Financial Services Commission

Commission des services financiers de l’Ontario

Neutral Citation: 2001 ONFSCDRS 27
Appeal P00-00024

OFFICE OF THE DIRECTOR OF ARBITRATIONS

ALI REZA ADABI-GHOMI
Appellant

and

ALLSTATE INSURANCE COMPANY OF CANADA
Respondent

Before:
Susan Naylor, Director's Delegate

Counsel:
Adam Wagman (for Mr. Adabi-Ghomi)
Todd J. McCarthy (for Allstate Insurance Company)

APPEAL ORDER

Under section 283 of the Insurance Act, R.S.O. 1990, c.I.8, as amended, it is ordered that:

The appeal is dismissed and the arbitration order dated March 2, 2000 is confirmed.
No expenses are ordered.

February 23, 2001

Susan Naylor
Director’s Delegate

Date

REASONS FOR DECISION

I. NATURE OF THE APPEAL

This appeal involves the dismissal of a claim brought on behalf of Ali Reza Adabi-Ghomi for payment for services characterised as "non legal" rehabilitative services, performed by Donna Moscattini, a law clerk. At all relevant times, Ms. Moscattini was in the employment of Thomson, Rogers, the law firm representing Mr. Adabi-Ghomi in regards to claims arising out of injuries he sustained in an accident on November 15, 1990.

II. BACKGROUND

There is no dispute as to the severity, and devastating impact, of Mr. Adabi-Ghomi's injuries. In addition to multiple physical trauma, Mr. Adabi-Ghomi suffered a brain injury that has left him with significant cognitive dysfunction and severe psychiatric problems. He has required several psychiatric hospitalisations. Despite the seriousness of his problems and his severely diminished life skills, Mr. Adabi-Ghomi has resisted efforts to steer him to a supported living environment. He has no family or friends to speak of, is socially isolated and very lonely. He requires a tremendous amount of support as a result of his situation, which he receives through a number of sources.

In addition to the contribution of Ms. Moscattini — to which I will return — the arbitration decision identifies the extensive commitment and services provided by Mr. Adabi-Ghomi's case manager and rehabilitation counsellor, Ms. Carolyn Degenhardt. The arbitrator also referred to the ongoing contribution of the many other health care providers involved in Mr. Adabi-Ghomi's care and to the supportive role of Mark Potts, Allstate's long-standing claims manager on the file. Since the accident, Allstate has continued to fund, without dispute, various treatment and rehabilitation services, including paying a total of $112,000 to Ms. Degenhardt's employer for case-management services. With the exception of the question of Ms. Moscattini's services, there have been few issues from the statutory accident benefits perspective.

As a law clerk at Thomson, Rogers, Ms. Moscattini has spent a considerable amount of time dealing with Mr. Adabi-Ghomi. The firm is handling Mr. Adabi-Ghomi's tort action, as well as managing his claims for statutory accident benefits. It is Ms. Moscattini's evidence — and the position of Mr. Adabi-Ghomi in these proceedings — that the vast bulk of her contact with, and with respect to, Mr. Adabi-Ghomi has not related to legal proceedings or issues — on the accident benefits front, at least, there being no real issues to speak of. Rather, they have involved dealing with Mr. Adabi-Ghomi's personal problems and everyday crises, providing him with needed support and reassurance — in other words, services in the nature of rehabilitation assistance.

Allstate's obligation to fund medical and rehabilitation services is set out in the applicable regulations, the Statutory Accident Benefits Schedule — Accidents before January 1, 1994, R.R.O. 672, specifically, s.6. Under this provision, Allstate must cover stipulated expenses resulting from the accident, provided they are reasonable. The expenses covered include expenses for rehabilitation and life-skills training (s. 6(1)(c)), and other medical or non-medical goods or services which Mr. Adabi-Ghomi requires because of the accident (s. 6(1)(f)).

Under Commission jurisprudence, it is well-established that the cost of legal services, including the services of a law clerk, incurred in connection with an accident benefits claim is not recoverable under s. 6, but rather falls to be considered under more specific powers allowing limited recovery for arbitration expenses.¹ This is the case even though it is recognised that the provision of legal services is a package often involving providing assistance and support going beyond strictly legal matters.

No issue was taken with this line of cases. However, Mr. Adabi-Ghomi's claim is that Ms. Moscattini's services went far beyond her law clerk duties and well into the realm of rehabilitation counselling and support, and that, to the extent they did so, they are recoverable under either s. 6(1)(c) or 6(1)(f). In support of the claim, eight years of law firm dockets were filed, covering the period from November 1, 1991 to October 21, 1999.² Ms. Moscattini blacked out entries other than those pertaining to Mr. Adabi-Ghomi's day-to-day non-legal, personal problems. The remaining 266.9 hours formed the subject of the claim. No specific hourly rate was claimed in respect of these hours, the applicant leaving open whether Ms. Moscattini's usual billing rate as a law clerk of $150 an hour was, or was not, appropriate,³ and no total value was attached to the claim.

The arbitrator dismissed the claim, dealing with it strictly on its facts. She did not rule that a case brought in respect of services performed by someone who was a part of a law firm could never succeed under s. 6, noting only that recovery was not limited to services provided by rehabilitation professionals.

The arbitrator accepted Ms. Moscattini's evidence to a substantial degree, finding that her services went beyond her regular law clerk duties and that she had clearly spent "a considerable amount of time" dealing with Mr. Adabi-Ghomi's personal problems.⁴ However, the arbitrator found that a claim for the services had not been established on the facts. She could not reliably tell from the evidence the extent to which the services forming the subject of the claim qualified as recoverable services as opposed to legal services, nor was it established at what rate such services should be reimbursed. Although this was enough to dispose of the claim, the arbitrator also went on to consider whether the expense of Ms. Moscattini's services was reasonable or required. She concluded, given the services available from other sources, especially from Ms. Degenhardt, that it was not.

III. ANALYSIS AND CONCLUSION

Part of the argument before me focussed on whether the objections raised to the decision amounted to errors in law. This was directed at the current version of s.283(1) of the Insurance Act, R.S.O. 1990, c. I.8, as amended, which restricts appeals to questions of law.⁵ However, this case is very old. Mr. Adabi-Ghomi first applied for arbitration on this and other issues back in March 1995, before the restriction on appeals came into effect. Prior decisions have held that the restrictions do not apply to such a case.⁶ Either way, I do not think the appeal can succeed. It is well-established in cases even under the prior statutory regime that the weight to be given to evidence is a matter for the arbitrator's judgement call.

The appellant put forward a claim for 266.9 hours of rehabilitation services that were characterised as over and above Ms. Moscattini's traditional duties as a law clerk, and qualitatively different from them. Even recognising that this is a very unusual case, I agree with the arbitrator that there must be a clear delineation between the time spent on the services forming the subject of the claim and other services performed for the client. The firm does not differentiate between Ms. Moscattini's services for its internal purposes. Ms. Moscattini's billing rate as a law clerk is $150 an hour, regardless of how the services are characterised. Mr. Adabi-Ghomi was told that the time he spent communicating with Ms. Moscattini was costing him — whether it ultimately would come out of litigation proceeds or otherwise⁷ — and it is accepted that the rate at which the expense relating to Ms. Moscattini's services was "incurred" is $150 an hour.

The dockets were basically reconstructed, after the fact, with Ms. Moscattini blacking out those parts which, to the best of her recollection, did not involve the time she spent dealing with Mr. Adabi-Ghomi's personal problems. There is no doubting Ms. Moscattini tried her best. There were problems with the evidence, however. When questioned on specific entries, Ms. Moscattini acknowledged that there was overlap in the entries between those shown as "non-legal" time and those blacked-out as "legal" time, and that she could not differentiate the time. At one point at the hearing, she was asked:⁸

Q. then how does one differentiate between the overlapping time, on the non blacked out hours, and what you say is proper claimable time?

A. I'll leave that to you

Given the state of the evidence, the arbitrator's view that the claim, as presented, was not proven is, in my view, unassailable.

The appellant argues that, even if he is not entitled to all the hours claimed, the arbitrator should have substituted a finding as to the number of hours Ms. Moscattini spent in claimable time. He points to Ms. Moscattini's confidence that the vast bulk of her work was of the latter nature, since there were, in effect, no legal issues from an accident benefit perspective, and to the arbitrator's finding that Ms. Moscattini did, in fact, spend considerable time on such work. He also points to examples in the dockets which, in his submission, clearly reflect personal entries, arguing that at a minimum, she should have made a finding based on this information.

The arbitrator found that the dockets, as presented, did not reliably distinguish between time spent on "non-legal" and legal services. The fact that the appellant may be able to point to random entries, here and there, that would seem to relate to personal matters does not advance his case significantly. The arbitrator found not only that the claim as presented was not proven, but that, in effect, there was no reliable basis on which she could ascertain the number of hours involved. In my view, she was well within her rights to draw such a conclusion on the evidence before her.

The arbitrator also found that Mr. Adabi-Ghomi had not demonstrated at what rate the expenses in issue were recoverable. At page 13 of her decision, she stated:

[Mr. Adabi-Ghomi] presented little, if any, evidence and made no submissions as to an hourly rate at which her services should be billed. Nor did he submit a total amount for the claim. Ms. Moscattini testified that her firm bills her law clerk services at the hourly rate of $150. However, Mr. Adabi-Ghomi contends that his claim in this arbitration is not for compensation for Ms. Moscattini's law clerk services. I assume from this that he is not seeking Ms. Moscattini's law clerk billing rate or the $23 per hour rate provided under the Legal Aid regulations for law clerks. The only other evidence I heard respecting rates was the evidence Ms. Degenhardt gave regarding RMI billings for case managers at $110 per hour, for caseworkers at $65 per hour and for child and youth workers at $48 to $50 per hour. However, I received no evidence comparing Ms. Moscattini's services with or distinguishing them from any of these three positions or advancing any of these rates as the optimum rate.

The appellant takes objection to these findings. He states that there was significant evidence comparing the role of Ms. Moscattini and Ms. Degenhardt, and that much of the evidence was directed to the types of services that both provided. This is quite correct, but it takes the arbitrator's comments out of context. The arbitrator recognised that there were common elements in the services performed by Ms. Degenhardt and Ms. Moscattini. Indeed, she concluded that much of what Ms. Moscattini did largely duplicated some of Ms. Degenhardt's tasks, listing such activites as telephoning, and taking calls from Mr. Adabi-Ghomi on personal matters, helping him with budgeting, attending case conferences and contacting Allstate and service providers.⁹However, there was, as the arbitrator suggests, little evidence by which the value of Ms. Moscattini's limited services, relative to the professional case-management services provided by Ms. Degenhardt, could be compared.

The basis of any comparison between Ms. Moscattini's work and that of a professional case worker was equally limited. Ms. Degenhardt was asked, on examination, what kinds of professionals, if any, would be able to take over the type of services performed in common by herself and Ms. Moscattini, a relationship which she described as attempting to fill the role of a family member. She had difficulty answering, musing that possibly someone along the lines of a case worker, with whom aspects of case management were sometimes shared.¹⁰ This was the extent of her evidence on point. While it may have been a slight overstatement to say that there was no evidence comparing the role of the case worker and the tasks Ms. Moscattini performed, the arbitrator was given very little to go on in determining whether the tasks performed by Ms. Moscattini were reasonably equivalent to those performed by a professional case worker.

When the arbitrator's comments are read in context, it is clear that she did not ignore any evidence, nor did she shy away from the task before her because it was difficult, as Mr. Adabi-Ghomi asserts. Rather, she rejected the evidence before her as an insufficiently reliable basis from which to determine a reasonable rate to attach to Ms. Moscattini's services. In my view, there is no basis on which to interfere with her assessment of the evidence. Indeed, it is somewhat incongruent to criticise the arbitrator for failing to attach a value to a claim in respect of which the claimant took no position.

Much of the argument on appeal involved the arbitrator's findings in regards to the reasonableness of the expense claimed in light of other services Mr. Adabi-Ghomi was receiving. She did not accept Mr. Adabi-Ghomi's position that his social and emotional needs were so great that he was entitled to be compensated by Allstate for the assistance and support of both Ms. Moscattini and Ms. Degenhardt. She concluded that the evidence "strikingly" showed that Ms. Moscattini's "non legal" services were redundant in that they overlapped and largely duplicated some of Ms. Degenhardt's work.

The appellant argues that the arbitrator did not refer to any of the voluminous medical evidence and must be taken to have ignored it, since she could not have arrived at the finding that Ms. Moscattini's services were redundant on the evidence before her.

The fact that the arbitrator did not include a detailed description of the medical evidence — the first objection — is readily explicable when the transcript is reviewed.

This was a case in which there was no dispute over Mr. Adabi-Ghomi's injuries or the consequences of the accident. There was also consensus among the doctors that Mr. Adabi-Ghomi requires a very substantial, consistent, ongoing level of support and care from community-based rehabilitation workers to allow him to live on his own.

According to the transcript, it was acknowledged that none of the medical records commented directly on the reasonableness or necessity, from a rehabilitation perspective, of Ms. Moscattini's contribution. In this context, records discussing the scope and amount of the support required were offered as a "piece of the puzzle," with the arbitrator cautioning that such evidence would not necessarily answer the question as to the particular need for Ms. Moscattini's services.¹¹

In her decision, the arbitrator summarised the situation, focussing on setting out the details of the testimony given by Ms. Moscattini and Ms. Degenhardt, rather than setting out details of the medical opinions in respect of which there was overwhelming consensus. She acknowledged that it was "clear that Mr. Adabi-Ghomi's accident had a severe impact on his life and health and has rendered him a very needy person."¹² Overall, her decision does not reflect a lack of appreciation for the scope and extent of the support and reassurance Mr. Adabi-Ghomi required.

The appellant suggests that the arbitrator erred in concluding that Ms. Moscattini's services involved an unreasonable expense merely because the services of both Ms. Moscattini and Ms. Degenhardt were aimed at providing support and reassurance. It argues that the arbitrator inappropriately relied on her reasoning in Pereira and State Farm Mutual Automobile Insurance Company (OIC A96-000996, April 24, 1998), aff d (OIC P98-000222, November 6, 1998), concluding that because Ms. Moscattini's services were duplicative, they were non-compensable. In Pereira, the arbitrator had found that the applicant's attendance at a second rehabilitation program was unreasonable and of no benefit and that her needs were met in full by her attendance at the first program.

I do not find the appellant's arguments persuasive. The arbitrator did not conclude that the expense was unreasonable merely because support and reassurance was being provided by more than one source. Her reasons reflect the recognition that while Mr. Adabi-Ghomi needed an extraordinary level of support and reassurance, he received it. Without saying so in so many words, the clear inference from her decision is that while Mr. Adabi-Ghomi may have received additional comfort from Ms. Moscattini's attention and to that extent benefited from it, his rehabilitation needs were reasonably covered by the level of care and support he was receiving from others. In particular, the arbitrator took account of "Ms. Degenhardt's exceptional commitment, [the professional case manager and counsellor approved by both parties], Mr. Adabi-Ghomi's continued support and treatment from his other health care professionals and his supportive relationship with Mr. Potts."¹³

Based on the evidence, the arbitrator might have concluded that the scope and extent of the support Ms. Moscattini offered was a reasonable expense. However, it would be going too far to conclude, as the appellant would have it, that the evidence does not support a finding to the contrary and that the outcome should have been a foregone conclusion. I cannot conclude that the arbitrator's conclusion was perverse or lacked any basis in the evidence. Therefore, the appeal is dismissed.

IV. EXPENSES

The expense power was changed as of November 1996. Up until then, there was no power to award expenses against an insured person. As with the question of law restriction, the amendments have not been applied to cases involving arbitrations commenced before the effective date of the change. This is on the basis that expectations as to existing rules may have influenced the individual's choice to access arbitration, and it would not be fair to apply new rules mid-stream.¹⁴

The appeal was not terribly strong. It did not involve novel issues, turning rather on the facts. Having regard to the circumstances, including the timing of the application for arbitration, the most appropriate course is for the parties to bear their own expenses.