Neutral Citation: 2001 ONFSCDRS 180
FSCO A99-000959
FINANCIAL SERVICES COMMISSION OF ONTARIO
BETWEEN:
CISLYN MAY REID
Applicant
and
ROYAL & SUNALLIANCE INSURANCE COMPANY OF CANADA
Insurer
DECISION ON EXPENSES
Before:
Lawrence Blackman
Heard:
Written submissions were received by October 11, 2001.
Telephone conference held October 19, 2001.
Oral decision (except on the issue of the expenses of the expense hearing itself) rendered October 19, 2001.
Appearances:
David S. Wilson for Ms. Reid
Peter Trueman for Royal & SunAlliance Insurance Company of Canada
Issues:
The Applicant, Cislyn May Reid, was injured in a motor vehicle accident on April 26, 1993. In a decision dated January 19, 2000, I dealt with the motion of Royal & SunAlliance Insurance Company of Canada ("Royal") to dismiss the Applicant's claim (on the grounds that it duplicated her court action) and with Ms. Reid's motion for interim payment of medical benefits claimed under the 1990 Schedule.1
In my decision, I made the following orders:
Royal's motion is dismissed.
Royal shall pay Ms. Reid, on an interim basis, $2,145.33 towards Dr. Goldberg's account and $1,153.60 for Dr. Goldstein's account, together with interest on these sums at the rate of two per cent per month from thirty days after the accounts were received by Royal.
Royal shall serve and file any submissions regarding a special award by January 26, 2000. Ms. Reid shall serve and file any reply by January 31, 2000.
Royal shall pay Ms. Reid her legal fees for both motions, in accordance with Rule 73 of the Dispute Resolution Practice Code.
By subsequent letter decision, I deferred the issue of a special award to the main arbitration hearing.
Director's Delegate Draper, by appeal decision dated August 1, 2000, held that:
The appeal is allowed and paragraphs 1 and 2 of the arbitration order dated January 19, 2000 are revoked and replaced with the following order:
Cislyn May Reid's application for arbitration is stayed pending the outcome of her court action, subject to a right to withdraw her arbitration application, without penalty, within 30 days of this decision.
No interim benefits are payable.
The parties will bear their own appeal expenses.
The issue in this further hearing is:
- What is the amount of legal expenses to which Ms. Reid is entitled from Royal for both motions?
Result:
- Ms. Reid is entitled to the sum of $4,913.98 from Royal for her legal expenses for both motions.
EVIDENCE AND ANALYSIS:
General Law
An arbitrator's jurisdiction both regarding the awarding and the assessing of legal expenses emanates from subsection 282(11) of the Insurance Act, R.S.O. 1990 c.I.8, as amended, which states that:
The arbitrator may award, according to 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 pertinent regulation is Regulation 664, R.R.O. 1990 as amended by Ontario Regulation 464/96 made under the Insurance Act. Subsection 12(1) states that:
The expenses set out in the Schedule are prescribed for the purpose of subsection 282(11) of the Act.
Subsection 3(3) of the Regulation Schedule states that:
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 or Financial Services Commission of Ontario, as it may be amended from time to time.
Hourly Rate
The Applicant's Bill of Costs is included at Appendix "A."
The parties firstly dispute the hourly rate to which the Applicant's counsel, Mr. Wilson, is entitled.
The applicable Dispute Resolution Practice Code is the Third Edition, April 15, 1997 (the "Code"). Rule 76 of the Code states, in accordance with subsection 3(3) of the Regulation Schedule, 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.
Ms. Reid submits that Mr. Wilson is entitled to the maximum hourly rate of $150. In support, the Applicant refers to the decisions of Arbitrator Killoran in Slater and Loyalist Insurance Company (FSCO A00-000358, January 29, 2001) where Mr. Wilson was granted the maximum amount (the insurer in that case conceding an hourly rate of $125) and Simpson and Trafalgar Insurance Company of Canada (FSCO A98-000215, July 10, 2000), wherein the insurer did not dispute Mr. Wilson's entitlement to $150 an hour.
The Insurer submits that Mr. Wilson is only entitled to an hourly rate of $83.75, which is the legal aid rate adjusted by counsel's experience allowance. Royal submits that "[i]n only the rarest case would a representative be entitled to the highest possible rate" of $150. The Insurer submits that as the Applicant ultimately, on appeal, lost the motions and had her application stayed, the lower rate is more appropriate.
I am satisfied that an hourly rate of $150 in this case for Mr. Wilson is justified.
The Applicant was granted her legal expenses of these motions. My expense order was not set aside on appeal. I am not prepared to revisit the question of entitlement to expenses through the back door of an expense hearing dealing with the proper quantum of counsel's account.
Mr. Wilson was called to the Bar in 1972. He has considerable experience in the area of first-party automobile insurance. His hourly solicitor/client rate is significantly above $150. I find that the wording of subsection 282(11) of the Insurance Act that a party is entitled to "all or part of such expenses incurred in respect of an arbitration proceeding" (as prescribed to a set maximum) includes a concern, amongst others, that arbitration be an accessible system of dispute resolution to those who bring claims in good faith, which includes being accessible to applicants who choose experienced and knowledgeable counsel. At the same time, subsection 282(11) seeks to deter those claimants who bring, for example, frivolous, vexatious or abusive proceedings.
I am satisfied that this proceeding was brought in good faith. In dealing with the issue of appeal expenses, the Director's Delegate stated that there was considerable support in the arbitration decisions for splitting claims between court and arbitration. The motions heard in this proceeding were of importance to the Applicant, specifically as the Insurer sought to have this proceeding dismissed. The question of how to proceed with potentially overlapping arbitral and court proceedings was an issue of general significance. Other than the time spent after the December 23, 1999 motion date regarding the claim for an interim special award (which I am not allowing), Mr. Wilson's considerable experience in this area of the law and his conduct in this proceeding tended to shorten and facilitate the motions.
Number of Hours
My January 19, 2000 order stated, in part, that Royal pay Ms. Reid her legal fees for both motions. The parties now agree that no time should be permitted for the preparation of the Application for Arbitration.
The Applicant reduces her claim for pre-hearing attendance and preparation to one hour, submitting that a portion of the time was expended making arrangements for the interim motion and discussions for same. I am not persuaded that this time should be allotted to motion preparation as opposed to the overall conduct of the arbitration proceeding, and decline to allow any of the pre-hearing time claimed.
The Applicant further seeks 16.45 hours for preparation (including correspondence pertaining to the motions) and 7.75 hours for attending at the December 23, 1999 motions. In its oral submissions, the Insurer indicated that it did not object to these hours. I am satisfied with these hours and allow them.
The Insurer objects to the Applicant's 3.85 hours for preparation of submissions for an interim special award. Mr. Wilson gave oral submissions on December 23, 1999 regarding this issue. As Royal stated that it was taken by surprise by this claim, I allowed the Insurer an opportunity to file written submissions by January 26, 2000 and the Applicant to file any reply by January 31, 2000. I am not persuaded that the Applicant's Reply added significantly to what was or should have been included in the Applicant's initial oral submissions, and hence decline to award any part of the additional 3.85 hours sought.
Accordingly, I award the Applicant 24.2 hours for preparation and attendance for the two motions, at $150 an hour. This equals $3,630. G.S.T. is allowed in the amount of $254.10. The total is $3,884.10.
Disbursements
The Applicant concedes that the arbitration fee of $100 should not be included in her account.
Royal submits that Dr. Y.K. Goldberg's July 5, 1999 report (in the amount of $749, including G.S.T.) is a section 24 claim under the 1990 Schedule and not a "legal fee." The Applicant submits that Dr. Goldberg's report was used in support of her motion and is thereby compensable.
Ms. Reid was injured in a 1993 accident. Hence, this matter falls under the 1990 Schedule. I believe that the Insurer's reference to "section 24" refers to the 1996 Schedule.2
In my January 19, 2000 decision, I specifically stated that Mr. Reid was not entitled to payment by Royal of Dr. Goldberg's $700 report as a service or device under paragraphs 6(1)(a) and (b) of the 1990 Schedule. I further stated that I was relying on Dr. Goldberg's report in finding a causative link between the accident in question and the treatment being advanced, leading to an order for payment of the treatment accounts pursuant to the 1990 Schedules "pay pending dispute" provision.
Having relied on Dr. Goldberg's report in reaching my order, and having not allowed payment of this account under the supplementary medical and rehabilitation section of the 1990 Schedule, I find that the account, including G.S.T., is a reasonable disbursement and is payable by the Insurer.
Preparation for and Attendance at the Expense Hearing.
The Applicant claims 0.75 hours for preparation for the expense hearing. She amends her claim by adding an additional amount for participation at the expense hearing.
The Insurer submitted that it provided the Applicant with an offer to settle the expense hearing. It asked that I provide my order on the main portion of the expense claim and then hear submissions regarding the costs of the expense hearing itself.
For the sake of expediency, I reluctantly agreed to do so. I have significant doubts as to whether the offer to settle provisions of the Code apply to expense hearings themselves. Rather than serving the purpose of encouraging the parties to resolve matters on their own, they serve the function, at this latter procedural stage, of unnecessarily increasing the number of procedural steps while dealing with significantly smaller amounts of money.
In any event, after deliberating a short period, I verbally advised the parties that I was allowing the sum of $4,633.10 for legal expenses, excluding the fees of the expense hearing itself.
The Insurer submitted in its factum that legal fees of $1,500 would be appropriate. It now advised that it had offered the Applicant $3,500 towards her legal fees and disbursements.
The offer to settle, however, was not made in writing (contrary to Rule 74 of the Code). The parties' disagreement as to who said what, when, regarding this purported oral offer, provided more support, if any was needed, that it ill behoves counsel to take on the mantle of witnesses. In any event, I fail to see the significance of an offer (even accepting the Insurer's submission as to the monetary amount offered) that falls (not insignificantly) below the amount I have allowed.
Accordingly, I allow the Applicant 1.75 hours for preparation for and participation at this expense hearing, at $150 an hour. This amounts to a further $280.88 (including G.S.T.).
Conclusion
Royal shall pay Ms. Reid the sum of $4,913.98 towards her legal expenses of these motions.
November 30, 2001
Lawrence Blackman
Arbitrator
Date
Neutral Citation: 2001 ONFSCDRS 180
FSCO A99-000959
FINANCIAL SERVICES COMMISSION OF ONTARIO
BETWEEN:
CISLYN MAY REID
Applicant
and
ROYAL & SUNALLIANCE 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:
- Royal & SunAlliance Insurance Company of Canada shall pay Ms. Reid the sum of $4,913.98 towards her legal expenses.
November 30, 2001
Lawrence Blackman
Arbitrator
Date
APPENDIX "A"
Legal Fees:
Date
Description
Hours Claimed
Hours Allowed
Sept. 30, 1999
Preparation of Application for Arbitration
Oct. 29, 1999
Preparation and attendance at pre-hearing
Dec. 9, 1999
Preparation of motion materials
Dec. 10, 1999
Attendance of Insured to review and sign documentation
Dec. 20, 1999
Preparation for motion
Dec. 21, 1999
Preparation for motion
Dec. 22, 1999
Review of law and preparation for motion
Dec. 23, 1999
Review of file and attendance before Arbitrator on motion
Jan. 28, 2000
Preparation of submissions for special award
Jan. 31, 2000
Further preparation of submissions for special award
Correspondence fee (for all correspondence from and after Sept. 30, 1999 up to January 31, 2000 referrable to motion) 6 letters sent and 5 letters received (at .2 hours per letter)
Review of file and preparation of Bill of Costs
Participate in bifurcated expense hearing
Sub Total
31.3 @ $150/hr.
25.95 @ $150/hr.
GST
Total Legal Fees
Disbursements:
Description
Amount Claimed
Amount Allowed
Arbitration Fee
Dr. Y.K. Goldberg report (and GST)
Total Fees, Disbursements & GST
$5,872.65
Footnotes
- The 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.
- The Statutory Accident Benefits Schedule —Accidents on or after November 1, 1996, Ontario Regulation 403/96, as amended by Ontario Regulations 462/96, 505/96, 551/96 and 303/98.