Neutral Citation: 2001 ONFSCDRS 10

FSCO A00-000358

BETWEEN:

PATRICIA SLATER

Applicant

and

LOYALIST INSURANCE COMPANY

Insurer

DECISION ON EXPENSES

Before:

Judith Killoran

Heard:

Written submissions received by January 12, 2001 and a telephone conference call on January 12, 2001

Appearances:

David S. Wilson for Mrs. Slater

Albert M. Conforzi for Loyalist Insurance Company

The Applicant, Patricia Slater, was injured in a motor vehicle accident on December 21, 1998. In a decision dated August 31, 2000, Arbitrator Novick dealt with a motion for interim benefits with the result that:

Loyalist agrees to pay $21,841.32, inclusive of interest, to Mrs. Slater on account of income replacement benefits owing to September 20, 2000, the date scheduled for the commencement of the hearing on the merits. Loyalist also agrees to pay $300 per week to Mrs. Slater from the date of the hearing until the date the arbitration award is issued.
Loyalist is liable to pay a special award in the amount of $6,500, inclusive of interest.

The first issue involving payment of income replacement benefits was resolved at the commencement of the motion by agreement. The parties agreed that the issue of the appropriate quantum of income replacement benefits would be decided at a hearing scheduled to commence on September 20, 2000. The parties subsequently resolved the quantum issue and agreed that Mrs. Slater is entitled to her expenses, to be assessed.

In a decision dated October 5, 2000, Arbitrator Joachim dealt with Mrs. Slater's claims for statutory accident benefits under the Schedule.¹ She made the following orders, while reserving on the issue of expenses:

I do not have the jurisdiction to vary the amount of the special award.
Even if I had the jurisdiction, I would not vary the amount of the special award.

The issue in this further hearing is:

What is the amount of expenses to which Mrs. Slater is entitled?

Mrs. Slater is entitled to her expenses which include legal fees of $6,412.50 plus GST and disbursements of $466 plus applicable GST.

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 regulation to the maximum set out in the regulation.

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."

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.
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 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.

On November 14, 2000, Mr. Wilson, Mrs. Slater's counsel, notified the Commission that he had submitted a Bill of Costs to the Insurer and was unable to settle it. A letter dated November 8, 2000 set out the position of Loyalist which was:

The attendance at the arbitration on September 20 was approximately 2.5 hours and the attendance with respect to the interim motion was approximately another 2.5 hours for a total of 5 hours. The interim motion attendance was also a pre-hearing.

In the circumstances a multiplier of 4 hours would be appropriate for a total of 20 hours at $125.00 per hour is $2,500.00 plus expenses.

We note that some of the amounts relate to ongoing carriage of the claim as opposed to the issues and arbitration and further the amounts related to correspondence appear to be excessive and not in keeping with the schedule of expenses under the Dispute Resolution Practice Code. Finally in the circumstances, we submit that the appropriate rate out (sic) to be $125.00 per hour and not $150.00.

Preparation and Attendance Time of Mr. Wilson:

I conducted the assessment hearing by telephone conference call. Mr. Wilson reviewed the issues which had been in dispute. It should be noted that the issue involving the quantum of income replacement benefits was ultimately resolved by the parties, as was Mrs. Slater's entitlement to expenses. Mr. Wilson referred me to the Insured's motion record which was filed for the motion on interim benefits and contained extensive exhibits. Mr. Wilson submitted that in order to establish the basis for a special award, it was necessary that he detail each incident of unreasonableness on the part of Loyalist. On that basis, he justified the extensiveness of the evidence in the motion materials.

In total, Mr. Wilson claimed, on behalf of Mrs. Slater, 41.75 hours of preparation and attendance time. Loyalist submitted that this was excessive as, according to its calculations, both hearings combined only required 5 hours of attendance time. Therefore, in its correspondence, Loyalist had applied a ratio of 4 hours of preparation time to each hour of hearing time and suggested reimbursing Mrs. Slater for 20 hours of legal fees. However, at the expense hearing, Mr. Conforzi conceded that the number of hours should be adjusted to 25 as he had neglected to add the 5 hours of attendance time to the 20 hours of preparation time.

Loyalist challenged the .9 hours docketed for correspondence as inappropriate and excessive. However, I disagree and find that .9 hours for correspondence is reasonable in this case and shall be allowed.

Mr. Wilson claimed one-half hour of preparation time and one-half hour of attendance time for the expense hearing. That, too, is reasonable and shall be allowed.

Subsection 3(2) of the Dispute Resolution Practice Code states 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, 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.

In general, the ratio of time spent in preparation to time spent in hearing has been used as a yardstick to determine the reasonableness of fees claimed. In this case, I find that a multiplier is not a fair method for determining the hours. A settlement between the parties about the quantum of income replacement benefits resulted from the time spent preparing materials and negotiating. As well, a significant special award was ordered due to the preparation time spent documenting each incident of delay and unreasonableness on Loyalist's part.

This is a situation where additional time spent in preparation resulted in decreased time spent in hearing. As expressed by Arbitrator Palmer in Argirovski and Allstate,³ "Efficient use of the Commission's time for hearings should be encouraged, not discouraged by setting inflexible ratios for preparation to hearing time."

I find that Mr. Wilson is entitled to 41.75 hours of preparation and attendance time plus one-half hour of preparation time and one-half hour of attendance time at the expense hearing. Therefore, Mr. Wilson is entitled to a total of 42.75 hours.

Hourly Fees:

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. Wilson claimed an hourly rate of $150 per hour. Mr. Conforzi disputed this rate and submitted that $125 per hour is a more appropriate rate. In his view, $150 per hour should be restricted to the most senior members of the legal profession. I disagree. I am satisfied that the maximum hourly rate is justified in this case. In fact, in the course of the expense hearing in Simpson and Trafalgar Insurance Company,⁴ the Insurer did not dispute that Mr. Wilson was entitled to $150 per hour.

Mr. Wilson was called to the Bar in 1972 and has considerable expertise in the area of accident benefits. I have no hesitation in finding that he is entitled to an hourly rate of $150.

Disbursements:

Mr. Wilson claimed disbursements totalling $466 which were not challenged by Loyalist. The disbursements appear reasonable and are allowed.

CONCLUSION:

Mrs. Slater is entitled to expenses which include legal fees of 42.75 hours multiplied by the hourly rate of $150 for a total of $6,412.50 plus GST and disbursements of $466 plus applicable GST.

January 29, 2001

Judith Killoran Arbitrator

Date