mr. Goldentuler's time to September 15, 1999—a meeting of 1.4 hours with Ms. Cavrak, at which I presume he acquainted her with the file. (Ms. Cavrak's time runs from September 22, 1999). Mr. Goldentuler attended the pre-hearing conference on October 27, 1998 and did other preparatory work. I allow 4.65 hours from June 5, 1998 to July 23, 1998 and 11.2 hours from August 17, 1998 to September 15, 1999. I allow 2.9 hours for Mr. Goldentuler's letters and file handling from September 22 to November 20, 1999. I am not prepared to allow any time claimed in the remainder of November and December 1999 when Ms. Cavrak was handling the file and claims over 20 hours of preparation time herself. In the absence of any detailed oral explanation of the time spent or decipherable time dockets, in my view, this is unwarranted duplication of effort.

Beginning in January 2000, Mr. Goldentuler claims over 26 hours of time on this file. In the absence of any indication of why this considerable amount of time was spent by Mr. Goldentuler when Ms. Cavrak had carriage of the matter, I am not prepared to order Allstate to pay for this time. I particularly do not allow 2.4 hours claimed for personal service of summonses by Mr. Goldentuler, and time spent in duplicative meetings with Ms. Cavrak, the clients, and various witnesses. I accept that Mr. Goldentuler may have legitimately spent the time claimed working on Mr. Argirovski's behalf in January 2000, but in the absence of a detailed explanation for these latter efforts, I am not ordering Allstate to pay this claim.

I allow 18.75 hours of Mr. Goldentuler's time in total at the claimed rate of $75.38.

I allow 100.5 hours of Ms. Cavrak's time at the claimed rate of $67.00. This is the full claim for her time spent preparing for and participating in this hearing. This case was thoroughly prepared and I find no basis to reduce the number of hours claimed to have been spent in this preparation.

I turn to the disputed disbursements.

Dr. Grossman:

The amended claim for Dr. Grossman totalled $1,050. This amount was agreed, with the only question remaining being whether Allstate should receive a credit of $53 for service of conduct money of that amount on Dr. Grossman. My understanding is that Ms. Cavrak's office has already paid Dr. Grossman. I agree, in principle, that Dr. Grossman should not be entitled to an additional $53 for her attendance at the hearing, when she has already been paid $200 per hour (the maximum the Code allows for an expert witness). However, if Allstate wishes to pursue this, I find, as Allstate served the summons and the conduct money, that it should take it up with Dr. Grossman directly.

The claim for Dr. Thornton totalled $1,300. Four hours and twenty minutes of Dr. Thornton's time are claimed at an hourly rate "previously agreed," according to his invoice, of $300. Dr. Thornton is a psychiatrist. According to the provisions of Schedule F, the maximum amount that may be awarded for the attendance of an expert witness is $200 per hour of attendance, up to a maximum of $1,600 per day. For preparation of an expert witness the maximum that may be awarded is $500, with no hourly rate specified. Allstate does not dispute the time claimed by Dr. Thornton, just the rate. Dr. Thornton's invoice claims three hours for attendance at the arbitration which I allow at $600. Dr. Thornton claims 1.33 hours for preparation and telephone calls which I allow at $300.

The claim for Dr. Silverman totalled $819.25. Allstate does not dispute the amount of time Dr. Silverman claims or the reimbursement of her parking and photocopying costs ($19.25). Allstate submits that $200 per hour is the maximum rate allowed for the attendance of an expert and submits that this rate is not appropriate for a chiropractor with eight years of experience. Ms. Cavrak submitted that Dr. Silverman's evidence was important and useful, that the expense has been incurred and should be reimbursed. I am not prepared to differentiate amongst experts in the fashion suggested by Allstate. I allow Dr. Silverman's claim at $819.25.

Dr. Brian Alpert, orthopaedic surgeon, claims 3.5 hours for "preparation and attendance" at the arbitration hearing at $300 per hour. As discussed, above, the maximum rate allowed for attendance of an expert is $200 per hour. The maximum for preparation for a hearing is $500. No hourly rate is set out. According to my hearing notes, Dr. Alpert testified for approximately one hour. I do not believe Dr. Alpert was kept waiting for any significant period of time. Ms. Cavrak has claimed one hour was spent meeting with Dr. Alpert on January 4, 1999. I am prepared to accept that Dr. Alpert spent another half-hour in preparation. Travel time is not recoverable under section 5 of Schedule F. I allow 1.5 hours for attendance at $200 per hour and 1.5 hours for preparation at the same hourly rate.

No.

Particulars

Amount Claimed

Disputed or No

Ruling on Amount Allowed

Dr. Grossman

$1,050.00

Disputed

$1,050.00

Dr. Thornton

$1,300.00

Disputed

$ 900.00

Dr. Silverman

$ 819.25

Disputed

$ 819.25

Dr. Alpert

$1,050.00

Disputed

$ 600.00

Deahy Assessment

$9,469.50

Disputed

TBA

Photocopies, Fax, Courier, etc.

$327.49

Not disputed

$327.49

York Central Hospital

$135.00

Not disputed

$135.00

North York Gen. Hospital

$138.00

Not disputed

$138.00

Interpreter at Deahy Assessment

$417.30

Not disputed

$417.30

Dr. Indech report

$1,070.00

Not disputed

$1,070.00

Dr. Little records

$150.00

Not disputed

$ 150.00

Dr. Lam records

$ 25.00

Not disputed

$ 25.00

Dr. Pollock records

$160.50

Not disputed

$160.50

Summons to witnesses

$106.00

Not disputed

$106.00

Application for Arbitration

$100.00

Not disputed

$100.00

Deahy Assessment:

The largest disbursement is that claimed by Deahy Medical Assessments Inc. The total claimed is $9,469.50. This claim was substantiated by a single page invoice dated December 29, 1999. After some questioning by Allstate, a second invoice, also dated December 29, 1999 was produced. This invoice contained an invoice number 1529. I set out the invoices below in parallel fashion, for ease of reference.

Deahy Invoice - dated December 29, 1999

Deahy Invoice # 1529 Revised Invoice

Functional Abilities Evaluation

$1,000.

Functional Abilities Evaluation

$ 600.00

Orthopaedic assessment

$1,350.

Orthopaedic assessment

$1,700.00

Psychiatry assessment

$1,750.

Psychiatry assessment

$1,750.00

Vocational assessment

$3,500.

Vocational assessment

$3,500.00

Medical pain assessment

$1,250.

Medical pain assessment

$1,250.00

GST:

$ 619.

GST:

Total:

$9,469.

Total:

"**All the fees listed are for the assessments and the reports from the experts. This is the fee for the assessments in each category in this particular case."

The revised invoice decreased the charge for the functional abilities evaluation ("FAE") by $400 and increased the orthopaedic assessment charge by $350. The revised invoice total is incorrect.

Allstate submitted that it remains unclear if the charges from Deahy are for assessment, reports, or both. Allstate asked for a breakdown of the charges, but the "Revised Invoice" was all that was received. Allstate submitted that the maximum for the cost of reports under Schedule F to the Dispute Resolution Practice Code is $1,500. Allstate submitted that the cost of the assessment is not an arbitration expense.

I questioned whether Mr. Argirovski had submitted the cost of the Deahy assessment and reports to Allstate as a claim under section 57 of the Schedule, "Cost of Examinations." My understanding is that the Applicant does not wish to treat this expense in that manner. As Arbitrator Joachim wrote:

There is a difference between arbitration expenses and medical benefits. Medical assessments and reports commissioned and prepared after the commencement of the arbitration, for the primary purpose of proving the claims in dispute in the arbitration, are generally payable as arbitration disbursements. Assessments, treatments, and reports directed at ameliorating the effects of the injuries sustained in the accident are generally payable only as medical benefits... Claims for medical benefits ... must be made directly to [the Insurer] and, if disputed, must be processed in accordance with the dispute resolution process.²

Ms. Cavrak submitted that Deahy Medical Assessments Inc. bills its clients in this manner of the invoices submitted. A client is billed for reports, which are compiled by reviewing documents and performing an assessment. Deahy does not break down the charges. Seeing the person is part of doing the report. The client requests a report and this is what is produced. Ms. Cavrak indicated she had no difficulty limiting her claim to the Schedule F amounts.

The functional abilities evaluation ("FAE") was conducted by a certified kinesiologist, Tania Lee. An "Arcon" computerized testing station was used for the assessment. Ms. Lee's report is two-pages long, followed by 17 pages of computerized individual test results, comments and graphs. The revised invoice claims $600 for this report. It was useful to compare this FAE to the results of the one commissioned by Allstate in October 1996. Dr. Jacobs indicated he reviewed the FAE as part of his medical assessment of Mr. Argirovski. I allow the $600 claimed in the Revised Invoice.

The cost of an orthopaedic assessment by Dr. Brian Alpert, variously billed at $1,350 and $1,700 is claimed. In my decision, I wrote as follows with respect to Dr. Alpert:

Mr. Argirovski's most recent examination by an orthopaedic specialist was conducted by Dr. Brian Alpert on December 14, 1999. Dr. Alpert's report of his examination was filed and he also testified at the arbitration. Dr. Alpert's conclusion after his examination of Mr. Argirovski is that he demonstrates a number of objective abnormalities including increased muscle tone in his lumbar paravertebral muscles, diminution of range of motion in the lumbar spine from one-third to two-thirds of normal, evidence of nerve root tension and damage including left calf circumference one centimetre smaller than the right calf, and straight leg raising limited to 60 degrees on the left side. Dr. Alpert found that Mr. Argirovski also suffers from tenderness in various parts of his cervical spine and has a decreased range of motion from half to 90 percent of normal in different planes.

Dr. Alpert's opinion is that Mr. Argirovski cannot return to his pre-accident employment as a cleaner or painter. In his view, Mr. Argirovski's restrictions include no prolonged walking, standing, or sitting, no bending, no pushing or pulling, no twisting, and no heavy lifting.

Dr. Alpert's report of December 14, 1999 makes no reference to Mr. Argirovski's involvement in an accident in January 1997. He testified in cross-examination that he was aware of that accident by reason of reviewing the report of Dr. Harris, which refers to the accident, and Dr. Grossman's clinical notes. He said that through inadvertence he had omitted any reference to this accident in his report. His understanding was that this accident was a minor incident. Dr. Alpert described the mechanism of injury to Mr. Argirovski's low back in the July 1996 accident, based on his understanding of the nature of the accident. In his view, the injury Mr. Argirovski suffered to his low back—a left L5-S1 posterolateral disc herniation with subsequent calcium crystal deposition— matched the forces of flexion and rotation that would have been experienced in that accident. In re-examination Dr. Alpert noted that the visit of Mr. Argirovski to the emergency department of a Toronto hospital two days prior to the 1997 accident, on January 22, 1997, complaining of muscle cramping implied that Mr. Argirovski had not recovered from the July 1996 accident, six months previously.

I accept Dr. Alpert's opinion with respect to Mr. Argirovski's present inability to perform his essential tasks as a cleaner, handyman, and painter. His opinion with respect to the cause of Mr. Argirovski's ongoing symptoms accords with Dr.

Indech's opinion, that is, that they arose as a result of the July 1996 accident. However, because of Dr. Alpert's lack of discussion of the effect of the 1997 accident in his report, I do not rely on his opinion with respect to the cause of Mr. Argirovski's injuries as heavily as I rely on Dr. Indech's opinion.

I received no submissions from either party to assist me to articulate the criteria that should be used to set the amount to be allowed on assessment of costs paid to an expert for the preparation of a report. I have only the reports themselves and the curricula vitae of most of the health care professionals who created them. I am unable to differentiate between the assessment and the report as Allstate submits. For different types of expert reports, different criteria apply, but ideally, for most medical reports, the author will have personally examined the insured person. I endorse the comments of Arbitrator Renahan who wrote the following when discussing the amount to be paid for an expert's report and his attendance at a hearing.

Although the reasonableness of a fee charged by an expert should be considered in light of the time, care and expertise that went into the conduct of the assessment, and the preparation of the report, I do not believe these are the only criteria to consider for the expense of an expert's opinion at an arbitration proceeding. One consideration for an arbitration expense is whether the expert understands the issue in dispute and addresses the specific issue in dispute.³

Dr. Alpert examined Mr. Argirovski on December 14, 1999, the same day as the Arcon FAE assessment was conducted. According to the interpreter's account, he interpreted for three hours and 45 minutes on that occasion. (Mr. Argirovski also attended at the Deahy clinic on December 9, 1999 when the interpreter billed for 1.5 hours of attendance). Dr. Alpert had an extensive medical file available to him relating to Mr. Argirovski's injuries and treatment, but he did not review this material in detail in his report that totalled ten pages, double spaced. I was critical in my decision of Dr. Alpert's failure to discuss Mr. Argirovski's 1997 accident, but I accepted his opinion regarding Mr. Argirovski's inability to return to his pre-accident employment.

I allow $900 for Dr. Alpert's assessment and report.

The account of Dr. Howard P. Jacobs of $1,250 for a medical pain assessment was submitted. Dr. Jacobs is a general practitioner who holds a diploma from the American Academy of Pain Management. Since 1990 his practice has been devoted to treatment of patients suffering from ongoing pain. Dr. Jacobs examined Mr. Argirovski, reviewed his history and carried out a number of tests to assess function, anxiety and depression. I allow $1,000 for this assessment and report.

A psychiatric assessment and report conducted by Dr. John Thornton and invoiced in the amount of $1,750 was submitted. Dr. Thornton interviewed Mr. Argirovski on December 17, 1999, accompanied by Karen Siegel, for 90 minutes. It appears they managed without an interpreter on that occasion. Dr. Thornton also conducted a "detailed review of the medical brief supplied by Mr. Argirovski's lawyers. Dr. Thornton found that Mr. Argirovski was impaired psychiatrically and psychologically such that he demonstrated a substantial inability to perform the essential tasks of his previous occupation. I did not need to consider Dr. Thornton's opinion in detail in my decision, because I found Mr. Argirovski to be substantially disabled by his physical impairments. However, as Mr. Argirovski's psychological symptoms were a significant part of his constellation of symptoms, it was reasonable for his lawyers to seek out a current expert opinion from a psychiatrist prior to the arbitration.

Dr. Thornton attended at the hearing. As related above, his account for services in January 2000 was based on an hourly rate of $300. His account for this assessment and report is $1,750, which translates into nearly six hours of Dr. Thornton's time. Dr. Thornton's report amounts to seven closely typed pages. He offers comments on the content of the medical brief. He interviewed Mr. Argirovski for 90 minutes. He claims over four hours additionally for reading the medical brief and crafting his report. In any event, Dr. Thornton's report charge surpasses the maximum of $1,500 that may be allowed for an expert's report. I allow $1,400 for this report.

A preliminary vocational analysis costing $3,500 was submitted as an arbitration expense. This assessment was performed by Clae Willis of Hamilton, Ontario whose qualifications include a B.A. in psychology from McMaster University and an M.A. in health care administration from Hawthorne University. The report is 38 pages long. This report was not referred to by either party at any time during the arbitration hearing or assessment of expenses. This report appears to relate to rehabilitation issues involving Mr. Argirovski that were not the subject of this arbitration. Allstate is not required to pay for this report as an expense of this arbitration.

In summary, on the Deahy reports I allow:

Deahy Revised Invoice Allowed At

Amt. Claimed

Functional Abilities Evaluation

$600.00

$600.00

Orthopaedic assessment

$1,700.00

$900.00

Vocational assessment

$1,750.00

$1,400.00

Psychiatry assessment

$3,500.00

0

Medical pain assessment

$1,250.00

$1,000.00

GST:

$619.50

$273.00

Total:

$9,469.50*

$4,173.00

*The correct total is $9,419.50

Claim

Sub-Total

Allowed at

H. Goldentuler fees 18.75 hours x $75.38 GST 7%

$1,413.38 $98.94

$1,512.32

J. Cavrak fees 20 hours x 67.00

$6,733.50

GST 7%

$471.35

$7,204.85

Disbursements: Photocopies, fax, postage, and courier GST on Disbursements:

$307.00 $21.49

$327.49

Dr. Grossman

$1,050.00

Dr. Thornton

$900.00

Dr. Silverman

$819.25

Dr. Alpert

$600.00

Deahy Assessment

$4,173.00

York Central Hospital

$135.00

North York Gen. Hospital

$138.00

Interpreter at Deahy Assessment

$417.30

Dr. Indech report

$1,070.00

Dr. Little records

$150.00

Dr. Lam Records

$25.00

Dr. Pollock records

$160.50

Summons to witnesses

$106.00

Application for Arbitration

$100.00

Total:

$18,888.71

December 7, 2000

K. Julaine Palmer Arbitrator

Date

Neutral Citation: 2000 ONFSCDRS 219

FSCO A98–000816

FINANCIAL SERVICES COMMISSION OF ONTARIO

BETWEEN:

VLADO ARGIROVSKI

Applicant

and

ALLSTATE INSURANCE COMPANY OF CANADA

Insurer

ARBITRATION ORDER

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

1. Allstate Insurance Company of Canada shall pay Vlado Argirovski $18,888.71 as his reasonable expenses of this arbitration.

December 7, 2000

K. Julaine Palmer Arbitrator

Date

Footnotes

1. 1The 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.
2. 2Turner and Economical Mutual Insurance Company, Decision on Expenses, (FSCO A-012411, August 29, 2000)
3. 3Dobkina and Commercial Union Assurance Company, Assessment of Expenses (FSCO A98-001232, October 31, 2000). The expert's fee under discussion in this paragraph was, coincidentally, that of Dr. Alpert.