Brian P. Henderson v. Lombard General Insurance Company of Canada, 2001 ONFSCDRS 53

Financial Services Commission of Ontario

Neutral Citation: 2001 ONFSCDRS 53 FSCO A97-001019

BETWEEN:

BRIAN P. HENDERSON Applicant

and

LOMBARD GENERAL INSURANCE COMPANY OF CANADA Insurer

SUPPLEMENTARY DECISION

Before: Fred Sampliner

Heard: By telephone conference call on October 13, 2000.

Appearances: Alex W. Demeo for Mr. Henderson Albert Conforzi for Lombard General Insurance Company of Canada

Issues:

The parties requested my reconsideration of whether Mr. Brian Henderson is entitled to reimbursement of his medical and rehabilitation expenses which were funded by the Workers' Compensation Board (WCB) arising from the November 1, 1994 motor vehicle accident. I did not decide this issue in the March 31, 2000 arbitration decision concerning Mr. Henderson's statutory accident benefits under the Schedule¹ because the parties indicated during the hearing that they had resolved this issue on their own. The arbitration decision is on appeal. The Director of Arbitrations referred this matter to me. In addition, the parties agreed that I should decide the hourly rate for Mr. Henderson's counsel in this arbitration proceeding.

The outstanding issues are:

1. Did the parties settle Mr. Henderson's WCB expenses?
2. If not, what is the amount that Lombard should reimburse to Mr. Henderson?
3. When does interest under section 68 of the Schedule commence on the WCB expenses?
4. What is the counsel fee Mr. Henderson is entitled to in respect of this arbitration?

Result:

1. The parties did not settle Mr. Henderson's WCB expenses.
2. Lombard shall reimburse Mr. Henderson $2,901.54 for the remainder of his WCB expenses.
3. Lombard shall pay Mr. Henderson interest on any amounts he repaid to the WCB from October 1, 1998, under section 68 of the Schedule.
4. Mr. Henderson is entitled to recover $125 per hour for his counsel's fees in this arbitration.

EVIDENCE AND ANALYSIS:

Mr. Henderson repaid $25,690 in full satisfaction of all his medical and rehabilitation services that were funded by the WCB.² Lombard Insurance Company of Canada (Lombard) reimbursed Mr. Henderson $22,788.46 of that amount. This dispute concerns the $2,901.54 difference between those figures, plus interest under the Schedule.

Settlement:

Mr. Henderson claims that Lombard agreed at the hearing to pay him the full amount of the WCB expenses. However, counsel acknowledged they did not set out the details of any agreement on this issue during the hearing because they were involved in organizing the presentation of the evidence.

The post-hearing correspondence reveals the parties misunderstood each other on the terms of the proposed settlement. This is supported by Lombard's request for Mr. Henderson to produce documentary proof of his repayment to the WCB, and refusal to take his word for it. I find that the parties did not establish the essential terms of their understanding at the hearing. As a result, I find there was no settlement of the WCB expenses.

Amount of the Reimbursement:

Lombard's reimbursement to Mr. Henderson represented the full amount less the $2,901.54 that the company maintained was covered by the provincial health plan (OHIP). On a single page handwritten document, Lombard's adjuster lists the expenses of Mr. Henderson's initial hospitalization in the United States that he believes were partially covered, and diagnostic imaging and emergency services in Canada that were fully covered by OHIP. Lombard's adjuster testified at the hearing that he normally handles reimbursement of OHIP-funded expenses.

However, these expenses were initially covered by the WCB, and Lombard did not bring direct evidence from OHIP to establish the appropriate reimbursement rates and coverages for this situation. For that reason, I am not satisfied with the adjuster's testimony and his handwritten calculations. I find that Lombard is not entitled to deduct any amounts from Mr. Henderson's reimbursement to the WCB, and that Mr. Henderson is entitled to the additional $2,901.54 of the $25,690 that he repaid.

Interest:

Mr. Henderson argues that he is entitled to interest under section 68 of the Schedule from July 8, 1996, when the WCB demanded he reimburse all of his funded benefits. Alternatively, he argues that Lombard should have repaid the WCB shortly after April 15, 1997, the day his lawyer faxed Lombard the memorandum and cover letter demanding payment.

Mr. Henderson failed to provide any specific notice or application to Lombard concerning the WCB expenses earlier than April 15, 1997, and I reject his first argument. I find that Mr. Henderson's April 15, 1997 fax to Lombard qualifies as sufficient notice of his claim for reimbursement of the WCB benefits.

However, Mr. Henderson's argument that Lombard was obligated to pay these expenses upon receipt of this notice is not supported by the Schedule's provisions. While normally insurers are required to either pay or assess medical and rehabilitation claims on receipt,³ Mr. Henderson did not at that time have the prerequisite approved assignment from the WCB allowing him to withdraw from that system in accordance with subsection 76(5) of the Schedule.

Mr. Henderson obtained legal authority to re-elect accident benefits on July 22, 1997 when the appeal decision in Davis and Pafco Insurance Company Limited.⁴ was issued, but he did not obtain the assignment because the WCB demanded full reimbursement of all his benefits before executing it.⁵ Mr. Henderson settled his tort claim and used the proceeds to repay the WCB on October 1, 1998. Lombard sent him $22,788.46 for the WBC expenses a year later.

I find that Mr. Henderson was in a position to comply with the Schedule when he repaid the WCB on October 1, 1998. Therefore, I find that Mr. Henderson is entitled to interest on any overdue amounts from October 1, 1998, pursuant to section 68 of the Schedule.

Counsel's Fee:

The parties disagree on the hourly rate for Mr. Henderson’s counsel. Mr. Demeo did not provide me with his year of call to the Bar or experience in personal injury. He asked me to accept that he is an experienced counsel entitled to the maximum allowable rate of $150 per hour for this complicated case. Lombard’s counsel suggested $110 per hour is the appropriate compensation level, consistent with a number of cases.

Based on Mr. Demeo's past experience with this Tribunal and the professional manner that he handled the hearing, I am willing to accept he has experience handling no-fault benefit claims. However, I cannot attribute the maximum rate to him based only on his self-characterization, his manner at the hearing or the complexity of the issues. I find that Mr. Henderson is entitled to $125 per hour from Lombard for his counsel's time in this arbitration.

EXPENSES:

This matter now may proceed in appeal, and I trust that the parties can resolve the remaining expense issues following the resolution of that matter.

April 10, 2001

Fred Sampliner Arbitrator

Date

Neutral Citation: 2001 ONFSCDRS 53 FSCO A97-001019

FINANCIAL SERVICES COMMISSION OF ONTARIO

BETWEEN:

BRIAN P. HENDERSON Applicant

and

LOMBARD GENERAL 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. Lombard shall pay Mr. Henderson $2,901.54 for the WCB expenses.
2. Lombard shall pay Mr. Henderson interest on any outstanding WCB expenses from October 1, 1998, under section 68 of the Schedule.
3. Lombard shall pay Mr. Henderson's counsel $125 per hour for this arbitration proceeding.

April 10, 2001

Fred Sampliner 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. 2WCB expense memorandum
3. 3Section 66 of the Schedule
4. 4(FSCO File No. P97-00010, July 22, 1997)
5. 5Subsection 76(5) of the Schedule