Oppedisano v. Zurich Insurance Company, 2000 ONFSCDRS 36

Neutral Citation: 2000 ONFSCDRS 36

FSCO A99-001137

FINANCIAL SERVICES COMMISSION OF ONTARIO

BETWEEN:

VINCENZO OPPEDISANO

Applicant

and

ZURICH INSURANCE COMPANY

Insurer

ASSESSMENT OF EXPENSES

Before:

Judith Killoran

Heard:

By telephone conference call on January 31, 2000.

Appearances:

Joseph Brian Donnelly for Mr. Oppedisano

Pamela Stevens for Zurich Insurance Company

Issues:

The Applicant, Vincenzo Oppedisano, was injured in a motor vehicle accident on January 6, 1994. In a decision dated July 6, 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:

1. Zurich shall pay Mr. Oppedisano weekly income replacement benefits at the rate of $214.19 per week (plus indexation, where applicable) from December 9, 1996 to date and ongoing, pending Zurich's delivery of a loss of earning capacity benefits offer and compliance with the procedure outlined in sections 21 to 23 of the Schedule.

2. Zurich shall pay interest on overdue amounts in accordance with section 68 of the Schedule.

Zurich agreed to pay Mr. Oppedisano's reasonable expenses but the parties were unable to agree on the amount.

The issue in this further hearing is:

1. What is the amount of expenses that Zurich shall pay Mr. Oppedisano?

Result:

1. Zurich shall pay Mr. Oppedisano $19,200 plus GST for his counsel's fees and $4,320 plus GST for his clerk's fees.

2. Zurich shall pay Mr. Oppedisano $5,741.23 for disbursements plus GST for those disbursements subject to GST.

EVIDENCE AND ANALYSIS:

Criteria for Assessing Expenses:

Subsection 282(11) of the Insurance Act, R.S.O. 1990, c.I.8, as amended, 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.

In the decision of Henri and Allstate Insurance Company of Canada,² Arbitrator Makepeace listed a number of general principles found in arbitration decisions regarding the assessment 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:

Mr. Oppedisano originally claimed legal disbursements of $6,882.82 plus $481.80 for GST. However, he subsequently withdrew from his claim $925.55 for the Rotstein report dated May 9, 1999.

Zurich agreed to all other disbursements and objected only to the claim for the Rehabilitation Management report dated September 11, 1997, in the amount of $1,337.10 plus $216.04 in interest. It challenged the report's relevance and noted out that it was only eight pages in length. However, the Applicant submitted that the cost of the report was based on eleven-and-a half hours of assessment.

I found the Rehabilitation Management report extremely useful when reviewing the evidence and quoted from it on page 10 of my decision. Subsection 5(5) of Ontario Regulation 664, R.R.O. 1990, as amended, permits me to allow up to $1,500 for preparation of a report. For these reasons, I find that Mr. Oppedisano is entitled to be paid for the entire cost of the Rehabilitation Management report.

Mr. Oppedisano also claimed interest on the cost of the Rehabilitation Management report. In Henri, Arbitrator Makepeace concluded that she did not have jurisdiction to order the payment of interest on a party's arbitration expenses. In this hearing, I was not presented with any submissions to the contrary. Therefore, I adopt Arbitrator Makepeace's conclusion and deny the claim for interest. Accordingly, the interest amount of $216.04 is subtracted from the total disbursements together with the $925.55 withdrawn by Mr. Donnelly. I find that Mr. Oppedisano is entitled to be paid his disbursements of $5,741.23 plus GST on those disbursements subject to GST.

Legal Fees:

Section 3 of Ontario Regulation 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:

1. For all services performed before an arbitration, appeal, variation or revocation hearing.

2. For the preparation for an arbitration, appeal, variation or revocation hearing.

3. For attendance at an arbitration, appeal, variation or revocation hearing.

4. 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 this 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.

Rule 76.1 of the Dispute Resolution Practice Code (Third Edition, April 15, 1997) provides that:

The maximum amount that may be awarded to an insured person or an insurer for legal fees is an amount calculated using:

(a) the hourly rates established under the Legal Aid Act for professional services in civil matters before the Ontario Court (General Division); or

(b) the hourly rate referred to in Rule 76.1(a) adjusted to include, where appropriate, the experience allowance established under the Legal Aid Act; however, where an adjudicator is satisfied that a higher amount for legal fees to an insured person is justified, an hourly rate of up to $150 may be awarded.

Mr. Donnelly, counsel for Mr. Oppedisano, was called to the Bar in 1975 and claimed the maximum hourly rate of $150 per hour, based on his years of experience and his expertise in the field of personal injury and statutory accident benefits.

Zurich submitted that Mr. Donnelly should receive $100 per hour, in consideration that the arbitrator should only award $150 per hour when satisfied that it is justified "given the nature of the case." Zurich emphasized the relatively uncomplicated nature of the case and the evidence, in what Zurich characterized as a straightforward chronic pain and shoulder disability case.

Rule 76.1 of the Dispute Resolution Practice Code permits an arbitrator to award counsel up to $150 per hour where the arbitrator is satisfied that it is justified. I am persuaded by the Applicant's submissions that this was not a straightforward and uncomplicated case. It required a good deal of preparation and analysis. As well, Mr. Donnelly provided excellent representation for his client, has considerable expertise in this area and many years of experience as counsel. I have no hesitation in finding that he is entitled to an hourly rate of $150 per hour.

Preparation and Attendance Time for Mr. Donnelly:

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.0. 1990, as amended. They are:

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

2. 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.

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 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.

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

Mr. Donnelly asserted that the principle relied on in arbitration decisions when determining the proper amount of preparation time to allow is to use a ratio of 1 to 4 hours of preparation time for each hour of hearing. He submitted that, in the particular circumstances of this case, he is entitled to a total of 148.1 hours for preparation and attendance.

Zurich submitted that there were approximately 19 hours spent in attendance at hearing. It relied on Machin and Allstate Insurance Company of Canada,³ where Arbitrator Makepeace concluded that as it "was a fairly typical chronic pain case, and the issues of fact and law involved were not particularly novel or complex. I find that two hours of preparation time for each hour of attendance is a reasonable allowance." By analogy, Zurich concluded that the total preparation and attendance time for Mr. Donnelly should be 57 hours.

The Applicant submitted that a large amount of preparation time was required to deal with the flaws in a medical report and to review the surveillance video. In my estimation, the many hours of preparation were reflected in the quality of Mr. Donnelly's advocacy at the hearing.

Mr. Donnelly submitted very extensive and precise dockets. In my effort to fix a reasonable figure for his fees, I approached his account from the perspective that there were four full days of hearing. Therefore, I calculated his attendance time at 32 hours, rather than the 19 hours claimed by Zurich. This allows for counsel's need to consult with his client, his clerk and witnesses, during the course of the hearing.

When I considered what ratio to allow for preparation time to hearing time, I decided that Mr. Donnelly was entitled to three hours of preparation time for each hour of hearing. I arrived at that determination by weighing the complexity of the case, the degree of preparation reflected in the superior representation by Mr. Donnelly during the hearing, and the importance of the issues. For those reasons, I am prepared to allow Mr. Donnelly 32 hours of hearing time and 96 hours of preparation time. Therefore, the Applicant is entitled to be paid for 128 hours of Mr. Donnelly's time at $150 an hour which equals $19,200 plus GST.

Clerk's Fees:

With respect to Mr. Costa, Mr. Donnelly's clerk, the Applicant claimed $45 per hour for his fees. The Applicant compared this to the $40 per hour which was awarded for the work of an articling student in the case of Olsynko and Dominion of Canada General Insurance Company.⁴ I agree that $45 an hour for Mr. Costa's fees is reasonable considering his 20 years of experience and particular expertise in the field of statutory accident benefits.

Preparation and Attendance Time for Mr. Costa:

Mr. Oppedisano claimed 132.5 hours for the work done by Mr. Costa contrasted with 11.2 hours claimed in Olsynko for the work of an articling student. Zurich questioned the number of hours and asserted that there was significant duplication between Mr. Donnelly and Mr. Costa's time. Mr. Donnelly justified Mr. Costa's time by saying that he required Mr. Costa's translation skills in order to communicate with his client. Mr. Oppedisano speaks Italian and very little English. Mr. Costa translated for both Mr. Oppedisano and Mr. Donnelly. On the other hand, Zurich claimed that only 21 hours should be billed for Mr. Costa's time.

Mr. Donnelly explained that the work done by Mr. Costa falls into three categories:

1. independent work

2. work dealing with translation

3. attendance at the hearing

There are at least two instances when Mr. Costa corrected the translator during the hearing and many instances when he assisted with communication problems during the hearing. I agree with Mr. Donnelly's submissions that Mr. Costa contributed to creating a proper and accurate record and Mr. Oppedisano is entitled, in a multicultural society, not to be penalized due to language difficulties.

I have allowed Mr. Costa's time to be calculated at 32 hours for attendance at the hearing plus a ratio of two hours of preparation time to hearing time which equals 64 hours. I find that Mr. Costa made an important contribution to the preparation of this case, not only as a translator, but in the areas of investigation and interviewing. Therefore, attendance and preparation time together amount to 96 hours at $45 per hour. Mr. Oppedisano is entitled to be paid $4,320 plus GST for Mr. Costa's fees.

February 11, 2000

Judith Killoran

Arbitrator

Date

Neutral Citation: 2000 ONFSCDRS 36

FSCO A99-001137

FINANCIAL SERVICES COMMISSION OF ONTARIO

BETWEEN:

VINCENZO OPPEDISANO

Applicant

and

ZURICH 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. Zurich shall pay Mr. Oppedisano $19,200 plus GST for his lawyer's fees and $4,320 plus GST for his clerk's fees.

2. Zurich shall pay Mr. Oppedisano $5,741.23 for disbursements plus GST on those disbursements subject to GST.

February 11, 2000

Judith Killoran

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. 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.
2. 2Assessment of Expenses decision, (OIC A-007954, August 8, 1997)
3. 3Assessment of Expenses decision, (OIC A95-000069, March 17, 1998)
4. 4Assessment of Expenses decision and Decision correction, (FSCO A97-001495, August 27, 1999)